State utility Regulators approve interim rates for Minnesota Power

On Thursday, December 2, the Minnesota Public Utilities Commission found Minnesota Power’s November 1 rate request filing complete and approved interim rates for the company’s customers. This is the first step of a longer process to evaluate Minnesota Power’s most recent request to change its rates.

The decision will increase rates by approximately seven percent for residential customers and approximately 14 percent for all other customers, effective January 1, 2022. Under the change, monthly bills for the average residential customer will increase by about $5.89. These interim rates will remain in effect until final rates are decided by MPUC, likely by early 2023.

Minnesota Power, a utility division of ALLETE (NYSE: ALE), filed a rate review on November 1 with state regulators seeking to increase its annual operating revenue by $108 million. The approximately 18 percent increase proposed by the company reflects changes in both revenue and expenses related to Minnesota Power’s ongoing EnergyForward lean energy transition, evolving customer energy demand, business operations and regulatory requirements since the company’s last completed rate review in 2016. In the past 25 years, Minnesota Power has completed only three full rate reviews.

After initially requesting an interim rate increase of approximately 14 percent for all customers, Minnesota Power worked closely with consumer advocate Energy CENTS Coalition (ECC) to reduce the interim rate increase for the residential customer class, with the remainder to be considered during the overall rate review. The proposal recognizes the residential customers in the region continue to face unique circumstances including customers who are still working to reduce their past due balances incurred during the moratorium on disconnections. The proposal is also supported by Citizens Utility Board of Minnesota (CUB).

“We appreciate the MPUC’s approval of interim rates and the efforts of stakeholders to reach a compromise on a reduced interim rate for our customers,” said Chief Operating Officer Josh Skelton.

Through EnergyForward, Minnesota Power achieved an unprecedented milestone in late 2020, becoming the first Minnesota utility to deliver more than 50 percent of its energy supply from renew- able sources and closing or transitioning seven of nine of its coal units. In its integrated Resource Plan submitted to state regulators on Feb. 1, 2021, Minnesota Power announced its goals to achieve a 70 percent renewable energy mix by 2030, an 80 percent carbon reduction and end to all coal operations by 2035 and reach a 100 percent carbon-free energy supply by 2050.