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ND utility regulators approve smaller rate increases, cite federal tax cuts

North Dakota Public Service Commissioner Julie Fedorchak speaks during a commission meeting Monday, Aug. 14, 2017. Bismarck Tribune

BISMARCK—North Dakota regulators approved more modest utility rate increases Tuesday, Feb. 27, due to federal tax cuts.

Both Otter Tail Power Co. and Montana-Dakota Utilities Co. cited the corporate income tax cut congressional Republicans passed late last year in requesting smaller interim rate increases that will be in effect until the North Dakota Public Service Commission determines final rates.

Otter Tail sought to reduce its interim electric rate increase from 10.4 percent to 6.8 percent. Typical residential customers would see a reduction of about $3.10 a month, a company spokeswoman said, and business customers would see an $18.25 drop.

"Federal corporate incomes taxes are a cost of service to our customers," Otter Tail said in its request. "The reduction of the federal corporate income tax rate from 35 percent to 21 percent reduces Otter Tail's cost of providing service."

MDU requested a smaller interim natural gas rate increase that would reduce residential customers' bills by $1 per month. It sought to reduce its interim rate increase from 12.5 percent to 7.4 percent.

Commissioner Julie Fedorchak, a Republican, said the requests are a "tangible" example of the tax law's benefits. Fellow Republican Commissioner Brian Kroshus said it's "fair to anticipate" North Dakota utility customers will see some savings "regardless of who provides service to them."

In January, the three-member commission ordered an investigation into the effect of the federal tax cuts on utilities. In response, Xcel Energy said the corporate tax rate cut is one part of a "complex and interrelated law."

Still, the Minneapolis-based utility said the new law is "beneficial" for its customers and estimated it would reduce the costs of service for electric operations by about 5 percent and by 2 percent for natural gas.

Xcel said it's proposing in North Dakota to use savings from the new tax law to avoid asking for price increases in "the next year or two" while it invests in projects.

John Hageman

John Hageman covers North Dakota politics from the Forum News Service bureau in Bismarck. He attended the University of Minnesota in the Twin Cities, where he studied journalism and political science, and he previously worked at the Grand Forks Herald and Bemidji Pioneer.  

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