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Minnesota Power gets green light for rate hike

Minnesota Power's residential customers will see their electric bills increase an average of $7 a month in 2010 after the utility received permission Tuesday for an interim increase while it goes through the process of requesting a permanent rate...

Minnesota Power's residential customers will see their electric bills increase an average of $7 a month in 2010 after the utility received permission Tuesday for an interim increase while it goes through the process of requesting a permanent rate hike.

The Duluth-based electric utility requested an interim increase of about $73 million, but it received about two-thirds or $48.5 million, according to a ruling by the Minnesota Public Utilities Commission.

The rates will begin to increase on Jan. 1 and will remain higher until the commission submits a final ruling by November on the utility's permanent request of an $80 million rate increase, or about $13 per month per residence.

Minnesota Power spokeswoman Amy Rutledge said the requested rate increase is the result of more investments in its infrastructure and renewable energy sources.

"It was not an expected outcome," Rutledge said of Tuesday's decision. "It does raise concern. Our rate request is really tied to the ongoing investments we've made into our system, so we can continue to provide reliable power to our customers and so we can bring cleaner, greener energy into our systems."

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The state commission ruled Tuesday in St. Paul that the recession and a recent Minnesota Power rate increase in November were grounds for approving a smaller increase than requested.

"The commission felt those factors justified a mitigated rate increase that would have probably been authorized if not for the exigent circumstances," said Janet Gonzalez, energy unit manager for the commission.

The interim decision comes on the heels of a late October approval of a $20.4 million rate increase, which is currently on residential bills.

Rutledge said the final commission decision could be in support of Minnesota Power's request come fall 2010.

"[Tuesday's] decision is not an indication of what the final decision could be," she said.

A small commercial business that uses 2,600 kilowatt hours per month would see its monthly bill increase about $25 per month, Minnesota Power said. The average residential increase of $7 is based on 750 kilowatt hours per month.

Minnesota Attorney General Lori Swanson asked last week that the commission deny the interim rate increase.

"We don't think that interim rate increases are warranted at this time," said Ben Wogsland, a spokesman for Swanson. "We think that it's putting the cart before the horse. We think they should come in and explain why they should receive a rate increase before they get a rate increase ... especially when we have these times with high unemployment numbers, and people are struggling out there."

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