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Minnesota Commerce Department recommends rate reductions for Minnesota Power customers

6/1/2017 11:10:15 AM

Public hearings scheduled for Eveleth, Duluth, Grand Rapids and Little Falls

For Immediate Release:

SAINT PAUL – In new filings with the Minnesota Public Utilities Commission, the Minnesota Department of Commerce is recommending that the Commission should not allow Minnesota Power to increase its current rates and instead should require the utility to reduce the rates it charges customers for electric service.

Last November, Minnesota Power filed a request with the Commission to increase annual rates by a total of $55.1 million, or about 9.1 percent overall, beginning January 1, 2017. In March, it revised the proposed increase to $38.8 million, or about 6.1 percent.

By contrast, the Commerce Department’s analysis indicates that Minnesota Power’s current rates do not need to increase and should actually be reduced by $16.7 million, or about 2.6 percent overall.

Depending on customer class and energy usage, the actual percentage rate increase or decrease for a particular customer would vary based upon final approval by the Public Utilities Commission.

Public hearings on the utility’s rate proposal will be held on June 19-22 in Eveleth, Duluth, Grand Rapids and Little Falls.

Minnesota Power, a division of ALLETE Inc., is an investor-owned utility that provides electric service to about 145,000 customers in northeastern and north central Minnesota.

After analyzing Minnesota Power’s proposed costs and revenues, the Commerce Department concluded that the utility can reduce the rates it charges customers while continuing to provide safe, reliable service and obtain a reasonable rate of return on equity (capital costs).

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.

While Minnesota Power’s proposed rate increase is under review, the Public Utilities Commission has granted the utility an interim rate increase of $32.2 million, or 5.07 percent. If the final rates approved by the Commission are lower, the utility will refund customers the difference with interest.

After written testimony, public hearings and evidentiary hearings are completed, Administrative Law Judge James R. Mortenson will present his recommendations to the Public Utilities Commission, which is expected to decide this matter in March 2018.

Public hearings on Minnesota Power’s rate proposal will be held in June at the following locations:

Eveleth
Monday, June 19, 2:00 p.m. and 6:30 p.m.

Eveleth Range Recreation & Civic Center
901 Hat Trick Avenue

Duluth
Tuesday, June 20, 2:00 p.m. and 6:30 p.m.

The Inn on Lake Superior
350 Canal Park Drive

Grand Rapids
Wednesday, June 21, 6:30 p.m.

Itasca Community College
Backes Student Center
Continued Learning Conference Center
1851 East Highway 169

Little Falls
Thursday, June 22, 5:00 p.m.

Morrison County Government Center
213 1st Avenue Southeast

For details on the rate case and to view all of the documents filed in this proceeding, go to the Minnesota eDockets website. Select 16 as the year and type 664 as the number.

Media Contact:
Ross Corson
Director of Communications
Minnesota Department of Commerce
P: 651-539-1463 | C: 651-368-5050 | ross.corson@state.mn.us

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