State agency wants natural gas rate hike slashed 80 percent

  • Article by: DAVID SHAFFER , Star Tribune
  • Updated: March 4, 2014 - 9:43 PM

Minnesota Energy Resources seeks a $14.2 million increase.

A Minnesota agency urged regulators to cut 80 percent off a rate hike requested by the natural gas supplier to Twin Cities suburbs, Duluth, Rochester and other communities.

The state Commerce Department recommended cutting Minnesota Energy Resources Corp.’s $14.2 million rate hike request by $11.4 million.

In a regulatory filing, the department asked an administrative judge who is reviewing the proposed rate hike to scale back the Rosemount-based utility’s request, citing an excessive rate of return and compensation and overstated operating expenses. The department also projected that the company will have higher revenue, reducing the need for a rate hike.

“At all times, especially when energy costs are hitting families and businesses during the coldest winter in three decades, it is important that we work to ensure rates are reasonable and justified,” Commerce Commissioner Mike Rothman said in a statement.

Customers of the utility already are paying 4.2 percent higher interim rates since January. The department’s recommendation is for significantly less than that. If the lower rate is approved, the utility would be required to give refunds on customers’ bills.

Minnesota Energy Resources, a subsidiary of Chicago-based Integrys Energy Group, is the state’s third-largest natural gas utility, serving about 214,000 customers in 165 communities in Minnesota. Metro-area communities served by the utility include Cottage Grove, Eagan, Farmington, Lakeville, Prior Lake and Rosemount.

The company said it was reviewing the department’s regulatory filing and will submit a response later.

Hearings are scheduled next week in Rochester, Rosemount and Cloquet to hear public comments. Administrative Law Judge Eric Lipman is expected to issue a recommendation later this year after a trial-like process. The Minnesota Public Utilities Commission ultimately sets the company’s rates.

 

David Shaffer • 612-673-7090 • @ShafferStrib

  • Public hearings

    Three public hearings will be held this month to hear from customers of Minnesota Energy Resources Corp. about its proposed rate increase.

    Rochester: 12:30 p.m. March 12 at Rochester City Hall.

    Rosemount: 7 p.m. March 12 at Dakota County Technical College, Room 2-104, 1300 145th St. E.

    Cloquet: 7 p.m. March 13 at Cloquet Chamber of Commerce, 225 Sunny Side Drive.

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