2026 Legislature: Energy Affordability

Even though affordability is widely understood to be a key consideration in the PUC’s charge to set “just and reasonable rates,” it is not clearly stated in Minnesota statute. We’re seeking legislation to clarify that the PUC must seek rates that promote affordable service for all Minnesotans, and that customers’ ability to pay must be a factor in determining a reasonable return on equity for utility companies.  

To set a utility's base rates, the PUC does a comprehensive review of every cost of providing utility service. These costs are totaled into a "revenue requirement," usually in the hundreds of millions or billions of dollars each year. The PUC also makes its best projection of how much energy the utility's customers will purchase over the course of the year. Put simply, the revenue requirement is divided by the total amount of expected sales to set the rate that customers are charged per unit of electricity or natural gas. This is done with detailed review, but it is still based on a best estimate of expectations for the year to come. 

However, there is no clear, standard manner in which utilities report on how much revenue they actually collect from customers. CUB proposes that regulated utilities be required to make a public filing each year showing their authorized revenues and actual revenues side by side. 

Customers who are unable to pay their monthly bills in full are typically charged late fees at 1.5% per month (18% per year)—far more than the utility’s cost of carrying the unpaid balance. These late fees compound each month and can add up quickly. Some Minnesotans owe thousands of dollars in fees, alone, on top of the cost of utility service. Further, customers who have been shutoff for nonpayment are charged additional reconnection fees in order to restore service. CUB proposes to eliminate residential reconnection fees for nonpayment, and to limit the imposition of late fees. This proposal would apply to all utilities in Minnesota, including cooperatives and municipal utilities.

Utilities that are regulated by the PUC issue customer notices each time they request a rate increase, including information about the proposed rate increase, how it will affect the typical customer, and top reasons a utility cites for needing to increase rates. CUB proposes to set customer notice requirements in state statute with some updates, including how to file a public comment electronically, and information about how much of the proposed rate increase is due to a utility’s requested increase to its return on equity.  

Minnesota statute requires utilities to adopt standards for safety, reliability, and service quality. For decades, Xcel Energy has had penalties associated with failure to achieve certain metrics, on topics like reliability, customer complaints, and the time callers spend on hold with customer service. In 2025, similar penalties were established for Minnesota Power. Both utilities consented to the penalties in settlements. However, because Minnesota statute does not explicitly state that the PUC has the authority issue such penalties, it’s not entirely clear if the PUC has the authority to update the penalties or to impose them on other utilities if warranted. CUB proposes to grant the PUC explicit authority to make and update such penalties as needed.  

(SF 486/HF 771) In 2025, with support from more than 20 utilities and other organizations, CUB proposed an expansion to the Energy Assistance program. Energy Assistance is a lifeline for 125,000 Minnesotans, helping them afford electricity and heating fuels each year. However, the program is supported only by federal funding, is unavailable during the summer, and can only assist about 20% of qualified households. CUB’s bill would provide additional state funding for the program and keep it open during the summer months. The bill has strong support among the energy community and policymakers, and we look forward to supporting it again in 2026 should funding be available.