New Electric Rates

Effective December 1, 2018


Rate changes

On November 2, 2016, Minnesota Power filed an application with the Minnesota Public Utilities Commission (MPUC) for a 9.1 percent increase in electric rates, or about $55.1 million per year, with an interim rate increase of 8 percent. In February 2017, Minnesota Power reduced its rate increase request to 6.1 percent, or about $39 million, because of higher-than-expected electricity sales to industrial customers. At the same time, Minnesota Power asked that the interim rate increase that went into effect in January 2017 be lowered from 5.6 percent to 5.1 percent.

The MPUC on May 29, 2018, issued an updated final order increasing rates by $12 million, or a 1.8 percent average increase, with the allowed percent increase varying by customer class. For the average residential customer, the result is a $2 reduction on monthly bills, while most other classes of customers will see modest increases.

We have put into effect changes to energy rates for most customers, demand rates for larger commercial and industrial customers, and monthly service charges for some customers. For most customers the biggest change will be higher energy and demand rates because some previously separate billing charges are now part of the demand and energy rates. The increased demand and energy rates will be offset by a decrease in the fuel costs included in the resource adjustment line and decreases to the amounts in other separate charges, resulting in a moderate overall increase for non-residential customers.

Changes for monthly electric base rates

Minnesota Power 2018 final rate implementation: FAQs

On Nov. 2, 2016, Minnesota Power filed an application with the Minnesota Public Utilities Commission (MPUC) for a 9.1 percent increase in electric rates, or about $55.1 million per year, with an interim rate increase of 8 percent. In February 2017, Minnesota Power reduced its rate increase request to 6.1 percent, or about $39 million, because of higher-than-expected electricity sales to industrial customers, and also asked that the interim rate increase that went into effect in January 2017 be lowered from 5.6 percent to 5.1 percent.

The MPUC on May 29, 2018, issued an updated final order increasing rates by $12 million, or a 1.8 percent average increase, with the allowed percent increase varying by customer class.

The new final rates will apply to electric use on and after Dec. 1, 2018. The first bills containing December use will be sent out beginning in early December. These bills will be prorated using the previous rates through Nov. 30 and the new final rates starting Dec. 1.

The effect on bills varies by customer class and electricity use:

Residential
The average residential customer using about 750 kilowatt-hours of electricity per month will see a reduction in their monthly bill of about $2.15, or about 2.8 percent. New residential block rates are designed to encourage conservation, so residential customers with high electricity use (higher than 1,000 kilowatt-hours per month) may see monthly bill increases.

Residential CARE
The average residential customer on the CARE program will see a reduction in their monthly bill of about 5 percent, or about $3.00. New residential block rates are designed to encourage conservation, so residential customers with high electricity use (higher than 1,000 kilowatt-hours per month) may see monthly bill increases.

Residential dual fuel
The average residential dual fuel customer will see an increase in their monthly bill of about $2, or about 1.8 percent.

General service
The average general service customer will see a $9 increase in their monthly bill, or about 3.2 percent.

Large power and other commercial classes
Other classes of customers such as large light and power, large power and commercial/industrial dual fuel will see modest bill increases between 1 percent and 2 percent.

Conservation is the most effective way to lower your bill, and we can help.

Minnesota Power can help customers reduce their energy use through a variety of programs and rebates, such as rebates for LED light bulbs, smart thermostats and more. The best way to start is to get a free home energy analysis by one of our experts. Please visit mnpower.com/ProgramsRebates/PO1 or call 218-355-2909 for more information.

Customers who register for MyAccount on our website (mnpower.com) also can track their energy use and view their billing history. This can be a powerful tool to help customers understand their energy use and find ways to reduce it. MyAccount also allows customers to pay their bill online.

Not necessarily. The residential bill reductions mentioned here are possible despite a rate increase of 3.5 percent for residential and general service/municipal pumping customers. That’s because separate line items, or riders, on bills that pay for specific programs and projects have changed. Some have been rolled into general rates and some have been reduced, resulting in lower bills for many residential customers. The change in line items also means a bill increase of less than 3.5 percent for general service customers. Most customers, except residential customers with usage less than 1,000 kilowatt-hours per month, will see a net bill increase.

Yes, state law requires Minnesota Power to refund, with interest, the difference between the higher previous rate, paid since January 2017, and the new final rates. The refunds are expected to be made through a one-time bill credit in early 2019, with the average residential refund/credit to be about $57.00. So many customers can expect to see a lower monthly bill in early 2019.

During Minnesota Power’s last general rate review, the final rate increase that went into effect in 2011 was much lower for residential and general service customers than for other customer classes. In this rate review, the MPUC determined that these two customer classes should have an increase that was about 2 percent higher than for the other classes.

Yes. This is part of the reason why the final rate increase was less than MP requested. For the remainder of the tax savings, customers should expect an initial refund/bill credit on or after their March bill, then monthly credits for tax savings after the initial refund/credit. We’re still working on calculating these refunds/credits, so we don’t yet have an estimated amount.

We have implemented changes to demand rates for larger commercial and industrial customers, and monthly service charges for some customers. For most customers the biggest change will be higher energy and demand rates because some former line items have moved into demand and energy rates. The increased demand and energy rates will be offset by a decrease in the fuel costs included in the resource adjustment line item and decreases to the amount being charged in other separate line items, resulting in a moderate overall increase for non-residential customers. We’re also closing the municipal pumping class to new customers. We will transition current municipal pumping customers to either the general service or large light and power class, whichever is the lowest-cost option for them, in mid-2019.

Yes, the way late payment charges appear on bills for some customers is changing. We waive late payment charges for residential customers in the LIHEAP (Low Income Home Energy Assistance Program) and Cold Weather Rule programs. In the past, there was no line item on bills to reflect this waived charge. Under new accounting procedures, the late payment charge for LIHEAP and Cold Weather Rule customers is still waived, but they will see a $0 late payment charge line item on their bills if a payment is late.

Also, for all customers, there will no longer be a minimum late payment charge.

Minnesota Power made its initial request to the MPUC to support infrastructure investments, efficiency upgrades and business expenses as the company continues to transform how power is produced and delivered to customers. The MPUC set interim rates and reviewed Minnesota Power’s request for about 18 months before deciding to set lower rates than requested by the company. Because the final rates are lower than interim rates, many customers will see a refund in early 2019.

In-depth information, including tables and a sample bill, is available on the Minnesota Power website at mnpower.com/customerservice/rates.


2016 Rate Review

To learn more about the 2016 Rate Review, click here.

For more information

Minnesota Power's electric rates
Visit www.mnpower.com/CustomerService/Rates or call 800-228-4966 or 218-722-2625.

Minnesota Power's rate review
Visit the Minnesota Public Utilities Commission’s website at www.mn.gov/puc. Select eDockets, then type 16 in the year field, enter 664 in the number field, select Search, and the list of documents will appear on the next page.


Questions about the Minnesota Public Utilities Commission’s review process?

Consumer Affairs Office
121 7th Place East, Suite 350
St. Paul, MN 55101
651-296-0406 or 800-657-3782
Email: consumer.puc@state.mn.us

Customers with hearing or speech disabilities may call the MPUC through their preferred Telecommunications Relay Service.