Minnesota Power proposes $89M electric rate hike to support clean energy, reliability
As part of its EnergyForward strategy, Minnesota Power this week filed a 2024 electric rate proposal with the Minnesota Public Utilities Commission (MPUC) that would bring in $89 million in additional revenue, but add approximately $11 per month to average residential customer bills.
The rate adjustment would help the company meet rising production and delivery costs for its electric services, as well as support hiring and retention among its workforce. Minnesota Power intends to have more than 70 percent of its power portfolio flow from renewable sources by 2030. As of last year, it was already at a portfolio of nearly 60 percent renewables.
“Over the last decade, Minnesota Power has transitioned to become one of the nation’s clean-energy leaders, and we are doing this in a sustainable way that always keeps our customers at the forefront,” Jennifer Cady, Minnesota Power vice president of regulatory and legislative affairs, said. “The Minnesota Legislature has adopted a more aggressive goal for our state’s energy transition, and we are embracing the challenge by accelerating our EnergyForward plan while continuing our commitment to customers to provide reliable service while keeping their bills as low as possible.”
Among other things, the new proposal would issue a $38.8 million annual reduction in the Minnesota Policy Adjustment line item on customer bills, as costs for the Great Northern Transmission Line and Production Tax Credits move into base electric rates. Subsequent hikes to rates will also support transitioning to new renewable energy sources, a build up of resiliency, tackling supply chain issues and attracting capital for continued investments, among others.
In support of this, MPUC will set an interim rate while making its overall decision – Minnesota Power asked that it be set at 8.6 percent, beginning in Jan. 2024. That would represent a monthly bill increase of about $8 per month. If the final rate is set lower, any difference would be refunded to customers – with interest.
Of the company’s nine coal units, seven have already been retired, and the remainder will likely be closed by 2035. It intends to expand its renewable portfolio with up to 700 MW of wind and solar in the coming years.
The regulatory process should take approximately 12 months. It will include reviews by state agencies and input collection from customers and stakeholders.
