Xcel Energy customers to see rate hikes

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More than 88,000 Xcel Energy customers in North Dakota will start seeing their electric bills rising soon.

A 12-percent increase will begin Feb. 18. The North Dakota Public Service Commission granted the interim increase in December. Xcel also is seeking an additional 2.5-percent increase in 2012.

With the upcoming rate hike, monthly bills will increase by:

- $7.59 (from $64.44 to $72.03) for residential customers using 750 kilowatt hours of electricity.

- $8.99 (from $87.93 to $96.92) for residential electric heat customers using 1,100 kwh.

- $12.45 (from $126.64 to $139.09) for small commercial customers using 1,500 kwh.

- $344.65 (from $2,773.68 to $3,118.33) for large commercial customers using 40,000 kwh.

Xcel serves the North Dakota cities of Grand Forks, Fargo, Minot and Larimore.

Bills would go up further if the PSC approves the 2.5-percent increase. That’s expected to generate $24 million — $19.8 million in 2011 and $4.2 million in 2012 — for Xcel to make infrastructure improvements, especially at its two nuclear power plants in Minnesota, according to Laura McCarten, regional vice president of NSP-Minnesota, which owns Xcel.

It also will help the company meet increased regulatory compliance standards and to offset general rising business costs.

“If we hadn’t made these investments, we would be shutting down the nuclear plants in a couple of years,” she said. “This investment will allow us to continue operating, and will raise our production by 13 percent.”

Xcel officials have begun meeting with customers to explain their reasons for the hikes. They met today with the Herald’s editorial board.

“While we have worked to manage costs and increase our efficiency, we are not able to avoid this rate request,” McCarten said.

The utility’s last rate increase was in 2007. Prior to that, the last increase was in 1992.

The company is taking a multi-year approach to costs and budgeting. As an example of cost-cutting, in 2010 the company consolidated its supply contracts with one supplier, Border States Electric, Fargo, to provide electric and natural gas materials throughout the company’s eight-state service area.

That has resulted in a savings of $14 million in 2009 and $18 million in 2010.

“We just have to invest in more infrastructure and we have to provide customer service,” she said. “We’re also showing that we’re being very cost-conscious. I think we have found that balance.”

Public hearings on the rate increase will be held May 23-24 in Grand Forks, Fargo, Minot and Bismarck. A formal hearing is scheduled Aug. 9-12 in Bismarck, before the PSC makes a final decision on the request.

To help customers offset the rate increase, Xcel is encouraging them to take advantage of federal energy efficiency rebates still available through the American Recovery and Reinvestment Act.

Four rebate programs are available for homeowners — the purchase of energy-efficient furnaces and boilers, water heaters, insulation and ground source heat pumps, with up to a total of $5,000 in rebates.

Businesses can qualify for up to $15,000 in rebates by purchasing energy-efficient boilers, furnaces and lighting equipment.

Qualifying equipment must have been purchased after June 1, 2010, and will be available on a first-come, first-served basis until the funding is depleted, or until Dec. 31, 2011.

“There will never be a better time than right now to purchase energy-efficient equipment,” said Mark Nisbet, North Dakota principal manager for Xcel. “The rebates and tax credits make purchases much more affordable and you can reap the benefits of energy savings every month on your utility bill.”

Reach Bonham at (701) 780-1110; (800) 477-6572, ext. 110; or send e-mail to kbonham@gfherald.com.

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