Northern States Power rates hike controversy

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Rachel Kranz report on the controversy with the attempt by Northern States Power to raise its electric rates and the attempts by citizen groups to oppose the rate hike. Kranz examines how rates are set, how the company justifies its request for a rate increase, and why critics of NSP feel the publicly monitored utilities request should be denied.

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The new facilities that we build today are costing 100% more than they did 6 years ago. They're going to cost probably 100% more 8 years from now. This means that we predict. In the next 10 years that we will spend 4.3 billion dollars. And new facilities in next 10 years NSP is talking about conservation. They tell consumers to turn off their lights and things of that nature. But all the time they're doing this they're constructing more and more plants which are going to increase our cost considerably historically there was a time when electricity where I can on Maclay per unit than the previously existing a generating stations, but that's no longer true. In fact the turnaround. It's been very sharp Now new energy at generating plants produce electricity that per unit is far more expensive than the existing system. So the Outlook is that electricity will become a more and more costly, Minnesota Energy. Agency director John Mahone mpreg intern Seth Johnson and NSP President. Donald McCarthy can all agree on one thing if NSP continues its current practices electric bills are going to go up but they can't agree on is more complicated. How much should bills go up who's Bill should go up residence big business small business or even whether or not different NSP practices could in fact keep prices down. Some of these questions will be decided by the Public Service Commission after months of hearings and legal arguments and SP has asked for increases totaling 48 and 1/2 million dollars, which represents a straight 11% increase for all classes of consumers the Public Service Commission conducts a complicated process of taking testimony from NSP from intervening parties who represent various interest and from Individual members of the public themselves. Though there are still some legal challenges to be cleared up the interveners this year will probably include mpirg the Metropolitan senior Federation and the cities of Saint Paul and Minneapolis. The interveners are not only concerned with the size of NSF fees rate increase their also concerned with how that increases divided among residential and Commercial customers. What is known as rate design. There are several conflicting theories on rate is on some Economist claim that the only Criterion for an electric rate should be what it cost the company to provide the electricity since different customers visit different cost utility establishes. What are known as customer classes residence small businesses and large businesses and he's one of those groups pays a different rate for its electricity currently and it's because that cost is the major basis of its rates some Economist say that cost should be the only basis but some Economist and intervenors this year believe that Rachel beset by different standards. They believe that rates could be designed to promote conservation or to ensure that poor people are able to afford electricity. These Economist believe that a publicly regulated Monopoly should set its prices by different standards than a private unregulated competitive company. And of course, there are those in the middle life Public Service commissioner arliner doll. I think our first role is to make economic judgment because we are not charge was being social Engineers. I think that's a function of caring for people that whatever the reason might be need help. So government the function of the legislation that Congress and that primarily of our commission which I view as a economic regulating agency, but this does not say that we are completely void from the concerns and feelings in this area. So I think the other things frankly do hunter in a large part this has to do with the high cost of construction inflation in both the energy and the construction industry is so severe that every time a new power plant is built it dries up the cost of life. Today bus if demand for electricity increases construction will increase and cost will go up Minnesota Energy agency director John milhoan believes that even if total energy demand stops increasing the demand for electricity will continue to increase because of the substitution of electricity for more scare sources of power, like fossil fuels so milhoan predicts an increase in electric bills that will be higher than the increase in the total cost of living and SP officials agree that expensive construction drives their prices up and they predict that energy usage will increase at a rate of about 6% a year requiring almost double their present generating capacity in 10 years and more energy increase our profits by increasing the demand we have to go out and raise more money. And that's not easy these days. The interest rates are high. I just don't I just don't buy the theory that having a bigger investment is going to mean more money for the for the investor fact, I think of anything probably the opposite is true free with NSP President Donald McCarthy. Neither with his reason ignore with his fact a group called The coalition to stop the rate hike doesn't believe that NSP