State regulators have voted to reduce Xcel Energy’s proposed electric rate hike.
In the latest commission meeting, the Public Utilities Commission, or PUC, voted to reduce Xcel Energy’s proposed 18% rate increase down to a 6% increase.
The PUC said the determination came after a nearly year-long review of Xcel’s request and multiple settlement negotiation sessions.
Xcel’s desired 18% increase has been temporarily in effect for the past six months due to lack of prompt action from the PUC. This raised rates for more than 97,000 South Dakota customers.
Commissioner Chris Nelson challenged Xcel’s choice to not fully reimburse their customers for the temporary rate increase.
“The rate that we are going to approve today is probably 68 to 70 percent lower than the interim rate, okay? But you're talking about refunding 48 percent," said Nelson. "So help me understand why folks were paying 70 percent more than they should have been but your only refunding 48 percent more. And that includes the interest, so obviously you are refunding something even less than 48 percent.”
Xcel representatives said infrastructure costs they incurred in January of 2023 is what is offsetting their decision to provide full refunds to customers.
According to the PUC, the new settlement agreement of 5.85% will raise the average customer’s monthly bill by $4.67 and discontinue the current 17.9% increase that originated in January.
The settlement includes a moratorium, preventing Xcel from increasing their base rates until 2026. In exchange, the PUC agreed to continue to allow Xcel to recover capital costs.
Commissioner Kristie Fiegen is the Chairperson for the PUC. She said while it was a complicated issue, she appreciates all the work each organization committed to the process.
“So thank you for the hard work that you guys have all done. I appreciate Xcel coming to the table and doing just and reasonable rates for South Dakota customers,” said Fiegen.
Customers can expect to receive a refund for the six months of extra payments. The average refund will be around $90.
