Xcel wants a big rate hike, but customers say not so fast
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Minnesotans will get the chance to weigh in on a proposal by Xcel Energy to raise residential electric rates by 9.6% this year and another 3.6% in 2026.
Why it matters: If the hike is approved, the average residential customer would see their bills increase $13 a month by the end of 2026.
The big picture: Minneapolis and St. Paul homeowners are facing hefty proposed property tax increases next year, and home insurance rates have also been surging.
Zoom in: Xcel justified the rate hikes by arguing that it needs the extra money to improve infrastructure, build clean energy projects that protect customers from rising fuel costs and meet renewable energy goals.
- It also says it needs to prepare for expected increases in electricity use, including from vehicles and data centers.
What they're saying: Customers have already filed 6,000 comments with the Minnesota Public Utilities Commission, which will decide how much of a hike Xcel gets, said Annie Levenson-Falk, executive director of the Citizens Utility Board of Minnesota.
- That's a response level she's never seen before and it's likely tied to people facing affordability challenges. The number of customers who had their Xcel service shut off last year surged. She said too much of the proposed increase is tied to shareholder profit.
- "A lot of people are very upset by the idea that someone wants to increase their rates and I think that is really going to get the PUC's attention," said Levenson-Falk, whose nonprofit organization advocates for utility consumers.
The other side: In a statement, Xcel said its Minnesota customers' electric bills are 32% below the national average over the last year and its residential bills have only increased by 1.55% per year since 2013, well below inflation.
What we're watching: Hearings over the next two weeks will help the PUC decide how much of a hike to approve.
- A decision will come in the summer of 2026. If approved, the 9.6% increase would take effect immediately but would not be retroactive. It would be followed by the 3.6% increase.
- The PUC has approved a 5.2% interim increase, which is already reflected on Xcel bills. If the commission approves a smaller hike, customers would get a refund.