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NERA's Role in Otter Tail Power Company Rate Case
The Situation
In October 2007, Otter Tail Power Company filed a general rate case with the Minnesota Public Utilities Commission seeking to increase rates for electic utility services in Minnesota.
NERA's Role
Otter Tail commissioned a NERA team led by Special Consultant Dr. Hethie Parmesano to conduct a marginal cost study and provide rate design assistance. Dr. Parmesano also testified in support of the marginal cost study and rate design elements.
The Result
On 1 August 2008, the Minnesota Public Utilities Commission granted Otter Tail Power Company a revenue increase of $3.8 million, or about 2.9 percent, to address rising costs and growing energy use. The new rate structures, based on Dr. Parmesano's marginal cost study and rate design assistance, improve the economic efficiency of the price signals to customers and reflect the effect of Otter Tail's participation in the regional energy market on the company's marginal costs.