After a staggering 1,000-plus announced layoffs over recent months, Northeastern Minnesota’s iron-mining industry clearly needs a boost. Thanks to the Minnesota Legislature, every time any one of us flips on a light switch we’ll help provide it.
An energy-jobs bill passed during Friday’s special session authorized lower electrical rates for iron mines and other big energy guzzlers. They’ll pay less, leaving us little-guy residential and commercial power users to pay more to make up for it.
While this fact probably won’t help ease the pain of opening your Minnesota Power bill in the near future, for years, the utility said, the guzzlers have been paying more and the rest of us have been enjoying more-affordable rates as a result. We’ve had it good for some time. When Minnesota Power last raised rates in 2011, for example, state regulators approved a 4 percent increase for residential customers and a 16 percent increase for mines and other large industrial customers, as the Star Tribune reported Friday.
So the legislation approved Friday simply allows Minnesota Power to set rates more in line with actual energy use — for both big and small customers, said Pat Mullen, Minnesota Power’s vice president of marketing and communications.
“We have some of the lowest (electrical) rates (for residential customers) in the nation. We have for years. But that’s partly because (those rates have) been subsidized (by big industries),” Mullen said in an interview Monday with the News Tribune Opinion page.
“A lot of people don’t probably understand that the residential customers have benefited from our large-power customers for many, many years. … It’s really just trying to get (big industries) to where they could be or should have been all along.”
Lower rates can help the mines and as many as 19 other large power users weather difficult economic times. But at what cost to the rest of Minnesota Power’s 143,000 customers? It’s not known yet how much more residential and commercial customers will pay as a result of the legislation. When pressed, Mullen suggested a 5 percent to 10 percent increase was possible. But that’s just “ballparking” and a “wild guess,” he said. Any rate increase will require the approval of the Minnesota Public Utilities Commission and would follow a public process.
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