South Dakota rate case
Public Utilities 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.
Update
To address rising costs and growing energy use, Otter Tail Power Company is proposing to increase its base rates for electric service in South Dakota for the first time since 1987.
The overall revenue increase requested is approximately $3.8 million, or 15.3 percent, over 2007. This doesn't mean that all customers will see a 15.3 percent increase. Some customers will see less and some will see more based on their electric service rates and the amount of electricity they use. One of the primary drivers of this level of increase is the cost associated with the significant amount of wind energy we're adding.
Sample rate case impacts
If the South Dakota Public Utilities Commission (PUC) approves the request as filed, a residential customer using an average of 894 kilowatt-hours of electricity a month—the average monthly kwh use for the residential class—would see an increase of $10.68 a month over 2007. Similarly, subject to PUC approval, a commercial customer using an average of 3,073 kwh of electricity a month—the average monthly kwh use for the commercial class—would see an increase of $29.39 a month over 2007. These examples do not include future increases or decreases to the cost-of-energy adjustment.
Changes that may be of interest
We proposed several rate changes as part of our filing. The first rate change customers may want to note is the inclusion of renewable resource costs in base rates. Otter Tail Power Company's balanced approach to a secure energy future encompasses renewable resources, demand-side management including energy conservation, power plant and operating efficiencies, natural gas peaking plants, and prudent baseload coal generation. Because South Dakota does not allow recovery of renewable resource costs through riders as do Minnesota and North Dakota, we propose to recover those costs through base rates.
The second rate change customers may want to note is the elimination 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 will see a greater increase on their bills than lower-use customers, the elimination of declining block rates encourages customers to save money through energy conservation.
Information resources
Even after this case, Otter Tail Power Company's rates will be among the lowest in the nation. And we have a number of resources available to help customers manage electricity costs. Visit ConservingElectricity.com or call Customer Service at 800-257-4044 to access those resources.
Tentative schedule
Interim rates |
N/A |
Final decision |
Mid-summer 2009 |
