MPUC Approval of Customer Notification of Rates

State of Minnesota Public Utilities Commission

May 19,2011

To: Official Service List

From: Burl W. Haar

Executive Secretary

Re: In the Matter of the Application of Minnesota Power for Authority to IncreaseRates for Electric Service in Minnesota

Docket No. E-015/GR-09-1151

Approval of Customer Notice for Final Rates

In its December 30, 2009 NOTICE AND ORDER FOR HEARING, the Commission delegatedauthority to its Executive Secretary to approve customer notices and bill inserts for the durationof this proceeding.

In its November 2, 2010 FINDINGS OF FACT, CONCLUSIONS, AND ORDER, theCommission required Minnesota Power to submit in its compliance filing a proposed customernotice that explains the final rates, the monthly basic servicecharges, and the expanded incliningblock energy charges for residential customers, authorized in this matter.

On March 9, 2011, Minnesota Power submitted a proposed customernotice with its compliancefiling. Since then, Minnesota Powerhas revised its proposed notice to include an explanation ofthe interim rate surcharge authorized in this matter.

This notice, as revised (please see attached) is approved and may be used as a customer billinsert.

This document can be made available in alternative formats (i.e., large print or audio) by calling651-296-0406 (voice). Persons with hearing or speechdisabilities may call us throughMinnesota Relay at 1-800-627-3529 or by dialing 711.

Attachment

www.puc.state.mn.us

PI [ONE (651) 296-7124 •800-657-3782 • tax (651) 297-7073 • 121 7,h Place East •Suite 350•Saint Paul, Minnesota 55101-2147

Rate ChangesWe have implemented changes to energy ratesfor most customers, and demand rates for largercommercial and industrial customers. The monthlyservice chargesdo not change for residential andsmall commercial/industrial customers. However, themonthly service charge for residential customers willno longer include the first 50 kWh of energy usage.

The biggest change is the implementationofnew energy block rates for residential customers.Instead of two rate levels for energy usage, therewill now be five. The new block rates are intended to

encourage conservation and result in a lower price ofenergy for customers who use less electricity.

The separate line item for Boswell 3 Environmentalwill no longer appear on your bill. The TransmissionAdjustment will continue as a seperate line item.

How the changes affect your bill will varydepending on the amount of electricityyou use.

Interim Rate SurchargeUnder state law, Minnesota Power was allowed tocollect an interim (temporary) rate increase whilethe MPUC considered our 2009 rate request. Theinterim increase of $48.5 million annually took effecton January 1,2010. The MPUC's final decision inMinnesota Power's rate case resulted in a total retail

rate increase of $53.5 million annually. Since thefinal rate increase is more than the amount collected

during the interim rate period, Minnesota Power willcollect the difference back to the November 2,2010Commission Order date, without interest, on your Julyor August bill. The interim rate surcharge amount willbe applied across-the-board to all customer classesand will result in a one-time charge of about $5.40for a typical residential customer (based upon 771kWh average monthly usage).

For More InformationFor more information about the new electric

rates, please visit: www.mnpower.com or inquireat Minnesota Power by calling 218.722.2625 or800.228.4966.

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Customer Notice

off New Electric Rates

New Electric Rates Begin With Usage on

June 1,2011

On November 2, 2009, Minnesota Powerfiled a request with the Minnesota Public UtilitiesCommission (MPUC) for an electric retail rateincrease of $80.9 million annually or 18.9 percent.The company later reduced its original request to$72 million. The MPUC issued its final Order in the2009 rate case on November 2, 2010, approvinga $53.5 million final increase, or an 11.34 percentaverage overall change in retail rates. The allowedpercent increase varies by customer class.

The approved rates will increase a typicalresidential customer's bill by about 4 percent overprevious rates in effect prior to January 1,2010.The MPUC approval increased electric rates for allcustomer classes. The amounts of these increases

are explained in the tables inside this Notice.

Final RatesFinal rates will go into effect for electric service rendered on and after June 1,2011. The following table shows howthe new electric rates will affect monthly billsfor an average customer in each customer class. The monthly increaseamounts include all line items on customer bills, including the cost of fuel, purchased power and most riders, but do notincludesales taxes and municipal franchise fees. These amounts may vary by individual customer based on energy usage.

