Great River Energy, Minnesota's second-largest electricity supplier, said Wednesday that its power sales are up this year and that its projected rate increase for 2014 will go down — to zero.
"After five years of flat or negative load growth, we are seeing a dramatic turnaround in 2013," CEO David Saggau said in remarks released by the wholesale power cooperative from its annual meeting.
He also predicted the Maple Grove-based company will not raise wholesale rates for 2014, after having seven years of steady increases — for a total of 58 percent — that two industrial customers recently complained were excessive. The company once had projected a rate hike of 4 percent in 2014.
For residential customers served by the 28 local co-ops that own Great River Energy, the news likely will mean little or no retail rate increases next year. Wholesale power rates make up 60 percent to 80 percent of retail rates, but local co-ops also have distribution costs, which still could go up, affecting rates.
Larry Schmid, Great River's vice president and chief financial officer, said in an interview that energy sales rose 6 percent through May, compared with the same period a year ago. Although about half of that increase is from higher electric use because of a colder winter and spring, the remainder appears to be growth in power use generally, he said.
But Schmid said Great River's projected zero percent rate increase for 2014 is not tied to increased power sales. Schmid said the company is getting better prices for electricity it sells in the regional grid. Saggau also cited cost cutting as a key factor.
Utilities across the nation have reported slack electric sales since the recession because the slow pace of home construction meant fewer new power customers. Businesses' electric needs also dropped in a weaker economy.
Those factors have been cited by Xcel Energy, the state's largest power company, as one reason it needed a 2013 electric rate increase.
