Otter Tail looking to increase rates

Otter Tail Power Company has announced their intention to increase their electrical rates.

On November 2, they submitted an application with the N.D. Public Service Commission (PSC), starting a nearly year-long process often referred to as a “rate case.”

The PSC will now review the costs Otter Tail incurs to provide its customers with electricity, and then determine the appropriate prices for the use of those services.

“This independent, public process helps ensure transparency and fair rates for all customers,” stated a press release sent out by the company.

As for the reason Otter Tail would like to increase their prices, they say the primary drivers are increased costs associated with maintaining a “safe and reliable system” while also meeting a growing demand for electricity.

“High interest rates and changes in our customer mix also contribute to the timing,” the press release adds.

“We requested permission for an increase to rates of approximately $40.6 million. … If the PSC approves our overall request as filed, the net increase to you would be 8.43%.”

That equates to an increase of approximately $11.33 per month for a typical residential customer using 875 kilowatt-hours monthly, or an additional $34.30 per month for a typical business that uses 2,800 kilowatt-hours monthly.

The new rates wouldn’t take effect unless and until they’re fully reviewed and approved by the PSC, which isn’t expected until late 2024. However, Otter Tail has also requested an interim rate increase, which would take effect much sooner.

The interim request would increase rates by $34.4 million beginning on Jan. 1, 2024, and would remain in effect until late 2024 pending PSC approval.

“About $20 million of this requested interim increase is already being billed in individual rider line items under ‘Other Charges/Credits’ and simply will move to the new ‘Interim Rate Adjustment’ line item,” explains Otter Tail.

“To move this charge and collect the additional $14.4 million, we’ll apply a 30.51% increase to select charges, including the customer, energy, demand, facilities, fixed, and monthly minimum charges as applicable.”

The press release goes on to state in simple terms, that the “net increase to you would be 6.03%”

If the PSC were to approve final rates that are lower than the interim rates, Otter Tail says they would refund the difference with interest.

The press release then includes a table showing how the interim increases would impact monthly bills for each customer type, noting that the increases depend on the customer’s electric service rate and the amount of electricity they use.

Members of the public will have an opportunity to comment on the permanent rate changes before they go into effect.

“The PSC will schedule a public input session via video conference, which will provide you with an opportunity to offer your comments and ask questions about our request,” states the press release.

The PSC will also hold a formal hearing about Otter Tail’s rate review, though that date has not yet been determined.

Once scheduled the hearing and public input session information can be found at psc.nd.gov, or on Otter Tail’s website at otpco.com.