Aug. 5--Duluth-based Minnesota Power announced today that it will seek permission to hike electrical rates again.

"We recognize a price increase is not welcome news to our customers, but it is necessary to meet the rising costs of producing and delivering energy," Allete CEO Don Shippar said in a statement issued this morning. "We've invested nearly $1 billion in the electric system over the past three years to ensure we provide the safe and reliable service our customers expect while at the same time delivering additional sources of clean energy policymakers have mandated."

The rate case is the second the utility company has filed since in the past two years.

In May 2008, Minnesota Power filed papers with the Minnesota Public Utilities Commission seeking authority to increase its base rates for the first time in 14 years. However, it received permission to jack rates by only about half of the $40 million per year it had requested. Those rate increases are expected to take effect this fall.

So far, the company has offered no details on the scale of the increase it will seek.

"Those numbers have not been finalized," said Amy Rutledge, Minnesota Power's communications manager.

She described Wednesday's notice as an advance notice, saying: "It's our intention to be as transparent as possible with customers, the MPUC and investors."

Any additional rate increases probably would come into play next year.

"While the official rate request will not be filed until later this year, we felt it was important to give our customers notice now of the necessity to increase rates in 2010," Shippar said in a news release. "While operation and maintenance costs have increased as a direct result of capital investment projects, we've reduced costs in other areas without impacting customer service to help lessen the impact. Those steps include staff reductions and pay freezes for executives and management, as well as aggressive cuts to discretionary spending."

Some of Minnesota Power's spending has been mandated by the state, which has required utilities to generate 25 percent of their electricity from renewable sources by 2025.

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