Your Electricity Rates Could Go Up To Bring Costs Down For Big Companies
News broke last week that there is a plan in the works to have residential customers of Minnesota Power shoulder a larger energy bill to "help taconite plants and paper mills survive an onslaught of global competition".
The plan, filed last week to the Minnesota Public Utilities Commission, would lead to an approximate 14.5% increase in household energy bills according to a report from the Duluth News Tribune. This increase would lead to an average increase on monthly bills of about $11.45 per month for residential customers, according Minnesota Power. This, of course, will vary depending on how much electricity your household uses. The residential increase will not impact low-income ratepayers. The plan also would increase rates for schools, government offices, businesses, and other commercial customers by a rate of $11.45 per month per meter.
This plan is being pursued following the passage of a law by the 2015 Minnesota Legislature to allow Minnesota Power to submit discounted rate plans for a specific group of large industrial customers including taconite mines and forest product industries. The legislation states that a rate plan change could be submitted to "ensure competitive electric rates for energy-intensive trade-exposed customers."
Minnesota State Representative Tom Anzelc, who represents the Grand Rapids area and also was the author of the bill that was passed to allow this rate change, told MPR News he doesn't agree with the decision act on this plan at this time, saying "The proposal from the power company is ill-timed and much, much, much too large."
A press release from Minnesota Power states that the industrial companies that would benefit from this rate plan change have been shouldering more than their share of the overall energy bill in the state, saying
Industrial customers’ rates have been set higher than the actual cost to serve them for many years—two decades or more. They have been absorbing these costs not related to their electric service. Operating in a highly competitive commodity-driven global marketplace, these companies can’t simply absorb costs or pass them on to their own customers.
The case being made is that the rate plan change would essentially be a step to level the playing field for the large industrial companies that are currently paying a higher cost-per-unit price than other customers; motivated by a desire to keep those companies open in Minnesota and, in turn, employing Minnesotans and paying taxes in Minnesota.
A decision is expected to be made on the proposed rate increase sometime in early 2016.
The 10 companies identified by Minnesota Power (according to the Minnesota Power press release) as those that would benefit from this rate plan change are Verso Paper in Duluth; Sappi Mill in Cloquet; Boise Paper in International Falls; Blandin Paper in Grand Rapids; Mesabi Nugget in Hoyt Lakes; United States Steel, which operates Minntac Mine in Mountain Iron and Keetac in the city of Keewatin; United Taconite in Forbes and Hibbing Taconite, located in Hibbing, both of which are managed by Cliffs Natural Resources; ArcelorMittal which operates the Minorca Mine near the city of Virginia; and Mining Resources near Chisholm.