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Commerce Department Recommends Xcel Trim Rate Request by 60 Percent

June 05, 2014


For Immediate Release:

SAINT PAUL, MN – The Minnesota Department of Commerce Division of Energy Resources  recommended today that the $291 million rate increase proposed by Xcel Energy for electric service in 2014 and 2015 be reduced by over $174 million or 60 percent overall.  Xcel provides electric service to over 1,240,926 customers, located largely in the Twin Cities and the southern half of Minnesota.  After an extensive review of Xcel’s proposed rate increase, Commerce concluded that Xcel would still be able to provide safe, reliable service by making needed improvements to distribution, transmission and generation facilities at the pared-down rate increase level. 

“Xcel’s requested rate increase is way too high,” said Commerce Commissioner Mike Rothman.  “The utility’s math does not add up – Minnesota consumers can have reliable electricity at reasonable rates by trimming Xcel’s request by 60 percent to reflect our thorough findings.”

The Commerce Department plays a strong role on behalf of rate-payers in Minnesota by providing a thorough analysis of requested rate increases made to the Public Utilities Commission.  The Department’s Division of Energy Resources (DER) will continue its investigation into the proposed rate request to ensure that Xcel is able to provide reliable service at reasonable rates.  DER recommended reductions in Xcel’s proposed cost of capital, along with proposed costs that overstate actual costs, including benefits paid to employees, chemicals used to produce energy, and property taxes.  Additionally, DER concluded that Xcel understated sales revenues and insurance benefits, which diminishes Xcel’s need to increase rates.  For 2015, DER recommends that the Public Utilities Commission limit the increases only to needed capital investments in Xcel’s system and only to the extent that the capital improvements are made.  In addition, DER recommends that rates in 2015 reflect increased revenues.  

Finally, the Department is asking the Public Utilities Commission to approve full decoupling for Xcel’s system on a pilot basis, which means that the utility’s earnings would be separated (decoupled) from the incentive to sell more energy.  With decoupling, utilities are more likely to invest in and encourage energy efficiency, or less likely to resist economically beneficial efficiency and conservation for consumers and businesses.

After the written testimony, public hearings and evidentiary hearings are completed, Administrative Law Judge Jeanne M. Cochrane will present her recommendations to the Minnesota Public Utilities Commission.  The Commission is expected to decide this matter before March 2015.

Public hearings will be held the week of June 23 in various locations in the Xcel service area:

  • Monday, June 23, 1 pm – Earle Browne Center, Minneapolis 
  • Monday, June 23, 7 pm – Sabathani Center, Minneapolis
  • Tuesday, June 24, 1 pm – West Minnehaha Recreation Center, St. Paul
  • Tuesday, June 24, 7 pm – Woodbury Central Park, Woodbury
  • Wednesday, June 25, 7 pm – Civic Center, Mankato
  • Thursday, June 26, 7 pm – Eden Prairie City Center, Eden Prairie
  • Friday, June 27, 1 pm – Lake George Municipal Complex, St. Cloud

For details and further information, please see the Commission’s website:  http://mn.gov/puc/

About the Minnesota Department of Commerce Division of Energy Resources

The Division of Energy Resources is tasked with ensuring that energy service is reliable and reasonable priced while minimizing adverse environmental impacts.  Consumers interested in energy efficiency and conservation can visit the Department of Commerce Division of Energy Resources website for consumer energy tips and guides.