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Harshawn Ratanpal

Xcel natural gas customers will get refunds after paying higher temporary rates

xcel energy
The company logo adorns the side of an Xcel Energy work truck Thursday, March 12, in Denver.
David Zalubowski | AP

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The Minnesota Public Utilities Commission approved new natural gas rates for Xcel Energy. It’s lower than the company initially requested and will result in customers getting a refund in the coming months.

At a time of rising utility costs, Xcel Energy’s Minnesota customers are poised to get some money back through a refund.

The Minnesota Public Utilities Commission has approved a lower rate hike than the company requested. Customers have been paying higher temporary rates since January, so Xcel will refund the difference. That refund will be calculated sometime in the coming months.

Xcel told the commission last year it needed an 8.2 percent rate increase, or $63.4 million, to cover growing capital and maintenance costs. That includes new transmission infrastructure and fire safety systems, according to the company.

In May, Xcel reached a settlement with consumer groups, including the Citizens’ Utility Board, or CUB. In it, they agreed to a total increase of 4.88 percent. CUB estimated that residential rates would increase 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,” wrote Annie Levinson-Faulk, the group’s director, in May.

This week, the Public Utilities Commission approved a 4.8 percent hike, slightly lower than that settlement proposed. Levinson-Faulk called it a “strong decision.”

“They took actions that protected ratepayers,” she said.

In a statement to MPR News, an Xcel spokesperson said the commission’s decision allows 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 reduced the rate of return for shareholders on natural gas investments. That’s after it approved a higher allowed return for Xcel’s electric investments earlier this year. Consumer advocates asked the commission to reconsider the decision, but it declined.

Earlier this month, Xcel proposed keeping electric rates steady for the next two years.