should get any rate increase this year. They point to NSP record profits of last year as an indication that the company doesn't need more money. They do agree that construction draws costs up but they don't agree that more construction is necessary. They cooled PC a board member in electrical engineer Steve gadler who maintains firmly that customer demand at least is not going up by 6% He says that the figure was more like 3% or maybe even 0 At least one group in the Coalition the farmer labor Association a populist caucus within The dfl Advocates the public ownership of utilities as the only really affected means to promote conservation and keep costs down SLA member Ed Faline has been advocating public ownership of power ever since he first let us study on the matter as former Alderman on the Minneapolis city council every instance that we've examined Public Power the rates are much cheaper and services much more friendly. The state of Minnesota is fortunate in having approximately 167 Municipal Lyon electric companies where the city's own their own electric company in and serve serve the customers in the in their city in almost all of those instances instantly all the ones that we looked at the rates average 2/3 that which northern states power charge of the people of semen. And that was even true of Rochester Minnesota which buys their electricity wholesale from northern states power and then sells it retail to the citizens of Rochester. So if Rochester with a municipal Eon electric company, which doesn't even generate electricity, but just retails electricity can sell electricity for two-thirds of what we pay for it in the city Minneapolis, then certainly it seems to me that their exorbitant profits in the rate structure and in the way in which the citizens of Minneapolis anyway are being forced to pay for the and subsidized the profits of northern states power to understanding electricity question is that the fact don't necessarily give you any answers. First of all, even when opposing sides can agree on the fact they're often able to come to opposite conclusions. Anyway, each sighting those same fact, but in the second place off and they don't even agree on the fact is the man going up or RNs peace profits too big to small or just write the answers to these questions are a matter of opinion far more than a fact and yet these are among the crucial questions for deciding and SP policy. The Public Service Commission is charged with a Monumental task of setting utility rates in a way that is both fair to the people of Minnesota and profitable to the owners of the utilities public interest versus private profit. Those are the two poles of the conflict with the PSC tries to mediate with varying degrees of success the Public Service Commission as it exists today is actually a relatively new institution. It was established by the legislature in 1975 as the overall Authority for gas and electric companies in Minnesota, except for those utilities that are municipal e or publicly owned before its powers were widened. It concerned itself mainly with gray and warehousing transportation and the telephone companies Minnesota was at that time one of three or four states in the nation without Statewide power ranking. Interesting me enough. Although Minnesota gas company fought the psc's power right up to the Minnesota Supreme Court and SP has supported Statewide regulation from the beginning Public Service commissioner Richard Parish, formerly the state legislator who fought for regulation for almost 15 years says that Statewide regulation is really to NSP is Advantage. He says that consistent regulation makes the economy more predictable for the company as opposed to an unregulated state in which the company has to negotiate with a plethora of cities and suburbs they found out that they were spending endless amounts of money to go to the council meetings do and they never knew where they were at and I suppose that the in a regular industry where they were in the surrounding states regulated. They always had the answer the question. Yes, but what are you doing with your lines in Minnesota? And that always was a problem then if they then moved to regulation hear the Assumption was at least there was some similarity and that they could rely on those figures Tracy. They didn't do this at a charity but it did make common-sense serious questions about what the psc's role in regulating supposed to be the psc's ruling on nsps 1975 write request was challenged by the Saint Paul Area Chamber of Commerce, the Chamber of ejected to the PSC incorporating. What's it called social judgments into its right structure. The chamber's felt that only economic data should be considered and Ramsey Court Judge high and Siegel agreed Siegel overturn the PSC decision, which is currently being once again appealed by the PSC the PSC maintains that it does have the right to make social judgments. But even on the Public Service Commission, there are differing opinions about how to balance social and economic judgments. This difference stems from a conflict inherent in the psc's major task setting a rate of profit. That's fair both to the stockholders and to the customers one of the most interesting questions I think is whether the fairness of the return should be looked at in terms only for the investor or weather. That fair return also relates to Fair rates suppose that you determine that all utility companies of a certain type or earning 6% return on their investment and you had a company before