The Minnesota Public Utilities Commission just approved Xcel Energy's three-year rate plan with some significant changes to their commercial and industrial schedules. Rate increases are 2.1%, 1.8%, and 2.4% over the three years, but the real story is the complete overhaul of Schedule A-3 for general service customers. Anyone else in Xcel territory dealing with confused clients about these changes?
Minnesota PUC just approved Xcel's multi-year rate plan
Carl we're seeing similar confusion here in Iowa with MidAmerican Energy. They've been watching the Xcel case closely and are hinting at their own multi-year plan filing next year. The demand charge modifications on A-3 seem reasonable compared to what other utilities are doing - at least they're keeping the seasonal differential structure. How are your Duluth clients handling the transition?
Most are adapting well, though the new coincident demand billing on A-3 is causing some sticker shock for clients who never paid attention to their peak usage timing. One manufacturing client saw their demand charges jump $3,200 in the first month under the new tariff. The good news is the energy charges actually decreased slightly for off-peak usage.
We're watching this from South Dakota since Xcel serves parts of our territory too. The multi-year rate plan approach seems like it provides more predictability for large customers. Our clients appreciate knowing what their rate increases will be for the next three years rather than dealing with annual case uncertainty. The regulatory certainty is worth something even if the total increase is similar.
Lester that's exactly what I'm hearing from clients. The predictability factor is huge for capital planning and budgeting. Plus Xcel agreed to several energy efficiency programs as part of the settlement that should help offset some of the rate increases. The new time-of-use pilot program for Schedule A-3 customers could be interesting to watch develop.