Xcel agrees to CUB requests to substantially improve disconnection practices

Over the past several years, the number of Xcel customers who have been disconnected for nonpayment has skyrocketed. In May 2023, almost 5,000 customers had their gas or electricity shut off, which—at the time—was the highest number of monthly disconnections by the utility in at least the past decade. That doubled in May 2024, with 10,000 customers being disconnected from service. So far in 2024, a total of almost 43,000 Xcel customers have had their service shut off. 

Xcel’s own practices have made it unreasonably difficult for customers to avoid disconnection or be reconnected once their service has been shut off. Among other policies, Xcel has generally required customers to pay 50 percent of their balance upfront in order to enter into an arrangement for the repayment of past-due bills. The Energy CENTS Coalition has been receiving calls on a weekly basis from customers being asked to pay thousands of dollars to be reconnected—amounts they cannot afford.

Fortunately, after extensive negotiations with CUB and Energy CENTS,  Xcel has agreed to modify its practices to better protect its customers and provide them with reasonable opportunities to avoid disconnection, enter into affordable payment agreements, and keep them informed of their legal rights. With Xcel’s support, we recently filed this agreement with the Minnesota Public Utilities Commission.

What to do if you face utility disconnection

All Minnesotans are entitled to protections related to utility bills and service, and many are eligible for financial assistance. If you are behind on your bills and/or at risk of shutoff, click here for more information.

If you face financial difficulties or extenuating circumstances (such as a job loss, illness, unexpected expense, military deployment, or other similar situation), make sure these concerns are raised with your utility when requesting an agreement to repay past-due bills over time.

Affordable payment agreements

Financial and extenuating circumstances

By law, utilities must offer payment agreements to help customers pay down past-due balances. When setting the terms of those agreements, the utility is required to consider the financial and extenuating circumstances of the household. Importantly, the law does not limit which events qualify as financial or extenuating circumstances, and utilities should consider each situation on a household-by-household basis. 

Xcel has agreed to ensure these factors are incorporated into the payment agreement process so that customers may pay down arrears in a manner that is affordable for them. Rather than require certain payment agreement terms, Xcel has agreed to negotiate agreements with each customer on an individual basis and to accept payment agreements covering a customer’s current charges plus a predetermined amount toward the past-due balance.
 

Down payments

Xcel agreed to greatly reduce down payment amounts in most circumstances. Rather than requiring 50 percent down payment, households seeking to enter their first payment agreement will now only be asked for an upfront payment of 10 percent of their arrearage balance. If that amount is still unaffordable, Xcel will work with the customer to develop a plan that is reasonable for them. If a customer misses a payment or otherwise breaks the agreement, the down payment will increase slightly for each subsequent agreement. 

The framework below will be a guide for Xcel’s customer service staff. If a customer shares that these down payment amounts are unaffordable based on their household circumstances, the down payment amount can be reduced. 

Payment Agreement Guidelines for Normal and Extenuating Circumstances

Payment agreement terms

Other contract terms may also be adjusted when working with households. For example, if a customer has a high past-due balance, the length of time over which the arrears are paid back may need to be extended for monthly payments to be manageable.

Disconnection threshold

Xcel has committed to adopting a minimum arrearage threshold before disconnecting a customer for nonpayment. 

When a customer’s account balance reaches $180 past-due, the company sends an initial disconnection notice and starts a nine-week outreach effort, which includes communications via phone calls, emails, U.S. mail, past-due notices on bills, and potentially in-person door knocks. During this time, customers are provided with information about assistance options and payment agreements and are given time to access applicable resources. 

Xcel will only disconnect customers  once this outreach period ends and the customer’s arrearage balance reaches $300 past due. 

Notice of disconnection

At the end of the nine-week engagement process detailed above, Xcel sends a final notice to the household prior to disconnection. Historically, this notice would be put in the mail five business days before disconnection in the summer, and ten business days before disconnection in the winter. Xcel has agreed to extend the length of time between notice and disconnection to ten days year-round. 

In addition to this extended notice period, Xcel has asked the Commission to allow phone calls or voicemail messaging to be used as the last point of contact prior to disconnection. Before the deployment of its advanced meters, Xcel conducted in-person field visits to households when carrying out disconnections. However, these visits often occurred during the day when customers were away from home, resulting in low success rates for final contact. Xcel has committed to pairing final phone calls with another form of communication—either text messaging or email—if they have permission from the customer. 

Transparency of policies and practices

CUB and Energy CENTS want to make sure Xcel’s customers are aware of the company’s policies and practices surrounding disconnections and payment agreements. Xcel has agreed to post this information on its website and to periodically file policy changes with the Public Utilities Commission to increase transparency for both customers and stakeholders. 

Extreme heat and air quality protections

In addition to the modified practices detailed above, Xcel has proposed—and CUB and Energy CENTS have supported—a plan to remotely reconnect customers during periods of extreme heat. Minnesota law already prevents utilities from disconnecting customers during heat events, but there are no requirements to resume service if a disconnection has already occurred. 

Xcel’s proposal has been made possible by the “advanced metering infrastructure” (aka smart meters) it is installing at customers’ homes and businesses. Previously, Xcel needed to visit each individual residence to reconnect service. Now, customers with advanced meters can be remotely reconnected to electricity service in as little as 15 minutes. Given these remote reconnection capabilities and the health risks associated with extreme heat, the Public Utilities Commission directed Xcel to evaluate the possibility of using its advanced meters to better protect the public from heat-related harms.

CUB and Energy CENTS recommended that these reconnection protections be extended to instances of poor air quality. When air quality worsens, households are encouraged to stay inside and close their windows. However, without electricity to run air conditioning or fans, closing windows can prevent circulation and cause inside temperatures to rise to dangerous levels. Although Xcel has not yet adopted our recommended changes, the company explained that customers sensitive to poor air quality can apply for medical protection. This is an intermediate step that will help medically vulnerable individuals retain service or be reconnected during unhealthy air quality events.  

If a member of your household has asthma, uses a ventilator or respirator, or is otherwise sensitive to changes in air quality, Xcel’s medical certification form can be accessed here.  

Conclusion

These improvements to Xcel’s payment agreement practices will help Minnesotans more affordably pay down past-due balances and avoid disconnection. We greatly appreciate Xcel’s willingness to engage with us and to modify its policies and practices. Most of these revisions do not require Commission approval to be implemented, but a hearing will be held in late October to review the changes and evaluate the company’s extreme heat reconnection proposal. 

We will continue to advocate for policy changes that will better protect customers and make utility service cleaner, safer, and more affordable for Minnesotans. 

If you or someone you know is at risk of utility disconnection, please reach out to us at info@cubminnesota.org or by calling 651-300-4701. Receiving a disconnection notice can be scary, but CUB can help you navigate the options available to you and point you towards assistance resources.