Otter Tail Power Company files request to increase its rates in North Dakota

Published on November 07, 2017 by Chris Galford

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The Otter Tail Power Company of North Dakota is looking to update base rates nearly a decade old in the state and has officially filed a request with the North Dakota Public Service Commission (NDPSC).

“While we’ve been diligent in managing expenses and selecting low-cost options to meet customer needs, the cost of providing service is more than we’re able to recover through our current base rates, which went into effect almost a decade ago,” Tim Rogelstad, Otter Tail Power Company President, said.

The need for a rate increase was furthered by company investments into required environmental technology and improved transmission infrastructure for its Big Stone coal plant. They also intend to create a new Customer Information System for customers next year.

“The environmental technologies at Big Stone Plant will allow us to continue using this baseload resource well into the future,” Rogelstad said. “And our transmission projects are efficiently moving energy produced in this region and improving reliability of the energy grid.”

But as costs on their end increase, so do costs on consumers. They expect the average residential customer bill to increase by $11.50 per month and the average business customer’s bill to increase by $22 per month if the rate case is approved.

If the rate increase is approved, it would take nearly a year for the process to go through. The NDPSC needs to review the cost burden on Otter Tail, then will need to determine how much customers should actually pay for those services.

In total, Otter Tail seeks a non-fuel base rate increase of $13.1 million. While the case is being determined, they have also asked to increase rates at an interim $12.8 million. Cost recovery riders would continue at these rates until the final rates are implemented. If final rates end up being lower than the interim, customers would be refunded the difference–though the company would not collect the difference if the final ends up being higher than predicted.