Xcel Energy was given permission to raise its energy prices for residents by 10.6 percent to the end of 2019 – but we're already paying for most of the hike.
On Thursday, the Public Utilities Commission (PUC) agreed to a settlement on a multiyear rate hike proposed by Minnesota's largest utility, which provides power to more than 3.3 million homes across the state.
The agreement covers the years 2016-2019, during which time Xcel will be allowed to increase electricity costs for homeowners and renters by 10.6 percent, for businesses by 6.9 percent, and for street lighting by 13.1 percent.
But customers have already been paying for more than half of that hike, because the PUC already gave Xcel permission to raise electricity rates by 5.5 percent in 2016 which added $4-6 to average monthly bills. This was raised retroactively to 6 percent on Thursday.
This year, rates will increase 2.7 percent, which according to the Star Tribune will cost the average customer an extra $30 a year.
There will be no change to prices in 2018, before a 1.9 percent increase in 2019 will add an extra $12 to bills.
The company had agreed last August to keep its rate increase down at 6.1 percent over four years, but increased its request after a winter that saw its revenues fall $60 million short of its forecast, partly because customers are being more energy efficient, the newspaper notes.
The rate increase will cover the costs Xcel expects in transmission and power generation, and doesn't take into account its investments in wind farms and the planned gas-fired plant in Becker.
Last month, Xcel began offering customers the opportunity to get their energy from 100 percent renewable sources called Renewable Connect, with customers paying a premium on top of their regular electricity bills to get their power from Minnesota solar and wind farms.