Public hearing on Otter Tail Power Co.'s rate hike set for June 4 in Bemidji

BEMIDJI — An administrative law judge will be in Bemidji on Tuesday, June 2, for a public hearing as the Minnesota Public Utilities Commission considers an electric rate increase for Otter Tail Power Co.

The PUC approved an interim rate increase of 11.34%, which went into effect on Jan. 1. The final rate increase is expected to be determined in early 2027. Otter Tail is proposing a 17.7% final rate increase.

If approved, Otter Tail anticipates an increased revenue of $44.8 million.

In a notice sent to customers, Otter Tail stated its last rate review was based on 2021 costs and that the current rates “no longer cover the cost of providing reliable service.”

The rate increase, if approved, would add an anticipated $18.14 to a residential service with an average monthly usage.

“We understand rising electric costs are challenging for our customers,” stated President Tim Rogelstad in an October 2025 news release announcing Otter Tail’s intention to seek higher electric rates.

“We 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’t reflect the real costs of maintaining and strengthening our electric system.”

Otter Tail cites infrastructure investments, grid resiliency efforts, the transition to renewable energy resources and inflation as primary drivers for the increase.

If the final rate approved is lower than the interim rate set, Otter Tail stated it will refund customers the difference, plus interest. If it’s higher, Otter Tail maintains it won’t back-charge customers.

Otter Tail Power’s service area spans 70,000 square miles in North Dakota and Minnesota, and serves many cities and towns in Northwest Minnesota, such as Bemidji, Detroit Lakes, Bagley, Clearbrook, Gonvick, Cass Lake and Mahnomen.

The public hearing in Bemidji is set for 6 p.m. Tuesday at the Sanford Center ballroom, before Administrative Law Judge Christa Moseng. A virtual public hearing is also set for 6 p.m. Thursday.