Gov. Mark Dayton signed a broad jobs and energy budget bill that gives a rate break to mining companies, papers mills and steel mills.
The new law allows major industrial customers in northern Minnesota to apply for a break in their electricity rates. It aims to help lower energy costs for companies competing in a global marketplace, among them the taconite mines on the Iron Range.
Larry Sutherland, general manager for Minnesota ore operations at U.S. Steel, said his company saw a dramatic increase in electricity rates between 2014 and 2015. Earlier this month, Sutherland told the state Executive Council, which includes the governor, lieutenant governor, attorney general, state auditor and secretary of state, that mining companies can't afford the higher costs as global steel prices plummet.
"My electrical increase across Minnesota ore went up $13.2 million," Sutherland said. "That's approximately 60 cents a produced ton of taconite. That's a huge increase year on year just on energy."
State Sen. David Tomassoni, DFL-Chisholm, said about 1,000 people working in the taconite mines on the Iron Range have been laid off in the past year. He said lowering the cost of electricity will help companies compete.
"You know, maybe this is something that will actually help save the industry and the jobs we have," Tomassoni said.
But to pay for the break for industrial companies, residents and smaller businesses will be forced to pay more. State Sen. John Marty, DFL-Roseville, said he didn't object to helping out steel and paper companies but worries that the way the law is written, other companies could also take advantage of it. He said that means higher rates for everyone else.
