April 11, 2011
Minnesota’s current utility policy unfairly targets business ratepayers and sends the wrong message to our state’s job-providers. We need to provide fairness and predictability in rate case revenue allocation, which will help encourage economic growth in Minnesota. For some businesses, the price of energy is 25 percent of the overall cost of production. Businesses like these need to know that regulators will not use their rates to subsidize those of other customers.
Minnesota needs to continue its tradition of competitively priced energy. Large employers are often large energy users, and energy pricing and policy are among the primary factors a business considers when determining whether to move to, expand in or leave a location. For some Minnesota companies, our rate policy is too unpredictable to promote development.
The Public Utilities Commission has used energy rate-setting procedures as a means to burden the business community, creating harm not just to business but to the residents who rely on these employers for their livelihood.
Advocates of subsidies at the expense of business rely on a 1970s case that claims business can absorb and pass on rate increases more than other classes. This is simply untrue. Today, more than ever, our Minnesota businesses are competing on a global level. No business can take on unnecessary operating increases and simply pass those along. Markets are not set in a neighborhood, but increasingly on a national or international scale. We need to make sure Minnesota energy rates remain competitive.