Residents speak out against proposed MDU rate hike; company says increase necessary - Bismarck Tribune

Residents speak out against proposed MDU rate hike; company says increase necessary

Residents with fixed incomes raised concerns about higher electricity bills during public input meetings held by the North Dakota Public Service Commission as it considers Montana-Dakota Utilities Co.’s request to increase rates.

"There are those of us out there who have no option but to heat the house," Bismarck retiree Earl McClenathan said in testimony Wednesday during one of two public hearings.

MDU on May 16, 2022, filed the request for an overall 12.3% rate increase, or $25.4 million annually. The company cites the construction of an 88 megawatt natural gas turbine at Heskett Station north of Mandan as the primary reason for the needed increase. The coal plant is being switched to natural gas, according to MDU Regulatory Affairs Director Travis Jacobson.

The PSC last July approved an interim increase of about 8.9%, or $10.9 million, effective the following day. An interim rate increase is common in such cases. Customers will be reimbursed if the final order from the PSC is less than the interim rate.

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Jacobson also cited infrastructure investments, cost of debt, increases in labor costs and inflation as additional reasons for the needed increase.

The company serves roughly 94,000 customers in 119 communities in western and south-central North Dakota.

The typical heating customer using 800 kilowatt hours per month would see an increase of roughly $15 on the monthly bill. Five dollars would come from the monthly service charge and the other $10 would come through usage fees.

Residential customers would see a 17.3% increase. Increases for other classes such as commercial customers could range from 4.2% to 18.4%. The disparity in rate increases between classes is based on how much it costs to serve each class, according to Jacobson.

MDU's last rate increase was 3.7% in 2017.

AARP North Dakota has concerns that a jump in rates would adversely impact people age 50 and older, for whom the group advocates. It says the proposed increase unfairly targets residential customers and doesn’t give them enough ability to counteract the hike by reducing usage.

AARP objects to a proposed increase in the basic service charge, a fixed fee that all customers pay regardless of how much electricity they use. The charge for residential customers would go from about $14 a month to $20. MDU has said the goal is to have the monthly charge as close as possible to the cost of serving the customer.

McClenathan said his home uses electric baseboard heaters, and he has seen his usage skyrocket during recent cold months. He told the commission that he used 3,355 kilowatt hours in February and 2,819 kilowatt hours in March, significantly more than the average household of 800 kilowatt hours a month.

"Is there something that can be done for someone like me that has no option? Maybe there's a cap or something in there," McClenathan said.

AARP and Marathon Petroleum Corp., which owns the refinery in Mandan, submitted documents opposing a rate increase.
Some Americans are getting heated this winter over rising utility costs.

Reach David Velázquez at 701-250-8264 or david.velazquez@bismarcktribune.com.