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Department of Commerce recommends significantly smaller rate increases for Xcel Energy

Analysis conducted by the Department reveals Xcel understated revenue and overstated costs

March 01, 2013

For Immediate Release:

SAINT PAUL, MN – The Minnesota Department of Commerce, Division of Energy Resources (DER) recommended today the reduction of over $191 million of the $285 million rate increase proposed by Xcel Energy for electric service in 2013, a reduction of 67 percent overall.  Xcel provides electric service to over 1,227,768 customers largely in the Twin Cities and the southern half of Minnesota.  The Department concluded that the recommended reductions of 67 percent will be sufficient for Xcel to provide safe, reliable service by making needed improvements to distribution, transmission and generation facilities.  

“Our recommendation made to the Public Utilities Commission highlights the need for strong regulation and oversight on behalf of Minnesota’s public interest,” stated Commerce Commissioner Mike Rothman.  “Our staff reviewed an extensive list of variables to calculate the appropriate cost for Minnesota consumers to ensure reliable electricity at reasonable rates.”

DER recommended reductions in costs for items including cost of capital, costs related to employee benefits, income taxes, insurance costs, cost allocations, investor relations, charitable foundation contributions, and numerous other costs.  Additionally, DER concludes that Xcel’s revenues will be higher, diminishing the need to increase rates.  Moreover, DOC concludes that Xcel’s proposal to increase rates due to customers’ efforts to conserve energy should not be approved.

After 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 September 2013.

Public hearings will be held beginning next week and later in March in various locations: 

  • Monday, March 4, 1 p.m. – Earle Browne Center, Minneapolis
  • Monday, March 4, 7 p.m. – Sabathani Center, Minneapolis
  • Thursday, March 7, 7 p.m. – Woodbury 
  • Friday, March 8, 1 p.m. – St. Paul
  • Monday, March 18, 7 p.m. – Mankato
  • Tuesday, March 19, 7 p.m. – Eden Prairie
  • Friday, March 22, 1 p.m. – St. Cloud

For details and further information, please see the Commission’s website.

The Commerce Department, Division of Energy Resources is tasked with ensuring that energy service is reliable and reasonably 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.