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.
[image_caption]Jenna Warmuth[/image_caption]
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.
I love this entire opinion, specifically call out “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.”
I will kindly, and respectfully point out to anyone interested in distributed energy resources and exploring the potential for aggregated distributed energy resources (like rooftop solar with residential batteries, commercial interruptible loads) to submit comments to the Minnesota Public Utilities Commission in docket CI-22-600. The due date is February 9.
In that docket, the Commission is asking whether aggregators of retail customers should be allowed to bid these demand response programs in MISO markets. I believe our Commission should allow aggregators of retail customers to participate in MISO markets. Michigan lifted the ban on Aggregators last December. Illinois already allows these aggregators.
I agree that Xcel doesn’t need us to pay for their poor decisions, but there are a few things I have comments for.
First off, everything costs proportionately more for people of low income so it seems little dramatic
Second, if there “…many low-income households…” where their energy costs are 30% of their income it would be good to understand why. 40 hours a week at Caribou or Starbucks would mean that an energy bill would be $750 a month and a lot of apartments don’t charge separately for heat. That’s an enormous bill. The question of is the issue income or expense relates is not explained here. If it’s income, that’s not really an Xcel issue.
Thirdly, I do think that weatherization programs can help but there are instances where it doesn’t make sense in general or for a particular building and where subsidies may be the cheaper alternative. For example, as much as new windows are more efficient, it’s not a cost effective solution by any means. I’m all for getting rid of some of the red tape but would like to see subsidies target cost effective solutions – less broad in terms of items/categories but greater amounts. Heck, one thing they could do is provide free window plastic wrap to people. It’s inexpensive and fairly effective at cutting heating bills in old buildings based on my personal experience.
As a side note, I get that solar is great and cheap and that you are an advocate, but it’s not a total solution. I do think that there is an argument for base load plants in the near future in light of the expense and environmental damage of battery storage.
Again, do the “go green gang” look at what is happening around the world? I suggest the go green gang look at Germany today. While the German Government and greenies promised the German residents that their commitment to solar and wind would carry them through Russia pulling their oil and gas….. Germany is now starting up coal fired plants (closed by German Govt) left and right because solar and wind couldn’t produce the energy they needed. Solar and wind are not able, as of today, to bring dependable energy to metropolitan areas.
80%+ of our energy is from fossil fuel right now in Minnesota, that will continue for the foreseeable future. Biden administration’s war on fossil fuels is pushing up the cost of heating your house and driving your car. Look no further than that for the cause of soaring energy.
Never one to let a crisis go unexploited, Joe using the Russia/ Germany energy issues as representative of ours is ridiculous. Unless he knows something about Canadian expansionism that we don’t.
Perhaps. But it’s not like Dems who create crisis after crisis only so they can come up with their solutions to enact policy.
What this writer isn’t showing is the move to solar is not as simple as it sounds. Much of the materials needed come from places our country has no control over. That is what Mr. Smith is showing. It is extremely risky to put our country at the whims of others. That’s what Germany has done and, along with much of Europe, is now suffering. And they are paying a huge price for it.
Another aspect is that solar and much of renewable energy have massive up front costs that most people cannot afford. And the time it takes to get back to ‘even’ is many, many years. So unless you know you are going to remain in one home or office for a long, long time, the investment doesn’t make sense for those that can even afford to pay it. As for the low and lower income, forget it. Reality here is it not happening.
And why do we have this problem in the first place? It’s because we have an administration that has put energy producers as the enemy. The Biden policies are the ones who are responsible for the astronomical increases. Their policies are making energy producers invest in things they probably don’t need to. And we are the ones that have to pay for it, no matter what.
Conservatives are not at good at communicating policy but have never been wrong on green initiatives. They have been saying for a long time that going green way too fast is going to be costly and affect low income the worst. Well, it’s here. We should be looking alternative energy, but not forced down our throats at such a pace as many wish because this is the end result, we all are being put to the sword.
“Dems create crisis after crisis”…
Well, after denying the existence of global warming for 30+ years after the NASA scientists had incontrovertiblely demonstrated it was caused by humans burning fossil fuels, “conservatives” now complain about the “cost” of saving the 11,000 year old stable climate. As though doing nothing (the American right’s preferred “solution”) to save the climate won’t cost humanity untold trillions more in coming decades.