you which one you gave it a 6% return that resulted in rates which were rates for the customers which were substantially higher than the rate for other companies. Now is that 6% still fare under those circumstances? Is basically a philosophical question. I think which involves a great deal of judgment with an art it is no way a technical science commissioner Catherine's a serval says with the commission asks many questions during its attempt to find a fair rate of return questions, like what are comfortable companies are named. What's the going rate of profit for investors? In other parts of the economy and is the company operating efficiently enough to deserve an increase in profits, but says it all stresses that balancing the answers to the questions is a matter of judgment policy. Not at all a question of Simply obeying economic law. Some observers feel that the role of the PSC as described by the legislature is essentially unclear as evidenced by the conflict over judge seagulls decision representative Gordon Voss for a sample who's been heavily involved with energy legislation thinks that the legislators energy policy is not coherently expressed among state agencies, the Minnesota Energy agency decides whether or not to let a company build a new plant it Deals Only with the question of energy. Is there a demand for more electricity then to environmental agencies deal with the location of the plant hear the laws unclear but it seems that once the energy agency decides that the plant is necessary. The environmental groups probably can't reject the plant on environmental grounds. They can only choose the least objectionable site. then the Public Service Commission steps in its supposed to set rates for the company that will allow it to recover necessary construction costs presumably the energy agency thinks that a plant is necessary when it gives permission to build one but conceivably the Public Service Commission could disagree and then not set rates to cover construction cost already authorized by another agency boss says that more coordination must come from the legislature, but we lead in by recognizing our problem with energy and pieces with past three pieces of legislation all thinking of them as separate as separate problems, and the difficulty is that they're not separate problems that far that the problem of the interaction of of energy production and energy consumption of energy conversion with environment is is a very real one in some of those Environmental Policy things are related to the to the same kinds of things that have to Do with the with certificates of needs and demand and I believe that we're going to have to pull this is legislatively. This is the action of legislature and I would guess this next session. We're going to have to pull those three laws together adjust them so that they're consistent so that your decision is a total decision and what you balanced all the factors and which there is a time schedule set out for decision-making groups that Advocate Public Power wonder if the Public Service Commission can ever adequately regulate a private company at Selene is a member of the farmer labor Association a populist dfl caucus and he's a former Minneapolis Alderman who let his study of Municipal e on power in Minnesota. He says that there is no way of reconciling a private companies need for profit on the Public's need for service with the the way in which the Public Service Commission is set up and the way in which the hearings are conducted you're dealing with Givens that are laid out for you by northern states power. In the the amount of teeth that the Public Service Commission has was made I think manifestly cleared. It was just a few weeks ago with the district court in St. Paul overturning Public Service Commission set a decision on rate structuring and going along with the Run Estates power is the original intention and that was to give the Industrial and Commercial uses of a better brake and residential users. And so you have a really dummy Corporation set up there in the Public Service Commission without any kind of teas at all and it's simply a rubber stamp for anything at nine states power. Once Public Service Commission. Would they do agree with Faline at others that it is often difficult for members of the general public to compete with nsps resources and its team of expert lawyers and Economist who prepare cases before the PSC. In fact, both commissioner sassa Villa in Paris feel that the PSC itself is either understaffed or in danger of becoming so because of low pay for staff members during the recession and paid lower wages are now being taken away from us by people who will pay more even the state of Minnesota has to get in there and pay a considerable sum of money that stand up on meat on an equal footing the utilities were regulating and this is one of the things we dramatically need is an extension of our staff. We going to meet the utilities on their own grounds and fight them toe-to-toe and that's the only way we can protect the public and SP itself has somewhat mixed feelings about the PSE on the one hand rate researcher Keith Sorensen says that it can be frustrating and expensive to keep up with government demands for information and testimony. On the other hand and it's be President Donald McCarthy points out that NSP has always supported Statewide regulation. He says that there may still be a few bugs in it, but in general his company and the PSC have a good working relationship the central question