EnergyForward investments in reliable, safe and cleaner
power are transforming the energy system that serves customers
DULUTH, Minn.--(BUSINESS WIRE)--
Minnesota Power, a utility division of ALLETE (NYSE:ALE), today filed a
rate review request with the Minnesota Public Utilities Commission
(MPUC) asking for a rate increase of $55 million to support
infrastructure investments, efficiency upgrades and business expenses as
the company continues to transform how power is produced and delivered
to customers.
"Since 2011, Minnesota Power has invested extensively in our ambitious
EnergyForward plan, changing how we provide safe and
reliable energy to our customers in ways that include producing cleaner
power, strengthening the electric grid that delivers energy, and adding
technology that will help improve customer control over energy use,"
said David McMillan, executive vice president Minnesota Power. "The rate
review process will evaluate recent investments we have made on our
system that enable us to continue transforming energy supply and
delivery to benefit customers."
The majority of the rate request ($37 million) is related to additional
EnergyForward capital investments which include upgrades
to transmission and distribution infrastructure, measures to protect
against extreme weather events and enable the safe integration of
renewable resources, and the continuation of efficiency and
environmental improvements at the company's existing power plants. Other
components of the rate request address lower sales revenue and pension
investment costs. MP also is proposing to provide annual savings to
customers by extending to 2050 the capital cost recovery on the Boswell
Energy Center. Minnesota Power's last general rate review was seven
years ago.
The MPUC will make two separate decisions in the rate review: setting
interim rates that go into effect while the commission considers
Minnesota Power's full request, and a final ruling on the amount of the
full rate request. Minnesota Power is asking for an interim rate
increase of 8 percent for all customers. If approved, a typical
residential customer's monthly bill would increase by $6.00 when interim
rates take effect Jan. 1, 2017. A small business customer's monthly bill
would increase by $22.00.
Minnesota Power also is requesting the MPUC to review the rate alignment
for all customer classes to reflect the actual costs of serving those
individual groups. Different customer classes already pay different
rates, but a cost-of-service study, required to be filed with the
company's rate review request, concluded that residential customer rates
would need to increase by approximately 35 percent to cover the actual
cost of producing and delivering their energy. Business customers are
paying the remainder of those additional costs within their current
rates.
"When customers pay energy bills that don't reflect the true cost of the
service, those price signals affect everything from the investments
businesses make in their employees and the region to the willingness of
homeowners to invest in conservation," McMillan said. "Every Minnesota
Power customer will experience increased rates under our proposal.
However, we are asking the MPUC to start aligning rates more closely
with the true cost of providing service."
If the MPUC agrees with Minnesota Power's assessment of cost allocation
on its system, residential customers will see an additional 10 percent
increase in early 2018. The combined interim and final rate will result
in an average monthly increase of $15.00 for residential customers and
$28.00 for small business customers. That decision on when and at what
level to implement final rates will occur after the MPUC accepts input
from the public, state agencies and other community stakeholders.
Corresponding with the rate review request, Minnesota Power also filed
its annual Renewable Resources Rider plan. If approved by the MPUC, the
proposal will result in a 2017 reduction to residential and most
business customers' bills that would offset about half of the interim
rate increase.
Minnesota Power has undertaken significant cost management steps in the
past seven years. Minnesota Power's request reflects operations and
maintenance business expenses that will be comparable to 2010 levels.
"Our energy is an outstanding value when you consider the security,
comfort and quality of life it provides," McMillan said. "We know that
there is no good time for a rate increase, though the investments we've
made are meeting customer expectations for the safety, reliability and
flexibility of our energy grid while adding cleaner energy sources, all
under our EnergyForward plan."
To help customers manage and reduce their monthly bills, Minnesota Power
offers conservation programs that provide helpful tools to lower energy
use and obtain rebates for energy efficiency. For customers who find it
difficult to pay bills each month, Minnesota Power partners with
community programs that provide energy assistance. Minnesota Power has
established a special website—www.mnpower.com/2016RateReview—where
customers can get more information and they can submit questions about
the rate request to AskUs@mnpower.com.
Minnesota Power provides electric service within a 26,000-square-mile
area in Northeastern and Central 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161102005970/en/
Minnesota Power/ALLETE
Amy Rutledge, 218-723-7400
Manager -
Corporate Communications
arutledge@mnpower.com
Source: Minnesota Power
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