Incoming! Rate hike for Minnesota Power customers
Minnesota Power, based in Duluth, got approval for a 4.9 percent rate hike to residential customers’ electricity rates compared to 2023 rates.
Minnesota Power estimates the average residential customer will see an increase of about $5 per month in early 2025. However, because the utility had put an interim rate increase of 8.6 percent in place at the beginning of the year, customers may see a small decrease in their monthly bills and a one-time bill credit in early 2025. Large commercial customers will see a 4.4 percent rate increase.
Minnesota Power had originally requested in 2023 a rate increase of 12 percent:
The company said its initial request last year would help increase its cybersecurity and grid maintenance staff and oversee large projects as it pursues 100% carbon-free energy by 2040. The company reached nearly 60% renewable energy in 2022.
The company’s last rate increase was 9.5 percent and was approved in January 2023. In order to raise rates, the Minnesota Public Utilities Commission (MPUC) must approve and the rate increase underwent public comments, some of which the Star Tribune noted:
More than 650 people wrote to the PUC about the rate increase, most in opposition. Many were dated before or just after the settlement was announced publicly. Matthew Laveau of Wrenshall said “these added costs are not sustainable to their customers.”
Gretchen Matuszak of Esko wrote that she is retired and can hardly keep up with her electric bill as it is now. “You sure make it tough for us old timers! Give us a break!”
The company’s rate increases are likely to have a painful impact on the bottom lines of industrial customers:
Minnesota Power has about 150,000 customers across northeastern Minnesota. It serves energy-hungry iron mines, pipelines and the paper industry, which together make up nearly 70% of the utility’s energy sales.
The company has the lowest monthly bills for the average residential customer of Minnesota’s three investor-owned utilities, and its electric rates for those customers are below the national average, according to 2022 data, the latest reported by the PUC. Its prices for commercial and industrial customers are higher than neighboring states, however, and 95% of the national average.
American Experiment has written before about “green deindustrialization” thanks to soaring electricity costs. Expect that further rate increases will stretch industrial customers even further and may cause more closures like the Northern Foundry in Hibbing.