PUC lowers Xcel interim rate increase 

On November 1, 2024, Xcel Energy filed another request to increase rates for its Minnesota electric customers. The increase would add an additional $491 million to customers’ tab over the next two years—a 13.2 percent increase over that time period. CUB previously published an article summarizing some of the details of this latest request and our concerns about it. In this article, we provide an update on a series of orders filed on December 30th by the Minnesota Public Utilities Commission (PUC), which address some preliminary issues of the rate case, including approval of interim rates. 

On December 30th, the PUC referred Xcel’s rate increase request to the Minnesota Office of Administrative Hearings (OAH) for a contested case before a judge. Through that proceeding, Xcel and other parties (including CUB) will file expert witness testimony and other evidence discussing the merits of Xcel’s proposed rate increase. The case will specifically consider whether Xcel is asking customers to pay more than is reasonable for safe and reliable electric service.  

The PUC also addressed interim rates in a December 30th order. Minnesota law generally grants utilities the right to collect a portion of their requested rate increase while a rate case is pending before the judge. This is called the "interim rate.”  On December 30th, the PUC approved a $192 million interim rate increase, which went into effect on January 1, 2025. This means the average Xcel residential electric customer will see their rates go up by about $5.39 per month throughout 2025. If the final rate increase approved by the PUC at the conclusion of the rate case is lower than the interim rate increase, then Xcel must refund the difference to customers.  

Interim rate amounts are calculated using criteria established in State law. Among those criteria, interim rates cannot be used to recover costs that differ “in nature and kind” from costs the PUC has previously approved for rate recovery. We are pleased to see that, in response to CUB’s and others’ advocacy, the PUC prevented Xcel from including in interim rates around $92.6 million in “wildfire mitigation expenses.” Xcel proposes to invest this considerable amount in wildfire mitigation in Minnesota after numerous lawsuits alleged Xcel’s utilities in Colorado and Texas were partly to blame for wildfire-related property damage in those states. As we noted in comments filed with the PUC, most of Xcel’s proposed wildfire mitigation-related expenses in Minnesota fall within a new cost category that the PUC has not approved for rate recovery in prior Xcel rate cases. Though the PUC may eventually allow Xcel to recover some or all of these Minnesota wildfire mitigation-related costs through rates, Xcel will first need to prove that the costs are reasonable.  

More details about Xcel’s requested rate increase are available in this customer notice, which Xcel filed with the PUC and recently sent to customers as a bill insert. 

What comes next? 

Soon the judge assigned to the rate case will host a prehearing conference with parties to establish a procedural schedule. It is likely that the rate case will not conclude until late 2025 or early 2026. Keep an eye on our website and social media pages for updates on these developments. 

Get involved 

If you are an Xcel customer and are concerned about this proposed rate hike, let the PUC know. Public comments will be helpful to bolster the case being made by CUB and other parties.  

You can write a comment online or send an email to consumer.puc@state.mn.us, and reference Docket No. 24-320. (Please note that everything in your comment will become part of the public record.) You can also participate in one of several public hearings that will be scheduled in the future.  

Struggling with energy bills? 

In the meantime, here are some immediate resources that can help with your home energy bills: 

• Energy Assistance provides grants toward past-due and future energy costs. If you qualify for Energy Assistance, you can also have future utility bills capped at a certain portion of your income through affordability programs offered by some utilities, including Xcel Energy.  
• Weatherization Assistance and low-income conservation programs provided through the utility offer free or low-cost efficiency improvements and appliances to qualifying households. 
• All customers can get rebates and discounts on energy efficiency measures through their utility. 
• Check out CUB’s efficiency tips to save money.