OTP rate increase plannedPublished 11:43am Thursday, December 19, 2013
A North Dakota state official Wednesday approved environmental cost recovery tariffs and rate increases for Otter Tail Power Company customers.
The increases come as a result of construction of air quality control equipment at Big Stone power plant in South Dakota. Otter Tail Power Company co-owns the plant with Montana-Dakota Utilites Co.
Customers will see a $2.77 increase on their monthly bill beginning in 2014, based on 750 kwh of electricity. Otter Tail Power Company Vice President of Public Relations Cris Oehler said the rate increases were necessary to offset the costs of the work done at Big Stone.
“That’s a $400, $500 million project, and half of that comes from Otter Tail Power,” she said.
Oehler said the cost of the project has been reduced since earlier plans.
New Environmental Protection Agency requirements mandated the companies install the air control equipment at Big Stone.
The increases will likely continue until the project is completed, according to Oehler. After that, the costs will be rolled into the customer’s base rate rather than on the environmental cost recovery rider.
The company chose to spread the increases over the life of the project to avoid a huge increases over a shorter period of time.
“This way, the increase comes in smaller incremental chunks each year to the customer,” Oehler said.