\nOtter Tail Power Company, a wholly owned subsidiary of Otter Tail Corporation (Nasdaq: OTTR), filed a request with the Minnesota Public Utilities Commission (PUC) to increase electric rates for its Minnesota customers. This request initiates an 18- to 24-month review process during which the PUC evaluates the company\u2019s costs for providing electric service and then sets rates in a manner the PUC deems reasonable for both the company providing the service and the customers who depend on it.<\/p>\n
\n\u201cOur customers, employees, friends, and neighbors see the costs of goods and services going up all around us, and we know that\u2019s not easy,\u201d said Otter Tail Power President Tim Rogelstad. \u201cWe\u2019ve taken a hard look at our operations to manage expenses and improve efficiency before asking our customers to pay more. This request reflects what\u2019s necessary to continue delivering the dependable service our communities count on.\u201d<\/p>\n
\nAs part of the state regulatory process, Otter Tail Power requested PUC permission to increase rates on an interim basis beginning January 1, 2026. If the PUC approves this request, the overall interim bill increase of approximately 12.6% remains in place until the PUC completes its highly structured review designed to balance public interest, utility viability, and legal rigor. During this 18- to 24-month interim period, a typical residential customer\u2019s bill would increase approximately $13.15 a month; a typical business customer\u2019s bill would increase approximately $43.67 a month. Each customer\u2019s interim increase will be different based on the rates they\u2019re on and how much energy they use.<\/p>\n
\nThe company anticipates the PUC will make its final rate decision in the first quarter of 2027; final rates likely will not impact customers\u2019 bills until the second or third quarter of 2027.<\/p>\n
\nIf the PUC approves Otter Tail Power\u2019s final rate request as filed, the net increase over what customers pay today would be approximately $44.8 million, or 17.7%. A typical residential customer\u2019s bill would increase approximately $18.14 a month; a typical business customer\u2019s bill would increase approximately $73.20 a month. As with interim rates, each customer\u2019s final increase will be different based on the rates they\u2019re on and how much energy they use. If final rates are lower than interim rates, customers will receive refunds with interest. If final rates are higher, the company won\u2019t collect the difference.<\/p>\n
What customers see in return for this rate increase<\/b><\/p>\n
\nAccording to Rogelstad, while inflation is one of the primary drivers behind this request, customers benefit from infrastructure investments that support immediate and long-term reliability; grid resilience efforts that reduce, and potentially prevent, service disruptions; and the transition to renewable resources.<\/p>\n
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- Infrastructure investments.<\/b> To support immediate and long-term reliability, Otter Tail Power is investing in the infrastructure that moves electricity to homes and businesses. For example, the company is extending the life of aging infrastructure by replacing cross arms, poles, and insulators that have been in place for 50+ years, as well as adding new infrastructure.\n<\/li>\n
- Grid resilience.<\/b> Grid resilience efforts include expanding underground lines, now covering 28% of the company\u2019s distribution system, to reduce exposure to storms and improve reliability. The company also is increasing vegetation management near power lines to prevent service disruptions.\n<\/li>\n
- Energy transition. <\/b>Otter Tail Power is transitioning to a larger percentage of renewable energy generation resources for Minnesota customers. These zero-fuel-cost resources, along with tax credits, have helped ease the transition. The company is including in this request the costs associated with no longer serving Minnesota customers with power from its co-owned, coal-fired Coyote Station in North Dakota by the end of 2031.\n<\/li>\n
- Inflation. <\/b>Otter Tail Power\u2019s last Minnesota rate review was based on the cost of doing business in 2021. Since then, inflation has increased the cost of materials, and the labor and equipment needed to build and maintain the electric grid. According to Rogelstad, the company is managing these impacts through smart planning and efficient operations, but the cost of providing service is more than it can recover through current rates.\n<\/li>\n<\/ol>\n
\n\u201cWe understand rising electric costs are challenging for our customers,\u201d said Rogelstad. \u201cWe also take very seriously our wholehearted commitment, and our regulatory obligation, to reliably serve those customers. This request is not being driven by data centers, despite what some national headlines might suggest. We would not ask for this rate increase if it didn\u2019t reflect the real costs of maintaining and strengthening our electric system.\u201d<\/p>\n
