MPUC sets new rates for Allete’s Minnesota Power

The Minnesota Public Utilities Commission approved a rate increase of approximately $59M, or approximately 9%, that Minnesota Power, a utility division of ALLETE Inc., is allowed to recover through the base rates that it charges to residential and business electric customers. The commission also authorized a return on equity of 9.65% for the company. The decision is subject to a final written order and reconsideration. Under the MPUC decision, rates will increase by approximately 9% for all customer classes. The average residential customer’s monthly bill will increase by approximately 2% above the interim rate they currently pay. The 9% increase will also apply to business and industrial customers, whose interim rate was 14%. The applicable difference between final and interim rates will be refunded to business and industrial customers. Final rates are expected to go into effect this summer. As a regulated utility, Minnesota Power must receive approval from the MPUC whenever changes in revenue or expenses require adjusting its rates. In the past 25 years, Minnesota Power has completed only three full rate reviews, and its residential customers’ monthly bills are below the national average while they receive the highest percentage of renewable energy in the state. The company’s last rate review filed in 2019 was withdrawn in response to the COVID-19 pandemic and its impacts on customers and the region’s economy.