The state of energy affordability in Minnesota
It’s one of the big political buzzwords of 2026: Affordability. More and more Americans are finding it hard to keep up with the basic cost of living. The costs of housing, food, medicine, groceries, and other essential needs have gone up dramatically.
Energy costs, too, have been making headlines across the country. Here in Minnesota, we are fortunate that both our average electric rates and average monthly bills are lower than most of the country. Both are rising more slowly than the national average, too.
However, that good news hides a deeper problem: data reported by our state’s utilities show that home energy service is unaffordable for a significant portion of Minnesotans.
In short:
- Minnesotans are over $120 million behind on their energy bills.
- Disconnection rates are higher than ever.
- In some parts of the state, the average energy cost is unaffordable.
- Many Minnesotans are making unhealthy sacrifices to pay their energy bills.
The data is clear: action is needed to make energy service affordable for Minnesotans.
Electric Utilities | Gas Utilities |
|---|---|
Minnesota Power | Minnesota Energy Resources Corporation |
Otter Tail Power | Great Plains Gas |
Dakota Electric Association | CenterPoint Energy |
Xcel Energy | |
Minnesota’s regulated utilities, listed to the right, file monthly reports with the Public Utilities Commission on the status of residential customers. Importantly, we don’t have access to similar data for customers of most cooperative utilities (for example, Connexus) or municipal utilities (for example, Anoka Municipal Utilities).
Based on the data we do have, CUB has tracked the number of disconnections, total arrears, and more since 2015. Here’s what the data shows.
Minnesotans are over $120 million behind on their energy bills.
Altogether, Minnesotans owe about twice as much on their energy bills as in 2019. Monthly average arrears totaled more than $120 million last year.
This increase is primarily driven by customers with past due balances falling farther into utility debt. The number of past-due customers has increased by only 4% since 2019.
Disconnection rates are higher than ever.
Disconnections were trending downward prior to 2020. After the pandemic-era pause on utility disconnections ended, the number of shutoffs increased precipitously. In 2024, more than 91,104 Minnesota households were disconnected for nonpayment by regulated utilities—more than any other year on record. Disconnections kept pace in 2025, at 90,433.
Importantly, households continue to be disconnected throughout the winter, when energy for heating is a necessity. It’s a common misconception that utilities can’t be shut off in Minnesota during the colder months. In order to stay protected, a customer must enter and make timely payments on a payment agreement with their utility. During the 2024-2025 Cold Weather Rule period, more than 20,000 households were disconnected from electric or natural gas service.
In some parts of the state, the average energy cost is unaffordable.
Counties in Minnesota where energy burden is at or above 6% |
|---|
Clearwater County |
Kittson County |
Lake of the Woods County |
Mahnomen County |
Murray County |
Redwood County |
Renville County |
Roseau County |
Traverse County |
As an imperfect rule of thumb, home energy expenses should be no more than 4 to 6% of a household’s income to be considered affordable. But in nine out of Minnesota’s 87 counties, the average household energy burden is 6% or more. All of these counties are in Greater Minnesota, where average income tends to be lower and energy costs higher, and where many households rely on expensive delivered fuels for heating.
Again, averages don’t paint the full picture. In those nine counties, and every other, many households face energy burdens far higher than 6%.
Many Minnesotans are making unhealthy sacrifices in order to pay their energy bills.
According to US Census Bureau data:
- 59% of Minnesota households had difficulty paying for usual household expenses
- 36% reduced or went without basic household necessities to pay energy bills
- 23% of low-income households kept their homes at unsafe or unhealthy temperatures
Public concern is growing.
Xcel’s 2024 electric rate case gives us another anecdote. Xcel’s current request to increase electric rates received more than 7,500 public comments. That’s more than 15 times as many public comments as Xcel’s previous rate case, three years earlier.
CUB reviewed more than half of these comments and, unsurprisingly, commenters were concerned about the increase in costs. Many people discussed the direct effect it would have on their household. Of the 4,008 comments we reviewed, eight supported the rate hike.
Commenters were overwhelmingly upset about corporate profits and executive pay. More than 50% of comments mentioned Xcel’s profit margin or return on equity. Approximately 20% discussed executive compensation.
CUB works hard to fight unnecessary rate increases and to ensure that every household in Minnesota can keep their lights and heat on. We’re advocating at the Minnesota Public Utilities Commission to protect Otter Tail and Xcel customers facing a rate hike, to protect Minnesotans from future gas rate hikes due to overspending, and much more. We’re also advancing an energy affordability agenda at the 2026 legislature – read more here.
If you are having trouble keeping up with your energy bills, contact CUB at 651-300-4701 or contact@cubminnesota. You can also set up a free Energy Bill Consultation to talk about ideas to keep both your electric and gas bills low over the long-term.