Want lower electricity prices? Move to a poor neighborhood.

That’s the extraordinary proposal made by the state’s largest electric utility, Xcel Energy, to the Minnesota Public Utilities Commission (MPUC).

Last month, Xcel proposed a two-year pilot project to provide an “automatic bill credit,” not based on electricity usage, or household income, but based on geography. Quoting from the April 16, proposal,

We propose a two-year pilot that would provide a monthly Automatic Bill Credit
to all households in U.S. Census Block Groups across the Company’s Minnesota
electric service territory where electric energy burden is estimated to exceed 4
percent of median household income. The objective is to reduce energy burden
based on existing and known disparities, without requiring income qualification or
other program enrollment documentation.

So, you yourself don’t need to be in a low-income household, you just need to live in a designated low-income zip code. The proposal was developed by something called the Equity Stakeholder Advisory Group (ESAG).

The value of the credit would work out to be about $458 per year, and the selected zip codes would cover an estimated 23,000 households. The cost of offering the program (to be borne by all customers) would total $5.4 million per year.

We could all use a break on energy costs. The reason why a price cut is so necessary is the huge amount of money spent by utilities on useless renewable energy mandates and other climate change programs.

According to data compiled by USA Today, Nebraska enjoys the nation’s lowest residential electricity rates. Unfortunately, the rates paid by Minnesotans stand significantly higher than rates paid in neighboring Iowa, North Dakota, and South Dakota.

Californians pay some of the highest electricity prices in America and regulators there shot down a proposal that was closer to the opposite approach. Electric utilities in California had proposed charging higher rates to higher income customers. In the end, the CPUC opted for a more conventional low-income discount.

The Minnesota PUC will be taking comments on the Xcel proposal through June 24.

MPUC Docket No. E-002/M-24-173