in the revenue increase matter and it's a tough question is what is a fair amount of profit. It's a tough question for the same reason that the whole electric rate question is tough the answer all depends on how you look at it and whose interests you consider more important as public service commissioner. Catherine's acetyl puts it are you talking about the interest of the customers to keep prices low or the interest of the company to keep profits High the company itself doesn't recognize a conflict between its needs and the needs of the public but many citizens groups do see a conflict. Who do you believe NSP is a publicly protected Monopoly that is no other electric companies allowed to compete with it and its own territory since it is a monopoly the Public Service Commission sets. Both its rates that is its prices and its rate of return that is its profits this year. And SP has asked the commission to increase the rate of return from about eight and a half to about nine and a third percent NSP board chairman. David McIlroy says that is a private Enterprise and its pee must stay competitive in a market where the cost of capital is going up but Public Service commissioner arliner, the things that the company is already competitive Capital by have by their rating for sampling the bond rating. They have a double-a or Triple-A rating. I think that NSP has a good rating at the present time and other factor is that their stocks are selling above the book value. They're paying a dividend which they've done. I think these things are things that are attractive to the institutional investors individual investors. And in spite of the fact that maybe NSP I was a disappointed with the and return that we granted in the past case. We ordered to refund a 22 million dollars at the stocks haven't really gone down there still paying a dividend. I think they're healthy company from 1974 to 1975 and its peace profits went up considerably stockholders earnings increase from $2.40 to $2.95 a share dividends also went up about two and a half cents a share and in the first quarter of 1976 earnings went up about $0.04 a share and it's p board chairman McElroy attributed the increases in part to rate increases, but in the second quarter and ESPYs earnings went down $0.13 a share and those declines were attributed in part to the operation of the new Circle plan. The company is worried about the decrease in earnings, but company critics say that one sugar gets going the company's profits will be back up again. So the facts are there, but which ones you choose depends on your point of view a group known as the coalition to stop the rate hike doesn't believe that NSP should get any increase revenues at all. The Coalition includes environmental groups, like clear air Clearwater unlimited and Mecca as well as Community groups, like the Minnesota Tenants Union and the Minnesota recipients Alliance. It also includes a local union state Senator Alan spier & state representative Janet Clark. The group is trying to mobilize public opposition at PSC rate hearings by pointing out and ESPYs record profits last year. What NSP is done in effect is told the Public Service Commission that its costs are going up. So it needs more money one way to get more money is to raise its prices enough to cover its cost. By the way. These costs don't include fuel cost which are already automatically charge rate increases. They don't have to go through the PSC all other cost to do have to go through the PSC and some kinds of cost the PS. He won't allow this year and SP is trying to pass on to especially controversial kinds of cost to its customers. Those cost are certain charitable contributions, mainly dealing with Health and Welfare and certain advertising expenses mainly dealing with safety and conservation. And if he President Donald McCarthy says that charity and public service advertising are a part of the cost of doing business in Minnesota is not asking For any money from his right bears for Goodwill advertising. NSB in his current rate case is only asked for advertising expense that we believe is in the customer's best interest. We believe that the any advertising we do on conservation working trying to help the customer how to use energy wisely how to use less of it is in his best interest and we think that's a legitimate advertising expense as far as charitable contributions. You can work both sides of that then I guess we have said that we think that there are some charitable contributions that NSP makes we think are in the customer's best interest. We think our contribution United Way, which is our biggest charitable contribution is a direct benefit. To our customers and the we think we oughta be able to recover. This is its charitable expenses on to its customers. It is an Essence forcing its customers to contribute to certain Charities through their increased electric rates. And he says they will still qualify for a 5% deduction for charitable expenses on their income tax and why Rothenberg admits that NSP ought to be allowed to charge its customers for the cost of Public Service advertising he suspects that much of their advertising isn't really public service, but just plain old advertising either on the television Media Radio or the newspapers and it turned out that lot of this advertising which was ostensibly according to MSP used to promote conservation was nothing of the sort rather it extolled. The policies of NSP with supposedly encourage conservation to really what the advertising