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Utilities in Minnesota


Utilities in Minnesota

There are three types of energy utilities in Minnesota:

  • Investor-owned utilities (“IOUs”): Corporations with shareholders who benefit from any profits. The rates that IOUs are allowed to charge are approved by the state’s Public Utilities Commission (PUC).
  • Municipal utilities (“Munis”): Nonprofit public entities. Muni rates are regulated by city councils or locally appointed utility commissions. Rochester is the state’s largest municipal utility, but munis mainly serve smaller communities throughout Minnesota.
  • Cooperative utilities (“Co-ops” or “rural electric associations”): Member-owned nonprofit organizations that serve rural areas. A co-op’s rates are governed by a board of directors elected by its members. While cooperative utilities can opt to have the PUC regulate their rates, only one–Dakota Electric Association, south-east of the Twin Cities–has chosen that option. Co-op service territories cover 85 percent of Minnesota, but account for only 18 percent of retail electric sales.


In Minnesota, where you live determines which electric utility serves you. An electric utility is required to serve every customer in its territory.

Natural Gas

Unlike electricity, natural gas service does not touch every corner of the state. It is too costly to serve areas that are far from the pipelines that deliver gas to Minnesota. In other places, rocky terrain, forests, wetlands, and other geographic features make it too difficult to provide service.

Most Minnesotans who have natural gas are served by large gas companies or their local municipality. The PUC regulates rates charged by the large companies (like CenterPoint, Xcel, and MN Energy Resources Corporation). Municipal gas rates are generally regulated by local boards. In addition, a handful of small companies distribute gas to a few thousand customers in Minnesota; these companies fall below the legal threshold that requires rates to be regulated.

Customers who do not have natural gas service most likely heat with delivered LP gas (propane), fuel oil, wood, and/or electricity.

Where does my electricity come from?

Source: U.S. Energy Information Association

The electricity that lights your home or business will come from various sources, but the chart above shows Minnesota’s total in-state power generation mix. Since 2005, coal power generation has declined, but the state still has more than the national average. 

However, Minnesota taps more wind power than the national average, and solar power generation is rapidly growing. Renewable power (including wind, solar, hydro, and biomass) makes up more than 32 percent of power generation in Minnesota. In 2023, for the first time, Minnesota generated more electricity from wind than from coal.

Source: Minnesota Pollution Control Agency

Further, since 2005, greenhouse gas emissions from Minnesota’s electric sector have decreased by 54 percent, faster than any other sector of the economy.

Utilities own some generation sources, like power plants and wind turbines, and so do independent companies that sell power to the utilities. The power that is not generated in Minnesota is delivered from other states or Canada on high-voltage transmission lines.

Customers also own sources of generation. This ranges from industrial customers with big power generators to homes with rooftop solar panels. Even if customers own generation, they’re almost always still connected to the utility grid.

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