Across the country, home energy costs are rapidly approaching a 10-year high.
As we are in the middle of a bitter Minnesota winter, customers of behemoth monopoly utility Xcel Energy might be facing yet another blow to their wallets. After requesting two rate increases over the past ten years, Xcel has made its biggest ask yet: a proposal that would raise ratepayers’ bills an astonishing 21.2% over a three-year period. In other words, a Minnesota household would end up paying an additional $140-$240 each year. With many households already feeling the strain of inflation, significant bill increases are simply out of reach even for those who have steady jobs and stable housing.
What would customers be getting in return for such exorbitant rate hikes? For its part, Xcel claims that the unprecedented increase is necessary to add renewables, update or replace aging infrastructure, maintain reliability, and maintain “predictability of rates.” But these claims simply don’t hold up to scrutiny. In fact, while Minnesota ratepayers foot the bill to the tune of $677 million, the return on investment would largely line the pockets of Xcel’s shareholders.
Moreover, Xcel’s proposal actively overlooks a cleaner, more equitable alternative that would mean lower rates, more affordable bills, and an accelerated transition to a fully renewable economy. This fall, Vote Solar and our partners in the Just Solar Coalition filed joint testimony with the Minnesota Public Utilities Commission, urging them to reconsider Xcel’s questionable rate hikes and adopt several recommendations instead.
First, Xcel Energy must address entrenched racial and wealth disparities in energy security and affordability. All across the country, low-income households shoulder disproportionately high energy burdens, and Minnesota is no exception. A non-low-income family in Minnesota can expect to spend around 2 percent of their household income on utilities. For a low-income household, the state average quadruples, jumping up to 8%. For many low-income households and families of color, that number is as high as 30%, forcing people to choose between paying a utility bill and affording other necessities like food or medication. Low-wealth customers are also the most vulnerable to disconnections. Losing power is inconvenient for everyone – but for those with medical conditions or food insecurity, it can be dangerous.
Renewable energy and energy efficiency are proven solutions to reducing disparities in energy burdens and helping families keep the lights on. However, accessing those tools is much easier said than done. For example, energy assistance and weatherization programs designed to help income-qualified families afford their utility bills often involve cumbersome income verification processes, lengthy multi-step applications, and other procedural barriers. For someone who may already be working long hours or caring for family members, jumping through unnecessary hoops is unreasonable. The commission should prioritize ensuring that all Minnesotans can afford energy, regardless of wealth and participation in existing assistance programs.
Beyond making energy more affordable for everyone, scaling up distributed resources like solar and storage will reduce our reliance on polluting and increasingly price-volatile fossil fuels. The commission should direct Xcel to accelerate our transition to a future built on reliable, decentralized energy that propels our de-carbonization efforts forward and advances energy justice. Such a future is only possible if powerful utilities like Xcel shift their approach to distributed energy resources, seeing them as essential building blocks, rather than as nuisances to be lobbied against, delayed and stomped out.
Finally, it’s vital that Xcel and the Public Utilities Commission make room for marginalized voices in spaces where energy decisions are made. Energy equity requires a democratic and participatory process that all stakeholders are not only empowered to engage in fully, but whose priorities are listened to and acted upon. At minimum this could include basic access to information and influence – developing and distributing educational resources in the languages primarily spoken by ratepayers, providing transportation or childcare for those interested in attending stakeholder negotiations and public hearings, and compensating intervenors for their time and efforts.
It’s past time for Xcel Energy to embrace distributed renewable energy sources and make significant strides toward the energy future we need, and the Minnesota Public Utilities Commission must hold Xcel accountable to the communities they serve.
Jenna Warmuth is a Minnesota resident and the Midwest regional director at national solar advocacy nonprofit Vote Solar.