Minnesota Power, a utility division of ALLETE, has reached a settlement agreement on its 2024 electric rate proposal with the Minnesota Department of Commerce, Minnesota Attorney General’s Office and Large Power Intervenors.
The agreement is expected to set final rate increases of about 4.9% for residential and small business customers and about 4.4% for industrial and large commercial customers upon approval by the Minnesota Public Utilities Commission (MPUC). It is also anticipated to fix Minnesota Power’s return on equity at 9.78% and allow cost recovery outside a rate case for certain environmental costs and capacity purchases.
“This agreement recognizes the importance of considering the needs of our customers and communities,” said ALLETE Chair, President and CEO Bethany Owen. “Taken as a whole, it results in a lower rate increase for customers than we originally requested while also allowing Minnesota Power to make the investments and hire the workforce needed to ensure we can meet the state’s ambitious climate goals.”
The MPUC had approved an interim rate increase of 8.6%, or about $8 per month for the average residential customer as compared to 2023 rates, effective January 1, 2024. The difference between the interim rate and final rate, which is about a $5 per month increase for the average residential customer over 2023 rates, will be refunded to customers, with interest, through bill credits after the final rates are approved.
The MPUC will continue its statutory rate review process while the settlement agreement is prepared. While an administrative law judge will hold public hearings on the rate proposals in May, the MPUC will consider approval of the agreement’s proposed rate increases later in 2024.
