Minnesota Power is proposing a rate increase of varying amounts for its customers.
My specific concern involves the increase in the rate for dual fuel customers. Currently dual fuel customers pay $.037 per kwh, which is 52 percent lower than their regular rates. Many consumers have recently switched to dual fuel to take advantage of these rates while helping Minnesota Power reduce the load on the grid by having their power interrupted during peak hours. A considerable cost is involved in making the transition to dual fuel (in my case, approximately $5,000.) When adding my second fuel source, I had an expectation of a reasonable increase in my rates. The proposed increase in dual fuel rates is an increase of 62 percent rising from $.037kwh to $.060 kwh. While still lower than the full residential rate, the new rate will be only 28 percent lower than the regular rates, far worse than what the average customer can reasonably expect based on past usage.
In addition, Minnesota Power charges additional fees, which far exceed other power companies and co-ops throughout the state. When Minnesota Power permits you to access dual fuel they first check the transformer and wires running from the transformer to the home to be sure they can handle the load. If they cannot handle the load they charge you $900 for a new transformer and $600 for new wires. In addition they will charge you $300 to hook up the service and they add on a $5 per month service charge ($10 for commercial users) for using their electricity. My brother-in-law was my electrician; he works mainly in the south metro area near New Prague. He couldn't believe the charges. He stated none of the electric companies will charge for these services down there, they want to get you on "off peak" to reduce the load on the grid. He also stated the co-ops and power companies in his area encourage off peak use throughout the year. Minnesota Power does not allow off peak use throughout the year. In fact, if you have a heat pump which heats in the winter and cools in the summer, you will be charged off peak rates only for the months of October through May. For the June through September months the standard rate applies.
In conclusion I'd like to say I feel the proposed rate increases, which Minnesota Power claims to be an average of 7.5 percent, appear to be weighted heavily toward the off peak users which are using electricity at a time of the day when the actual cost of electricity is much lower than normal. To increase off-peak user cost by over 60 percent should not be allowed. Instead, Minnesota Power should, at the very least, keep the increase closer to the traditional difference in cost between standard rate and dual fuel rate, in this case the cost for dual fuel users would be $.040 kwh which is 52 percent of the proposed standard rate of $.083 kwh.
Andy Froelich
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Park Rapids
