How will Xcel’s electric rate increase impact Minnesotans?
Last year, Xcel filed a request to increase electric rates for Minnesota customers. If the request is approved as is, the typical customer's bill will go up by $10.27 per month, or $123.37 per year.
Xcel's Electric Rate Increase
We’re all experiencing it: the costs of everyday life are rising, and many Minnesotans can’t keep up. Housing, groceries, insurance, and medicine are getting more and more expensive, and all signs point to it getting worse in the months ahead. Utilities like electricity and natural gas aren’t an exception. Even given that context, Xcel Energy wants to raise residential customers’ electric bills.
Throughout this article, you'll find quotes from everyday Minnesotans who will be impacted by higher Xcel electric bills. Over 7000 public comments have been submitted to the PUC in Docket 24-320.
“The proposed continued rate increases over the next 1 1/2 yrs would suggest that we restrict expenditures in other areas, but this is impossible since amounts continue to increase for groceries, health insurance & other medical, car & home insurance & maintenance costs, and real estate taxes. At this rate, the American dream will soon be lost to us.” - Alice M
According to the U.S. Census Bureau:
- 59% of Minnesota households have difficulty paying for household expenses. That percentage rises to 70% for households making less than $75k/year.
- 46% of Minnesota households making less than $25k each year go without basic necessities like food or medicine to pay for their energy bills.
- 36% of low-income households keep their home at unsafe or unhealthy temperatures to keep costs down.
“I have health issues and have had to stop going to doctor appointments because it’s either pay to heat my house and have electricity or be able to afford medical copays and medication for my degenerative condition.” – Ann B
“My electric bill skyrockets every summer because I need to use my window unit, and I can’t NOT because I have a health condition that makes it difficult for me to cool down. Even keeping my apartment at 75 [degrees] is a challenge for me, and my bill was almost $200 at one point. I had to choose between food and my health because I make too much for assistance but not enough to pay both. Their requested increases are for the purpose of pure greed.” – Victoria H
"We are all financially sinking! Increasing our rates 5% now, then 9%, then 3% makes our energy even more unattainable to the hard working folks of Minnesota! I already keep my heat at 57 and don’t turn on any air conditioning to keep my rates as low as I can. Please consider us, our children, and our elders on fixed budgets! I know I’m not alone in these struggles" – Manda B
Given those numbers, it’s no surprise that the number of Xcel customers who are behind on their bills has skyrocketed. Total residential arrears (past-due balances) doubled from $45 million in 2019 to almost $90 million in 2024. The COVID-19 pandemic was a contributing factor in this increase. Rises in inflation and cost increases for household necessities mean that customers haven’t been able to catch up.
Beyond the total arrears, the average past-due balance carried by households is up from $270 in 2019 to over $500 in 2024. The overall picture is consistent with the inequalities we see in the US economy: most households can keep up with their bills, but more households are coming up short, and households that were already struggling have fallen even more behind.
The number of disconnections Xcel has carried out the past few years is astonishing. Of the 91,000 disconnections carried out in 2024 by gas or electric utilities, 58 percent--or 52,000--were in Xcel's service territory. Over 51,000 households have been disconnected so far this year.
Utility disconnection has countless devastating downstream impacts. Food and medicine go bad, access to internet fails, cooking and laundry options are limited, heating and cooling are unavailable, and so much more. Utility shutoffs often have compounding costs for households that are already struggling.
“I am a single income household, and even with working over 40 hours a week with a business degree, I am unable to manage living costs effectively. These rising costs are unsustainable for the average household, especially in a time of widespread economic strain.” – Alexis A
“I am a longtime residential customer who lives on a fixed income, and the requested rate increase would adversely affect my financial situation. While I can (and have) cut back on non-essential goods and services during this unstable and inflationary time, I cannot appreciably reduce or eliminate my need for electricity.” – Brenda A
“To cope with current energy costs, I have resorted to unplugging appliances and cutting back on energy usage, even considering forgoing outdoor Christmas lights this past holiday season—something my children love—just to manage our bills. Despite these efforts, I am still struggling to make my payments. In fact, this year, I have often had to pay less than my entire bill for months at a time, waiting until I receive my end-of-year bonus to pay off the accumulated balance in full. My neighbors have felt the same pressure; two families on my block invested in solar power this year, not because they wanted to, but because they felt forced by Xcel’s escalating costs.” – Lindsay C
Outside of Minnesota, federal impacts will continue to negatively affect Xcel’s customers. The 2025 government shutdown has delayed the delivery of federal Energy Assistance funds to states, and qualified Minnesotans are still awaiting funding. (Take a look at CUB’s guide for resources and options for consumers while we wait for these funds to arrive.)