Change in Monthly Electricity BillsAverage Monthly Average Monthly Bill—

Customer Classification kWh Usage Previous Rates Monthly Increase

Residential 771 S67 $3Seasonal Residential 333 S39 $1Residential Controlled Access 1,699 S98 $4

Dual Fuel—Residential 1,143 $73 $7

General Service 2,706 S233 $13

Dual Fuel—Commercial and Industrial 5,609 S313 S33

Municipal Pumping 19,719 31,446 S155

Large Light and Power 196,301 $12,810 $1,288Large Power 53,259,874 $2,434,586 $349,718Street and Area Lighting 404 S53 57

Residential Service

Current New

Customer Classification Rates Rates

Min. Monthly Service Charge—$/month (no change)Residential S8.00 $8.00

Residential—Seasonal S8.80 S8.80

Residential—Controlled Access $8.00 $8.00

Residential—Dual Fuel $8.00 $8.00

The new blocks of energy usage per month and theassociated cost per kWh are shown in the table below.The new block rates, ordered by the MPUC, are intendedto encourage conservation, resulting in energy savings.

Customer Classification

Current

Rates

New

Rates

Block

Rate

Levels

Energy Rates—$/kWhResidential

0-50 kWh

51-300kWh$0.00

$.04773

$.05116$.05116

1st

2nd

3rd

301-350 kWh

351-500 kWh

501-750kWh

$.04773$.08004

$.08004

$.06753$.06753

$.08186

751-1,000 kWh

Over 1,000 kWh

$.08004

$.08004

$.08463

$.08955

4th

5th

Residential—Seasonal

Residential—Controlled Access

Residential—Dual Fuel

$.07574

$.03943

$.04300

$.08253

$.04350$.05196

Commercial & Industrial Service


Current

Rates

New

Rates

Min. Monthly Service Charge—$/month (no change)General Service

(withor without demand meter)C&I (Dual Fuel Service and

Controlled Access Service)Municipal Pumping

(with or without demand meter)

$10.50

$10.50

$10.50

$10.50

$10.50

$10.50


Current

Rates

New

Rates

Energy Rates—$/kWhGeneral Service

without demand meter ($/kWh)with demand meter

energy charge ($/kWh)demand charge ($/kW)

C & I Dual Fuel Service ($/kWh)lowvoltagehigh voltage

Municipal Pumpingwithout demand meter ($/kWh)with demand meter

energy charge (S/kWh)demand charge (S/kW)

$.07084

S.05020

$4.87

$.04300

$.04025

$.07854

S.04284

S5.81

S.07854

$.05306

S5.86

$.05196

S.04809

$.07854

S.05181

$6.20

CERTIFICATE OF SERVICE

I, Margie DeLaHunt, hereby certify that I have this day, serveda true and correct copyofthe following document to all persons at the addresses indicated below or on the attachedlist by electronic filing, electronic mail, courier, interoffice mail or by depositing the sameenveloped with postage paid in the United States mail at St. Paul, Minnesota.

Minnesota Public Utilities Commission

APPROVAL OF CUSTOMER NOTICE FOR FINAL RATES

Docket Number E-015/GR-09-1151

Dated this 19th day of May, 2011

/s/ Margie DeLaHunt

First Name Last Name Email Company Name Address Delivery Method View Trade Secret Service List Name

Julia Anderson [email protected]

Office of the AttorneyGeneral-DOC

1400 BRM Tower

445 Minnesota St

St. Paul.MN

551012131

Electronic Service Yes OFF_SL_9-1151_contested case list 2

Christopher Anderson [email protected] Minnesota Power 30 W Superior St

Duluth,MN

558022191

Electronic Service No OFF_SL_9-1151_contested case list 2

Thomas Bailey [email protected] Briggs And Morgan 2200 IDS Center

80 S 8th St

Minneapolis,MN

55402

Paper Service No OFF_SL_9-1151_contested case list 2

Richard Baxendale Boise Cascade Corporation 926 Harvard Avenue East

Seattle,WA

98102


John Berklich Hibbing Taconite Company PO Box 589

Hibbing,MN

55746

Paper Service No OFF_SL_9-1151 _contested case list 2

William A. Blazar [email protected] Minnesota Chamber Of

Commerce

Suite 1500

400 Robert Street Nor

St. Paul,MN

55101

Paper Service:h

No OFF_SL_9-1151_contested case list 2

Bill Bond [email protected]

ArcelorMittal USA -

Minorca Mine Inc.