\nAccording to Rogelstad, even with this increase Otter Tail Power customers will keep paying less for the energy they need to power their homes and businesses than they would almost anywhere else in the region. \u201cWhile this is an impressive statement, we aren\u2019t competing against our neighbor\u2019s rates. We\u2019re competing against our own,\u201d said Rogelstad. \u201cOur ability to keep our rates among the lowest in the region demonstrates our tradition of working hard for the economic viability of our customers and communities, and we\u2019ll keep that tradition going.\u201d<\/p>\n
Forward-Looking Statements<\/b><\/p>\n
\nExcept for historical information contained here, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words \u201canticipate,\u201d \u201cbelieve,\u201d \u201ccan,\u201d \u201cconfident,\u201d \u201ccould,\u201d \u201cestimate,\u201d \u201cexpect,\u201d \u201cfuture,\u201d \u201cgoal,\u201d \u201cintend,\u201d \u201clikely,\u201d \u201cmay,\u201d \u201coptimistic,\u201d \u201copportunity,\u201d \u201coutlook,\u201d \u201cplan,\u201d \u201cpossible,\u201d \u201cpotential,\u201d \u201cpredict,\u201d \u201cprobable,\u201d \u201cprojected,\u201d \u201cshould,\u201d \u201ctarget,\u201d \u201cwill,\u201d \u201cwould\u201d and similar words and expressions are intended to identify forward-looking statements. Such statements are based upon the current beliefs and expectations of management. Forward-looking statements made herein, which may include statements regarding 2025 earnings and earnings per share, long-term earnings, earnings per share growth and earnings mix, anticipated levels of energy generation from renewable resources, anticipated reductions in carbon dioxide emissions, future investments and capital expenditures, rate base levels and rate base growth, future raw materials costs, future raw materials availability and supply constraints, future operating revenues and operating results, and expectations regarding regulatory proceedings, as well as other assumptions and statements, involve known and unknown risks and uncertainties that may cause our actual results in current or future periods to differ materially from the forecasted assumptions and expected results. The Company\u2019s risks and uncertainties include, among other things, uncertainty of future investments and capital expenditures; rate base levels and rate base growth; risks associated with energy markets; the availability and pricing of resource materials; inflationary cost pressures; attracting and maintaining a qualified and stable workforce; changing macroeconomic and industry conditions that impact the demand for our products, pricing and margin; long-term investment risk; seasonal weather patterns and extreme weather events; future business volumes with key customers; reductions in our credit ratings; our ability to access capital markets on favorable terms; assumptions and costs relating to funding our employee benefit plans; our subsidiaries\u2019 ability to make dividend payments; cybersecurity threats or data breaches; the impact of government executive orders, legislation and regulation including foreign trade policy and environmental; health and safety laws and regulations; changes in tax laws and regulations; the impact of climate change including compliance with legislative and regulatory changes to address climate change; expectations regarding regulatory proceedings, assigned service areas, the construction of major facilities, capital structure, and allowed customer rates; actual and threatened claims or litigation; and operational and economic risks associated with our electric generating and manufacturing facilities. These and other risks are more fully described in our filings with the Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K, as updated in subsequently filed Quarterly Reports on Form 10-Q, as applicable. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update any forward-looking information.<\/p>\n
About the Corporation<\/b>: Otter Tail Corporation, a member of the S&P SmallCap 600 Index, has interests in diversified operations that include an electric utility and manufacturing businesses. Otter Tail Corporation stock trades on the Nasdaq Global Select Market under the symbol OTTR. The latest investor and corporate information is available at www.ottertail.com<\/a>. Corporate offices are in Fergus Falls, Minnesota, and Fargo, North Dakota.<\/p>\n
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View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20251031774648\/en\/<\/a><\/span><\/p>\n
Investor Contacts<\/b>: Beth Eiken, Manager of Investor Relations, (701) 451-3571
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Media Contact<\/b>: Stephanie Hoff, Director of Corporate Communications, (218) 739-8535<\/p>\nKEYWORDS:<\/b> Minnesota United States North America<\/p>\n
INDUSTRY KEYWORDS:<\/b> Utilities Energy<\/p>\n
- Grid resilience.<\/b> Grid resilience efforts include expanding underground lines, now covering 28% of the company\u2019s distribution system, to reduce exposure to storms and improve reliability. The company also is increasing vegetation management near power lines to prevent service disruptions.\n<\/li>\n
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