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Interim rate increases: How they work

  • December 31, 2012 - 6:47 PM

 

Six investor-owned utilities and one power cooperative in Minnesota are subject to regulation by the state Public Utilities Commission (PUC) over the rates they charge customers.

Current law: When seeking a rate increase, a utility enters a regulatory process lasting 10 months or longer. In the meantime, the law says the PUC must approve a utility's request for an interim increase that takes effect right away. The interim increase can be denied by regulators only under "exigent" or emergency circumstances.

Proposed law: The basic regulatory process wouldn't change, but utilities would be eligible for an interim rate hike only if the PUC decided a "compelling necessity" existed for the increase. To see the text of the proposed changes, go to startribune.com/a1977.

Affected utilities: Xcel Energy, CenterPoint Energy, Minnesota Power, Minnesota Energy Resources, Interstate Power and Light, Otter Tail Power Co., Dakota Electric.

Legal issue: The Minnesota Supreme Court is considering an appeal over the PUC's authority to limit interim increases under law. For a look at how the state Appeals Court ruled, go to startribune.com/a1978.

DAVID SHAFFER

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