South Dakota PUC approves 67.5 percent lower Xcel Energy electric rate increase in settlement

After requesting a $44.1 million revenue generating rate increase in a filing last year, Xcel Energy settled this week with the South Dakota Public Utilities Commission (PUC) on a fraction of that rate increase: $14.4 million.

As a result, typical residential customers in Xcel Energy’s South Dakota service territory will see bill increases of approximately $4.67 per month. In all, around 97,500 customers will be impacted by the change, and will see refunds headed their way as well, as interim rates had been in place since January. Those interim rates will be refunded in part, with interest.

“The PUC team is a watchdog on behalf of South Dakota consumers, while ensuring state law is followed and applied through the process of setting just and reasonable utility rates,” PUC Chairperson Kristie Fiegen said. “The result of the PUC’s thorough investigation into Xcel Energy’s request is this settlement that reflects South Dakota principles, fairness and consumer protection. As I considered the request, I focused on how Xcel can provide reliable service to meet the needs of its customers in our state, while respecting South Dakota, not Minnesota, values. Moreover, the agreement struck a strong chord with me by settling on a rate increase that is substantially lower than what the company originally requested.”

Recovery of various projects and costs incurred by Xcel for reliability updates will be granted as a result of the settlement, and customers will be able to gain access to certain credits henceforth, including production tax credits for wind and nuclear generation. Further, Xcel agreed to a moratorium on additional base rate increases until at least Jan. 1, 2026 – although in return, it will be able to continue its Infrastructure Rider, allowing for recovery of specific capital additions and inclusion of certain projects annually.

“Rate dockets are extremely complex and require significant research,” PUC Vice Chairman Gary Hanson said. “PUC staff accomplished a bit of magic in reducing the cost to consumers and was able to reach an agreement with Xcel that is nearly $30 million below what was originally requested. An individual with utility regulatory experience obtained party status, participated in the docket and in the end, approved of the settlement reached. His independent analysis confirms the due diligence and exceptional investigation accomplished by the PUC staff members.”

The last base rate increase from Xcel Energy occurred in June 2015.