Xcel Energy customers in Minnesota will see their electric bills increase by 5.2% this year, adding an extra $5.39 per month for a typical household. The temporary rate hike was approved by the Minnesota Public Utilities Commission (PUC) in December, but regulators are now scrutinizing Xcel’s request for a larger increase over two years.
The PUC is reviewing Xcel’s proposal to raise rates by 9.6% in 2025 and another 3.6% in 2026, which would result in an additional $13.79 per month for the average home. Xcel claims the rate hike is necessary to fund its transition away from fossil fuels, including building more wind and solar plants, retiring coal fleets, and upgrading its power distribution system.
However, Attorney General Keith Ellison has expressed opposition to the interim rates, stating that regulators have consistently approved smaller rate hikes than Xcel’s requests. Ellison’s office has also accused Xcel of disconnecting record numbers of customers from service while taking in big profits.
Despite the temporary rate hike, Xcel expects to receive hundreds of millions of dollars in new tax credits for producing carbon-free nuclear power, which it plans to return to customers. The company also points to lower fuel costs and energy savings as reasons to offset the impact of the temporary rates.
The PUC has granted most of Xcel’s request for temporary rates but denied $92.6 million from customers for planned wildfire prevention spending due to a lack of justification. Xcel is still fighting some aspects of the PUC’s ruling in court, including a limit on how much it can charge customers for top executives’ salaries.
As the PUC reviews Xcel’s proposal, customers may receive refunds if lower rates are approved. The commission will make its decision later this year, with the larger overall rate request pending until 2026.
Source: https://www.startribune.com/xcel-energy-electric-bills-rise-52-in-minnesota-for-2025/601201246