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Xcel Energy was granted a rate hike – so how's it going to affect your bill?

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Rates for Xcel Energy's 1.23 million electric customers in Minnesota are going up – but what changes those people may see on their monthly bill isn't clear yet.

The officials tasked with regulating energy companies in the state – a group called the Minnesota Public Utilities Commission – approved an electricity rate hike Thursday, a commission news release says.

The uptick isn't strictly for the future however. It actually covers both 2014 (which of course already happened) and 2015.

So how does that work, exactly? How can an energy company ask for a rate increase on bills they've already sent out?

The explanation

Xcel Energy, expecting a rate hike of some sort, began charging an interim rate increase of 4.57 percent in January of 2014.

The company asked the commission for a two-tiered increase: 6.9 percent in 2014, followed by a 3.5 percent jump in 2015. The overall result would have been a $291.2 million hike, totaling 10.4 percent.

Following that request, an administrative law judge – after looking at evidence and conducting some public hearings – put forth some recommendations based on the findings: 2.54 percent in 2014, followed by a 4.45 percent jump in 2015. The overall result would have been a $191.3 million hike, totaling 6.99 percent.

You'll notice that what the judge recommended and what Xcel asked for are fairly far apart.

So what will the final rate hike be? Well, the commission is still figuring that out. The "financial impact" of some recent decisions has to be weighed, and when that's done, they'll specify a final increase.

Now, if that increase is less than the 4.57 percent interim rate hike Xcel has been charging, customers could see a refund.

The Star Tribune reports customers could get a "slight" refund – but expect it to get negated by the rate hike that will go into effect later this year.

An increased service charge?

The commission weighed in on one other bill-affecting proposals Thursday.

Xcel Energy asked if it could increase the monthly service charge residential and small business customers pay – that's a monthly charge that's on the bill, regardless of how much electricity is used.

The commission rejected that request.

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