In the Matter of the Application of Minnesota Power for Authority to Increase Rates for Electric Service in the State of Minnesota.
Minnesota Public Utilities Commission File No.
P. Moratzka, Marc A. Al, Riley A. Conlin, Stoel Rives,
L.L.P., Minneapolis, Minnesota (for relators Large Power
Ellison, Attorney General, Lisa Crum, Jeffrey K. Boman,
Assistant Attorneys General, St. Paul, Minnesota (for
respondent Minnesota Public Utilities Commission)
Ellison, Attorney General, Ian Dobson, Assistant Attorney
General, St. Paul, Minnesota (for respondent Office of the
Minnesota Attorney General-Residential Utilities and
Elizabeth M. Brama, Valerie T. Herring, Kodi J. Verhalen,
Briggs and Morgan, P.A., Minneapolis, Minnesota; and David R.
Moeller, Duluth, Minnesota (for respondent Minnesota Power)
Considered and decided by Bjorkman, Presiding Judge;
Connolly, Judge; and Florey, Judge.
decision of the Minnesota Public Utilities Commission to
account for, in a docket outside a general-rate case,
additional sales revenue associated with providing electric
service to energy-intensive trade-exposed (EITE) customers
under an EITE rate schedule, is reasonable and in conformity
with the plain language of Minn. Stat. § 216B.1696
certiorari appeal, relators Large Power Intervenors (the
LPIs) challenge a final order in rate
proceedings initiated by respondent Minnesota Power. The LPIs
argue that the Minnesota Public Utilities Commission (the
commission) violated the plain language of Minn. Stat. §
216B.1696 by excluding approximately $15.5 million of
additional sales revenue from Minnesota Power's 2016
general-rate case. The commission had determined, in a
different docket which is not the subject of this appeal,
that the amount would be refunded to Minnesota Power's
non-EITE customers in order to comply with section 216B.1696.
Because the commission's decision to account for the
additional sales revenue in the EITE docket, rather than in
the general-rate case, was reasonable and in conformity with
the plain language of section 216B.1696, we affirm.
Factual and Procedural Background
2015, the legislature passed Minn. Stat. § 216B.1696
(the EITE statute), which sets forth a public policy favoring
competitive rates for EITE customers:
It is the energy policy of the state of Minnesota to ensure
competitive electric rates for energy-intensive trade-exposed
customers. To achieve this objective, an investor-owned
electric utility that has at least 50, 000 retail electric
customers, but no more than 200, 000 retail electric
customers, shall have the ability to propose various EITE
rate options within their service territory under an EITE
rate schedule that include, but are not limited to,
fixed-rates, market-based rates, and rates to encourage
utilization of new clean energy technology.
Minn. Stat. § 216B.1696, subd. 2(a).
statute directs the commission to approve a qualifying
utility's proposed EITE rate schedule "upon a
finding of net benefit to the utility or the state."
Id., subd. 2(b). An EITE rate schedule allows the
utility to offer EITE customers credits that reduce the rate
that they pay for electricity. This is important because it
has allowed those customers to operate facilities that were
utility must then track in a separate account "the
difference in revenue between what would have been collected
under the electric utility's standard tariff and the EITE
rate schedule." Minn. Stat. § 216B.1696, subd.
2(d). "In its next general rate case or through an EITE
cost recovery rate rider between general rate cases, the
commission shall allow the utility to recover any costs,
including reduced revenues, or refund any savings, including
increased revenues, associated with providing service to a
customer under an EITE rate schedule." Id. But,
a utility may not "recover any costs" from, or
"refund any savings" to, any EITE customer or
low-income residential ratepayers. Id.
30, 2016, Minnesota Power filed a petition, under Minn. Stat.
§ 216B.1696, to establish a competitive rate for EITE
customers. Minnesota Power proposed an EITE rate schedule
that would provide a usage-based "Energy Charge
Credit" to EITE customers who met certain conditions,
and it proposed to recoup the cost of the credit through a
surcharge on non-EITE, non-exempt customers. Minnesota Power
predicted that the credit would spur increased electricity
purchases by EITE customers, satisfying the statute's
requirement that any EITE rate schedule approved by the
commission produce a "net benefit" to the utility
or the state. Minn. Stat. § 216B.1696, subd. 2(b).
December 21, 2016, the commission approved Minnesota
Power's proposed EITE rate schedule, but ordered
Minnesota Power to file a rate-design proposal detailing how
to recover the cost, or refund additional revenues,
associated with implementing the EITE rate. The commission
also ordered Minnesota Power to establish a tracker account
to measure "the difference in revenue between what would
have been collected under the electric utility's
applicable standard tariff and the EITE rate schedule."
The commission's December order provided that it
"shall become effective immediately." Neither the
LPIs nor Minnesota Power applied for rehearing within the
time period allowed (20 days) under Minn. Stat. §
216B.27, subd. 1 (2018).
December 30, 2016, Minnesota Power made a compliance filing
that included its cost-recovery proposal, several rate-design
alternatives, and a revised communications plan. The matter
came before the commission on March 9, 2017, and on April 20,
2017, the commission issued its order.
April 20, 2017 order, the commission:
• authorized Minnesota Power to collect a surcharge from
non-EITE customers to recover the cost of providing credits
to EITE customers;
• required Minnesota Power to distribute the EITE
surcharge as a uniform per-kWh charge applicable to all
• directed Minnesota Power to refund to non-EITE
customers any revenue increases resulting from increased
sales to customers taking service under the EITE rate
• required Minnesota Power to report back on its efforts
to identify customers who may be exempt, based on income,
from paying the EITE surcharge; and
• specified the form and content of the notice that
Minnesota Power must provide to non-EITE customers prior to
collecting the surcharge.
commission ordered Minnesota Power to submit a compliance
filing within 30 days "setting forth the surcharge and
refund mechanisms in detail, including the baseline gross
revenue for 2016 and the methodology for determining net
revenue increases." The order provided that it shall
become effective immediately. ...