State regulators were told Tuesday that a settlement in Xcel Energy’s Minnesota natural gas rate case would chop the utility’s proposed increase down to size, setting an overall revenue bump of 4.88% and a 4.1% rise for residential customers. Customers who have been paying a temporary 6.8% interim increase since January would get refunds with interest if the commission signs off on the deal. The agreement, filed by Xcel along with the Minnesota Department of Commerce, the Citizens Utility Board of Minnesota, the Suburban Rate Authority, and LIUNA, resolves most issues in the company’s pending case.
What's in the deal
The framework trims Xcel’s original 8.2% request, about $63 million a year, down to 4.88% overall and implies a return on equity of about 9.55%, below the 10.65% the company had asked for. The settlement also leaves monthly fixed charges unchanged, reduces recovery of executive compensation expenses, and limits customer-funded dues to trade groups. "While any increase in utility costs is going to be difficult for many people, this settlement is a fair outcome," Annie Levenson-Falk of the Citizens Utility Board said, as reported by FOX 9.
Timing, refunds, and climate language
An administrative law judge is expected to issue a recommendation by Sept. 1, and the Minnesota Public Utilities Commission is anticipated to issue a final decision this fall, according to the settlement filing. Because customers have been paying interim rates since January, the agreement would require refunds with interest if the final approved rate is lower than the interim amount. The deal also asks Xcel to explain how proposed gas-system expansions would affect Minnesota’s climate goals, and it calls for regulators to convene a public stakeholder process by Jan. 1, 2027, to develop a standard method for projecting greenhouse-gas emissions. Not everyone signed on: the Minnesota Office of the Attorney General did not join the agreement and will continue to litigate the case. Members of the public can file comments by June 12 on the Minnesota Public Utilities Commission website.
Legal implications
The Attorney General's refusal to join makes this a non-unanimous settlement, which increases the chance that the administrative law judge or commissioners could modify terms during the review. Any changes could alter bill impacts, refund amounts, or specific provisions tied to compensation and dues recovery. For now, customers continue paying the interim rate while the case moves through the MPUC process.
What customers should watch
If the PUC approves a final rate below the interim amount, Xcel would issue refunds with interest to affected accounts. If not, the interim increase could remain in effect. Customers should watch for the ALJ report in early September and the commission calendar this fall. We will monitor filings and PUC orders and update as the case progresses.
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