did was to promote Goodwill 4nsp among the public and for that reason Public Service Commission ruled that virtually all the advertising of an SP was directed primarily to promoting Goodwill in good feeling tight and SP and not toward providing direct benefits for the customer on that limited amount of advertising which did provide direct benefit to the consumer the commission ruled that this could be added onto customer bills. But this is a relatively estimates that charitable expenses would only add about $0.16 a year to the bill of the average resident and advertising expenses would only add about $0.36 a year but Elliot Rothenberg says that these things add up and besides he says it isn't the money it's the principle of the thing. Even if NSP is not allowed a larger rate of return however nor its advertising and charitable expenses as part of its rate increase. The company's cost are still going up why well since 1969 or so, there's been a major shift in the economics of the electrical industry before that time every new power plant drove cost down because every new plant could generate electricity more cheaply than the old ones technology cheap Fuel and economies of scale meant that the more electricity NSP sold. The more its cost went down. Buy 1969 external developments in the economy and internal developments in the electricity industry combined to turn the situation around completely at that point every new plant was so expensive that new construction drove prices up not down. This means that cost will continue to rise as demand Rises which raises serious questions about how to keep prices down in the old days. The companies were awarded the big users because they were cheaper to supply these days according to commissioner at all companies will have to develop more conservation-minded pricing the past. When is the old I had used to say the promotion laps in the company electricity is Penny cheap and it isn't any cheap anymore and often times. Some of the big users have been the ones that have contributed to the peak in the peak of car says when the electricity gets to its highest point during a particular. Of time and the company must have facilities Bill 2. Operating just applied to service during they speak. It isn't only the big industrial uses of cars that have contributed to that. We have the homeowners the residences at the here in Minnesota with a summer peeking area and the big got a big factor air conditioner. And so I think we should be taking a close. Look at how do we deal with a peak load? How do we deal with Peak pricing? But obviously if the big customers have been receiving their electricity almost at cost or someplace and maybe below-cost. I don't think this is fair to the other subscribers in the system electrical cost on construction, but they don't agree on which electrical consumer classes are responsible for new construction that leads to the question of the rates affect on conservation do any species rates for different consumer classes encourage or discourage demand for electricity on that subject to there was considerable disagreement. The minute you start to look at rate design theories you descend into a quagmire of conflicting social economic and political philosophies in the end. What emerges is a sense that while economic data can help you construct a right design only philosophy can help you choose one. The reason is that each different rate design theory is directed towards a different goal for example, and it's p screw right design is based for the most part on cost. They want to charge each type of customer residential big business small business what it cost them to provide the electricity however, and its pee officials say that some other social factors are taken into account such as to a very limited extent ability to pay. The goal of a cost-based rate is to make sure that no one group subsidizes another and to prevent a group taking advantage of artificially low rates and over-consuming. Other white design theories place a premium on other goals Lifeline pricing for example would charge a bare minimum for the first few hundred kilowatt-hours just enough for a poor family too light at a house in rice refrigerator under that system, which has been adopted in some places. The lifeline rate for the first few hundred hours would stay low even as other rates went up. MSP officials deny that a Lifeline rate would really benefit the poor as a professor has to do they claim that there was little correlation between poverty and low usage of electricity and that providing a blanket low-rate might even drive electricity consumption up for those whose use now Falls beneath that lower limit. Another kind of right to sign is directed towards conservation. It's called time of day pricing and it would drive up the price for electricity use during peak hours. That's because often generators built to provide for electricity needs during peak hours. Say hot summer afternoons stand idle the rest of the time if the pq's could be cut down maybe the new generators wouldn't have to be built. The Public Service Commission is very interested in time of day and is currently studying that system the main problem with it seems to be that time of day meters are so expensive. They aren't worth installing except for the really big users. They wouldn't be able to be used to discourage such a widespread residential use of electric air conditioners. MSP officials also say that in fact stores and industries have very little flexibility to avoid