State Capitol Bureau
BISMARCK - Otter Tail Power Co. has an idea for smoothing out those huge electric bills many North Dakotans are getting this winter and wants the North Dakota Public Service Commission to approve it soon.
The PSC will hold a work session this morning to consider Otter Tail's request to use deferred accounting so it can stretch out the higher costs over more months, to lower the monthly bills customers receive. The commission would have to schedule a formal meeting to vote on approval.
"I'm interested in taking a close look at this and having a chance to understand it thoroughly before making a determination whether it is in the best interests of Otter Tail's ratepayers," Commission President Susan Wefald said Thursday.
The plan would not decrease the total amount customers will end up paying; it just stretches out the time period over which the extra amount will be billed.
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Otter Tail's rates shot up in recent months because it had to buy higher-priced power on the open market from Oct. 24 to Dec. 24, while its Big Stone plant in northeastern South Dakota went offline for a pollution upgrade. The shutdown revealed a bad turbine that also had to be repaired, forcing the plant to stay down longer than had been planned.
Under state law, power companies are allowed to pass on to its customers any higher fuel or energy costs it sustains. But in Otter Tail's case, that higher cost was historically large. Commissioners said earlier this week that they will study how Otter Tail bought its higher-priced fuel, because they question whether the company adequately shopped around.
The extra cost per kilowatt-hour was 0.26 cents in October and November, rose to an extra 0.36 per kwh in December and to 3.5 cents in February. The bills customers are to receive in March are scheduled to increase 5.15 cents per kwh - the highest cost of fuel adjustment seen at the PSC since at least 1995, Wefald has said.
Residential customers with electric heat are paying several hundred dollars more per month, and institutions such as schools and nursing homes are paying thousands more.
The company wants the PSC to allow it to stretch out the bills, starting in March, so billings will have no more than 2 cents per kwh added for the fuel-cost adjustment.
Company spokeswoman Chris Kling said Thursday that customers who are unable to pay higher bills should contact the company and arrange for a payment plan.
Otter Tail's headquarters are in Fergus Falls, Minn., and the company 57,000 customers in North Dakota, including Jamestown, Wahpeton, Devils Lake and many smaller communities.
Cole works for Forum Communications Co., which owns The Forum. She can be reached at (701) 224-0830 or forumcap@btinet.net
