Surprising No One, Xcel Is Raising Electricity Prices 20 Percent
Xcel Energy is proposing to raise electricity prices by 20 percent in the coming years to fund a $597 million spending spree, according to a new article in the Star Tribune.
The huge increase in electricity prices comes at the worst possible time for Minnesota. Our state has been battered by COVID-19 and the government-mandated shutdown of our economy to combat the virus. The economy has also suffered in the wake of the riots that erupted in the Twin Cities as a result of the death of George Floyd in police custody and the surge in murders, carjackings, and other violence that followed the pledge by the Minneapolis City Council to “defund” the police department. Now, rising electricity prices will make the recovery even more difficult.
Minnesota’s electricity prices have been skyrocketing since 2005, when Xcel Energy was forced to build wind turbines in order to keep their nuclear power plants running. The upward trajectory was cemented into law in 2007 when lawmakers foolishly passed Minnesota’s renewable energy mandate, which mandates that our state get 25 percent of its electricity from renewables by 2025, but requires Xcel to get 30 percent of its electricity from wind and solar by 2020.
This is why Xcel Energy customers have seen their electricity rates increase much faster than Minnesotans who have other electric providers, as you can see in the graph below which uses data from the U.S. Energy Information Administration.
The 20 percent increase Xcel is proposing is really just the tip of the iceberg. According to the article, this increase in electricity costs will not begin to pay for the $3 billion Xcel wants to spend on wind turbines and solar panels that are part of the utility’s insidiously named “COVID relief” package. This $3 billion package will necessarily increase the cost of electricity for Minnesota families and businesses, which will ultimately hurt the economy more in the long run. However, the effect that this spending will have on ratepayers was not discussed in the article.
Anyone who has been paying attention to electricity issues in Minnesota understands the relationship between Xcel spending money on wind, solar, and transmission lines and the rising prices paid by consumers. This is why the quote from Annie Levenson-Falk, the executive director of the Citizens Utility Board (CUB) in the Star Tribune article was so stunning:
“The magnitude of Xcel’s proposed rate increase is “really surprising,” said Annie Levenson-Falk, executive director of the Citizens Utility Board of Minnesota, an advocacy group for residential ratepayers.
Many residential customers are already struggling — and unpaid electric bills are rising — due to economic pressure brought on by the coronavirus pandemic, she said. Meanwhile, “the company is doing just fine.”
This quote is jaw dropping because there is absolutely nothing surprising about the size of this rate increase. Just last year, the company sought a 15 percent increase in electricity rates, and now they are asking for a 20 percent increase because they are spending even more money.
The only reason you would say the size of the increase is “really surprising” is if you 1) have zero idea how any of this works, or 2) you don’t want anyone else to know how any of this works.
Wind and solar advocacy groups like CUB and Fresh Energy constantly advocate for more wind and solar, and then they act surprised when the price of electricity paid by Minnesota families continues to skyrocket. But rising prices are the logical end conclusion of the policies that they advocate for; they are not a surprise. This is the unavoidable conclusion to the story that everyone should have seen coming.
Unfortunately, this rate increase will look small in comparison to future rate increases that will come from Xcel’s plan to close down their existing coal plants before the end of their useful lifetimes and build massive quantities of wind, solar, and natural gas power plants to replace them. American Experiment has modeled the cost of this proposal and concluded it will cost $57 billion through 2051, resulting in an average increase of $1,428 per year for each of Xcel Energy’s customers.
Remember, if you live in Xcel Energy’s service territory you have no freedom to choose another electricity provider who is not committed to raising your electricity prices by 20 percent every three years. You are trapped, by the laws of the state of Minnesota, in an abusive relationship with Xcel Energy and you must buy your electricity from them no matter the cost. The only recourse you have is to move out of Xcel’s service territory, or sign our petition telling Xcel Energy that you refuse to pay for their Green New Deal.
Sign here to join the nearly 1,900 Minnesotans who have told the Public Utilities Commission that enough is enough, and they should not allow Xcel Energy to keep raising the cost of electricity.