MN Power Plans To Pass ‘Millions’ In Missed Payments From Verso On To Customers
Verso - the paper mill located on Duluth's western-approach - closed in June 2020 as part of a sale in operations to ST Paper LLC. Since that time, the company has "stopped making payments" to Minnesota Power - owing "millions of dollars" in past utility charges. News sources are reporting that the utility company has plans in place to pass that missed revenue on to its existing customers to make up the difference.
The missed payments are part of a dispute between Verso and Minnesota Power over the new agreements the utility company has made with the new owners of the paper mill. When the plant was originally sold, Verso had entered into an agreement with Minnesota Power over minimum payments:
"Verso was supposed to make the payments through January 2023, but argues that since it sold the mill, it should be off the hook for the minimum payments because Minnesota Power has entered into a separate electric service agreement with the new owner. Verso accused the utility of trying to "double-collect for the same facility"."
The new owner of the paper plant, ST Paper LLC, acknowledges that it does have a utility agreement with Minnesota Power that it entered into at the time they took ownership. However, the utility company ha shared that minimum payments (those owed even if the plant is offline) is not a part of that deal - which leaves Verso on the line for its original agreement.
Minnesota Power filed a petition with the Minnesota Public Utilities Commission on August 2. "The company was already planning....to ask the PUC to raise electricity rates for its customers, though an exact amount has not been made public. If Verso doesn't agree to pay by then, Minnesota Power will seek to make up the difference in its upcoming rate case".
Versos defense rests in its claim that Minnesota Power is trying to reap the revenue of having it both ways. Brian Potts, an attorney representing Verso, says that "both the former and the current paper companies paying separate electric service agreements for the same facility is a move by Minnesota Power to "unjustly enrich itself". Potts went on to suggest that "[s]uch double collection is not only nonsensical, it is illegal."
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