Xcel cuts electric rate increase for North Dakota customers in half

BISMARCK, N.D. (North Dakota Monitor) — Xcel Energy has agreed to cut a proposed electricity rate increase for North Dakota customers.

The agreement that is pending approval with the North Dakota Public Service Commission would raise overall rates by 10.37%, with the increase for residential customers at 12.92%.

Northern States Power Co., part of Minnesota-based Xcel Energy, had originally asked for a rate increase of 19.34% with the residential rate increasing by more than 24%.

A Public Service Commission hearing on Monday went over details of the rate request and the compromise agreement.

North Dakota customers have already been paying a higher electric rate this year under an interim rate increase. Customers’ bills should not change dramatically if the rate increase is approved as currently proposed, said Victor Schock, director of utilities for the PSC.

A vote by the three-person commission could come in January.

Xcel had not asked for a rate increase in four years, which a representative said was needed in part to address high inflation. The rate increase will also help pay for a new Grand Forks service center, a new substation and equipment upgrades.

Xcel has about 97,000 customers in North Dakota, including in Fargo, Grand Forks and Minot.

During the hearing, Public Service Commissioner Sheri Haugen-Hoffart said in reviewing the 165 public comments, she noted four themes, which she asked Allen Krug, vice president of state regulatory policy, to address.

Data centers: Krug said the rate increase has nothing to do with data centers in North Dakota or Minnesota. Krug said Xcel was committed to not making existing customers pay for new large electric load projects such as data centers.

Impact to seniors and those on fixed incomes: Haugen-Hoffart said those relying on Social Security cost-of-living increases feel the rate increase more than others.

Krug said “no cost increase is without pain,” but noted the increase is less than the rate of inflation since the previous rate increase.

Effect of Minnesota policies: Minnesota has been pushing utilities away from fossil fuels such as coal. Xcel is retiring coal-fired power plants in Minnesota earlier than North Dakota regulators anticipated.

Krug said the rate increases are not driven by those policy differences between the two states. He said Xcel has made investments to ensure power reliability.

He also said Xcel continues to use natural gas and said there is potential for a natural gas-powered plant in eastern North Dakota if a pipeline to bring natural gas from the state’s oilfields in the west is built.

Xcel profits: Krug said the company’s profits are in line with what investors request.

The Public Service Commission had set aside the whole week for the hearing, but it wrapped up before noon Monday as a result of the compromise.

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