Xcel electricity and gas rates increased on January 1, with final rate hikes pending

Published January 7, 2022

If you receive natural gas or electricity service from Xcel Energy, you’ll notice an interim rate increase on your next bill. Before the holidays, the Minnesota Public Utilities Commission (PUC) approved the increases, beginning January 1, but at substantially lower amounts than Xcel initially requested.

An interim rate hike is a standard step after a utility has requested a general rate increase, as Xcel has done for both its electricity and natural gas service. Interim rates go in place as a full rate increase request is being considered, which requires a legal proceeding that generally takes 12-18 months. If final rates are lower than the interim rate increase, customers receive refunds with interest. 

Xcel’s residential electricity rates will increase by 6.4% during 2022, which is about $5.50 per month for the average household. Xcel had asked for a 9.7% interim increase, but the PUC reduced this request, finding that residential customers face “exigent circumstances” in the current economy. In other words, the PUC understands the special pressures many customers are facing right now due to COVID and its effects on the economy.

The PUC also approved an interim rate increase of 4.9% for Xcel gas. At the same time, to reduce the bill impact to customers, the PUC decided to extend customer charges to repay the cost of the February gas price spike over 63 months, rather than 27 months as previously set. In 2022, the net result for residential customers will be a rate increase of 1.0%, or about $0.60 for the average customer. 

CUB understands the impacts of rising energy costs to Minnesota consumers, and we’re fighting back against utilities’ high rate hike requests. CUB will be intervening in Xcel’s electric rate case (and Minnesota Power’s as well), and we are recommending the PUC deny more than $220 million of utilities’ spending on gas last February in a separate case. (More on that case in this blog soon.) We’ll share updates as the cases progress.

In the meantime, here are some resources that can help with utility 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 the utility. 
• Check out CUB’s efficiency tips to save money.

If you have questions, concerns, or would just like to talk with someone to see if there are ways to reduce how much you spend on energy costs, contact us: 651-300-4701 or info@cubminnesota.org.