The board of directors of Southern Minnesota Municipal Power Agency (SMMPA) has approved a 4 percent increase in its wholesale electricity rate for its 18 municipal utility members effective Jan. 1, 2010.
It is unknown what effect the decision will have locally. Jan Smith, secretary for the Grand Marais Public Utilities Commission, said the city’s PUC board doesn’t begin its budget process until November. That means electricity and other rates for 2010 have not been discussed yet.
SMMPA said increased cost of fuel, debt service and state-mandated renewable energy programs will all add to its costs in 2010. The increase will also enable the agency to maintain adequate financial reserves as a key risk management strategy.
SMMPA Executive Director and CEO Ray Hayward said of the board’s action, “While we understand that no one likes a rate increase, even a modest one, the board made a good decision, balancing the needs of the agency and the impacts upon the customers. Our primary focus is to be reliable and affordable for our members and their customers, now and well into the future. To accomplish these combined goals requires a rate increase at this time.”
SMMPA provides electricity and related services to 18 municipally operated utilities, including Grand Marais, mostly in south-central and southeastern Minnesota. For more information about SMMPA, visit www.smmpa.com
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