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Seeking to balance the costs of improving the environment and enhancing long-term service reliability with customer bill impacts, Xcel Energy (NYSE:XEL) today asked the Minnesota Public Utilities Commission to authorize increases in base electricity rates over a two-year period.
“Our customers expect safe, reliable and clean energy at an affordable price, and this request supports the investments needed to deliver on those expectations,” said Dave Sparby, president and CEO of Northern States Power Co.-Minnesota, an Xcel Energy company. “Our proposal provides more manageable and predictable bills while allowing us to provide high-quality service and customer value.”
The company proposes prices for a two-year period, during which investments in carbon-free energy sources, a diverse supply mix and service reliability improvements are at their peak. Average customer rates would increase by 4.6 percent effective Jan. 3, 2014, when interim rates would take effect. A typical residential customer’s monthly bill would increase by about $4. Average customer rates would increase an additional 5.6 percent during 2015.
These rates are based on the company’s increased cost of providing service of $193 million in 2014 and $98 million in 2015. “Our objective is to moderate our request and keep the annual rate increase between 4 and 6 percent as we complete major improvements to our electric system,” Sparby said. “Post-2016, we believe our costs will be at or below the rate of inflation, and customers will have the benefit of a healthy, diverse system for well into the future.”
Approximately 45 percent of the increase is for investments that allow continued operation and increased output at Xcel Energy’s nuclear plants for an additional 20 years, and new wind resources. “Our portfolio of nuclear plants and new wind power will allow us to avoid carbon emissions by more than 200 million tons over their lives,” Sparby said. “These investments help keep customer costs low and are essential to achieving state energy policy goals calling for a 30 percent reduction in carbon emissions by 2025.”