PUC rejects lower power rates for mines

Word NEWS in Old Typewriter Typebar Letters Isolated on WhiteThe Minnesota Public Utilities Commission dismissed the Minnesota Power petition to allow lower rates for its industrial customers, most notably Iron Range taconite mines, while raising rates for residential customers.

The request by Minnesota Power came after a new law passed the state legislature allowing the mines to seek lower rates. Minnesota’s iron mines are reeling amid a global glut of cheap supply and lower demand for iron ore and steel. Half of the Range’s mines are currently idled.

The Duluth News Tribune reported on the ruling:

The five-member board of commissioners ruled that the Duluth-based utility hadn’t submitted enough evidence that the rate shift would meet the statutory standards of providing a “net benefit.”

“I don’t see the record established to show there is a net benefit for the utility or the state,” said Commissioner Dan Lipschultz near the end of the nearly eight-hour hearing.

The denial was without prejudice, however, which opens the door for Minnesota Power to come back with a new proposal. The utility also could resubmit the same plan with more data that better establishes that the shift is needed to help bolster the mining and paper industries that are under siege from foreign competition.

PUC commissioners “said they need more information to make a decision on this unique type of rate request. There has never been this kind of (rate shift) before that’s been mandated by the Legislature,” said Amy Rutledge, Minnesota Power spokeswoman.

It bears mentioning that this was not a legislative mandate. Rather, the legislature allowed Minnesota Power to ask for the rate changes. The PUC did not see evidence that those changes were necessary or fair at this time.

It remains to be seen what Minnesota Power and the mines might bring back to the PUC later on. Much will likely depend on what happens in the iron and steel business itself.

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