FOR IMMEDIATE RELEASE
March 29. 2006

RPU Utility Board approves 8.5% electric rate increase effective April 4

ROCHESTER, MN—Rochester Public Utilities (RPU) announced today, an 8.5% electric rate increase effective April 4.

RPU’s wholesale energy provider, Southern Minnesota Municipal Power Agency (SMMPA) announced in January a second increase for 2006, for their member utilities, of which RPU is one of 18 members. The first increase was 5% effective January 1 and the second is a 16.9% increase effective May 1. The reasons for the second increase that SMMPA offered were a 30% increase in fuel costs for 2006, a $1.5 million increase due to market prices, an extended outage of Sherco 3 for scheduled maintenance, and an increase in rail costs to transport coal. This latest rate increase from SMMPA raises RPU’s approximate purchased power cost to over $68 million.

In an effort to mitigate the effect of the increase from SMMPA, RPU has proactively been taking measures to lessen the effect to customers. Adjustments made to the 2006 budget were approximately $5 million. “We felt we needed to be proactive in taking these actions because of our wholesale power cost going up. The approximate $5 million that we adjusted on our 2006 budget was a substantial adjustment, but it will not compromise our customer service focus or our service reliability,” said Larry Koshire, General Manager for RPU. The average residential customer will pay an additional $5.25 per month bringing the average monthly residential electric bill to approximately $67.

RPU will work with customers to help reduce the impact of this increase, such as conducting energy audits. The energy audit will help customers identify where improvements can be made to make their home more energy efficient. For $25 a certified energy auditor will analyze their homes efficiency and will point out areas where the efficiency can be improved. Customers can sign up for an energy audit on the RPU web site or at the RPU service center.

Customers currently on Even Pay will see an increase in their monthly amount starting with their April billing. This adjustment is necessary in order to keep customers on the Even Pay program in balance with their actual monthly billed amount. Even Pay customers will receive a letter in the mail detailing their new Even Pay amount.

The increase approved by the Utility Board will now go before the City Council at its April 3rd meeting.