CUB achieves substantial improvements to Xcel’s shutoff practices

On Thursday, the Minnesota Public Utilities Commission (PUC) approved an agreement between CUB, the Energy CENTS Coalition, and Xcel that makes substantial improvements to how Xcel treats past-due customers.  

Xcel has gotten stricter in its treatment of past-due customers in recent years. About 45,000 Xcel customers have had their electric or gas service shut off due to non-payment so far in 2024. With few exceptions, Xcel has required customers to make a down payment of 50 percent of their past-due amount before entering into a payment plan. This has made it difficult for customers to avoid disconnection or reconnect service, and was likely a violation of Minnesota law.

In light of these serious concerns, we are thankful to Xcel for their willingness to make significant changes. While this will not eliminate the hardships faced by past-due customers, it should make payment agreements more affordable and help households avoid shutoffs.

Increased protections for Xcel customers

Through months of negotiation, CUB and the Energy CENTS Coalition came to an agreement with Xcel about improving their policies and practices related to disconnection. On November 7, the PUC approved that agreement.

Moving forward, Xcel will be required to:  

• Lower initial down payments: Initial down payment requests will be lowered from 50 percent to 10 percent, and will be further reduced if needed depending on each household’s financial circumstances to reach a payment plan the customer can afford (see new payment agreement guidelines here).
• Provide flexible payment arrangements: Beyond down payments, the PUC affirmed that Minnesota law requires Xcel (and all utilities) to consider the financial circumstances of each household on a case-by-case basis. Utilities must agree to set payment arrangements that the individual customer can afford, including flexibility in setting down payment and monthly payment amounts, as well as the length of the total payment plan period.
• Improve disconnection notice policy: Xcel will not send disconnection notices until a customer’s past-due balance reaches a minimum of $180, and the utility will not pursue disconnection until the past-due balance exceeds $300. Xcel must also wait at least 10 days after mailing a final disconnection notice before disconnecting a customer.
• Enhance policy transparency: Xcel must post its disconnection and payment agreement policies on its website and explain to customers their right to an affordable payment agreement. Moving forward, Xcel will also have to file an update with the Commission describing any future changes it makes to these policies. 

Next steps

• Consider eliminating late fees or using late fees to support affordability programs: Xcel (and many Minnesota utilities) charge customers late fees of 1.5% per month, comparable to the high interest rate used for many credit cards. Xcel is now required to propose a program in its rate case to eliminate late fees or donate them to affordability programs. CUB plans to be involved in the rate case and will review this proposal.
• Offer new extreme heat and poor air quality protections: Xcel must develop a plan to reconnect disconnected customers on days of extreme heat and/or poor air quality. Individuals with existing conditions that make them particularly vulnerable to poor air quality conditions (e.g. asthma) can also receive additional protections from shutoff during poor air quality events. Xcel will be conducting outreach to provide customers information on how to request those medical protections. 

Addressing disparate impacts in utility service quality 

A coalition of “Grid Equity Commenters” (including Cooperative Energy Futures, Environmental Law & Policy Center, Sierra Club, and Vote Solar) also introduced evidence that Xcel customers of color are disproportionately likely to face shutoffs and longer power outages. We are concerned with these findings and appreciate the compelling arguments offered by Fresh Energy and the Grid Equity Commenters about how to address these disparities. 

The PUC ordered Xcel to collect additional data and conduct an analysis to identify the causes of these disparities. Xcel must also hire an independent third-party evaluator with expertise in racial disparities to conduct a one-year study of the company’s policies, and engage stakeholder input throughout the process.

What to do if you face disconnection

If you are behind on your bills or are worried about your service being disconnected, CUB recommends to:

1. Call your utility and ask to arrange a payment plan. Regardless of your utility provider, all Minnesotans have a legal right to a payment agreement that is affordable given their own financial circumstances.
2. Contact the PUC if you can’t reach an agreement. If the utility won’t agree to a payment plan that is affordable, do not agree to the plan. Failing to make timely payments could subject you to disconnection. Instead, contact the Public Utilities Commission (651-296-0406). Their Consumer Affairs staff will mediate with the utility on your behalf.
3. Check if you are eligible for Energy Assistance or other funding. Find out more here. Let your Energy Assistance provider know if you have a utility disconnection notice or are running low on delivered fuel. They will put your application at the top of the pile, and you will also be eligible for additional funds.

Minnesotans have extra protections during the Cold Weather months, but you must still make and keep a payment agreement in order to avoid disconnection.