Xcel proposal could reduce refund owed to customers
Last year, Xcel filed a rate case, seeking 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
Xcel electric bills have already increased this year. Under state law, utilities are allowed to raise rates on an interim (temporary) basis while their full request is being reviewed by the Minnesota Public Utilities Commission (PUC). Since January, Xcel customers have been charged an interim rate increase of 5.2%, or about $5 per month for the typical residential customer. If final rates approved by the PUC are lower than these interim rates, the difference between the final rate and the interim rates already charged will be refunded to ratepayers, with interest. If the final approved rates are higher than interim rates, customers cannot be charged for any difference between January 2025 and the date the PUC issues its written order.
Last month, Xcel submitted a proposal to the PUC that upends the typical process for establishing interim rates and determining how any customer refunds are calculated after final rates are set. The company’s proposal would reduce the refund it may eventually owe customers—a result clearly inconsistent with Minnesota Law.
Xcel’s 2026 interim rate proposal
The rate case Xcel filed last November is a multiyear rate case: it proposes to increase rates in 2025 then again in 2026. State law permits the PUC to establish different interim rates for the second year of a multiyear rate case. Last month, Xcel proposed that the its 2025 interim rates remain in effect and that the PUC “allow it to calculate its interim rate refund or surcharge by comparing the revenue received during the full period in which interim rates were in effect against the revenue that would have been collected if final rates had been in effect.“
The PUC has never calculated interim rate refunds or surcharges this way. Typically, the PUC compares interim and final rates on a year-by-year basis, determines whether an over- or under-collection occurred, and then approves an appropriate refund or surcharge.
Xcel’s proposal would reduce the refund owed to customers if there is an under collection in one year of the rate case and an overcollection in the other.
CUB and other parties oppose Xcel’s proposal
On October 31, 2025, CUB filed joint comments with a group of Xcel’s large industrial customers opposing Xcel’s proposal. The Minnesota Department of Commerce, Office of the Attorney General, and Energy CENTS Coalition also filed comments opposing the proposal. As we and each of these other parties pointed out, Xcel’s proposal directly violates Minnesota Law (Minn. Stat. § 216B.16, subd. 3(c)), which establishes an objective process for calculating interim rates and addressing over- or under collections.
In their comments, the Department of Commerce nicely articulated the fundamental unfairness of Xcel’s proposal:
Xcel’s rates have increased by about 94% since 2005. Indeed, Xcel’s rates have cumulatively increased at least $2.2 billion since 2011. And Xcel’s current request continues this pattern of nearly annual increases. Xcel is seeking net increases in gross revenues of $344.3 million (9.4%) in 2025, and $129.4 million (3.3%) in 2026.The impact of these relentless increases is clear. . . .
Both residential and industrial customers have borne the impact of rising rates. About 13% of Xcel’s residential customers may now endure an excessive energy burden. The end result has been a spike in utility disconnections. . . . Xcel carried out more disconnections in 2023 than in any year since 2016, and nearly reached its previous high of 26,757 shutoffs from 2015. And last year, Xcel disconnected more than 52,000 residential customers, which was more than double the year before, and roughly double the number of disconnections conducted in 2015. . . .
In contrast to its struggling customers, Xcel saw its net income increase approximately $220 million from 2023 to 2024. Through June 2025, Xcel continued to enjoy rising profits; its net income was about $140 million more than the same period in 2024. And in October 2025, just as the utility was claiming to the Commission it faced “substantial risk” in connection with its 2026 interim revenue deficiency, its stock reached a five-year high.
CUB agrees: Xcel's proposal would result in an unfair and unlawful rebalancing of interests that favors the utility over its customers.
Get involved
The PUC has final say on how much Xcel can increase its rates for electric service, and you can tell them what you think. To do so, submit a comment to the PUC online or by sending an email to consumer.puc@state.mn.us. Make sure to reference Docket 24-320 so your submission can be considered. Your comment—including your name, email address, and any other information you share—will become a part of the public record. The deadline to submit a public comment is December 30, 2025. See the whole timeline for Xcel’s rate case here.