ISHPEMING - The Upper Peninsula Power Company (UPPCO) is seeking to raise electric rates for 2014.
On Friday, UPPCO applied to the Michigan Public Service Commission (MPSC) for permission to raise retail electric base rates by 8.1 percent.
While the net effect on customers would vary by rate classification, if approved, the average residential customer in the Integrated System using 500 kilowatt-hours of electricity per month would see an increase of approximately $10.15 per month.
An average residential customer in the Iron River System using 500 kilowatt-hours per month would see an increase of approximately $10.09 per month.
The MPSC oversees the rates UPPCO charges and must approve any rate increases.
Actual increases may change as UPPCO works with the MPSC and conditions change.
The major reasons for UPPCO's request are directly related to the following increased expenses:
- Required safety improvements at the Victoria and Prickett hydroelectric generation plants.
- Rebuilding a generator and other improvements at Hoist hydroelectric generation plant.
- Improvements to the electric system for increased reliability.
- Increased tree trimming to reduce weather related outages.
- General inflation.
"We know rate increases are difficult for our customers," said Jodi Pineau, UPPCO customer operations supervisor. "Unfortunately, they're necessary for us to ensure the safe and reliable energy that customers depend upon. We have made efforts to reduce costs such as healthcare benefit changes that have resulted in significant savings."
UPPCO officials noted that their service territory is large and sparsely populated.
"As costs to maintain our large distribution system rise, we have fewer customers per miles of electric line to share the costs than a more compact urban utility," Pineau said. "Still it's never easy raising rates."