Electricity rate increase could cost NDSU $1 million annually

FARGO, N.D. (North Dakota Monitor) — A proposed electric rate increase would cost North Dakota State University about $1 million a year, a representative of the college told utility regulators Monday.

Northern States Power Co., part of Xcel Energy, has asked the North Dakota Public Service Commission to approve a rate increase of more than 19%, or $22.34 per month for an average residential customer.

Xcel Energy’s requested rate increase would affect parts of Fargo, including the NDSU campus.

“NDSU projects that our annual electrical costs would rise by over $1 million,” Brent DeKrey, director of facilities management at NDSU, testified from Fargo at a PSC hearing Monday.

DeKrey said such a large increase could mean increased tuition and fees for students, reduced resources for research at NDSU and additional costs passed along to the state’s taxpayers.

Minnesota-based Xcel has about 97,000 customers in North Dakota. The proposed rate hike would increase Xcel’s annual revenue in the state by $44.6 million.

The PSC also took testimony from people in Grand Forks and Minot, which are also served by Xcel, as well as from the Capitol in Bismarck.

A point of discussion in the rate case is Xcel’s move away from coal to generate electricity.

Xcel last year retired one of three coal units at the Sherburne County Generating Plant, or Sherco, near Monticello, Minnesota. It plans to retire Sherco’s remaining coal-fired units in 2026 and 2030, marking the company’s full exit from coal. Xcel has invested in solar and wind energy and continues to rely on nuclear power plants.

There was little discussion of Sherco on Monday and whether the move away from coal was driving up rates, as Victor Schock, director of utilities for the PSC, has said.

Alex Nisbet, regulatory policy specialist for Xcel Energy, said that the Sherco impact was “being reviewed at great length” in the case.

Utility companies seeking a rate increase in North Dakota often reach a settlement with the PSC for less than the initial request.

North Dakota Xcel customers have been paying a higher rate since February, about half the requested increase.

Nisbet said final rates often end up close to the interim rate.

Asked if Xcel anticipates moving away from natural gas like it has coal, Nisbet said Xcel plans to build a new natural gas combustion turbine in Minnesota with plans for others.

WBI Energy is developing a pipeline to bring natural gas from western North Dakota, where it is a byproduct of oil production, to the east.

“That’s a project that excites us a lot,” he said.

The PSC held a second public input session Monday evening. The public also can submit comments on the rate case by emailing ndpsc@nd.gov or by mail to: Public Service Commission, 600 E. Boulevard Ave., Dept. 408, Bismarck, ND 58505.

The PSC has set a formal hearing to begin Dec. 1.

Reach North Dakota Monitor Deputy Editor Jeff Beach jbeach@northdakotamonitor.com.