FERGUS FALLS, Minn. (AP) - Regulators in three states are trying to determine if Otter Tail Power Co. understated its profits and misled regulators in its annual reports.

Several agencies are deciding what action to take, if any, after reviewing an internal investigation by Otter Tail Power, which denies any wrongdoing but hired a Minneapolis law firm to investigate claims from two people familiar with the utility's financial data.

Regulators are focusing on whether the utility understated its profits while parent company Otter Tail Corp.'s non-utility businesses under the Varistar holding company overstated their revenues.

They also want to determine whether the private companies took credit for revenues generated by the utility, said Janet Gonzalez, manager for the Minnesota Public Utilities Commission's energy division.

Last year, two people affiliated with Otter Tail Power called its ethics hot line to question its accounting practices. The law firm Lindquist and Vennum investigated, and its report was filed with the Minnesota PUC.

On Friday, Otter Tail Power President Chuck MacFarlane said all but one of the claims was addressed to the satisfaction of several Minnesota agencies.

However, Otter Tail Power and the state Department of Commerce haven't reached a consensus about whether the company properly calculated the interest it pays on short-term loans for new construction, he said.

"We're confident we've done those things accurate and prudent," MacFarlane said.

Otter Tail Power serves 127,000 customers in Minnesota, North Dakota and South Dakota.

The Internal Revenue Service and Occupational Safety and Health Administration also are looking into the claims, North Dakota Public Service Commissioner Susan Wefald said. OSHA's inquiry, on behalf of the U.S. Department of Labor, seeks to determine whether Otter Tail Power retaliated against the hot line callers.

"We don't believe we retaliated at all," MacFarlane said.

The Minnesota Department of Commerce has made recommendations to the Minnesota PUC. The attorney general's office also made recommendations to the commission, which will review the case this fall.

Wefald said North Dakota is "piggybacking" on Minnesota's probe to determine if Otter Tail Power if North Dakota customers should get a refund.

The main issue is how the company interprets state regulations, Otter Tail Power spokeswoman Cris Kling said.

If the states' utility commissions determine the company should interpret regulations differently, it will comply, she said.

Gonzalez said the Minnesota PUC wants to make sure customers are paying "just and reasonable" rates.

The Minnesota PUC has made no determinations. Gonzalez said commissioners could do nothing, or fine the company if they determine Otter Tail Power deliberately misinterpreted laws to mislead regulators.

South Dakota utility officials said they plan to monitor the Minnesota investigation.