The North Dakota Public Service Commission on Tuesday adopted a settlement in Otter Tail Power Company's 2023 electric rate case that reduces the company's amended request and sets a negotiated revenue increase for retail customers.

Commissioner Sherry Haugenhofer moved to adopt the findings of fact, conclusions of law and order in case PUD-23-342. Haugenhofer said the parties filed a settlement Dec. 11 and that, because of the agreement, a weeklong hearing was finished in one day. "I support this order of Otter Tail's 2023 electric rate increase," she said.

The settlement reflected in the commission record reduces Otter Tail's originally amended request of $22,462,000 (10.9% retail revenue increase) to a negotiated overall test-year revenue increase of $13,100,000 (6.18%). The settlement record notes adjustments including removal of long-term incentive compensation costs, partial removal of certain performance-plan costs, amortization of rate-case expense over five years (rather than three), an adjustment to construction work in progress, and a 50-basis-point reduction to the company's authorized return on equity. The agreement also establishes an over-earnings sharing mechanism: 70% of earnings above a 10.2% return would be returned to customers, with Otter Tail retaining 30%.

The settlement also specifies base-customer charges and illustrative bill effects: the record shows a residential monthly customer charge moving from $14 to $17, and an average residential customer using 875 kilowatt-hours facing an increase of about $8.43 per month under the settlement. The commission record shows the settlement sets Otter Tail's 2024 base rate in the administrative record as $701,700,000; the proceeding also includes prior interim rates that were authorized to be effective for service on or after Jan. 1, 2024.

Two interveners were granted participation in the docket: Applied Digital and Midwest Large Energy Consumers. The settlement and the formal hearing were reviewed by commission staff before the commission's vote. A voice vote carried the motion.

The commission did not adopt every item originally requested by Otter Tail; instead the parties negotiated reductions the commission described in its findings of fact and order. The order was adopted at the special meeting; the docket remains the formal record for procedural deadlines and any further filings.