Minnesota Power seeks 18 percent electric rate increase to support sustainable energy transition
A request filed with the Minnesota Public Utilities Commission (MPUC) by Minnesota Power this week seeks to increase the company’s annual operating revenue by $108 million and up its retail electric rates by approximately 18 percent to better reflect current revenue, expenses and goals.
Among these goals is Minnesota Power’s ongoing EnergyForward clean energy transition, but impacts to revenue and expenses have also come from changes in customer demand, business operations, and regulatory requirements. The company has not updated its rates since 2016 — one of just three full rate reviews conducted in 25 years.
Even in five years, though, the field has changed significantly. Last year, Minnesota Power became the first Minnesota utility to deliver more than 50 percent of its energy supply from renewable sources while closing or transitioning seven of its nine coal units. Further, it intends to reach a 70 percent renewable energy mix by 2030 and push through to a fully carbon-free energy supply by 2050.
“The energy industry of the 2020s looks far different than it did five years ago as our customers’ expectations for clean energy and high-value service are increasing,” said Bethany Owen, chair, president and CEO of ALLETE, Inc. — of which Minnesota Power is a subsidiary. “Through EnergyForward, Minnesota Power is meeting those expectations by delivering a resilient, reliable and sustainable supply of 50 percent renewable energy that is competitively priced.”
With extreme weather events expected to increase in frequency and devastation as the effects of climate change grow, Minnesota Power plans to use a chunk of new investments to power a more resilient grid. It also intends to give customers new tools to oversee and control their energy use, impact their monthly bills and choose their energy sources.
“Rate reviews are part of doing business as a regulated utility, and we’ve worked hard to keep rates affordable for customers by keeping operations and maintenance costs to 2010 levels,” Josh Skelton, Minnesota Power COO, said. “The investments we have made in our EnergyForward plan over the past five years and the changing demand for energy require the company to seek this review. We understand our customers have high expectations that this energy transformation is done the right way, with thoughtful planning and efficient coordination of resources.”
If MPUC approves the rate change, the typical residential customer of Minnesota Power could see bill increases of about $15 per month. Small business customers could see increases of approximately $55 per month. However, until a decision is made, Minnesota Power has requested a lower interim rate increase of approximately 14 percent for all customers, beginning in January 2022.
