Swanson: Ban temporary utility rate hikes

The Minnesota Attorney General says she hopes the new Legislature will roll back the state's practice of allowing utilities to charge temporary rate increases.

Lori Swanson said she's asking lawmakers to change the law that allows utilities to collect rate hikes before they are formally approved.

"Right now, Minnesota law presumes that the minute a utility files a rate hike request, that they get to start putting those rates into effect, and then after the fact have to make refunds if in fact they can't prove up their case before the Public Utilities Commission," said Swanson. "Minnesota consumers are essentially being asked to be like a bank to the utilities, where ordinary consumers are floating the money or advancing the money to the utility."

Xcel Energy, one of the largest utilities operating in Minnesota, issued a written response to Swanson's proposal, saying interim rate hikes have helped the company pay for long-term investments in its power plants and transmission lines.

"Interim rates help provide timely recovery of these investments, including the costs incurred in the year or more while the rate request is under review. At the same time, the current interim rate law provides good protection to consumers, including a refund to ensure only approved costs are recovered," the company said.

Utilities have refunded more than $170 million to Minnesotans in the past five years, Swanson said. She said 18 other states have passed similar legislation, requiring approval before rate hikes can be assessed.