Otter Tail seeks rate increase in Minnesota

Otter Tail Power Co. said Feb. 16 that it has filed a request with the Minnesota Public Utilities Commission (MPUC) for permission to increase its rates. The proposed increase reflects the company’s investments in new environmental technologies and a stronger system that delivers electricity to its customers paired with overall rising costs.

The Big Stone coal plant air quality control system (AQCS) project was declared commercially operational on Dec. 29, completing six years of effort. Otter Tail is the majority owner in Big Stone, which is located in Big Stone City, South Dakota.

“While we’ve been diligent in managing expenses and selecting low-cost options to meet customer needs, the cost of providing service is more than we’re able to recover through our current rates, which went into effect in 2011 based on 2009 costs,” said Otter Tail Power Company President Tim Rogelstad.

“With customers in mind, we’ve been innovative so that the price they pay for clean, reliable electricity will continue to be among the lowest in the region. For example, the new air-quality control system at Big Stone Plant cost about 30 percent less than other options—and the project came in at less than $380 million, more than $100 million under budget,” Rogelstad said.

Otter Tail Power requested permission to increase rates by about $19.3m, or 9.8%. If the MPUC approves the overall request as filed, residential customers would see a bill increase of approximately $9.50 a month; general service business customers would see a bill increase of approximately $22 a month. The increase would be more for some customers and less for others, depending on the rates on which they’re served and the amount of electricity they use.

While the MPUC considers this request, the company has asked to increase rates on an interim basis. If approved, the interim increase would be effective April 16, 2016. It would remain in effect until the MPUC makes a final determination on the company’s overall request, which Otter Tail Power expects would be in 2017.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.