Rate changes effective January 2009

November 2008

There’s no way to sugarcoat this article. In fact, maybe the word announcement better describes this particular communication than the word article. The announcement is that we need to increase our retail rates in January 2009. For residential accounts, the rate increase will average about 8.5 percent. You will first see the effect of this rate change on the electric bill, which is payable during the first part of February.

By far, the majority of the revenue that is needed with this rate increase is because of higher wholesale electric bills we will be paying to our power supplier, Minnkota Power Cooperative. In March of 2008, Minnkota increased our wholesale rates by 3 percent. We made no changes to our retail rates at that time. In March 2009, the Minnkota wholesale rates will again be increased, this time by 13 percent. The effect of these two wholesale rate increases will be that our 2009 wholesale power bill will be at least $5 million greater than our wholesale power bill in 2007.

For our general service, typically residential accounts, the monthly facility charge will increase by $2 per month in 2009. The per kilowatt-hour used charge will be a flat 7¢ per kilowatt hour. In 2008, you paid 6.5¢ for the first 4,000 kilowatt-hours and 6¢ for anything over 4,000 kilowatt hours. The percentage increase on your power bill will depend upon the amount of power you use and which of the three general service categories you fall under.

Our off-peak rate for 2009 will increase from 3.6¢ to 4¢. This is a lesser increase than the general service rate increase on a cents per kilowatt-hour basis, but on a percentage basis, it calculates out to 11.1 percent.

If there is a bright spot in all of this, it is that electricity still has the best price stability of any form of energy. Also, electricity from any utility in North Dakota is far less expensive than many other parts of the country.