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Xcel Energy drops rate hike request for 2023

After receiving backlash from state agencies and customers, Xcel Energy withdrew its request to raise rates in 2023.

SAINT PAUL, Minn. — It seems like every year we talk about our utility bills going up and rate hikes.

And with what's currently going on in the world — the war in Ukraine, COVID, major weather events — we were expecting to see prices go up again next January. 

But in a bit of a surprising move, Xcel Energy dropped its request to raise rates for its 1.3 million customers in Minnesota, hoping to get its money in a different way.

The Minnesota Public Utilities Commission met Tuesday to discuss Xcel Energy's request to raise prices for their customers.

Xcel Energy submitted that request back in September.

But many customers, the Attorney General's Office and the Minnesota Department of Commerce weren't very happy about it, given the heavy burden high inflation is already putting on consumers.

"The department has cast a significant amount of doubt on whether Xcel needs any additional rate increase,” Minnesota Department of Commerce attorney Katherine Hinderlie told the commission Tuesday morning.

Hearing their concerns, Xcel Energy decided to go with a different approach.

On Monday, Nov. 28, the company sent the utilities commission a letter that explained another idea.

"This provides a path to avoiding any interim increase,” Xcel Energy managing attorney Matthew Harris explains.

The company was willing to withdraw its request for a rate increase in 2023 if the commission was willing to give them more flexibility and certainty with their budget.

“We are trying to avoid increasing our rates in 2023, recognizing that we’re going to be getting in additional revenue from other sources that we have,” Harris explains.

Harris says Xcel Energy is producing more energy than its customers can use.

That extra energy is sold at an auction to other utilities across the Midwest.

"And that auction has been very volatile in the last two years. Two years ago, we received somewhere in the ballpark of $2 to $5 million in that auction. And last year we received over $100 million in that auction."

Harris says Xcel Energy wants more flexibility and certainty when it comes to that money.

“We think that we will receive substantial revenue from that auction in the future. We think that’s reasonable, and we want to make sure that whatever we do receive from that auction will be returned to our customers,” Harris says.

Commissioners decided to accept that proposal, voting 5-0 in Xcel Energy’s favor.

However, there is a chance rates could go up in the future.

This most recent request to raise rates was an interim rate increase.

Xcel Energy and the commission are still hashing out a long-term rate agreement for the years 2022 through 2024.

Harris says a decision on that won't come until next summer.

So, summing everything up, there won't be rate increases as of right now, but there is an entirely separate discussion happening that could raise your rates down the road.

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