Bemidji hearing set on Otter Tail Power rate increase request

A Bemidji family could see its electric bill rise by about $18.14 a month if Otter Tail Power Co. wins approval for a 17.69% rate increase, and the company will face public comment in town before state regulators make their decision.

The Minnesota Public Utilities Commission approved interim rates of 11.34%, or $28.6 million, effective Jan. 1, 2026, after Otter Tail requested $33.1 million on an interim basis. Now the utility is asking for a final increase of about $44.8 million, a move it says is needed to keep pace with infrastructure investment, grid resiliency work, renewable-energy transition costs and inflation.

The public hearing is scheduled for 6 p.m. Tuesday, June 2, in the Sanford Center ballroom in Bemidji. A virtual hearing is set for Thursday, June 4, at 6 p.m. Those sessions give customers in Beltrami County and across Otter Tail’s service area a formal way to tell regulators how the higher rates would affect monthly budgets, service reliability and the cost of living.

Otter Tail serves a broad swath of northwestern Minnesota, including Bemidji, Detroit Lakes, Bagley, Clearbrook, Gonvick, Cass Lake and Mahnomen, so the request reaches far beyond the city limits. The company filed the case with the commission on Oct. 31, 2025, and says the review process is expected to take 18 to 24 months before a final ruling.

The Minnesota Public Utilities Commission says rate cases are designed to determine just and reasonable rates after a comprehensive review of a utility’s investments and expenses. Otter Tail says its current request is based on 2021 costs from its last review, and the company argues the higher rates are needed to continue providing dependable service.

This is not Otter Tail’s first contested Minnesota rate case. In 2021, the commission approved a significantly reduced increase, and regulators said then that the average residential customer would likely see only about 4 cents more per month. That earlier ruling stands in sharp contrast to the current request, which would hit households and business customers with noticeably larger bills if approved as filed.

State lawmakers have also recently pointed to Otter Tail in broader debates over utility profits and rising power costs in Minnesota, adding another layer of scrutiny as the case moves forward. The commission is still handling other Otter Tail-related dockets, underscoring that the utility’s finances and its rate-setting practices remain under close regulatory review.