North Dakota regulators may raise Otter Tail wind charge

FERGUS FALLS, MINNESOTA - Otter Tail Power Co. is asking state regulators for permission to increase a special charge that its electric customers now pay to finance the utility's North Dakota wind energy projects.

The charge, which was first approved by North Dakota's Public Service Commission in May, is now 0.193 cents per kilowatt-hour. It adds $1.45 to the electric bill of an Otter Tail residential customer who uses 750 kwh of power each month.

Otter Tail has asked the commission for permission to raise the charge to 0.510 cents per kwh, beginning in January. The higher charge would mean the same residential customer would pay an extra $3.83 monthly.

Otter Tail has about 57,000 North Dakota customers. The utility, which is based in Fergus Falls, Minn., provides electricity to Wahpeton, Devils Lake and Jamestown, as well as dozens of smaller rural communities.

Susan Wefald, the commission's president, said Otter Tail customers who are curious about the charge may request a public hearing. The commission may hold an informal hearing on its own before it decides the case, she said.

Otter Tail first asked to levy the charge after it acquired an ownership stake in a recently built wind farm south of Langdon in northeastern North Dakota. It bought 40.5 megawatts of output from the Langdon project, which is capable of generating 159 megawatts of electricity.

Otter Tail also is acquiring 48 megawatts of the 200-megawatt output of the Ashtabula Wind Center, which is being built east of Lake Ashtabula in Barnes County. The utility has said it is investing $121 million in the project.

Commissioner Kevin Cramer said allowing the increased charge may help encourage more utility investment in North Dakota wind projects.

North Dakota ratepayers may prefer that Otter Tail have its own stake in wind projects instead of buying electricity on the more expensive spot market and passing the costs along to them, Cramer said.

"Overall, the cost of this wind may very well reduce the overall cost to ratepayers," Cramer said. "The market price... for electricity has been so high, and there's no reason to expect that it's going to go down."