– State regulators approved an interim rate increase for Minnesota Power customers on Thursday that will see the average residential bill rise by $4.50 per month.

The Public Utilities Commission approved the 5.8% increase despite Minnesota Power’s request to bring rates up 7.7%, or about $6 per month for residential customers. The interim rate goes into effect in January and will stand until the final rate is decided.

The Duluth-based utility is ultimately seeking a 10.5% rate increase that would bring average residential bills up $11 per month and increase small business bills by $30 a month. It will be up to the PUC to determine the size of the rate increase, and a decision could take more than a year.

Minnesota Power said it needs the rate hike in the face of “significant lost sales” from big business customers and increases in its expenses.

The utility, which has 145,000 customers across northeast and central Minnesota but sells most of its electricity to taconite operations and paper producers, was last granted a 3.5% increase that went into effect in December 2018 — less than the 6% increase the company asked for.