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Fergus Falls, Minn. (AP)

State agencies call for probe into Otter Tail Power rates

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Two state agencies are calling for an investigation into how Otter Tail Power Co. sets its billing rates.

The state attorney general's office and the state Commerce Department made their recommendations in recent filings with the Minnesota Public Utilities Commission, which is considering the utility's rates.

Those recommendations came in response to an anonymous letter claiming the Fergus Falls utility provided misleading information to state and federal regulators.

As a result, Otter Tail allegedly may be improperly charging its customers for costs associated with wholesale power sales or not sharing profits from those sales with them.

Otter Tail Power Co. spokeswoman Cris Kling denied the allegations in a report in The Forum of Fargo, N.D., on Thursday. She said the company accurately reports its costs and profits from wholesale power sales.

However, Ronald Giteck of the attorney general's office wrote in his filing that the company has resisted efforts to learn about its operations.

"When data is ultimately divulged, it often demonstrates misleading and inaccurate regulatory reporting of operations," wrote Giteck, an assistant attorney general.

The Commerce Department also called for an independent investigation in its filing, saying accurate information is essential to determining fair rates for the utility's nearly 61,000 customers.

"Thus, again, it is necessary to have accurate data to ensure that rates charged to ratepayers are reasonable," the department wrote.

Kling said the utility has provided all the information allowed by an administrative law judge in its current rate case. When some information was protected by attorney-client privilege, the judge allowed the company to provide summaries.

She said all issues raised about the proper costs and revenues associated with sales of wholesale power have been "analyzed and resolved or referred to the rate case."

Janet Gonzalez, the Minnesota Public Utilities Commission's energy unit manager, said the PUC commissioners haven't yet taken up the recommendations for an independent audit. The commission must rule on the rate case by Aug. 1.

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Information from: The Forum, http://www.in-forum.com