Xcel Energy is asking for another big rate hike

Hearings on Xcel Energy's proposed three-year rate hikes will be held in St. Paul today and Minneapolis tomorrow.

Catch up fast: Xcel has proposed raising rates by 21% over three years to replace aging infrastructure.

• Xcel was approved for an interim hike of more than 8% for average residential customers that is showing up on bills this year.
• It has also proposed a 4% interim hike for 2023 that would go into effect on Jan. 1. If approved, the average residential customer would see an 8.55% increase on their basic service and energy charges.
• The Minnesota Public Utilities Commission (PUC) softened a larger interim rate increase last year, saying Minnesotans were under economic distress due to the pandemic.

What they're saying: The PUC should do the same this year, said Annie Levenson-Falk, executive director of the Citizens Utility Board, which advocates for utility consumers in Minnesota.

• "I would argue that economic circumstances haven't gone away, they've actually intensified," she said.

The other side: Xcel said its rates were 23% below the national average in 2021 and 17% below the Minnesota average. The hikes, it said, will help transition the utility to carbon-free electricity by 2050.

What's ahead: The PUC is likely to make a decision on the three-year rate hikes in June of 2023.

Zoom out: Energy prices have been a big driver of inflation. Nationally, September electricity costs were up 14.8% in the Twin Cities, just below the national average of 15.8%.

• Those costs include not just rate increases, but also usage, additional charges, credits, and taxes.

Details: Today's hearing in St. Paul is at 5:30pm at the Rondo Community Library, 461 Dale Street N.

• Friday's hearing is at 2:30pm in the Minneapolis Central Library, 300 Nicollet Mall.

Editor's note: This story has been updated to clarify that a 4% overall rate hike would equate to the average residential customer seeing an 8.55% increase starting Jan. 1.