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MDU rate increase will not be as high as originally proposed

Electric bills for some North Dakotans will be going up, but not as high as originally expected. About 100,000 North Dakota customers of Montana-Dakota Utilities who saw a temporary increase in their electric bills this winter will continue to pa...

Electric wire on the pole, power
Electric wire on the pole, power

Electric bills for some North Dakotans will be going up, but not as high as originally expected.

About 100,000 North Dakota customers of Montana-Dakota Utilities who saw a temporary increase in their electric bills this winter will continue to pay higher rates if state regulators approve an agreement between MDU, the advocacy staff of the North Dakota Public Service Commission and intervening party, AARP.

Mark Hanson, a spokesman for MDU, said they were able to come to the agreement after several meetings among the three parties.

"It's a compromise for all sides," Hanson said. "Everyone kind of had to get to the point that they all felt comfortable with, and we feel like we came to that decision. We came up with an agreement that we feel is fair to the customer and fair to the company."

MDU originally proposed a 6.6 percent overall increase, or $13.4 million annually. This would have increased rates 9.4 percent for residential customers, which would have equated to a $9.60 a month increase.

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Instead, the agreement states the overall increase would be approximately 3.7 percent, or $7.5 million annually. The residential rates would increase by 5.2 percent. A residential customer using 980 kilowatt-hours with a $0.46 daily basic service charge will see an increase of $4.50 per month on average, the agreement said.

Since the base rate increase is less than the current interim increase collected from customers, a refund will be due to customers, the agreement stated. A refund plan will be submitted within 30 days after the case is decided.

North Dakota Public Service Commissioner Julie Fedorchak said MDU also agreed to decrease the percentage it is allowed to earn on its investments for their stockholders.

"(MDU) really went through and addressed some of the company's expenses and reduced those," she said. "(MDU) reduced some of the costs that the company wanted to charge. ... There was a lot of very specific rate-related, cost-related changes that are provided for in the settlement agreement that helps you reduce the overall rate increase for customers."

North Dakota AARP Director Josh Askvig said his group is pleased with the agreement.

"We're happy with the settlement," he said. "We're hopeful the PSC will approve it ... and appreciate the opportunity to be engaged and represent our members and residential customers in general."

Askvig said many North Dakotans rely on Social Security, and that for some it is their only source of income.

"Utilities are one of those pocketbook issues," he said. "Everyone generally at some point and times has to pay for a utility bill. ... Everything we can do to help mitigate increases in utility costs and keep utility costs low is going to be beneficial to not only to (those on Social Security), but to the communities in which they reside."

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The PSC will decide whether to accept or decline the agreement in the coming weeks. If the agreement is accepted, the settlement will be effective immediately. Fedorchak said the PSC will set up a work session at a later date.

"I don't think it'll take too long because I think it's a pretty solid proposal and really goes a long way to addressing the biggest issues in the rate case and provides a pretty strong pathway forward for how to balance all of the issues in this rate request," she said.

Related Topics: JULIE FEDORCHAK
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