Happy New Year! As an Xcel electric customer, you may have received the email on Wednesday morning reading:
Dear Valued Customer,
On November 1, Xcel Energy proposed new electric rates for Minnesota customers to begin in 2025 and 2026. Our rate proposal to the Minnesota Public Utilities Commission (MPUC) supports our commitment to provide reliable, safe, and clean electric service to our customers, including investments in:
- Enhanced reliability and resiliency of the system that serves customers.
- Clean energy projects that lock in fuel savings for customers.
- Our carbon-free nuclear plants that are key to meeting our clean energy goals.
The requested 2025 increase is approximately 9.6%, or $9.89, to an average residential customer’s monthly electric bill. The requested 2026 increase is for an additional 3.6%, or $3.90. While the MPUC reviews Xcel Energy’s request, the interim rate increase for 2025 will be 5.2%, or $5.39, per month for an average residential customer.
New Rates Proposal
Customers may submit a comment on our rate proposal to the MPUC online, by mail or email. Please follow the link below and reference Docket No. E002/GR-24-320 in your comment.
To recap, Xcel is asking the state PUC to approve a 9.6 percent rate increase for 2025. As a temporary measure, the PUC is allowing the company to raise rates by 5.2 percent as they consider the matter. As I reported last month, Xcel had requested a temporary increase of a little over 6 percent, which the PUC whittled down to the 5.2 percent hike you will see on your power bills beginning this month.
The whole process at the Commission will play out over the next year, perhaps spilling over into 2026. As mentioned in the Xcel email’s last sentence, you can play a part. There will be public hearings on the proposed increase held around the state in 2025 and you can submit your own comments directly to the PUC. See the bottom of this link for more information.
In the email above, Xcel mentions three reasons for their proposed rate increase: more investments in transmission lines, renewable energy, and nuclear power.
The PUC mentions two more: Xcel reports that their sales of electricity (fewer kWh) are declining and Xcel also wishes to increase payouts to their company investors. Since utilities are mostly fixed-cost businesses, lower sales mean higher prices per unit. Higher dividends and interest payments to investors will require more revenue.
Speaking of nuclear power, Xcel Energy announced some good news yesterday. They have received Federal approval to extend the operating life of their Monticello nuclear plant to the year 2050. Xcel already has state approval through the year 2040.
Built in 1971, Monticello is the smaller of the two nuclear plants owned by Xcel in Minnesota. As I never tire of repeating, new nuclear power plants are outlawed by state law.
As for the claim of declining future sales, color me skeptical. We’ve all heard about the AI-fueled boom in data centers and the accompanying surge in electric power demand.
As he’s wont to do, the Minnesota Star Tribune‘s Walker Orenstein was breaking news yesterday on Twitter (X) concerning Xcel’s newest big customer, Amazon. Orenstein reports:
How much is 600 megawatts? Enough to power an entire city the size of Portland, Oregon.
One could infer that the Monticello plant’s future output will be dedicated to serving a single customer, Amazon. I can infer that because Xcel is building a 700 MW solar farm at the site, which gives rise to the need for diesel back up.
Of course, it would be gauche of me to point out that the backup Amazon diesels might not be necessary at all if Xcel were to keep open the massive, adjacent coal-fired power plant (Sherco) instead of building intermittent solar. So, I won’t point that out. [But, while I’m on this tangent, how it is that Xcel sold the Amazon land to a third-party for $7 million and then was flipped to Amazon for ten times that amount just six months later?]
So much for “electricity is penny cheap from NSP to you.” Those were the days.