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Dave Olson, Published November 02 2010

Moorhead electricity rates may rise

Electric rates for Moorhead Public Service customers may go up 4 percent next year, and one reason for the proposed boost is taking shape on southeast Main Avenue.

A $5.2 million, 10-megawatt generating plant being built in the area of the 700 block of southeast Main will replace the city’s existing power plant on the edge of Woodlawn Park.

The Moorhead Public Service Commission will discuss the proposed rate increase at a public hearing set for 5:30 p.m. on Nov. 9 in the Moorhead City Council Chambers at 500 Center Ave.

A formal decision on the rate structure for 2011 will be made on Dec. 14.

Moorhead Public Service raised electrical rates for 2010 by 4 percent last fall.

The increase was down sharply from increases in prior years that totaled 31.5 percent from 2007 to 2009.

Those increases were largely due to higher prices the utility paid for its energy supplies, according to Moorhead Public Service.

The utility did not raise water rates in 2010 and no increase is planned for 2011.

The city’s current power generator dates from the 1960s and serves as the city’s back-up power supply.

It is leased to Missouri River Energy Services, the city’s supplemental power supplier, which will cover two-thirds of the new plant’s cost.

Missouri River will also lease the new plant when it is operational. That is expected to be late next year when the old plant is scheduled to be decommissioned.

The new plant will have five 2-megawatt generators powered by diesel fuel.

The old plant has a single 10-megwatt generator that runs on fuel oil.

The new plant’s generating capacity will be enough to power about 15 percent of the city.

During a power emergency, the plant’s electricity would likely go to schools and colleges that would serve as community shelters, said Bill Schwandt, MPS general manager.

The proposed increase in electrical rates for 2011 would cost the average residential customer $3.63 more a month, based on power use of 1,000 kilowatt hours a month.

Schwandt said in addition to helping pay for a new power plant, the proposed rate increase would go toward a number of other things, including:

Last year, the amount the utility transferred to the city increased by about $500,000, roughly double the typical annual increase, Schwandt said.

As a result, he said, city officials intend to hold the increase in the transfer in 2011 to between $100,000 and $150,000.

Schwandt said the total transfer to the city in 2011 is expected to be about $6.7 million.

Readers can reach Forum reporter Dave Olson at (701) 241-5555