Minnesota Power has proposed rate increases of 15 percent for residential customers and 4 percent for industrial users. The $8 monthly service charge would also increase to $9.
Under Minnesota law, any increase to the base utility rates companies charge users must be approved by the Public Utilities Commission (PUC).
As part of the process, representatives from Minnesota Power, state agencies and consumer advocacy groups met in Little Falls, June 22, to answer questions from area residents and state their positions on the increases.
Minnesota Power Executive Vice President David McMillan said the rate difference between large industrial consumers and residential customers comes from a study the company did on the cost of supplying different types of customers.
“Our cost of service study indicates our smallest customers pay less than the cost of actually providing the electricity to them,” McMillan said.
The proposed rate increases come as Minnesota Power invests in renewable energy and methods of safeguarding its grid from natural disasters, McMillan said.
The proposed increase would mean the average residential customer would pay $9 more per month, McMillan said.
The Minnesota Department of Commerce disagrees with the proposed rate increase, arguing Minnesota Power exaggerated its numbers.
“The Commerce Department analysis found that Minnesota Power’s proposal overstated its costs, including an excessive rate of return on equity. The utility’s proposal also understated revenues, especially from large power customers,” the agency said in a press release.
Joseph Rowan of Little Falls said he was concerned that with Minnesota Power starting with a proposed increase of $55.1 million last year, lowered to the current $38.8 million increase, that this was part of negotiations and the increases could still go lower.
McMillan said the only reason the proposed increases had gone down was because the company heard U.S. Steel was reopening a large taconite plant.
Rowan also said he had an issue with McMillan saying base rates haven’t gone up since 2010, when there was an interim increase of 5 percent approved in 2016.
The company decreased its renewable energy rider by 5 percent during this time, McMillan said leading to no net increase.
Roger Bruhn of Long Prairie said he had an issue with the fact that even though it seemed fair to have the customers pay based on the cost of providing them energy, it was asking those on fixed incomes to pay more.
“If you’re on a fixed income of $491 (a month) that’s probably not going to seem fair,” Bruhn said.
He also said he had a problem with Minnesota Power’s billing statements, arguing that there was a host of a la carte items that he couldn’t understand.
McMillan said he agreed with Bruhn that there is a lot of complex language on the billing statements, but said in many cases, it’s because the state tells Minnesota Power what can be put on the bills.
“We didn’t make them up. Most of them exist because legislators told us to do it that way and regulators are working with us to say, ‘You have to display it this way,’” McMillan said.
Bruhn wasn’t alone in having an issue with the proposed rate increase. Scott Meyer of Little Falls had an issue with Minnesota Power’s service and said therefore he disagreed with them increasing rates.
Two people who spoke in favor of Minnesota Power at the meeting were Carol Anderson, director of Community Development of Morrison County and Rick Utecht of Todd County Development.
Both said Minnesota Power does a lot of good work in the area.
“They’ve provided economic development services to all of the communities they’ve served,” Anderson said.
Anyone who wants to submit public comment on the case must do so before 4:30 p.m., Monday. Comments can be submitted via the website at minnesota puc.granicusideas.com or emailed to [email protected] The PUC asks that when submitting written comment, writers reference the case’s docket number, 16-664.
For more information about the case, people can visit the edocket website, www.edockets.state.mn.us and find all documents related to the case using its e-docket number.