Otter Tail Power Co. wants to begin charging its North Dakota customers for the expense of building a new wind farm, a request that may be delayed until state regulators can review its electric rates.
The Public Service Commission on Wednesday began considering an Otter Tail request to allow it to add a “renewable generation” rate to its North Dakota electric bills.
Otter Tail serves Devils Lake, Wahpeton, Jamestown and a number of other communities in North Dakota, where it has about 57,000 electric customers. It is based in Fergus Falls, Minn.
The proposed rate would add about $1.45 monthly to the electric bill of a residential customer who uses 750 kilowatt-hours of power each month, the commission said. Many Otter Tail customers use more, and their potential bills would be higher.
Customers who want to challenge the proposal have until April 1 to request a hearing, Commissioner Tony Clark said.
Otter Tail has an ownership stake in a wind farm, which has 106 turbines capable of generating 159 megawatts. It recently was completed south of Langdon in northeastern North Dakota. The company owns 40.5 megawatts of generating capacity and has signed a 25-year contract to buy another 19.5 megawatts.
When Otter Tail purchased wind energy from other providers, it passed the expense along to customers using a monthly adjustment that accounts for differences in the cost of the energy it buys, Clark said.
Otter Tail cannot use that same method to recoup its costs from power sources that it owns, Clark said. The special electric rate for renewable generation is intended to help Otter Tail cover expenses from its share of the new wind farm, he said.
Such issues normally are examined in the context of an electric rate case, during which the PSC does a comprehensive examination of the utility’s cost of providing service, Clark said.
Otter Tail filed a request for higher electric rates in Minnesota last October, and company statements have said it intends to do so in North Dakota by year’s end. Otter Tail has not sought higher North Dakota electric rates since April 1983, a spokeswoman said.
Recent steep increases in Otter Tail customers’ electric bills have made North Dakota’s three public service commissioners particularly sensitive to the utility’s wind-energy request.
One of Otter Tail’s principal electricity sources, the Big Stone power plant in northeastern South Dakota, was shut down for two months late last year to install pollution-control equipment.
The utility bought more expensive replacement energy on the open market and passed the expense along to customers, who have swamped the PSC with recent complaints about their power bills.
“Customers are already feeling the pinch because of these high fuel-cost adjustments,” Clark said. “Is now the right time to be bringing on this additional cost?”
By Dale Wetzell
Associated Press Writer
28 February 2008
|Wind Watch relies entirely
on User Funding