Fresh Energy and our partners have been working over the winter to promote energy efficiency and oppose inequitable rates in Minnesota Power’s rate case, which the Company filed with the Public Utilities Commission late last year. With their original filing, Minnesota Power was seeking to raise rates and make other changes including updates to rate design. However, with the extreme economic impacts that COVID-19 is having on Minnesota Power’s taconite mining and paper mill customers, they have since filed a proposal to withdraw the rate case and replace it with a much smaller rate increase.
Most stakeholders, including Fresh Energy and our partners: Minnesota Center for Environmental Advocacy, Sierra Club, Clean Grid Alliance, as well as the Minnesota Department of Commerce, are not objecting to the withdrawal. We are not objecting because the rate increases and design changes we were working against, like increases to the “fixed” customer charge, have been pulled back.
Our Original Concerns
Fresh Energy and other clean energy stakeholders formally intervened in the rate case when it was filed in November of 2019. Fresh Energy’s Andrew Twite developed extensive expert testimony on the rate design changes Minnesota Power had proposed along with its request for higher rates. Rate design is the pricing structure for customers’ electric bills and can have significant policy implications for energy conservation, equity, and carbon emissions.
Our primary opposition was to Minnesota Power’s proposal to increase its “fixed charge” and remove its Increasing Block Rate structure without a suitable transition to “time of use rates.” A fixed charge is the portion of an electric bill that is constant month-to-month and does not change based on how much electricity a customer uses. And an Increasing Block Rate structure provides discounted electricity rates for low-use customers. Both of these changes would have disproportionately harmed low-income customers and people of color. In addition, these changes would have decreased energy conservation incentives and given customers less control over their electric bills. Over the last decade, Fresh Energy has consistently and successfully opposed many utility proposals to increase their fixed charges in rate cases.
Work Will Continue
If the Public Utilities Commission accepts Minnesota Power’s proposal to withdraw the rate case, Fresh Energy will continue working on updates to rate design with Minnesota Power and other stakeholders. In this and other work, Fresh Energy is committed to ensuring that electricity rate designs increase efficiency, allow people to reduce their electricity bills through conservation efforts, are equitable, and support the transition to a carbon-free electric system.
