By Maren Kizershot
This July, Xcel Energy is holding a series of public hearings within its service territory in order to hear what its customers think of its request to increase the rate that people must pay to purchase energy. This has allowed many people to speak to the fact that Xcel is proposing an increase of 9.8% over 3 years or a rate increase spread out over 5 years. Xcel is asking the Public Utilities Commission to let them raise their fixed customer charges $2 a month to help achieve this goal.
On July 12th, many Xcel customers gathered in the St. Paul Public Library along with the Public Utilities Commission, employees of Xcel Energy, and others to discuss the proposed rate increase. Many people, including several recently retired people living on a fixed income, stood up to voice their opinion on the issue. A large amount of the people present thought that the $2 increase on the fixed customer charge would not only hurt those who were living on a fixed income and those with low incomes, but would decrease the incentive to use less energy. Many speakers suggested that this charge be added based on how much energy is used in order to reward those who use clean energy or reduce their consumption.
The Sierra Club is encouraging supporters to have a say in this decision by attending a hearing or submitting a comment to the Minnesota Public Utilities Commission. Sierra Club is calling on the MN PUC to:
- Oppose increasing the fixed customer charge. Support reducing the fixed charge.
Xcel’s request is to increase the fixed customer charge 23% or $2 each month. High customer charges disproportionately affect low-income consumers, for whom the charge makes up a larger percentage of their bill that they cannot avoid through moderating their consumption. High customer charges also discourage consumers from using less energy, investing in simple and affordable energy savings efforts or solar because their overall electricity bill changes less in response to the actions they take. Our expert found that reducing the fixed customer charge by about half of the proposed increase (i.e. a drop of $1 or more per month) was justified when properly accounting for costs associated with simply being a customer versus the costs associated with a customer’s energy demand (or the amount of energy needed/used.)
- Support Xcel Energy’s plan to retire Sherco 1&2 coal units and invest in wind and solar
In October 2015, Xcel Energy demonstrated tremendous clean energy leadership with their announcement to retire Sherco 1&2 coal units in 2023 and 2025 and to accelerate their investment in 3500 MW of wind and solar. Xcel estimates this plan will mean they will achieve 60% carbon reductions and achieve over 40% renewable energy! With a 5 year extension of federal tax incentives for wind and solar, now is the time for this investment. We commend Xcel on its leadership and support affordable rates and reasonable rate recovery for this effort.
If you would like to make a comment on Xcel Energy’s rate increase proposal, visit mn.gov/puc, select Speak Up!, click on “Open Discussions” find this docket (“Northern States Power Company d/b/a Xcel Energy for Authority to Increase Rates for Electric Service in Minnesota” Docket number 15-826), and add your comments to the discussion.