2010 Minnesota Natural Gas Rate Case
On Nov. 12, 2009, Xcel Energy filed an application with the Minnesota Public Utilities Commission (MPUC) for an increase in natural gas rates beginning in 2010. Xcel Energy's last rate request came in 2006.
“We have made significant investments in our natural gas system to provide safe and reliable service to our customers,” said Judy M. Poferl, president and CEO, Northern States Power Co.-Minnesota, an Xcel Energy company. “It is necessary that we recover both the costs of these investments and increased operating costs so we can continue to provide a high level of service to our customers and communities.”
Xcel Energy serves 433,000 natural gas customers and operates more than 8,700 miles of natural gas mains and distribution lines in Minnesota.
In its application, the company requested an overall increase in natural gas rates of $16.2 million, or 2.8 percent for 2010. The company proposes an increase in the monthly customer charge combined with a lower distribution charge for most customers to better match rates with costs. For a typical residential customer, the company proposes an increase of $4.00 in the monthly customer charge combined with a 9.5 percent reduction in the distribution charge. On average, this would increase the bill for a typical residential natural gas customer by $2.71 per month or 3.9 percent over current rates.
The company also requests an additional increase of $3.45 million, effective Jan. 1, 2011, for recovery of pension funding costs to comply with federal law. On average, the proposed 2011 rate increase for pension funding costs would increase the bill for a typical residential natural gas customer by 58 cents per month over the proposed 2010 rates.
Since 2007, Xcel Energy has invested nearly $70 million in its core natural gas system in Minnesota to maintain safety and reliability. This includes reconstruction projects to upgrade more than 115 miles of natural gas mains and 9,000 services, and significant relocation projects such as the required move of a large natural gas main from beneath the now demolished DeSoto Bridge in St. Cloud. The main was moved underground and bored underneath the Mississippi River.
As part of this filing, the company proposed to implement interim rates effective Jan. 11, 2010. Interim rates are expected to increase customers’ bills by approximately $1.53 per month, or 2.2 percent. The interim rates would remain in effect until the MPUC makes its final decision on the case.
The proposed rate increase only affects customer and distribution charges for delivering natural gas - about 30 percent of an average residential customer's total bill - and not the wholesale cost of natural gas, which is determined by national market conditions. Xcel Energy earns no profit on the price of natural gas itself, as it passes the costs of its wholesale gas purchases directly to retail customers on a dollar-for-dollar basis.
Xcel Energy has several free online resources available to customers to help them conserve natural gas and reduce their energy bills. Some of these resources include the Home Energy Analyzer, Energy Calculator and ENERGYsmart Library. Customers can take advantage of these resources by visiting www.xcelenergy.com/infosmart. In addition, Xcel Energy has specially trained customer service employees who can connect income-qualified customers with public and private resources to assist them to pay their energy bills. For more information, please call Xcel Energy at 1-800-895-4999.
