Utility regulators in North Dakota have approved a compromise electricity rate increase for customers of Xcel Energy, effective February 5, 2024. The North Dakota Public Service Commission (PSC) stated that this decision protects local ratepayers from subsidizing renewable energy projects based in Minnesota. Initially, Northern States Power Co., a subsidiary of Xcel Energy, requested a substantial rate increase of 19.34%, with residential rates projected to rise by over 24%.
The final agreement resulted in a reduced overall rate increase of 10.37%, with residential customers seeing a 12.92% rise. Customers in North Dakota have already experienced a higher electric rate this year due to an interim increase, adding an average of $11.36 to monthly bills. The approved final rate adjustment raises this figure by an additional 58 cents, bringing the total increase to $11.94.
Xcel Energy had not requested a rate increase in four years. A company representative noted that the adjustment is necessary to address high inflation and facilitate investments in infrastructure. The rate increase will also contribute to the funding of a new service center in Grand Forks, along with a new substation and essential equipment upgrades. Xcel serves approximately 97,000 customers across North Dakota, including major cities such as Fargo, Grand Forks, and Minot.
Commission Chair Randy Christmann emphasized that the approved agreement ensures North Dakota customers will not be responsible for costs associated with what he termed “green new deal” facilities in Minnesota. The settlement specifically excludes 23 facilities, primarily those related to wind and solar projects, from cost recovery.
AARP, which previously expressed objections to the original rate increase request, welcomed the settlement’s exclusion of costs tied to decisions made in Minnesota. Nonetheless, Josh Askvig, AARP North Dakota State Director, pointed out that the final settlement places a disproportionate burden on residential customers rather than on businesses.
In Minnesota, there has been a significant push to transition away from fossil fuels such as coal. Xcel Energy is accelerating the retirement of coal-fired power plants in Minnesota, a move that was not anticipated by North Dakota regulators. Earlier in the PSC meeting, commissioners also approved an extension of the permit for mining coal at the Freedom Mine near Beulah, highlighting ongoing discussions about energy production and grid reliability.
Christmann, who attended the meeting via remote connection while traveling from a regional power transmission meeting in Arkansas, reiterated the importance of maintaining North Dakota’s coal-fired power plants for overall energy stability. He stated, “It’s more important than ever to keep our baseload power plants operational.”
This decision not only impacts the immediate financial landscape for North Dakota customers but also reflects broader regional energy policies and the ongoing transition in the utility sector.
