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Seniors, state agencies say Xcel Energy rate hike request too high

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Minnesota’s largest utility Xcel Energy has told the Minnesota Public Utilities Commission that it needs a rate hike of hike of $291 million — or 10.4 percent — over two years.

KARE reports that the proposed increase would raise an average residential customer's bill by an estimated $10 a month; the request would raise rates by 4.6 percent in 2014 and an additional 5.6 percent in 2015. If approved, the rate increase would be the sixth in eight years.

On Monday, the first of seven public hearings on the rate hike was held at the Earle Brown Heritage Center in Brooklyn Center. The Star Tribune reports that Minnesota's Commerce Department, which analyzes utility rates on behalf of consumers, wants regulators to reject 60 percent of the requested hike because it says that Xcel overstated both its costs and its projected revenue shortfall. The Minnesota attorney general’s office also has questioned Xcel’s request for higher rates.

In addition, the AARP, which lobbies on issues that impact older Americans, is mobilizing its 650,000 Minnesota members to speak against the increase. The newspaper added that AARP said that 600 people have submitted written comments opposing it.

"Break that down, 10 bucks a month. That may seem nominal to a lot of folks but for people still struggling to make ends meet, that are seeing prescription drugs increase, everything on rise except for their income. Makes it difficult," said Will Phillips, AARP Minnesota State Director.

Xcel regional vice president Chris Clark said that while the rate hike would present a hardship to some customers, the utility must have the resources to secure reliable service in the future.

"We are very well aware anytime we are requesting an increase we are requesting an additional cost to our customers. That said, we are focusing on investing in our system in our long term," Clark said.

Xcel has said that it needs the money generated by higher rates to pay for upgrades in older power plants and the electric grid and to cover increased costs and a projected 2014 revenue shortfall. In a press release. The company said the importance of a resilient electric grid was underscored during the June 2013 Minnesota storms that left half of Xcel's 1.2 million Minnesota customers without power.

There are more public hearings scheduled this week. Times and locations can be found here. After the hearings are complete, an administrative law judge will preside over a trial-like evidentiary hearing in August and will likely issue a recommendation on rates in December. The state Public Utilities Commission will make the final decision, probably in 2015.

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