Xcel Energy filed an application with the Minnesota Public Utilities Commission (PUC) on November 2 (Docket 115-826), seeking to increase electric rates by means of a three-year multiyear rate plan (MYRP ) in order “to reflect the current cost of providing service to our customers,” the utility said.
The Minneapolis-based utility, which serves 1.2 million customers statewide, asked for a 9.8 percent electric rate hike that would be phased-in over three years – and by 2018 would cost the typical residential customer $132 more in annual payments, according to a report in the Star-Tribune.
While multiple factors are driving its overall request, Xcel said, “Our capital investments in transmission, distribution and generation [represent] by far the largest component. … In addition, our rate request reflects certain carry-forward items related to our last electric case, including the … tools used to moderate rates in 2014 and 2015. The combination of these factors, as well as the need to address increases in our normal business costs, leads us to file this case.”
Specifically, under the MYRP, the utility is requesting a three-year increase of $ 297.1 million – or 6.4 percent in 2016 ($194.6 million), 1.7 percent ($52.1 million) in 2017, and 1.7 percent ($50.4 million) in 2018.
The company also is offering an alternative, separate five year option for consideration, which Xcel states, “offers discounted rates, both in 2016 and in the later years of the plan, and more time for parties to work on policy matters.”
This is the first time that such a multi-year plan has been tested in Minnesota – made possible by a 2015 change in state law that Xcel supported in the legislature. “We recognize that we are the first utility in … Minnesota to propose a three-year or longer MYRP and the first utility to propose a plan under the revised MYRP statute,” Xcel said, noting that, “The goal of either our MYRP Plan or the five- year option is to provide just and reasonable rates for our customers. We look forward to dialogue with our stakeholders and the commission as we explore using the new MYRP law to set rates for multiple years, while finding administrative efficiencies and additional customer and other stakeholder benefits.”
The Minnesota PUC is likely to take about a year to consider the complicated case.