Minnesota Power rates will increase 8.6% next month - Duluth News Tribune
Minnesota Power rates will increase 8.6% next month - Duluth News Tribune | News, weather, and sports from Duluth, Minnesota
Minnesota Power rates will increase 8.6% next month
The average residential customer will see monthly bills go up by $8, the Duluth-based utility company said.
DULUTH — Minnesota Power customers will see higher electricity bills beginning next month.
The Minnesota Public Utilities Commission on Thursday, Dec. 7, approved the Duluth-based utility's interim rate hike of 8.6%, which comes out to an $8 increase per month for the average residential customer, Minnesota Power said.
The new rates will take effect Jan. 1 and will remain in place while the PUC considers the company's full 12% rate hike request. A decision on the full request is expected in 2025.
Approval of the full plan would allow Minnesota Power to generate $89 million in revenue for Minnesota Power and increase its return on equity from 9.65% to 10.3%.
Minnesota Power, owned by Duluth-based Allete, said this increase will help it staff up ahead of large projects required to reach 100% carbon-free energy by 2040. The company reached nearly 60% renewable energy in 2022.
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"This rate request is essential for Minnesota Power’s ability to make the best investments, including in our workforce, to achieve these carbon-free goals while maintaining safe, reliable and affordable energy for our customers," Jennifer Cady said in a news release Thursday.
The company has previously said it expects to have 1,178 full-time and part-time employees by the end of next year, an increase of 123 positions over 2022 levels. Positions include cybersecurity, grid maintenance and staff to oversee and develop large projects to reach renewable energy goals.
This rate increase will not recover costs for the large projects Minnesota Power expects to undertake in the coming years, like the modernization of a 465-mile high-voltage direct current transmission line connecting Hermantown to Center, North Dakota; a new transmission line connecting the Iron Range and Central Minnesota; and more than 700 megawatts of new solar and wind generation. Those costs will be recovered in future rate cases.
The company’s last rate increase, 9.5%, was approved in January and came in at almost half of its full request of 17.58%.
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Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”