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Minnesota Power Loses Round One in Rate Case

February 23, 2016 By Cheryl Kaften

On February 11, the Minnesota Public Utilities Commission (MPUC) denied a request, filed by Minnesota Power (Docket No. E015/M-15-984) last November 17, “to ensure competitive electric rates for energy-intensive trade-exposed [EITE] customers.”

Approval of the request would have offer economic relief to large, industrial customers in the region – including companies in the steel, mining, and forestry sectors – that are dealing with major market downturns. Some companies would have seen as much as a 5 percent decrease in their rates.

However, those same costs would have been relegated to Minnesota Power’s residential customers, who would have paid about 14.5 percent more on their monthly electricity bills; as well as to the utility’s commercial ratepayers, who would have found themselves remitted from 1 percent to 4 percent extra.

However, consumer advocates chafed at the new out-of-pocket costs – as much as $11.45 on residential monthly bills. The Minnesota Citizens Federation Northeast argued, “The fact that the large power customers and Minnesota Power repeatedly claim that residential and small users are being unfairly subsidized by the large users has been repeatedly contradicted by the fact that the PUC has consistently approved rate structures which it deems to be just and reasonable. If the PUC has been in the wrong, and the assertion by the large power customers and Minnesota Power has real merit, then they should have been able to successfully pursue relief in the courts long before now.”

Environmental groups also intervened. The Sierra Club North Star Chapter and the Minnesota Center for Environmental Advocacy (MCEA) noted that providing a “rate break for certain customers in this region, without optimizing the energy efficiency potential of these customers, does not represent a ‘net benefit’ to the utility or the state.”

And in the end, the five commissioners of the MPUC agreed that the utility had not provided a strong enough case – enough evidence of a net benefit – to enable them to approve the filing.

However, in the words of baseball Hall of Famer Yogi Berra, “It’s not over ‘til it’s over.” Minnesota Power is expected to beef up its case and re-file with the MPUC at some time in the near future.

It is an urgent question — you can’t just let this hang out there,” commented David Moeller, attorney for Minnesota Power, as reported in the local Star Tribune.

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