The Trump administration has also indicated its desire to eliminate the LIHEAP program entirely. Just this year, the federal staff tasked with administering the program was cut, and a draft of the federal budget zeroed out assistance funds entirely. Luckily, the program continued through the end of the 2024-2025 season, and has now been funded again for 2025-26, but staffing cuts are still fueling concerns about funding delays.
Further, Congress has ended tax credits for home energy projects that would save consumers money. The Department of Energy is also requiring unneeded power plants in other states to stay online, with some of the costs being covered by Minnesotans. According to the think tank Energy Innovation, the "Big Beautiful Bill" could cause Minnesota electricity rates to increase anywhere from 25% to 42% over the next decade. The average Minnesota household could see its annual energy bill increase by more than $400 by 2035. In short: energy bills will go up, even outside of Xcel’s request to increase rates.
“I am over $1,000 behind on my electric bill, and I’ve had to apply for energy assistance to avoid disconnection. I’m not alone—my direct neighbor is over $1,500 behind, and many others in my community are in similar situations.” – Alexis A
"I am a military veteran who has been a long term customer of the Xcel energy company. The last several years with Xcel have always included unchecked and excessive profiteering price increases which have been imposed upon us by the company. I am now forced to seek government energy assistance programs in order to help compensate for the outrageous Xcel energy price hikes, which are cleverly disguised under the pretense of Xcel's efforts to ‘provide better service’.” – Shawn L
Xcel has taken some steps to address affordability concerns. Programs the company offers like PowerOn, the Gas Affordability Program, and the Low-Income Discount provide direct support to eligible households. Further, CUB has worked with Xcel to substantially improve the company’s disconnection practices. Earlier this year, the PUC lowered the initial down payment to reconnect service, implemented a minimum $300 past-due balance before disconnection, and extended the notice period prior to disconnection.
We appreciate the steps Xcel has taken, but these changes alone won’t resolve the issues customers have affording their bills. Customers from all sorts of communities and experiences struggle to keep up with their electric bills, and not everyone is eligible for federal, state, or utility assistance programs.
“I finished college last year, worked hard, and found a job where I can use my degree and I can still barely afford my energy bill. This is not sustainable for the average person!” – Meng X
"An increased monthly electric bill of approximately $9-10, while seemingly small, would create additional financial strain for my family. For renters like myself who are already facing higher-than-ever monthly rent along with increasing food prices and cost of living expenses, the proposed increase would be financially detrimental and is concerning as I try to make ends meet every month." – Catherine P
"My spouse and I own a 1,000+ single family house. We have a mortgage. We have insurance, medical, energy, and electric bills. Taxes have increased. Basic necessities, such as groceries for my young children have increased. Living is difficult with these expenses. We have had to use the food shelf to make sure my kids have food and some necessities. We don't drive as much because of gasoline prices. It is difficult to live like this and we could lose our home if there are more increases.” – Jina S
“Xcel Energy is already making huge profits and the increase is NOT needed, while the rest of us, including my family, is struggling from paycheck to paycheck each month. This increase will not help, and please consider the needs of the population over enormous profits” – Kristin S
Given the increases in the cost of living, current and upcoming federal impacts, and the direct comments and experiences of Minnesotans across Xcel’s service territory, we urge the PUC to carefully consider Xcel’s request to increase electric rates.
From the PUC’s website: “One of the key functions of the Commission in performing this mission is to balance the private and public interests affected in each docket, and to make decisions that appropriately balance these interests in a manner ‘consistent with the public interest.’”
We believe that the PUC should seek every opportunity to reduce Xcel’s total revenue requirement to make sure Xcel customers can keep up with their electric bill.
If you’re concerned about the request, you can join the thousands of Minnesotans who have already shared their story with the PUC. Click the button below for a quick and easy comment form. Or, send an email to consumer.puc@state.mn.us and be sure to reference Docket 24-320. Your comment— including your name, email address, and any other information you share—will become a part of the public record. Here are some tips to make your comment as effective as possible.