Xcel Energy customers push back on possible rate hike

“When does the public get a break?” St. Paul resident Joe Prostrollo asked.

He, like many other Xcel Energy customers, is feeling frustrated at the price of their electricity bill.

Last year, Xcel Energy proposed a rate increase of $353 million, or 9.6%, for 2025 and an additional $137.5 million, or 3.6%, for 2026.

RELATED: Xcel seeking more from customers on heels of interim rate increase

However, the Minnesota Public Utilities Commission (PUC) lowered the request to $82.9 million, or 2.3%, for 2025 and an additional $127.3 million, or 3.4%, for 2026.

It is a $210 million bump for Xcel, but it’s more than 60% lower than what the company had been seeking. According to Xcel, over 2025 and 2026, the average increase for residential customers will be about $5.59 a month.

“We recognize that affordability is a top concern for many Minnesotans, and it’s central to every rate case the Commission considers,” PUC said in a statement. “While utilities are allowed under Minnesota law to file rate cases to recover the reasonable costs of providing safe and reliable service, that does not mean every requested cost is approved. The Commission carefully reviews each request and requires utilities to demonstrate that the costs they seek to recover are necessary and reasonable. If they cannot, those costs are not included in customer rates.”

PUC states that based on initial estimates, Xcel’s final rates will be lower than rates customers had been paying in the interim, meaning customers may receive a refund, but that could take months to calculate.

“There were an amazing number of public comments in this case,” Annie Levenson-Falk, the executive director of the Citizen Utility Board of Minnesota, recalled.

Levenson-Falk said the board recieved around 8,600 comments, nearly 17 times more than their previous rate case.

“We read nearly half of those comments,” Levenson-Falk explained. “A lot of people were talking about the impact that it has on their families to not be able to afford their bills.”

In a statement, Xcel Energy told 5 EYEWITNESS NEWS the new rates are significantly offset by federal tax credits and lower fuel costs. The company also says it expects its price to be below the national average:

“Xcel Energy is committed to providing safe, reliable service while leading the clean energy transition and keeping bills as low as possible.

“The Minnesota Public Utilities Commission’s decision enables Xcel Energy to invest in renewable energy, transmission and other infrastructure needed to meet growing electricity demand, strengthen reliability, spur economic development and deliver long-term customer value.    

“The PUC approved an increase of approximately $211 million over 2025 and 2026. We estimate the average residential customer bill will increase by about 3% per year.  

“Because the final rates will be below the interim rates set by the Commission for 2025, we expect to refund customers in the form of a one-time credit with interest. Once the Commission issues a written order, we will submit a plan for approval for the date the new rates will be implemented and timing of the refund.  

“The new rates are significantly offset by federal tax credits and lower fuel costs, and Xcel Energy’s residential electric bills were already 31% below the national average in 2025, and we expect bills to continue to remain well below that benchmark. We continue to offer payment assistance and flexible payment options for customers who need help.  

“To your question on executive compensation, these packages help us attract and retain the talent needed to lead Xcel Energy’s clean energy transition and deliver reliable, safe and affordable energy. These packages have a minimal impact on rates, and Minnesota caps the amount of executive compensation that can be recovered from customer bills at the equivalent of the governor’s salary per year.”