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Xcel Energy’s Minnesota customers will see higher electric rates starting this month. 

In December, the Minnesota Public Utilities Commission approved a 5.2 percent interim rate increase for the state’s largest utility, which was less than Xcel had requested. It amounts to an extra $5.39 a month for a typical residential customer.

The temporary rate took effect Jan. 1. It will remain in place while the PUC considers Xcel’s larger overall rate increase request of about 13 percent over two years.

Xcel says the increase will help pay for infrastructure improvements and its transition to carbon-free energy, as well as prepare for expected growth in electricity use by homes, businesses, vehicles and 

The utility also says improvements to its electric distribution system will make it more resilient and reduce wildfire risk. Xcel has been named in multiple lawsuits 

Under Xcel’s proposal, the average residential customer’s monthly electric bill would increase by about $9.89 in 2025, and an additional $3.90 in 2026.

Xcel says it will save customers money by passing along savings from lower fuel costs due to its expansion of wind and solar power, and federal tax credits for generating carbon-free nuclear energy. The utility plans to 

continue operating its two Minnesota nuclear plants

 at Monticello and Prairie Island for the next several decades.

The Minnesota Attorney General’s Office opposed the interim rate hike. In comments submitted in November, Attorney General Keith Ellison wrote that Xcel has “aggressively” pursued multi-year rate hikes while earning large profits.

“Meanwhile, Xcel’s ratepayers have seen their electric rates climb above those of other Minnesota utilities and the national average, as Xcel 

 struggling to pay their bills,” Ellison wrote.

In its response, Xcel noted that in three of the last six years, it did not raise its rates. And despite higher rates, the average residential customers’ actual bills have remained relatively flat and are below the national average, it stated.

A final decision on Xcel’s overall rate case is expected in the summer of 2026. The PUC will hold public hearings and gather feedback before then.

If the commission approves lower rates than the interim amount, customers will receive a refund plus interest.

Correction (Jan. 3, 2025): A previous version of this story incorrectly identified the year when higher bills could be expected. The above story is updated.

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Kirsti Marohn

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In December, the state Public Utilities Commission approved a 5.2 percent interim rate increase for Minnesota’s largest electric utility. That amounts to an extra $5.39 a month for a typical household.

Electrical lines and towers frame a power plant

Xcel Energy customers to see higher bills in 2025

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