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Xcel Energy customers face rate hike of up to 2 percent this fall

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If you're one of Xcel Energy's 1.2 million customers – you'll be paying a little extra for your electricity starting this fall.

The energy provider has been given the green light by Minnesota's Public Utilities Commission to hike rates by between 1.5 and 2 percent, MPR reports, the second year of increases after a 4.6 percent hike last year.

Xcel said that the increase will cover the cost of investments in high voltage distribution lines and renewable energy projects, the news station notes.

And the Star Tribune reports that Xcel is likely to follow up the fall hike by filing for another "multiyear" rate increase next year to recoup more from its investment in plants, transmission lines and its distribution network.

John Coffman, attorney for AARP Minnesota, which had intervened on behalf of older Minnesotans to fight against the latest rate hike, told the newspaper the increase approved by the PUC represented "a compromise," but was higher than he'd hoped.

The rate hike might have been higher, had the PUC not rejected Xcel's request to pass on all of the costs of its upgrade of its Monticello nuclear plant to its customers.

The request from Xcel had proved controversial, because the the company wanted to claw back $748 million back from customers to cover the cost of the upgrade at the 40-year-old plant, even though it was found that poor management and planning meant the upgrade finished $402 million over budget.

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