Otter Tail Power Company receives Minnesota Public Utilities Commission approval on Integrated Resource Plan
Yesterday the Minnesota Public Utilities Commission (MPUC) approved Otter Tail Power's, a wholly-owned subsidiary of Otter Tail Corporation (NASDAQ:OTTR), resource plan containing many elements of the settlement between Otter Tail Power and other parties filed April 2, 2024, in the company's 2022-2036 Integrated Resource Plan docket.
The MPUC decision:
- Allows Otter Tail Power to retain the reliability benefits of Coyote Station while running the portion of the plant used to serve the company's Minnesota customers for emergency purposes only. This will begin as soon as June 1, 2026, and end no later than 2031. At that time, the company's Minnesota customers will no longer use the capacity of or energy from Coyote Station. The MPUC's decision doesn't require the company to withdraw from Coyote Station or change how the company operates Coyote Station to serve its North Dakota and South Dakota customers, even beyond 2031.
- Allows the company to begin creating project plans for replacement energy for the portion of Coyote Station used to serve the company's Minnesota customers—and allows the company to make progress toward the Minnesota Carbon Free standard. Otter Tail Power will develop plans for 200 to 300 MW of solar resources, 150 to 200 MW of wind resources, and 20 to 75 MW of battery storage to be commercially operational between now and the end of 2029.
- Recognizes Otter Tail's proposal to add on-site liquefied natural gas storage at its Astoria Station natural gas facility, a shared resource across the company's three-state service area, is reasonable and prudent to protect system reliability and provide price protection for the company's Minnesota customers. This recognition takes the company one step farther in the regulatory process to add on-site fuel at Astoria Station.
"We appreciate the working relationships we have with the Minnesota Department of Commerce Division of Energy Resources, International Union of Operating Engineers Local 49 and North Central States Regional Council of Carpenters, and Laborers' International Union of North America Minnesota and North Dakota (LIUNA) who supported our settlement going into the final hearing," said Otter Tail Power Company President Tim Rogelstad. "And we gratefully acknowledge the MPUC's ability to manage extremely challenging dockets and continue to demonstrate its commitment to best addressing the needs of our customers."
Otter Tail Power serves customers in three states: Minnesota, North Dakota, and South Dakota. The company has an Advanced Determination of Prudence (ADP) request pending with the North Dakota Public Service Commission for the on-site fuel project at Astoria Station. The South Dakota Public Utilities Commission doesn't have a project preapproval process, so Otter Tail Power is not awaiting any related decisions in that state.
FORWARD-LOOKING STATEMENTS
Except for historical information contained here, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words "anticipate," "believe," "can," "could," "estimate," "expect," "future," "goal," "intend," "likely," "may," "outlook," "plan," "possible," "potential," "predict," "probable," "projected," "should," "target," "will," "would" and similar words and expressions are intended to identify forward-looking statements. Such statements are based upon the current beliefs and expectations of management. Forward-looking statements made herein, which may include statements regarding 2024 earnings and earnings per share, long-term earnings, earnings per share growth and earnings mix, anticipated levels of energy generation from renewable resources, anticipated reductions in carbon dioxide emissions, future investments and capital expenditures, rate base levels and rate base growth, future raw materials costs, future raw materials availability and supply constraints, future operating revenues and operating results, and expectations regarding regulatory proceedings, as well as other assumptions and statements, involve known and unknown risks and uncertainties that may cause our actual results in current or future periods to differ materially from the forecasted assumptions and expected results. The Company's risks and uncertainties include, among other things, uncertainty of future investments and capital expenditures, rate base levels and rate base growth, risks associated with energy markets, the availability and pricing of resource materials, inflationary cost pressures, attracting and maintaining a qualified and stable workforce, changing macroeconomic and industry conditions that impact the demand for our products, pricing and margin, long-term investment risk, seasonal weather patterns and extreme weather events, counterparty credit risk, future business volumes with key customers, reductions in our credit ratings, our ability to access capital markets on favorable terms, assumptions and costs relating to funding our employee benefit plans, our subsidiaries' ability to make dividend payments, cybersecurity threats or data breaches, the impact of government legislation and regulation including foreign trade policy and environmental, health and safety laws and regulations, changes in tax laws and regulations, the impact of climate change including compliance with legislative and regulatory changes to address climate change, expectations regarding regulatory proceedings, including state utility commission approval of resource plans, assigned service areas, the siting and construction of major facilities, capital structure, and allowed customer rates, and operational and economic risks associated with our electric generating and manufacturing facilities. These and other risks are more fully described in our filings with the Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K, as updated in subsequently filed Quarterly Reports on Form 10-Q, as applicable. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update any forward-looking information.
About the Corporation: Otter Tail Corporation, a member of the S&P SmallCap 600 Index, has interests in diversified operations that include an electric utility and manufacturing businesses. Otter Tail Corporation stock trades on the Nasdaq Global Select Market under the symbol OTTR. The latest investor and corporate information is available at www.ottertail.com. Corporate offices are in Fergus Falls, Minnesota, and Fargo, North Dakota.
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