We filed an application with the Minnesota Public Utilities Commission in Nov. 2015 for a three-year, $297.1 million, or about 9.8 percent, increase in electricity rates. This proposal included a rate plan to provide customers with more predictability and rate stability for a longer period of time than under a single-year rate request. The MPUC approved a Settlement Agreement in June 2017 that established a rate increase of $244.7 million or about 8.28 percent spread across four years.
There will be no increase to 2018 rates and we will provide notice with the 2019 increase. The current monthly customer charge remains the same with no change for 2016 through 2019.
A decoupling program began in Jan. 2016. The first decoupling surcharge or credit will appear as a line item on customer bills effective Oct. 1, 2017. The MPUC extended the pilot program from three to four years, ending in 2019.
State law allowed us to collect an interim (temporary) rate increase while the MPUC considered the rate request. The interim increase of $163.7 million annually for 2016 and 2017, or 5.5 percent, began on Jan. 1, 2016 and continued through Sept. 30, 2017. The final rate increase for 2017 was more than the interim rate amount collected in 2017. The 2016 over-collection with interest will be applied to the 2017 under-collected amount. Residential customers will receive an estimated refund, with interest, of 3.42 percent which includes the interim refund, a small credit resulting from the true-up of 2016 capital projects due to the timing of project completion, and our use of a deferred tax asset. A typical residential customer's refund will be about $3.33, which will appear on Oct./Nov. 2017 bills.
For more information about your new rate please see the customer bill insert notice titled New Minnesota Electric Rates - effective Oct. 1, 2017 below in the Additional Resources section.
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