Xcel gas customers to receive rebates after temporary rate increase

Amid climbing utility bills, Xcel Energy customers in Minnesota are set to receive refunds after paying higher temporary natural gas rates.

The Minnesota Public Utilities Commission approved a smaller rate increase than the utility had sought. Because customers have been charged higher interim rates since January, Xcel will return the difference, with the refund amount to be determined in the coming months.

Last year, Xcel told regulators it needed an 8.2 percent increase, equal to $63.4 million, to help cover rising capital and maintenance expenses. The company said those costs include new transmission infrastructure and fire safety systems.

In a settlement reached with consumer groups, including the Citizens’ Utility Board, the company agreed to a 4.88 percent overall increase. CUB estimated residential bills would rise by about 4.1 percent.

“While any increase in utility costs is going to be difficult for many people, CUB believes this settlement is a fair outcome,” Annie Levinson-Faulk, the group’s director, said in a statement.

The commission later approved a 4.8 percent increase, slightly below the settlement figure. Levinson-Faulk called the ruling a “strong decision” and said it included actions that protected ratepayers.

An Xcel spokesperson said in a statement to MPR News that the decision will allow the company “to make investments that maintain and modernize our natural gas system, improve safety and replace aging infrastructure to meet Minnesota's future energy needs.”

The commission also lowered the return allowed for shareholders on natural gas investments. It had already approved a higher allowed return for Xcel’s electric investments earlier this year. Consumer advocates asked the commission to revisit that ruling, but the request was denied.

Xcel also recently proposed holding electric rates flat for the next two years.