Fair Utility and Energy Rates

Jan., 2018: Our victory on electric rates will save households about $200/year

The Citizens Federation, along with its allies, has won a big victory for consumers:  We staved off Minnesota Power’s rate hike of about $225 per year (22%) down to just $36 per year (3.5%).  The MN Public Utilities Commission (PUC), in its decision at the end of January, agreed with our points.   The result is a very small hike of about $3 per month, a fraction of what had been proposed. People will save almost $200 per year, compared to what was requested by MN Power. 

A temporary interim hike of 5% was imposed in Jan., 2017, and since that is more than the final verdict of 3.5% increase, consumers will receive a modest refund in their bills, later on this year.

Low rate for low use preserved

A key issue in the rate case was MN Power’s desire to put the largest increases on residential users  (in order to lower rates for big industry), and to put even bigger hikes of 27% on people who use the least energy.    Over the past 40 years, MN Power has repeatedly attempted to shift rate expense from the big industrial customers onto residential ratepayers.   They keep saying that the residential rates are overpriced, and are subsidizing residential rates, which are under-priced.

However, The Citizens Federation has shown time and again that this isn’t the case, and the PUC has repeatedly agreed with us.     One factor in the PUC’s decisions, in case after case, is a consideration for the relatively low incomes in this part of the state, and how hikes of the size requested by MN Power are too big for many people to bear.  A key part in the latest PUC decision was a ruling that MN Power did not need to have quite as high of a profit percentage as they were seeking.

We won a reduced electric rate for everyone in 1979 and have defended it ever since.

We won a reduced electric rate for everyone in 1979 and we have defended it ever since.

Affordable Energy = Clean Energy!

The cost of renewable energy (solar, wind, and new forms of storage) have come down dramatically, and continue to reduce in price.  This means that clean energy now costs less than fossil-fuel energy (coal or natural gas-fired), or nuclear energy.

The Citizens Federation is advocating for clean energy generation, as a key strategy for holding down electric rates for everyone, now and int the future.

We are opposing Minnesota Power’s plan to build a new, natural-gas fired power plant in Superior, Wisconsin. 

We have testified to the Minnesota PUC.  In July, the Administrative Law Judge released a report which agrees with us.  That report is only a recommendation, but it helps our case.   The PUC will make the final decision this fall.    To view a KBJR TV report on this, which includes comments from the Citizens Federation’s staff director, Buddy Robinson, click this link.

 

Utility rates are a big concern for many:

The cost of essential services, like household utilities, is a huge problem if you are moderate or low income. The Citizens Federation has devoted a lot of energy to tackling this problem, and we have great results to show for our efforts:

  • We proposed and won, in 1979, a reduced electric rate for all Minnesota Power residential customers for the first 350 killowatt hours (kwh) per month. We have repeatedly and successfully defended it ever since in numerous rate cases, including in 2009. This saves about $200 a year per household versus what was proposed. For our efforts, we were awarded intervenor compensation four times by the state’s Public Utility Commission, in recognition of the important evidence we provided. The cumulative effect of our efforts is several million dollars a year that is saved, and spent in the local economy, which would otherwise have gone to out-of-area utility investors. Now we’re at work challenging the fairness of yet another electric rate hike request.
  • We helped convince the Duluth City Council in 2009 to not pursue the ill-advised idea of selling off the City’s municipal natural gas department. We showed how a privatized utility would raise rates and not save the City money.
  • We helped defeat telephone and electric deregulation in Minnesota, and helped defeat national deregulation of natural gas back in 1982.
  • We held down garbage rate increases in Duluth, and fostered real competition to break the price-fixing of the local cartel. Everyone’s garbage rates went down 10-15% as a result.
  • We helped create competition in the fuel oil and gasoline markets in Duluth, again breaking a local price-fixing cartel, and reducing everyone’s prices about 10 cents per gallon.