Xcel proposes $318M in rebates from nuclear tax credits
Xcel Energy proposed to issue a $318 million rebate to Minnesota customers in a press release on Monday.
More than half of the refund ($176 million) will come from federal tax credits for nuclear generation, with “the remainder of the refund coming from lower fuel costs and a 2011 outage at the Sherco coal plant.” Xcel estimates that the “average residential customer will receive a total refund of $81, reducing their monthly bills through March 2026.”
Customers should be pleased that some of their money will be coming back to them. Xcel is also correct that nuclear energy is “the only energy source available that is both carbon free and available 24/7.” Xcel’s two nuclear power plants account for nearly 25 percent of the electricity used by customers in its upper Midwest system.
The official statement from Xcel describes that: “This is the first time customers will see savings from the federal tax credit on nuclear energy generation, which the company advocated for in recent law.” That is a bland, inoffensive way of saying that Xcel lobbied for these tax breaks in the 2022 Inflation Reduction Act. According to OpenSecrets, Xcel Energy expended $2.2 million in lobbying expenditures in 2021, the highest amount since 2008.
In response to Xcel’s news, one astute social media user wrote: “Didn’t they just propose to raise our rates?”
Yep. The rebate will need to be approved by the Public Utilities Commission, which is the same PUC that is also considering whether to approve Xcel’s two-year increase in rates. The utility has requested a $353.3 million increase, or 9.6 percent, in 2025, and an additional $137.5 million, or 3.6 percent, in 2026. The total increase would be $490.7 million, or 13.2 percent, over two years.
The PUC approved an interim rate increase of 5.2 percent, or $192 million, starting on January 1, 2025. The average residential customer is seeing an extra $5.39 per month, which would nearly double if the full increase was approved. Xcel cites the reasons for the rate increase as “modernization of the transmission and distribution system, investments in cleaner electricity generation, lower sales, and higher returns for investors.”
Consumers can comment on Xcel’s rate case using docket numbers 24-320 and 24-321 at this link.