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Otter Tail Corporation (NASDAQ:OTTR), a $3.19 billion utility company with a strong financial health rating according to InvestingPro, has submitted a request to the South Dakota Public Utilities Commission (SDPUC) for a revenue increase under general rates in South Dakota. The filing, made by its wholly-owned subsidiary Otter Tail Power Company (OTP) on June 4, 2025, proposes a net annual revenue increase of $5.7 million, representing a 12.5% rise.
The request includes a proposed rate of return on rate base of 8.29% and a rate of return on equity of 10.8%, with an equity ratio of 53.54% of total capital. OTP has suggested modifications to the cost and investment recovery mechanism, proposing a shift from riders to base rates.
The proposed rate changes would take effect either upon the SDPUC’s final decision or 180 days from the filing date, whichever is earlier. The implementation would be subject to potential refunds following the SDPUC’s final determination.
This information is derived from an 8-K filing with the Securities and Exchange Commission.
In other recent news, Otter Tail Corporation reported its Q1 2025 earnings, displaying a mixed financial performance. The company achieved an earnings per share (EPS) of $1.62, exceeding the forecasted $1.54, but its revenue fell short of expectations, registering $337.35 million against a projected $349.7 million. This mixed result comes as Otter Tail Power, a subsidiary of Otter Tail Corporation, has filed for an electric rate increase with the South Dakota Public Utilities Commission, aiming to cover rising operational costs and maintain reliable service. If approved, this would result in a $5.7 million rise in rates, translating to an average increase of 12.5% for customers. The proposed rate hike follows the completion of a rate review in North Dakota, where new base rates were implemented in March. Otter Tail Corporation maintains a strong liquidity position with over $600 million available, underscoring its financial stability amidst these developments. Additionally, the company’s Plastics segment reported a 13% increase in sales volumes despite a decline in PVC pipe pricing. Looking ahead, Otter Tail Corporation has reaffirmed its EPS guidance for 2025, expecting long-term earnings growth of 6-8% as it advances strategic projects in renewable energy.
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