Minnesota Power Files Request for Rate Change to Support Sustainable Energy Future Amid Changing Customer Demand
01 Novembre 2021 - 04:00PM
Business Wire
Minnesota Power, a utility division of ALLETE Inc. (NYSE: ALE),
is filing a request today with the Minnesota Public Utilities
Commission (MPUC) to increase its annual operating revenue by $108
million and adjust rates for its retail electric customers.
The approximately 18% increase proposed by the company reflects
changes in revenue and expenses related to Minnesota Power’s
ongoing EnergyForward clean energy transition, evolving
customer demand, business operations and regulatory requirements
since the company’s last completed rate review submitted in 2016.
In the past 25 years, Minnesota Power has completed only three full
rate reviews.
“The energy industry of the 2020s looks far different than it
did five years ago as our customers’ expectations for clean energy
and high-value service are increasing,” said Bethany Owen, ALLETE
Chair, President and CEO. “Through EnergyForward, Minnesota
Power is meeting those expectations by delivering a resilient,
reliable and sustainable supply of 50% renewable energy that is
competitively priced. We are proud to be halfway to our goal of
providing 100% carbon-free energy by 2050, and we look forward to
continuing our close work with our customers and stakeholders to
complete this transition.”
Clean-energy transition while maintaining a reliable
grid
Minnesota Power achieved an unprecedented milestone in late
2020, becoming the first Minnesota utility to deliver more than 50%
of its energy supply from renewable 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 goal to achieve a 70% renewable
energy mix by 2030, an 80% carbon reduction and end to all coal
operations by 2035, and reach a 100% carbon-free energy supply by
2050.
Recognizing the impacts of climate change, Minnesota Power is
making additional investments in a more resilient grid to maintain
energy delivery as the number of more extreme weather events
increases. Minnesota Power also is providing customers greater
control over their daily energy decisions and monthly bills through
new tools that empower customers to reduce how much energy they use
and to choose their sources of energy.
“Rate reviews are part of doing business as a regulated utility,
and we’ve worked hard to keep rates affordable for customers by
keeping operations and maintenance costs to 2010 levels,” said
Minnesota Power Chief Operating Officer Josh Skelton. “The
investments we have made in our EnergyForward plan over the
past five years and the changing demand for energy require the
company to seek this review. We understand our customers have high
expectations that this energy transformation is done the right way,
with thoughtful planning and efficient coordination of
resources.”
Customer demand
Minnesota Power’s request also reflects changes in customer
demand for energy. Minnesota Power customers have exceeded state
energy conservation goals every year for the last decade, reducing
energy consumption and total energy bills for households and
businesses. In addition, the economy of northeastern Minnesota
continues to evolve, and as the energy requirements of customers
change, it affects rates paid by all classes of customers.
“Our unique customer base helps drive the economy of
northeastern Minnesota, and this has helped keep residential rates
among the lowest in the state,” explained Frank Frederickson, vice
president of customer experience. “However, the costs for
maintaining a safe and reliable electric system remain even when
there are changes in customer demand. If our request is approved by
the MPUC, the average monthly bill for our residential customers
will remain below the national average while they receive the
highest percentage of renewable energy in the state.”
The requested rate increase
As a regulated utility, Minnesota Power must receive approval
from the MPUC whenever changes in revenue or expenses require
adjusting its rates. Over the next year, the MPUC will receive
feedback from state agencies, interested parties and customers
before making a final decision on the rate request.
In this request to the MPUC, a typical residential customer with
a monthly usage of 701 kilowatt-hours would see an increase of
about $15 a month. A small-business customer with a monthly usage
of 2,581 kilowatt-hours would see an increase of $55 per month.
The company has requested an interim rate increase of
approximately 14% for all customers beginning in early January
2022. According to Minnesota law, the MPUC will approve an interim
rate increase that will remain in effect until a decision is made
on final rates. If the approved final rate is lower, the company
will refund the difference to customers with interest.
Today’s filing is the first step in a full regulatory review of
rates and recovery of the company’s expenses for delivering energy
to its customers. The company’s last completed rate review was
filed in 2016, while a 2019 request was withdrawn in response to
the COVID-19 pandemic and its impacts on customers and the region’s
economy.
Minnesota Power instituted additional steps to protect customers
during these challenging times, including suspension of
disconnections for 17 months and advancing three solar projects to
spur economic recovery. The company has also redesigned its
customer affordability program called “CARE,” increasing bill
discounts available to income-eligible customers. If the rate
request is approved, usage-qualified low-income customers will
continue to have some of the lowest average bills in the state due
to special discounts included in the company’s rate design
transition.
“The request we submitted today will help achieve our
sustainability commitments to the climate, our customers and the
communities we are grateful to serve,” Owen said. “We are
continuing to pursue aggressive carbon-reduction goals, working to
keep rates as low as possible for families and businesses, and
advocating for a regional economy that supports the well-being and
quality of life for everyone.”
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, 15
municipalities and some of the largest industrial customers in the
United States. More information can be found at
www.mnpower.com.
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. ALE-CORP
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version on businesswire.com: https://www.businesswire.com/news/home/20211101005642/en/
Amy Rutledge Manager Corporate Communications Minnesota
Power/ALLETE arutledge@mnpower.com
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