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Company suggests stretching high bills out over more months

BISMARCK -- Otter Tail Power Co. has an idea for smoothing out those huge electric bills many North Dakotans are getting this winter and wants the North Dakota Public Service Commission to OK it soon.

The PSC will hold a work session this morning to consider Otter Tail's request to use deferred accounting to allow it to stretch out the higher costs over more months, to lower the monthly bills they are receiving. The commission would have to schedule a formal meeting to vote on approval.

"I'm interested in taking a close look at this and having a chance to understand it thoroughly before making a determination whether it is in the best interests of Otter Tail's rate payers," Commission President Susan Wefald Said Thursday.

The plan would not decrease the total amount customers will end up paying; it just stretches out the time period over which the extra amount will be billed.

Otter Tail's rates shot up in recent months because it had to buy higher-priced power on the open market from Oct. 24-Dec. 24, while its Big Stone plant in northeastern South Dakota went off line for pollution upgrade and the shutdown revealed a bad turbine that had to be repaired. The plant stayed down longer than had been planned.

Under state law, power companies are allowed to simply pass on to its customers any higher fuel or energy costs it sustains. But in Otter Tail's case, that higher cost was historically large. Commissioners said earlier this week that they will study how Otter Tail bought its higher-priced fuel because they question whether the company adequately shopped around.

The extra cost per kilowatt-hour was 0.26 cents in October and November, rose to an extra 0.36 per kwh in December, to 3.5 cents in February. The bills customers are to get in March are scheduled to be charged an extra 5.15 cents per kwh - the highest cost of fuel adjustment seen at the PSC since at least 1995, Wefald said recently.

Residential customers with electric heat are paying several hundred dollars more per month and institutions like schools and nursing homes are paying thousands more.

The company wants the PSC to allow it to begin stretching out the bills that customers would get in March, so that billings will have no more than 2 cents per kwh added for the fuel cost adjustment. The overage would likely continue to be added customers bills until this fall, until the extra costs are all paid.

The company's associate general counsel, Bruce Gerhardson, also said in a letter to the commission Friday that "Otter Tail understands that the commission may have an interest in further reviews of fuel and purchased power costs (the company) has experience recently."

Company spokeswoman Chris Kling said Thursday that customers who are unable to pay higher bills should contact the company and arrange for a payment plan, the same action customers should use any time they are unable to pay a bill in full.

Otter Tail is headquartered in Fergus Falls, Minn., and has 57,000 customers in North Dakota, including Jamestown, Wahpeton, Devils Lake and many smaller communities.

Janell Cole works for Forum Communications Co., which owns The Dickinson Press.