North Dakota rate case
Public Service Commission approval required
Otter Tail Power Company is a regulated utility, which means the Minnesota and South Dakota Public Utilities Commissions and the North Dakota Public Service Commission approve the amount we charge customers for producing and delivering their electricity.
Request submitted in 2008
On November 3, 2008, we submitted a request to the North Dakota Public Service Commission for an increase in electric base rates in North Dakota only. See our most recent filing information for this case.
Update
On November 25, 2009, the North Dakota Public Service Commission (PSC) granted our company a revenue increase of $3.6 million, or about 3 percent. This increase is over the amount customers paid in 2007 including the Energy Adjustment, which will continue to fluctuate with changes in the costs associated with purchased power and fuel that we use to serve our customers.
What this means to you
Some customers see less than the overall revenue increase of 3 percent and some see more, based on their electric service rate selection and the amount of electricity they use. And because the costs associated with providing reliable electricity vary by the time of year, rates during winter and summer seasons will have different prices.
The charts below help to demonstrate how the approved revenue increase impacts various firm-service customers. Customers on other Otter Tail Power Company rates, including our discounted controlled-service rates, see different impacts. Customers received notices explaining the PSC-approved rates along with their first electric service statements that reflect those rates in December 2009. The charts are examples and don't include future increases or decreases to the Energy Adjustment or to other bill adjustments related to certain generation and transmission projects.
One of the reasons some customers see greater increases than others is a reduction in the use of declining block rates, which are rates that allow customers to pay less per kilowatt-hour as they use more electricity. Because higher-use customers see a greater increase on their bills than lower-use customers, reducing the number of declining block rates and the price differentials associated with them encourages customers to save money by saving energy.
As part of its decision in this case, the PSC also has requested that we remove economic development costs from our regulated revenue requirement. To allow time for us to complete or transition economic development projects in progress for 2010, we will continue our economic development activities through 2010. Beginning in January 2011 an average North Dakota residential-class customer using about 835 kilowatt hours a month will see a rate reduction of 0.025 cents per kilowatt-hour or approximately 21 cents per month. We don't know the degree to which we'll be able to assist North Dakota communities with economic development efforts once the rate reduction is in place. But we believe our efforts have been successful, important, and cost-effective, so we plan to make a case in our next rate filing for continuing them.
We implemented final rates in December 2009. As part of our initial filing, we increased rates on an interim, or temporary, basis beginning January 2, 2009. Because the PSC final decision resulted in a revenue increase of less than we collected during the interim rate period, we refunded customers the difference with interest. The refund appeared on customers' January 2010 electric service statements.