Anyway, thanks to “conservatives”, we as a society wasted decades doing almost nothing to alter our energy sources to reduce emissions. So in the third decade of the 21st Century, when the scientists have declared a final red alert on stopping a total meltdown of the natural climate, we now have far less time to do even more.
Thus any increased costs arising as a result of having less time to mitigate the coming calamity are squarely the fault of the US “conservative” movement. And your claims that Biden’s policies did anything to increase the cost of fossil fuels are not based in reality (as opposed to Putin’s invasion of Ukraine or the Saudis’ supply cuts, for example.)
“The Biden policies are the ones who are responsible for the astronomical increases. Their policies are making energy producers invest in things they probably don’t need to. And we are the ones that have to pay for it, no matter what.”
What are those policies? What companies are being made to “invest in things they probably don’t need to?”
I’d love to know; and also would love to know when the massive tax breaks and subsidies the oil companies still get, while there’s a supposed “Biden War on Fossil Fuels,” ended.
You’ve seen Waiting for Godot, I presume…
Total nonsense. Once again, in Jan 2022, Germany did not imagine that it would have to largely boycott Russian energy sources, since Fuhrer Putin’s War of Annihilation against Ukraine was not foreseen. Hence the German government could not have made the “promises” you assert about green energy.
As for actual reality, Putin’s illegal invasion has made clear his Russia is a rogue dictatorship and nation that cannot be trusted as a reliable and responsible energy supplier. So he has indeed caused Germany to accelerate the timing for increasing its renewable sources, even if in the short term the country will have to up coal usage as a bridge away from Russian energy.
Further, nothing that is happening in Germany is remotely applicable to the energy situation in America, as our reliance on Russian energy was slight. Your illogic would be looked on quite askance by Mr Spock. The lights are on in Germany, in any event.
As for your “Biden’s War on Fossil Fuel!” narrative, that’s been bogus from the start, as production figures show. And nothing Biden has done has caused the energy cost increases you complain about. They are the result of standard macroeconomics. Not that you should let reality slow you down…
Yeah, yeah, yeah Joe, and everyone on the planet including Joe, saw the Russian invasion of the Ukraine and the global consequences of! It appears recognition of the worlds reality is not your strong suit, throwing shade when and wherever possible, you get the A+++++.
One way or another on this issue, we need to keep an eye on the Public Utilities Commission: are they doing serious audits, or are they really on the side of the utility (as, in the past, some were)?
No Lefties you are wrong. Long before Russia invaded Ukraine, the German people were fed the line that “green energy” would be able to power Germany’s energy usage. The German Govt started shutting down coal fired plants and telling the folks natural gas is green energy. Once natural gas was unavailable from Russia, coal fired plants were started up. The reality is “green energy” can’t produce enough energy to run cities. That is a fact! We use 80%+ fossil fuels to power Minnesota, fact. Biden’s war on fossil fuels have skyrocketed the price, fact. Really not much to debate.
“No Lefties you are wrong” .
“Once natural gas was unavailable from Russia”
Yeah, OK Joe, do you read what you write? Do, you read what we said, or do you just jump to the reply and blast on about all kinds of shade you can throw that comes to mind, related or not?
Regarding the continued misinformation peddled here, re: Germany’s reliance on Russian natural gas, its declining due to a number of factors (and not just because coal). Here’s an overview: https://www.weforum.org/agenda/2022/08/energy-crisis-germany-europe
I really don’t understand why the perpetual liars don’t get banned by moderators.
Every. Single. Day. the same predictable handful of “conservatives” keep unleashing their torrent of blatant lies.
Do we really need to tolerate their intolerance of truth?
The likelihood that you “know” what the German people were “fed” about that nation’s plans to reduce CO2 emissions over the coming decades (with or without Putin’s invasion of Ukraine) is very low, sorry to say.
And unfortunately I’m not sure you can tell “fact” from (rightwing) opinion…
Let’s take the position that while solar energy is building, natural gas is used in the transition. Germany admits it made a bad decision to get Russian fuel sources. It won’t repeat that mistake going forward. And, while I’m here…let us hope and pray Putin retreats soon. very soon.
I think the most salient feature of this article is actually the reference to Xcel investors. As our energy policy and demands try to respond to sustainable requirements we’ll need to re-examine the whole notion of for-profit “public” utilities. By definition the legal requirements to maximize investor returns are inherently contrary to the public interest. The only real question then become how much of this price increase is paying for updated infrastructure, and how much is devoted to investor, executive, payouts?
