ST. PAUL, Minn. (Legal Newsline)-Minnesota Attorney General Lori Swanson is urging the state Public Utilities Commission to deny a rate increase sought by Minnesota Power.

Duluth, Minn.-based Minnesota Power, a division of ALLETE, is seeking to raise consumer rates by 20 percent to raise about $80 million. The company is also asking to begin charging $73 million of the increase starting Jan. 1, on an interim basis.

The utility wants to begin charging more while the Public Utilities Commission determines whether the permanent rate increase is warranted.

Officials said the company's request would raise the average residential customer's monthly bill by about $13. The company received approval last month for a $20.4 million rate increase.

A day after the approval, the company sought its latest rate increase.

Amid the state's economic downturn and high unemployment, regulators should deny the increase, which would harm already-struggling families and small businesses, said Swanson, a Democrat.

"As we enter the winter heating season, our citizens are struggling with a tough economy and high unemployment rates. The company filed this $73 million rate increase request before the ink even dried on its last $20 million," Swanson said. "The PUC should not allow the company to jack up rates on individuals and small businesses during these troubled financial times before it even proves the rates are necessary."

The commission will hold a hearing on the proposed interim rate increase Tuesday.

For its part, Minnesota Power says $46 million of the proposed rate increase would go to upgrade the Boswell Energy Center in Cohasset, Minn. The upgrades are aimed at reducing air pollution from the coal-burning power plant by up to 90 percent.

"While we continue to build our wind, water and biomass resources, we also know that our customers want and need the competitively priced power that is produced at our existing generating units. Our upgrades will result in cleaner, more efficient, state-of-the-art operations at these facilities," said ALLETE Chairman and CEO Don Shippar.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.