PO Box 1

5950 Old Highway 53Virginia,MN

55792


Elizabeth Brama [email protected] Briggs and Morgan 2200 IDS Center

80 South 8th Street

Minneapolis,MN

55402


Greg Chandler [email protected]

UPM Blandin Paper 115 SW First Street

Grand Rapids,MN

55744


Scott Coleman Minnesota Ore Operations- U.S. Steel

P.O. Box 417

Mountain Iron,MN

55768


Michael Darland Sappi Fine Paper NorthAmerica

225 Franklin Street

Boston,MA

2110



Lloyd Estrabillo [email protected] United States Steel Corp 600 Grant Street

Suite 2028

Pittsburgh,PA

15219


Sharon Ferguson [email protected]

Department of Commerce 85 7th Place E Ste 500

Saint Paul,MN

551012198


Ronald M. Giteck [email protected] Office of the AttorneyGenera!-RUD

Residential Utilities Division

445 Minnesota Street,BRM Tower

St. Paul.MN

55101

Paper Service

900


Elizabeth Goodpaster [email protected]

9

MN Center for

Environmental AdvocacySuite 206 Paper Service

26 East Exchange Str setSt. Paul.MN

551011667

Yes OFF_SL_9-1151_contested case list 2

BurlW. Haar [email protected] Public Utilities Commission Suite 350

121 7th Place East

St. Paul,MN

551012147


Samuel Hanson Briggs And Morgan, P.A. 2200 IDS CenterE Paper Service80 South Eighth Stree:Minneapolis,MN

55402


Shane Henriksen [email protected]

Enbridge Energy Company,Inc.

1409 Hammond Ave FL 2

Superior,Wl

54880


Linda S. Jensen [email protected] Office of the AttorneyGeneral-DOC

1400 BRM Tower 445

Minnesota Street

St. Paul,MN

551012131


Nancy Lange [email protected] Izaak Walton League ofAmerica

Suite 202

1619 Dayton AvenueSt. Paul,MN

55104



Robert S Lee [email protected] Mackal! Crounse & Moore

Law Offices

1400 AT&T Tower

901 Marquette AveMinneapolis,MN

554022859

Paper Service Yes OFF_SL_9-1151_contested case list 2

John Lindell [email protected] Office of the AttorneyGeneral-RUD

900 BRM Tower

445 Minnesota St

St. Paul.MN

551012130


Jay Lofgren [email protected]

Boise, Inc. Paper Division400 - 2nd Street

International Falls,MN

56649


Sarah Manchester Sappi Fine Paper NorthAmerica

225 Franklin Street

Boston,MA

2110


Pam Marshall [email protected] Energy CENTS Coalition 823 7th St E

St. Paul,MN

55108


Keith Matzdorf [email protected] Sappi Fine Paper NorthAmerica

PO Box 511

2201 Avenue B

Cloquet,MN

55720


David McMillan Minnesota Power 30 W. Superior Street

Duluth,MN

55802


Andrew Moratzka [email protected] Mackall, Crounse andMoore

1400 AT&T Tower

901 Marquette AveMinneapolis,MN

55402

Paper Service Yes OFF_SL_9-1151_contested case list 2

Richard L. Morgan Sappi Fine Paper NorthAmerica

P.O. Box 511

2201 Avenue B

Cloquet.MN

55720

Paper Service No OFF_SL_9-1151 _contested case list 2

Marcia Podratz [email protected] Minnesota Power 30 W Superior S

Duluth,MN

55802



Laura Schlatter [email protected]

Office of Administrative

HearingsP.O. 64620

Saint Paul,MN

55164


William Schmidt USG Interiors, Inc. 35 Arch Street

Cloquet,MN

55720


Joe Scipioni PolyMet Mining, Inc. P.O. Box 475

County Highway 666Hoyt Lakes,MN

55750


Janet Shaddix Elling [email protected]

Shaddix And Associates Ste 122 Electronic Service9100 W Bloomington I:rwyBloomington,MN

55431


Kathleen D. Sheehy [email protected]

Office of Administrative

HearingsPO Box 64620

St. Paul,MN

551640620


Jeremy Smolich Keetac PO Box 217

Keewatin,MN

55753


MPUC Approval of Customer Notification of Rates

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