Minnesota Power Asks Regulators to Consider a Reduced Rate Request
February 28 2017 - 04:15PM
Business Wire
Higher demand for energy from large industrial
customers provides an expected benefit to other customers
Minnesota Power, a utility division of ALLETE (NYSE:ALE), today
filed an updated request with the Minnesota Public Utilities
Commission (MPUC) to reduce the amount of its current rate request
from $55 million to approximately $39 million.
In its filing, the company told state regulators that increased
energy demand from the region’s mining industry is expected to
result in higher-than-expected revenue from electricity sales.
Consequently, the required revenue from other customers, including
residential and small business customers, will decrease.
“Minnesota Power believes that healthy mining and timber
companies improve our region's economy and quality of life,” said
David McMillan, executive vice president Minnesota Power. “One way
that area residents benefit from these businesses is in the cost of
energy. As mining and paper companies expand production, they use
more energy, which in turn can reduce the costs others must pay for
delivering the energy we produce.”
Minnesota Power filed its original request for a rate review in
November 2016, to support infrastructure investments, efficiency
upgrades and business expenses, recommending a 9.1 percent average
increase in electricity rates for all customers, including an 18
percent increase for those receiving residential service. With
today’s filing, the updated requested rate will result in a 6.1
percent average increase, with a 15 percent increase for
residential customers. Minnesota Power also has requested that the
interim rate increase, which has been on customer bills since
January, be reduced from 5.6 percent to 5.1 percent or $32.2
million.
However, the total change that customers are seeing in their
monthly bills will be less than this increase requested by
Minnesota Power. The impact of this rate request already has been
partially offset by a reduction in a monthly energy charge used to
pay for renewable energy investments. Consequently, the net
increase from the rate request that typical residential customers
will see in their monthly bills in mid-2018 will be approximately
10 percent, if Minnesota Power's rate request is approved in
full.
A typical residential customer’s bill would increase from about
$81 per month to about $90.
“Our EnergyForward plan to ensure reliable and safe power
from a cleaner mix of energy sources has transformed how we produce
and deliver energy to our customers," McMillan explained. "This is
the first time since the start of EnergyForward that we have
requested a rate review by state regulators. When customers think
about investments we have made in our power plants and the energy
grid, we hope they agree that an increase in monthly bills of an
average of $9 per month is resulting in significant value for this
region,” McMillan said.
The MPUC’s rate review process will continue with a series of
public hearings that will take place in communities throughout
Minnesota Power's service territory this summer. A final rate
determination is expected in early 2018.
Below are examples of the effect of the proposed increase on
typical customer bills. Individual changes may be higher or lower
depending on actual electricity usage.
New TOTAL
Average monthly cost Additional monthly Previous
Interim Renewable with interim proposed
kWh monthly monthly Adjustment and renewable
final monthly
Customer Classification
usage usage
increase
charge adjustments increase* Residential 744 $81 + $4
– $4 = $81
$9 Residential CARE 778 $66 + $3 – $4 = $65 $9
Residential Dual Fuel 1,119 $102 + $5 – $6 = $101 $3
General Service 2,670 $299 + $14 – $15 = $297 $10
Commercial & Industrial Dual Fuel 4,278 $371 +
$17 – $25 = $363 $11 Municipal Pumping 6,220 $676 +
$31 – $36 = $671 $26 Large Light & Power 297,246
$25,714 + $1,155 – $1,706 = $25,164 $356 Large Power
54,834,528 $3,608,097 + $171,332 + $51,463 = $3,830,892
-$31,952 Street & Area Lighting 364 $61 + $3 – $2 = $62 -$3
*If the $39 million increase we requested is approved by the
MPUC in early 2018, the average residential bill will increase from
$81 a month to $90.
Minnesota Power provides electric service within a
26,000-square-mile area in Northeastern Minnesota, supporting
comfort, security and quality of life for 145,000 customers, 16
municipalities and some of the largest industrial customers in the
United States. More information can be found at www.mnpower.com.
ALE-ENRG
The statements contained in this release, and statements that
ALLETE may make orally in connection with this release that are not
historical facts, are forward-looking statements. Actual results
may differ materially from those projected in the forward-looking
statements. These forward-looking statements involve risks and
uncertainties and investors are directed to the risks discussed in
documents filed by ALLETE with the Securities and Exchange
Commission.
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version on businesswire.com: http://www.businesswire.com/news/home/20170228006644/en/
Minnesota Power/ALLETEAmy Rutledge, 218-723-7400Manager -
Corporate Communicationsarutledge@mnpower.com
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