Commission, Xcel trying to electrify interest in rate hike
Backdropped by an unseasonably late snowstorm, the North Dakota Public Service Commission held the first of two meetings to discuss a petition filed by Northern States Power Company to increase utility rates. NSP is a publicly traded, Minnesota-based subsidiary of Xcel Energy which provides power for all users in the Fargo, West Fargo, Grand Forks and Minot areas. The power company requested the meetings as a way to gauge the concerns of its customers.
On Dec. 18, 2012, NSP had applied to the commission for a 9.25 percent increase totalling $16.9 million in its annual revenue. The rise would affect around 88,000 consumers in the state. In real terms, the proposal would increase a typical residential consumer of 750 kilowatt-hours by about $6.40 a month in the winter, $6.64 in the summer. At the time of its filing, the application proposed increases to take effect on and after Jan. 17, or upon final approval, based on their test year forecast for 2013.
Also included with notice was an alternative petition for interim rates, should the commission decide to suspend the NSP notice and proposed rates from tariffs within thirty days of filing. The petition supported an interim rate increase of $14.7 million (8.05 percent) effective Feb 16., subject to refund, which will remain in effect until final rates are decided upon. After the lengthy assessment and final decision in August, if the new rates decided upon are lower than the interim NSP will refund the difference.
The 1,043 page application had also requested implementation of a Transmission Cost Recovery tariff, which would allow NSP to recover its capital and operating costs for investments in new or modified electric transmission facilities not included in the 2013 test year revenue requirement.
Xcel’s senior regulatory consultant David Sederquist delivered his presentation from Fargo’s North Dakota State University, stressing the need for the increase. Citing infrastructural improvements, increases in energy consumption and various regulatory complainces, Sederquist also pointed out that North Dakota enjoys the third-lowest energy rates in the nation trailing behind hydroelectric-heavy and thus cheaper infrastructures in Oregon and Idaho.
“Our industry continues to change,” he explained, but “we have our eye toward being as cost-effective as we can.”
Commissioners Julie Fedorchak, Randy Christmann, and chairman Brian Kalk were broadcasting from their offices in Bismarck. The three emphasized the importance of making sure the state’s energy stays as cheap as it has been. “I think I speak for us all,” said Christmann, in that “we come here with the goal of keeping rates as low as we can,” while at the same time finding a workable balance for maintaining and improving the state’s utility access.
“There’s a lot of talk nationally about strengthening our power infrastructure,” Kalk added afterward. “Cost allocation is a big variable now. We want to keep rates fair.” His concern is that rate increases should cover specifically North Dakotan usage expenses, rather than siphoning fees toward other states within the Xcel system.
Sederquist pointed out that North Dakota is part of a five-state grid. “All of the states share in the costs,” which includes a diverse portfolio of energy sources scattered throughout, from nuclear (29.1 percent) and coal (43.5) to wind (9.8) and hydroelectric (7.5). He posits that spreading energy sources and hedging resources lowers overall costs and protects the grid from operational, financial and availability concerns. Meanwhile, the interim hike protects company assets during the “regulatory lag” of assessment.
Despite the showing of all three commissioners and about a dozen engineers and staff from both Xcel and NSP connected via interactive video link, there were no actual customers in attendance at the half-hour meeting only one member of the press and a Fargo-area man with an infrastructural rather than fee-related concern showed up.
“It kind of is normal. This is our third filing in the last five or six years,” said Sederquist, who intimated that small or no public attendence at these panel discussions has been usual. “We like to think there wouldn’t generally be an outcry over rates,” although he admits feedback would be beneficial. “We certainly welcome people to come.”
Kalk agreed: “At the end of the day we’re going to make a decision,” adding that “we’re really trying to figure out how to get people involved.”
The second meeting in Minot will be held today at noon, room 324 of Memorial Hall, on the Minot State University campus. Additionally, interested private consumers and businesses using NSP services can apply to the Public Service Commission office in Bismarck to intervene during the rate case to come. For more information, call 328-2400 or send an email to (firstname.lastname@example.org).
Additional to the meeting, if still relatable to power lines: The Public Service Commission office also wished to remind North Dakotans to call 811 before conducting any digging or excavating this year. Governor Dalrymple has declared April the state’s Safe Digging Month, coinciding with the national initiative of the same name, reminding citizens to “always call before you dig.” Arbitrary earth removal can result in service interruptions, environmental damage, personal injury and even death.