Peak periods. But the point for the Public Service Commission is not necessarily to find the perfect rate system because it isn't likely that any system can mediate perfectly between the competing interests of conserving electricity helping the poor and Performing economic calculations. The question is in a publicly regulated industry what criteria should be used to decide how much different people pay dick 11th and progressed Archer has not only in business to make a profit for its shareholders in the sense that most patients are it's a regulated Monopoly. So the we are citizens essentially established the Criterion by which NSP for maximize its profits. If we choose to give it a setup to build a lot of plants and sell a lot of energy and say that's the way you will become wealthier. That's what it will do. If instead we regulate it to give an incentive to use less energy to conserve reward conservation efficient use then that's what it'll do. So it's our choice here have an increase in energy costs presumably it would be to everybody's interests to figure out who is causing the increase in electrical demand because the more demand there is the more expensive power plant NSP has to build and the more power plants and if he has to build the more the rates go up, Public Service commissioner arlander doll says that formally big users actually drove costs down because each new power plant with cheaper than the one before and those days big uses were rewarded with big discounts. Now it all says that big users are causing big construction and that's driving rates up. He says that the right design should reflect that you use a cheaper you get it and this runs in my mind somewhat counter to the idea of conserving energy because what's the incentive of conserving if the more you use a cheaper you get for unit cost? I think that while our considerations are basically economic this doesn't mean that we don't deal with things of social concerns or frankly some political concerns. The problem is nobody can agree on whether or not major industrial users are the ones who were responsible for the big increases Minnesota Energy agency director. John milhoan says that blaming the large users No answer. I think it's a rather simplistic to say you're the big users or industry or the big guys are causing the problems. We benefit from The use of electricity in many many ways in the commercial sector because we shopping stores are employed by stores in the industrial area because we use the products of Industry of many of us work good for industry. Now in all of these areas we can and we should use the energy that we use far far more efficiently than we are but it's not the very accurate. I think to try to pick out one Boogeyman I say this guy is causing the problems. We are all gluttonous in our energy habits and we have to all work together to use our energy much more efficiently some of NSP Zone figures conflict on the matter of who's responsible for Rising demand in 1975. For example, residential users accounted for a full 35% of kilowatt hour. Sales, while small businesses used only 15% of the total large users. However used almost half 46% but all commercial and Industrial users put together had only increase their summer load by slightly under 1% while residential summer load increased by almost 18% So it would seem that wild commercial users use more Energy residential use is increasing faster in that case. How do you decide which group is responsible for all the new power plants which are making Costco up and how do you design a rate structure to reflect that? On the other hand electrical engineer Steve gather of the pollution control agency is suspicious of company figures about electric man. And he says that in order to really understand electrical usage you have to do a total utility industry study for the whole state and really figure out who's using what kind of power He suggests that Minnesota with its cool lakes may be a prime spot for nuclear power plants that Supply electricity to the nation's industrial centers feel Winnipeg in Chicago. He says that any company figure of demand like it's projected 6% you could easily cut in half at least gather believes that NSP may be supplying energy to out-of-state Industries then charging the people of Minnesota for construction cost through the rate increases. He says that NSP appears to be promoting conservation but is actually subtly promoting increase usage. Then it can take its figures to the Public Service Commission and the Minnesota Energy agency and use them as an excuse to raise rates and build more plants gather is right and its pee would have no incentive to promote conservation and its rates are likely to benefit large users. But NSP side several examples of conservation steps. It is taken among them and expensive meter for the largest users that penalizes them for using large amounts of electricity at one time. And if he also claims to have discontinued its discount rate for the most part the fact remains that whether or not it cost and SP less to provide big users. Big users are certainly paying less per kilowatt-hour than residents about $0.04 an hour less. Yet NSP claims that rates are designed so that small businesses in effect subsidized residence while large businesses pay their own way right research or Keith Sorensen says that if rates were based totally on cost resident rates would go up about 25% small business rates would go down about 15% and large business rates would stay about the same course. It's