We successfully completed a Minnesota rate review
Minimal changes to customer rates
Today the Minnesota Public Utilities Commission (MPUC) approved changes to our rates to reflect major shifts in our company鈥檚 generation fleet. The approval also marks changes to operating costs and revenues that occurred since our last Minnesota rate review, filed in 2016. The MPUC set our return on equity at 9.48%, which is an increase from the 9.41% return approved in 2017.
The rate changes allow us to recover the final costs associated with Hoot Lake Plant, which retired in 2021, and costs associated with two generation resources that came on line in the last year: Astoria Station, a 250-megawatt natural gas generator near Astoria, South Dakota, and Merricourt Wind Energy Center, a 150-megawatt wind project near Merricourt, North Dakota.
鈥淥ur employees continue our tradition of operational excellence and execute well on transformational projects,鈥� said President Tim Rogelstad. 鈥淭he Commission鈥檚 rate approval allows us to recover the costs of significant investments, which is great news for our investors. And that this is occurring without a material change to our rates is great news for our customers.鈥�
While the MPUC鈥檚 decision results in substantially unchanged rates, the approval recognizes many cost reductions we achieved during the rate review, including lower depreciation expense due to lengthening the useful lives of wind generation resources, decreased pension costs associated with higher pension fund assets, and an increase in expected wind farm tax credits. According to Rogelstad, while it will take time to calculate the dollar impact of the MPUC鈥檚 decisions on numerous and complex issues, the change to customer rates will be minimal.
鈥淥ur residential customers will continue to have some of the lowest rates in the country,鈥� said Rogelstad. 鈥淲hen our customers can benefit from expense reductions, it鈥檚 a win-win that aligns with the financial health of our company. We appreciate the Commission鈥檚 input on our request and decision to allow us to recover on our prudent investments to provide our customers with electric service that鈥檚 safe, reliable, and increasingly clean.鈥�
In its initial filing, we increased rates for Minnesota customers on an interim, or temporary, basis beginning听January 1, 2021. The result of the MPUC鈥檚 final decision is lower than the revenue we collected during interim rates, so we'll refund customers the difference with interest.
Minnesota customers can review bill changes that took effect with interim rates on our website.
We'll propose to implement the approved rates approximately 120 days after the MPUC final order becomes effective,听likely mid-2022.听