The Minnesota Public Utilities Commission (MPUC) on Thursday approved interim rates

for Minnesota Power customers in the first step of a longer process to evaluate Minnesota Power’s most recent request for a rate review.

The decision will increase rates by 5.8% for all customer classes, effective Jan. 1. Under the change, the average residential customer will pay an additional $4.50 per month.

Interim rates will remain in effect until final rates are decided by the MPUC.

Minnesota Power, a utility division of ALLETE Inc., filed a rate review on Nov. 1 with state

regulators seeking to increase its annual operating revenue by $65.9 million. The rate

request addresses changes in customer demand, increasing operating expenses and costs associated with regulatory obligations, Minnesota Power said in a news release.

The company has closed seven of its nine coal units and has grown its current energy mix to 30 percent renewables with plans to increase it to 50 percent by 2021 through the addition of hydro and wind resources. Minnesota Power said it also has undertaken significant cost-management steps, reducing operations and maintenance costs by nearly 20 percent since 2014.

If the MPUC decides on a final rate that is below the interim rate, Minnesota Power customers will receive refunds based on the difference between the final and interim rates, plus interest.