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Smaller rate increase recommended for Minnesota Energy Resources Corp.

May 06, 2011


Smaller rate increase recommended for Minnesota Energy Resources Corp.

For Immediate Release: Friday, May 6, 2011

Minnesota Department of Commerce Recommends Smaller Rate Increase for Minnesota Energy Resources Corp.

(ST. PAUL, MN) The Minnesota Department of Commerce, Division of Energy Resources Tuesday recommended reducing Minnesota Energy Resources Corp's proposed rate increase for natural gas service in 2011 by more than $3.2 million per year, or 21 percent.  MERC had originally requested a rate increase of $15.2 million per year.

"We believe the smaller rate increase recommended by our staff will protect ratepayers from undue burden but still allow MERC to provide safe, reliable service and make needed improvements to its distribution facilities," said Commerce Commissioner Mike Rothman.

The department, which investigates utility filings and provides recommendations to the Minnesota Public Utilities Commission (PUC), took into consideration a number of factors while analyzing MERC's rate increase request, including consolidation of the two operating divisions of MERC (MERC-PNG and MERC-NMU).  Other factors considered by the department included the cost of capital, operation and maintenance expenses, costs related to employee benefits - all of which department staff determined would be lower than MERC had estimated.
After written testimony, public hearings and evidentiary hearings are completed, Administrative Law Judge Mr. Manuel J. Cervantes will present his recommendations to the PUC.  The PUC is expected to decide this matter before the end of 2011.

MERC provides natural gas service to approximately 209,000 customers throughout the state of Minnesota.