October 26, 2021
Minnesota’s largest utility, Xcel Energy, is asking to raise its electricity rates by around 20 percent over the next three years.
Xcel says it needs the increase to cover the costs of replacing an aging electrical system as it transitions to more renewable energy. It comes at a time when many Minnesotans are struggling to pay their rising utility costs.
Here’s a closer look at Xcel’s proposal, and what it means for Minnesota ratepayers.
What does Xcel say it needs this proposed rate increase for?
The main reason is to replace aging infrastructure, such as transmission lines and substations.
Xcel says those investments are needed so it can continue to provide reliable service and expand service to meet customers’ future needs.
“This rate case is really about investing in that other part of our business, the poles and wires that deliver that energy to our customers and recognizing that much of that system was installed decades ago,” said Chris Clark, Xcel’s president in Minnesota, North and South Dakota. “It’s reaching the end of its life and it needs to be replaced.”
The request comes as Xcel is adding more renewable energy to its system, such as solar and wind. The utility has said it wants to use 100 percent carbon-free energy by 2050.
Xcel says the proposed rate increase of 21.2 percent over three years would help it create an advanced electrical grid to connect to those renewable energy sources and distribute the electricity. If it’s approved, the rate increase would generate about $677 million.
How much would this proposal cost Xcel customers?
The average residential customer would see their electric bills rise by about $18 to $20 a month cumulatively over the next three years.
That would equate to an average monthly increase of $4 a month next year, about $8 a month in 2023, and about $6.50 in 2024.
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