Some Xcel electric customers eligible for Automatic Bill Credit
On April 16, 2024, Xcel filed a petition requesting the Minnesota Public Utility Commission (PUC) to approve a two-year pilot for an Automatic Bill Credit Program (the ABC Program). The ABC Program is designed to reduce energy burden by providing an automatic bill credit to households in under-resourced and historically marginalized communities across Xcel’s Minnesota service territory. The Program was developed in part through Xcel’s work with Equity Stakeholder Advisory Group, which is comprised of approximately 35 organizations, including BIPOC community-based organizations, American Indian organizations, low-income advocates, workforce development and training organizations, CUB, and others.
What is energy burden?
“Energy burden” is a term used to describe the percentage of a household’s income devoted to paying energy costs (which typically includes electricity and natural gas). The average energy burden for Minnesota households is around 2 percent. Energy burdens greater than 6 percent are generally considered high, and energy burdens greater than 10 percent are considered severe.
Who benefits from the ABC Program?
To identify customers eligible to participate in the ABC Program, Xcel compared U.S. Census data such as median household income, poverty rates, and other demographic variables against average annual electricity bills. In this way, Xcel identified 77 census blocks where residential households had, on average, an energy burden over 4%—even when only electricity was considered. Given that most of these households also receive gas service and pay for other energy resources, a 4% burden solely for electricity service is very high. These geographic areas are where the ABC Program is targeted.
When the PUC issued an order last winter approving Xcel’s ABC Program, it required several changes to avoid over-including households less likely to need assistance. By applying several screens to the geographic data, the number of eligible census blocks was reduced from 77 to 63. Ultimately, 17,105 residential households located within those 63 census blocks will be eligible for the automatic bill credit. Maps showing the eligible census blocks are available in Xcel’s February 18, 2025 filing.
How is the bill credit calculated?
The bill credit delivered to households in each eligible census block will be calculated by subtracting the target annual electric bill (the amount that would result in a 4% average annual energy burden in the census block) from the actual average annual electricity cost per residential customer in that census block. The amount of the bill credit will differ from one census block to the next but will be the same for each household within the same census block.
Who pays for the ABC Program?
Xcel estimates the two-year ABC Pilot Program will cost around $4.1 million to implement. The utility proposed to cover those costs using a portion of the U.S. Departments of Energy’s annual settlement payments related to the U.S. Government’s failure to create a long-term nuclear waste repository. Normally those settlement payments are returned to Xcel’s customers via periodic, small refunds reflected on customers’ bills. (The last such refund was, on average, $3.40 per household.) The amount of two future refunds will be reduced to pay for the ABC Pilot Program. All told, this means that the ABC Program will be funded by Xcel ratepayers, though not in a way likely to create a significant or lasting increase to non-eligible households’ electric bills.
CUB’s perspective on the ABC Program
CUB often takes positions adversarial to utilities when we believe doing so protects ratepayer interests. But we are also proud of work we do with utilities to support programs like this one, which was designed with stakeholder input to meaningfully and creatively address ongoing inequities in how Minnesotans consume and pay for electricity. We are hopeful the ABC Program will be successful. We look forward to reviewing and commenting on future reports about the Program’s progress and results.
For more information on this Program, keep an eye on our website. In the meantime, if you have questions about your heating bills, or if you are looking for more ideas to reduce your energy usage or utility costs, reach out to CUB by emailing info@cubminnesota.org, calling us at 651-300-4701, or messaging us on Facebook.