Minnesota Public Utilities Commission approves 9 percent rate increase for Minnesota Power
Customers of Minnesota Power will soon see major rate hikes following approvals from the Minnesota Public Utilities Commission (MPUC) that will allow increases of approximately $59 million, or 9 percent above current rates.
These funds will be recovered through the base rates the utility charges its business and residential customers. This will coincide with a return on equity of 9.65 percent approved for the company. Currently, residential customers have been paying approximately 7 percent increases over previous figures through an interim rate, while business and industrial customers have faced interim rates of 14 percent. As a result, the latter will gain some relief – the applicable difference between final and interim rates will be refunded.
The final rates should go live this summer. Lower interim rates for residential customers had been meant to help mitigate the future rate impact. The company also added new programs and enhanced existing ones dedicated to low-income customer assistance during the review process.
“I’m proud of our Minnesota Power team, and all our company has done to lead our state’s clean-energy transformation while providing safe and reliable power and keeping residential customers’ monthly bills below the national average. Yesterday’s decision, however, does not give us the resources and tools we need to do all of this,” said Bethany Owen, ALLETE chair, president and CEO. Minnesota Power is a utility division of ALLETE Inc. “As utilities are asked to do more, and even faster, we expect rate review requests to become more frequent going forward. We plan to file another rate request later this year that will reflect the revenue requirements that Minnesota Power needs in order to advance its state-leading EnergyForward strategy.”
As large an increase as this represents, Minnesota Power had sought higher hikes still – in its filing in November 2021, the company pushed to increase its annual operating revenue by $108 million, or approximately 18 percent. While the company managed to keep last year’s operations and maintenance expenses lower than its expenses more than a decade ago, it noted that residential electric rates had not kept pace with general inflation over the past 10 years.
