Utility regulators in North Dakota have approved a revised electricity rate increase for customers of Xcel Energy. On February 5, 2024, the North Dakota Public Service Commission (NDPSC) finalized a compromise that raises overall electricity rates by 10.37%, with residential customers facing a 12.92% increase. This decision aims to protect North Dakota rate-payers from indirectly funding renewable energy projects located in Minnesota.
Xcel Energy, a Minnesota-based utility, had originally requested a rate hike of 19.34% for its Northern States Power Co. segment, which would have raised residential rates by more than 24%. The company revised its proposal following discussions with the NDPSC, resulting in a more moderate increase. Under the interim rate increase already in effect, average residential customers were paying an additional $11.36 per month. The approved final rate will add another 58 cents to this, bringing the total increase to $11.94.
The need for the rate increase stems from various factors, including rising inflation and necessary investments in utility infrastructure. A portion of the funds will be allocated towards constructing a new service center in Grand Forks, establishing a new substation, and upgrading existing equipment. Xcel Energy serves approximately 97,000 customers across North Dakota, including major cities like Fargo, Grand Forks, and Minot.
Commission Chair Randy Christmann emphasized that the agreement ensures North Dakota customers will not subsidize what he described as “green new deal” facilities in Minnesota. The settlement specifically excludes costs associated with 23 renewable energy projects, primarily wind and solar, from cost recovery. “I think North Dakota customers should feel good about that,” Christmann stated.
While the revised rate increase is less than initially proposed, advocacy group AARP expressed concerns about the financial burden on residential customers. AARP North Dakota State Director Josh Askvig noted that businesses should shoulder a larger share of the costs, arguing that the settlement continues to place an unfair onus on individual households.
The backdrop to these discussions includes Minnesota’s ongoing efforts to transition away from fossil fuels, particularly coal. Xcel Energy is moving to retire coal-fired power plants in Minnesota sooner than previously anticipated by North Dakota regulators. Earlier in the meeting, the NDPSC also approved an extension for mining permits at the Freedom Mine located near Beulah, North Dakota.
Christmann, who attended the meeting remotely while returning from a regional power transmission meeting in Arkansas, reiterated the importance of maintaining operational coal-fired power plants for grid reliability. “It’s more important than ever to keep our baseload power plants operational,” he remarked, highlighting the critical role these facilities play in ensuring a stable energy supply.
This development reflects ongoing debates about energy policy, regional collaboration, and the financial implications for customers as utilities navigate the transition to cleaner energy sources.
