State utility regulators Thursday granted an interim rate increase of 5.6 percent to Minnesota Power.

Duluth-based Minnesota Power last month filed for a rate increase of $55 million, or 9 percent, which included an interim rate increase of 8 percent, or $49 million, to go into effect Jan. 1.

But the utility lowered that interim request to 5.6 percent, or $34.7 million, because it foresees "a material increase in its revenue forecast," according to a filing Monday by Minnesota Power with the Minnesota Public Utilities Commission (PUC).

The company's largest customers, northeastern Minnesota's iron mining operations, are increasing their electricity demand.

"In addition, recent economic and public policy trends for northern Minnesota indicate there is potential for increased customer sales in 2017," Minnesota Power said in a PUC filing.

The PUC often grants interim rate increases, and it did just that Thursday for Minnesota Power. Rate cases take many months to adjudicate, and if the final rate increase granted by the PUC is below the interim rate increase, customers receive refunds.

Minnesota Power's overall rate increase proposal hasn't changed. It would lead to average residential rate hikes of 19 percent, or $15 per month. The interim rate hike approved Thursday will add $4 to residential customers' monthly bills, $2 less than the proposed 8 percent interim increase.

Minnesota Power, the state's second largest electricity provider, serves 145,000 customers in northeastern and central Minnesota,

The company has said it needs the rate hike to cover investments in its electrical system. The current general rate case is Minnesota Power's first since 2009.

Mike Hughlett • 612-673-7003