Minnesota Public Utilities Commission Acknowledges Need for Energy Justice in Utility Ratemaking
Advocates commend equity and affordability wins in Xcel Rate Case, push for more progress
St. Paul, MN – Yesterday, the Minnesota Public Utilities Commission (PUC) released a decision in Xcel Energy’s electric rate proposal, which will impact Xcel’s 1.3 million electric customers across the state. Meaningful provisions include lowering Xcel’s proposed return on equity from the company’s requested 10.2 percent to 9.25 percent, a rejection of proposed investments that would have stalled local clean energy growth, and a rejection of Xcel’s request that ratepayers foot the bill for excessive executive compensation. In addition, the commission found that energy justice is relevant to Xcel’s ratemaking process.
The Just Solar Coalition — consisting of Vote Solar, Community Power, Cooperative Energy Futures, Minnesota Interfaith Power and Light, and represented by the Environmental Law and Policy Center — has urged the PUC to address racial and wealth disparities in bill affordability. In Minnesota, a low-income household can expect to spend eight percent of their income on utilities, four times the average for a non-low-income household. These disparities are especially harmful to customers of color, who are likely to face the highest energy burdens, while also being excluded from programs designed to save energy costs and build wealth.
“A key function of the state utility commission is to ensure that the utility rates are just and reasonable. Today, they seized upon an important opportunity to do that—and they clearly recognized the relevance of Energy Justice within the ratemaking process,” says Environmental Law & Policy Center Staff Attorney Erica McConnell, who represented the Just Solar Coalition. “However, it was troubling to see the Commission move some critical issues out of the rate case and into other forums with less accountability and fewer financial repercussions for the utility.”
The commission’s order excluded any mandates on increased procedural justice and public participation in utility regulation, which the Just Solar Coalition has advocated for throughout the case. Despite the significant public impact of regulatory proceedings, ratepayers often face system barriers to participation, including highly technical language, inadequate public engagement, and the time and expense associated with formally intervening in a case.
“True energy equity requires that the most impacted stakeholders are empowered to participate fully in these critical decision-making processes,” says Jenna Warmuth, Midwest Regional Director at Vote Solar. “I’m proud that our coalition was able to make room at the table for groups that have been historically and systematically excluded. Unfortunately, the PUC failed to implement solutions that would have advanced public participation and access.”
Xcel’s proposal, which was filed in October 2021, has been widely criticized by clean energy, environmental, and social justice advocates for its unprecedented rate increases, particularly at a time when Minnesotans are feeling the strain of inflation and the rising cost of living. Over 500 concerned ratepayers pushed back against the proposed rate hike by attending public hearings and submitting written comments.