Xcel Energy requested a 21.2 percent, or $677.4 million, rise in energy rates over 3 years, with just over half hitting Minnesotans’ wallets in 2022. The firm’s average residential clients would receive a 19 percent increase in their electricity costs from 2022 to 2024 as a result of the rate hike, or $15 to $21 per month on average.

“This is a really clear rate case,” Xcel’s president for Minnesota as well as the Dakotas, Chris Clark, said. “It’s focused primarily on the wires and poles part of our company and making the infrastructure expenditures that are required.” The Minnesota Public Utilities Commission must approve any rate increase requested by Xcel, which is situated in Minneapolis.

With 1.3 million customers, Xcel is still by far the state’s largest electrical provider. For the previous two years, its residential clients have had consistent rates. The magnitude of the anticipated rate hike, on the other hand, may come as a surprise. “It’s pretty substantial to see a rate rise in the area of 20%,” noted Annie Levenson-Falk, who works as the executive director in charge of Citizens Utility Board of Minnesota, which is a residential ratepayer advocacy group.

She also mentioned that rising energy bills are already hurting consumers. Food and other home necessities are being affected by rising inflation in general. Oil prices have risen to seven-year highs, driving up the cost of gasoline. Natural gas prices are almost 75% more than they were a year ago, even as the winter heating period gets underway. And the price of propane is through the roof. Meanwhile, customers in Minnesota have recently started paying a $660 million bill resulting from an unprecedented price spike following a terrible winter storm in Texas. CenterPoint and Xcel, Minnesota’s two major natural gas companies, are both likely to submit for rate hikes.

“These things all blend when we interact with the client to assist them with their whole financial picture,” Levenson-Falk said. According to Xcel, its average home bill, which is currently $86.87, is lower than the national average. The average time it takes for a rate case to be resolved is around 18 months. However, utilities often request and gain authorization for interim rate hikes. Xcel has asked the Minnesota Public Utilities Commission (PUC) to authorize a 9.4% interim rate increase, or $288.3 million, to effect on January 1. The typical customer’s monthly bill would increase by $4.08 cents as a result of the temporary hike.

If the ultimate rate hike is less than the interim increase approved by the PUC, customers will receive a refund. Utilities frequently request bigger overall rate increases than the PUC ultimately approves. Xcel also sought an interim rate rise for 2023 in its PUC application on Monday. It has done so before, but the PUC has refused to accept the request right away instead of asking Xcel to return a year later. As a result, Xcel proposed an “alternative” interim rate this time. It lowers the first-year price spike — but only if the PUC also accepts a second-year interim boost. “On the second year, we need some certainty,” Clark added.

On January 1, the average residential client would experience a $1.22 increase in their monthly rate under the alternate option. In the alternative, residents will face a much larger interim charge on their bills in the second year. “At the end of the day, we’re asking for the same amount of money in each proposal,” Xcel’s director in charge of the regulatory pricing and analysis, Amy Liberkowski, said.

Xcel is a significant wind energy producer, and it was one of the first utilities in the United States to declare a target of 100 percent carbon-free electricity by 2050. According to the firm, the fee hike will enable it to lead “the clean energy revolution” and build an upgraded electrical distribution grid. “The majority of our efforts are really driven by outdated infrastructure,” Clark explained.

Leave a Reply

Your email address will not be published. Required fields are marked *