Families With Xcel Energy Pay More For Their Electricity Than People Living In All But 12 States
Xcel Energy bombards the airwaves with commercials stating how they are going to reduce carbon dioxide emissions and provide “affordable” energy to their customers. The problem with these slogans is that they are entirely false.
For example, in this statement from Xcel Energy Chairman and CEO, Ben Fowke. Mr. Fowke states:
“One of the many things we’ve learned from this pandemic is that nature can be our refuge, and we must protect it for current and future generations. For the past 15 years, we have led the clean energy transition while ensuring reliability and enhancing affordability. In December of 2018, we became the first major U.S. power company to announce a vision to provide customers 100% carbon-free electricity by 2050.”
To most people, the phrase “enhancing affordability” would mean that electricity prices have gone down over the last 15 year. However, nothing could be further than the truth. The only thing that was “enhanced” was the costs that Minnesota families were forced to pay for their electricity, as you can see in the graph below that was constructed using information from the U.S. Energy Information Administration.
Minnesota families with Xcel Energy pay more for their electricity than the national average. In fact, these families pay more for their power than the average residential cost of electricity in all but 12 states, according to EIA data. In stark contrast, Minnesota Power customers pay more than only 10 states, and Otter Tail Power pays more than only six.
This trend will only get worse in the future because Xcel Energy is already proposing a 17.75 percent increase in the cost of electricity that Minnesota families must pay, and that doesn’t even include the billions of dollars Xcel wants to spend on wind turbines and solar panels that will increase the cost of electricity even more in the years to come.
If Xcel increases their electricity prices by 17.75 percent, Minnesota families will pay about 16.66 cents per kilowatt hour for their electricity, which means they’d pay nearly $200 more every year to keep the lights on. At these prices, Minnesota families with Xcel Energy would pay more than people living in 39 other states (not including the Minnesota average).
Xcel’s prices are higher than other Minnesota utilities because the Next Generation Energy Act forced the company to derive 30 percent of their electricity from renewable energy by 2020, whereas the other Minnesota utilities only needed to meet a 20 percent mandate and were given more time to accomplish it.
Additionally, Xcel has sought to boost their renewable generation up and beyond the mandate because it increases the company’s government-guaranteed profits.
Doing more of the same thing is the definition of insanity. Pretending that Xcel’s actions have “enhanced affordability” is the definition of dishonesty.
We Need A Choice
Xcel’s decision to actively increase the cost of their electricity wouldn’t matter if Minnesota families were free to choose whichever electricity provider they wanted, but under the current regulations in the state of Minnesota, you’re forced to accept whichever electric company serves your area.
It’s the year 2020, and this system simply isn’t good enough anymore.
If we had the freedom to choose our own electricity providers, those who want a greener grid and are willing to pay extra for it would have every right to do so. Those who prioritize reliability and affordability would be free to select the service providers who had lower costs. Instead of government-approved monopolies, free markets would allow people to vote with their dollar, and make the right choices for their specific circumstances.
The fact that Xcel is a government-approved monopoly and their customers are forced to use their service is the single-biggest reason that Xcel doesn’t care how expensive their electricity is. Competition would be the single-most powerful tool for removing the bad incentive structure Xcel currently operates under.
Minnesota lawmakers would be wise to pass legislation allowing Xcel Energy customers to escape the abusive practices of the monopoly utility by giving families the freedom to choose.