Xcel Energy is asking Minnesota regulators for permission to increase electricity rates by more than 20% during the next three years — a change that would eventually add an average of about $18.50 a month to electricity bills.
The utility company submitted a 319-page application to the Minnesota Public Utilities Commission (PUC) Monday, detailing its proposal. In the filing, which can be found here, Xcel wrote the rate hikes "reflect the cost of providing service to our customers, including an appropriate return on common equity."
Xcel's plan would see residential customers' rates go up:
- 12.2% in 2022
- 4.8% in 2023
- 4.2% in 2024
Once all is said and done, Minnesota Xcel customers would see an average of $18.56 added on to their monthly electric bill (coming out to about $222.67 a year).
Xcel Energy makes a few arguments for this rate increase.
One, it will help the company continue to build out its renewable energy offerings. Two, the company will be able to create an "advanced distribution grid" to better serve customers. And three, Xcel will better be able to electrify services that currently rely on polluting fossil fuels (a shift called "beneficial electrification").
"These projects are key to meeting our customers’ needs today and in the future, as we build toward our vision of providing 100% carbon-free electricity to customers by 2050," a spokesperson for Xcel Energy told Bring Me The News.
In addition, the spokesperson said residential Xcel customers are already paying below the national average on their electric bills.
But Xcel Energy's request comes at a precarious time for many Minnesotans.
Americans began falling behind on electric and gas bills by staggering amounts last year, the National Energy Assistance Directors’ Association found. Financial problems have persisted for many — a recent NPR poll found 38% of American households reported they were seriously struggling to pay things such as rent, utility bills and grocery costs.
This winter could prove to be harsh, with experts warning natural gas bills during the cold months to come could jump as much as 30%, with natural gas providers set to pass on much of the costs incurred during last winter's polar vortex-induced natural gas demand spike in Texas and the South onto customers.
Xcel hasn't shown signs of struggling financially. Quarterly shareholders dividends this year were at more than 45 cents per share, and the company's net income has grown in each of the past three years, going from $1.261 billion in 2018 to 1.467 billion in 2020, according to macrotrends.
Minnesota's PUC will decide whether to grant Xcel's proposed rate increases, but the process could take months. Xcel has proposed an interim increase, in the meantime, which would see customers paying a bit less than what is laid out in the company's requested plan.
Xcel Energy has pledged to go 100% carbon-free by 2050. The company earlier this year said it will not build a large natural gas plant in Becker, Minnesota, as planned, and would instead operate four small natural gas facilities.