Yesterday, the Minnesota Public Utilities Commission (“MPUC”) approved a settlement between Xcel Energy and various intervening stakeholders, to resolve the revenue requirement issues in Xcel Energy’s pending multi-year rate increase.  The MPUC appeared to struggle with accepting the settlement in lieu of the full evidentiary record it is used to on financial issues.  Nonetheless, it ultimately agreed with stakeholders’ assessment that the deal was in the public interest, as well as an opportunity to break Xcel’s cycle of continuous rate cases over the last decade or so.

As part of the MPUC’s effort to get comfortable with the settlement, it resolved to open a new docket to develop and potentially apply performance metrics to Xcel Energy’s rates during the pendency of the approved multi-year rate increase.

In addition to approving the settlement, the MPUC addressed various revenue allocation and rate design issues.  With respect to revenue allocation, the MPUC deviated from prior practice of approving one class cost of service study (“CCOSS”), and using that MPUC-approved CCOSS as a starting point for revenue allocation.  Instead, the MPUC broadly commented on the various CCOSSs proposed by parties in the case and then chose a revenue allocation before any further in-depth discussion of the CCOSS or making any particular determination on the CCOSS.

The resulting table of increases by class for 2016 appears below:


Class Increased Revenue (000s) % Apportionment $ Increase (000s) % Increase
Residential $1,135,268 36.74% $63,812 5.96%
C&I Non-Demand $108,512 3.51% $3,063 2.90%
C&I Demand $1,818,873 58.86% $65,964 3.76%
Lighting $27,695 .90% $1,834 7.09%
Total $3,090,348 100% $134,673 4.56%


The MPUC further determined that the same percentage apportionment would be applied to the rate increases in 2017, 2018, and 2019. The MPUC then went on to rate design, making some minor changes to interruptible service and retained the existing residential fixed customer charges.  The MPUC concluded by making several specific determinations on the CCOSS.

A written order detailing the MPUC’s decision will follow.