Minnesota Attorney General Lori Swanson and two DFL lawmakers on Wednesday announced legislation that would limit rate increases charged by state-regulated utilities like Duluth-based Minnesota Power.

The changes could delay how quickly rate increases take effect and could spur utilities to be more cautious in claiming which expenses should be covered by those higher rates, including items such as air travel

It’s a big money issue for consumers: Minnesotans have seen $188 million in utility rate increases since 2006 and another $104 million of proposed increases are under review.

“Electric and natural gas bills take a big bite out of most people’s household budgets,” Swanson said in a statement. “As regulated monopolies, utilities should be put to strict proof before they can raise people’s rates.’’

State Rep. Debra Hilstrom and state Sen. Ellen Anderson, both St. Paul DFLers, said they will push the legislation during the upcoming session.

•One bill would end what has been a nearly automatic interim rate increase for utilities while a permanent rate increase is under review. The new legislation would make interim increases the exception, allowed only if utilities could prove an “immediate and compelling necessity” exists. At least 11 other states have similar rules, she said.

•A companion bill would require utilities to itemize their lists of travel and entertainment costs included as an expense for a rate increase.

Swanson, who is seeking re-election this year, said her office found utilities claiming “extravagant travel and entertainment expenditures, such as board of director’s retreats, international travel, sporting events, meals and private aircraft’’ as expenses under rate increases. Under current law, utilities are not required to separately itemize those expenses.

One of those expenses claimed in the 2008 rate increase by Minnesota Power was $1.2 million for use of its corporate aircraft.

“They were using their corporate jet to fly executives and their families to Florida,’’ said Ben Wogsland, spokesman for the attorney general’s office. “We don’t think that’s something consumers should have to pay for in their utility bills.’’

Amy Rutledge, Minnesota Power spokeswoman, said the company already has taken steps to scrutinize how costs are incurred before being applied to rate increases.

“The expenses in question were reviewed by the Public Utilities Commission and deemed appropriate,’’ Rutledge said. “Yes, there are expenses included in the rate case for the airplane … but it’s less than half of the total’’ cost of running the airplane for the year.

Meanwhile, utility officials say quick approval of interim rate increases are needed to help pay for massive projects to reduce air emissions, including carbon dioxide, and to help move the company toward renewable energy to break the region’s reliance on coal-fired electricity. Many of those projects are to meet government-mandated emissions limits, either expected or already imposed.

The money also goes to help modernize the utility’s delivery system.

“The interim rate increase is an effort to cover the cost of investments that we’ve already made. It’s money we’ve spent for improvements already in service,’’ Rutledge said.

Swanson said the recent rate increases came at a bad time, with average Minnesota households losing nearly 9 percent of their income between 1999 and 2009, according to Census data, and during historically high unemployment in the state.

“Utility customers shouldn’t be asked to pay new rate increases unless they are necessary, fair and transparent,” Anderson said. “These proposed new laws will hold utilities’ feet to the fire to make sure consumers are protecte.

Source: Duluth News Tribune

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