Minnesota Power is refunding $12 million to its customers, including northeastern Minnesota's iron ore industry.
Minnesota Power announced the refund as part of a company proposal to resolve a November 2019 rate request submitted to the Minnesota Public Utilities Commission (MPUC). The resolution on Thursday was approved unanimously by the MPUC.
Under the resolution, Minnesota Power is refunding the $12 million from interim rates collected between Jan. 1 to April 30
“We hope the lower rates and refunds we proposed and the commission approved today will help our customers weather the financial strain caused by COVID-19,” said Bethany Owen, ALLETE president and chief executive officer in a news release. “These are difficult times for everyone, and we appreciate
the support of many stakeholders and the commission's prompt action to approve our proposal. Delivering safe, reliable and affordable energy has never been more important to our customers and communities than it is right now.”
The average residential customer can expect a refund of about $20, according to Minnesota Power. Businesses will receive a refund of approximately $70. Refunds may vary depending on energy usage.
Refunds will be made to customers as soon as practical, subject to receiving written orders from the MPUC, according to Minnesota Power.
In April, the MPUC reduced a Minnesota Power interim rate request to an average increase of 4.1% across its customer base from 5.8%. In an initial filing, the the proposed rate increase was 10.59%.
Northeastern Minnesota's six iron ore plants will be included in the refund, said Kelsey Johnson, Iron Mining Association of Minnesota president.
Those iron ore plants are Minnesota Power's largest customer.
At any given time, the iron ore industry consumes about 600 megawatts of electricity. Tha'ts roughly enough to power two cities the size of Duluth.
The six iron ore plants spend roughly $1 million a day to operate taconite mining and iron ore pellet processing equipment.
“All customers receive the rebates, including the iron mining industry,” said Kelsey Johnson, Iron Mining Association of Minnesota president. “It's small, but we are appreciative of Minnesota Power making this consideration for its customers.”