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Office of Energy Security recommends smaller rate increase for Otter Tail Power

The Minnesota Office of Energy Security (OES) today recommended that Otter Tail Power Company's proposed rate increase be reduced by more than 80 percent. Otter Tail, which provides electric service to more than 60,700 customers in northwestern Minnesota, originally requested that the Minnesota Public Utilities Commission (PUC) approve an increase of over $10.6 million per year. The OES is recommending to the PUC a rate increase of no more than $1.9 million to provide safe, reliable service.

OES's recommendation takes into consideration a number of factors, including pensions, capital costs and costs of the abandoned Big Stone II facilities. In addition, OES projected higher revenues for Otter Tail, diminishing the need to increase rates.

After written testimony, public hearings and evidentiary hearings are completed, Administrative Law Judge Kathleen Sheehy will present her recommendations to the PUC. The PUC is expected to decide this matter in April, 2011.