Southern Minnesota Municipal Power Agency (SMMPA) announced that they were on track to end 2020 with extra operating reserves, and the board of directors approved a bonus for member utilities, refunding $10 million and promising no increase for wholesale rates of power for 2021.
The City of Grand Marais is one of 18 cities that are members of SMMPA.
In SMMPA’s newsletter, Director Beth Fondell, SMMPA’s Finance and Accounting and chief financial officer stated, “It’s wonderful to be able to help member utilities with a positive impact on their budgets. The agency is so strong financially that we can return money to the members.”
Refunds will be equivalent to about a five percent rate decrease for one year and will be distributed in the first quarter of 2021.
It was noted that refunds would be allocated based on members’ shares of SMMPA energy sales dating back to 2016, when rates were increased six percent as part of a multiyear plan to rebuild the company’s reserves.
“We definitely are in a mode of drawing down our reserves, but we want to be careful not to be too aggressive,” Fondell says. “We want stable rates.”
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