got another critics are right it cost more to serve the industrial users. Possibly the ones out of state because they're the ones causing the construction if milhoan is right. Everybody is causing the construction and it's 11:00 is right. Maybe we don't want an SP2 base electrical rates on cost Eddie's. Anyway, after all even NSP Zone researcher Sorensen admits that nsps cost of these are not definitive. They're just estimates and interpretations of some economic statistics the original question remains what philosophy should be behind setting electrical rates. Critics of NSP including members of the coalition to stop the rate hike and employees of mpirg feel that NSP is practicing unwarranted expansion. The reason they say is simple and its peace rates are based on a percentage of the amount. It has invested in its capital plants. It's difficult to increase that percentage but it's easy according to the critics to increase the capital plan. Does NSP is still making a 9% return on its investment. But since the investment is bigger, so is the 9% MSP officials and others react with astonishment to this Theory and critics react with astonishment to and his peas astonishment. The critics are sure that NSP is eager to expand but NSP and others including Minnesota Energy agency director, John milhoan and public service commissioner. Catherine's a civil say that NSP would have to be crazy to expand a today's high cost of capital. We have $100 investment and we're allowed 9% We pay that investor $9. But if we have $1,000 investment that's 10 times as much we pay out 10 times as much as night. We are at we're still right where we were before. A person is making $9 out of a hundred or making $90 off $1,000. No better off and he's not going to excuse me, he or she is not any better off when they're getting the same rate of return and that all we're asking to do is is to Ensure our investors that they are allowed an adequate return on their investment. We're not out and we don't have people beating on our doors to want to increase the the book value want them to increase the net worth of the company. There's plenty of opportunities for the investor to invest his money in the American system today and nasb is he's not looking NSB to create that opportunity for President Donald McCarthy and other NSP and public officials. Say that 4nsp to expand would be financially irresponsible Keith Sorensen and a spear a researcher explains that rates are based on the average cost of electricity. But each new plant cost more than the average according to Sorenson by the time NSP can raise its rates to cover the cost of the new plant. It's lost money because costs are going up faster than the rates can keep up with them. It's true that NSP doesn't have to wait to set its rights. It can set them first and get permission from the PSC afterwards. But Sorensen says that the company does not like to depend on unapprove rate increases 4th income. Ethylene of the farmer labor Association a populist caucus within the dfl and a member of the coalition to stop the rate hike agrees that such expansion would be financially irresponsible 4nsp. He thinks that NSP is indeed financially irresponsible something that the company denies Faline says that the company could afford to be irresponsible because it feels sure that it can get support from the PSC. We don't need all these nuclear power plants. These nuclear power plants are built for two reasons one because NSP gets a nice healthy 9% right off the top and the increased production increase Capital outlay increases their profits and second. They want to build the plants here because they can't build a build them elsewhere so they can wield the electricity into Winnipeg Canada or Chicago, Illinois where they can again solid for a higher profit. There is no consideration for The real needs of the people in Minnesota or for the City of Minneapolis. Of course, there are public expansion, but just as critics and the company cannot agree on the company's financial responsibility. They also cannot agree on the effectiveness of the monitoring agencies before any plans can be billed the Minnesota Energy agency has to give it a certificate-of-need directory millhone says that he's comfortable with a certificate Sydney that have already been granted and he believes that NSP is reluctant to expand unless absolutely necessary others. Like Celine are more skeptical of government agencies. So once again, like so many questions in the energy business, it comes down to the question of whom you choose to believe that's not to say that there aren't facts supporting both sides but facts have to be interpreted and critics complain that in any case with their limited Financial Resources. They have a difficult time getting access to the facts that would permit them to build a comprehensive case against in his pee pee see a board member an electrical engineer Steve gadler believes that it's Jenna's piece advantage to expand and he thinks that the company is unwisely expanding charging the people of Minnesota for the energy sent to Winnipeg and two other industrial centers, but gather says that it's difficult to prove just how much electricity the people of Minnesota really want both because he claims that NSP has been promoting electricity and because he's dependent on the industry for his statistics mean while he says anybody's guess about expansion is as good as the president of nsps. This is Rachel Kranz.

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