Minnesota Power to increase customer rates under new settlement
In settling over its 2024 electric rate proposal, Minnesota Power has set the stage for a 4.9 percent rate increase among residential and small business customers, and a 4.4 percent increase for industrial and large commercial customers.
The Minnesota Department of Commerce, Minnesota Attorney General’s Office and Large Power Intervenors had stepped into the case, but now, all the ALLETE utility division requires is approval from the Minnesota Public Utilities Commission (MPUC). As of Jan. 1, 2024, customers of Minnesota Power have operated under an interim rate increase of 8.6 percent approved by those same regulators. That pushed average residential rates up about $8 per month, so the new rates should lower that to an approximately $5 increase over 2023 rates.
“I’m grateful for the hard work on this by all of the parties, who agreed that this settlement is the right path forward for everyone,” Bethany Owen, ALLETE chair, president and CEO, said. “This agreement recognizes the importance of considering the needs of our customers and communities. Taken as a whole, it results in a lower rate increase for customers than we originally requested while also allowing Minnesota Power to make the investments and hire the workforce needed to ensure we can meet the state’s ambitious climate goals.”
For its part, Minnesota Power – which filed the rate proposal in November 2023 as part of its EnergyForward renewables transition and resilience strategy – should see a return on equity set at 9.78 percent. It would also be allowed to pursue cost recovery outside a rate case for specific environmental costs and capacity purchases.
MPUC is continuing with a statutory rate review process, and will consider approval of the agreement’s proposed rate increases later this year. In the meantime, an administrative law judge will hold public hearings on the rate proposals this month.
“We appreciate the willingness of our regulatory agencies and large power customers to work collaboratively to reach a mutually beneficial settlement agreement and find common ground for setting new rates for the electric utility,” said Jennifer Cady, Minnesota Power vice president of Regulatory and Legislative Affairs. “This commitment to outreach, collaboration and communication will only become more important as we continue to execute this historic clean-energy transition.”
The difference between existing interim rates, including interest, will be refunded to customers through bill credits if MPUC eventually approves the arrangement.