We agree, but to change the model, it looks like rate payers would have to come up with over $39B to buy out the infrastructure. Ironically. however, its the rate payers that have already theoretically paid for all that infrastructure and the dividends for the stock holders! Less the Bonds still in the market of course.
Rate payers only have to buy out the infrastructure if they take ownership of it. Most people don’t realize that we already have a non-profit model we could use. We have hundreds of privately owned group homes in MN that earn “profits” for their owners. I don’t know what the percentage is now, but when I worked in residential homes back in the late 80’s owners were guaranteed a 6% profit, but were ostensibly required to provide a basic set of services and amenities.
You could do the same thing with utilities, cap the profit margin without taking public ownership. Or conversely, you could take ownership… that “private” infrastructure was built with public money i.e. rate payers money. Investors don’t bring money to the table, they show up to take money off the table, if they don’t get back more than they put in, they go elsewhere. If Xcel was depending on investors to fund their improvements they wouldn’t be raising rates right?
I’m a long-time XEL investor and would recommend it to anyone saving for retirement. XEL is a good company well-managed, IMHO.
They are very professional, their equipment is kept in perfect condition, their workers are well paid and they deliver a reliable dividend that can be reinvested. It stays modest (not a “trader stock” with high volumes and broad price fluctuations) and is a refuge from volatility in the rest of the market.
I know a few other power companies around the country and would like to assure Minnesotans that they have a good company in this public utility sector. Duke and Florida Power, for example, have huge piles of coal ash stored in flood plains and high rates.
There are many “good” companies one can invest in Richard. THIS company has a mission to provide electricity, it doesn’t really do us a lot of good we can’t afford the electricity they’re producing and transmitting no matter how well their run.
Boy, I really have to question the “keep their equipment in perfect condition” claim when we’ve still got transformers out there routinely blowing up because of squirrel infiltration. How many do they have to lose before they proactively squirrel-proof them? And then there is the decades of neglected transmission infrastructure that now will cost billions to upgrade or the several instances where generating facility upgrades had massive cost overruns…Xcel is really good at maintaining shareholder value for folks like you by putting off infrastructure investments as long as they possibly can.
Paul Udstrand is correct. The issue is whether Minnesota or any other States should expect or allow monopolistic corporations to implement State policies on “green infrastructure.” The economic justification for public utilities and regulation thereof has historically and traditionally been because the generation, transmission and distribution of electric power was a “natural monopoly”. That is to say that the costs decrease with size. Up to a point, public utilities can be expected to encourage conservation and discourage wasteful use of the power so that construction of additional plants can be avoided. But we’ve reached or exceed the limits of what such an entity can do or can be expected to do.
The regulated privately owned public utility corporation has been the model for that last 125 years. Public utility and utility holding company systems have historically been linked to concentrated financial and political power. This power has served to perpetuate the privately owned public utility model over other alternatives such as municipally or publicly owned power generation or cooperatively owned power, such a rural electric coops. It seems to me that these are the models which should guide policy and the development of decentralized and localized green power generation and supply.
How do solar panels collect energy when they’re covered with 15 inches of snow?
Dennis, you should drive out to any one of many farm fields here in the metro area (there are several down by Afton way) and see for yourself how solar panels work in the winter.
In northern climates solar panels produce electricity around 18% of the time. The vast majority of the time, they are inert.
Um, no. The only time they’re completely inert is at night. There are more or less optimal conditions but solar tech has come a long ways. And obviously when we talk about sustainable energy we’re talking about mix, not just solar.
Science is working on methods for clearing snow even as you read this. Preliminary experiments with implements called “shovels” and “brooms” are showing promise.
Not sure about your mythical 15 inches of snow, but I do know they do produce electricity at your favorite make believe temp of -30. My neighbors have panels on their roof, and there’s a bunch of snow covering those panels, and yet, they have not complained about their house going dark. I wonder why?
They’re in Florida til April?
They are installed in such a way so that 15 inches of snow does not accumulate on them in the first place. Next question?
https://twitter.com/i/status/1611915475331563521
Well according to the solar panel experts, ‘1 kW of solar panels installed on a home will produce about 1250 kWh of energy in a year’. There are 8760 hours in a year, so the solar panels produce at 1250/8760 capacity or 14.2%. They do produce power, just not very often. Is that hard to understand?
“Solar power experts”. God save us from debate gamers.
Renewables are totally unreliable and thus very, very expensive.