Commerce Dept. calls Xcel's proposed rate increase 'way too high'


The Minnesota Department of Commerce says Xcel Energy's proposed rate increase is too large and should be scaled back by 60 percent.

The Pioneer Press says the increase Xcel is seeking over a two-year period amounts to a rate hike of 10.4 percent.

Commerce Commissioner Mike Rothman says “Xcel’s requested rate increase is way too high. The utility’s math does not add up."

Xcel Energy provides electricity to 1.2 million customers in central and southern Minnesota, including the Twin Cities. The utility maintains the rate increase is needed to cover the cost of improvements to its system of generating and transmitting power.

But the Commerce Department's statement says an investigation found Xcel overstated the costs of its expenditures and understated its revenue from sales and insurance benefits.

The Commerce Department sent its recommendation for a smaller rate increase to the Public Utilities Commission, which will have the final say. Later this month (June 23-27) public hearings on the proposal will be held at several Twin Cities locations and in St. Cloud and Mankato.

Proposed changes in how customers are charged

Separately on Thursday a coalition of environmental groups urged Xcel to change the way it charges its Minnesota customers for electricity.

MPR News reports five groups joined together in the call for a system that would raise the price of a kilowatt hour of electricity when the amount of power a customer uses crosses certain thresholds.

An official with the group Fresh Energy tells MPR when Xcel introduced a system of pricing tiers in Colorado it led to a reduction in energy use. Minnesota Power, which serves customers in central and northern counties, already uses tiered pricing.

The Star Tribune says the groups are proposing four tiers with rates starting at 6.7 cents per kilowatt hour and rising to 14 cents for heavy users. A spokeswoman for Xcel Energy tells the newspaper the utility will consider the proposal and is not ready to comment on it.

Tiered electric rates are used in California. A utility watchdog group in that state offers an explanation of how they work.

Minnesota's Commerce Department also recommended that regulators approve "decoupling." That's an approach to utility prices that separates earnings from the amount of energy consumed. Advocates say it makes utility companies more likely to encourage energy conservation.

There's more background on decoupling here.

Next Up

oct. 20 snow crash

Spinouts, crashes still happening after snow leaves MN roads a mess

The snow storm caused at least 208 crashes this weekend.


For The Week: Food tips and tricks to get you through the next 7 days

BMTN's food writer Lindsay Guentzel makes life easier for Minnesotans.

snow, plow

Here's how much snow fell in Saturday's storm in Minnesota

MSP Airport had the highest total as of 7 a.m. Sunday with 5.3 inches.

Screen Shot 2021-01-18 at 3.17.49 PM

No KAT? No D'Lo? No problem as Timberwolves defeat Pelicans

The Timberwolves were without Karl-Anthony Towns and D'Angelo Russell, but still picked up a (SCORE) win.

Screen Shot 2021-01-23 at 7.53.44 PM

Spinouts, crashes across Twin Cities as snow gets heavier

There have been multiple incidents across the metro area.

Mason Branstrator

Family, friends raising funds for teen soccer standout with spinal injury

Mason Branstrator of Duluth was injured in a skiing accident.

Screen Shot 2021-01-22 at 9.08.16 PM

Tributes pour in after MN Supreme Court justice's daughter found dead

Olivia Chutich died near the campus of Iowa State University.

Image from iOS (96)

Early Saturday fire damages Burger King in Richfield

The fire was reported around 1:15 a.m. Saturday.

Jamal Mashburn Jr. / Gopher Basketball

Maryland hands Gophers first home loss of season

The 17th-ranked Gophers fell to the Terrapins 63-49 on Saturday afternoon.

Alibi Drinkery in Lakeville.

Minnesota Department of Health files lawsuit against Alibi Drinkery

The Lakeville bar has been in the news for defying orders.