Today, the Office of the Attorney General and Citizens Utility Board of Minnesota (CUB) independently filed petitions requesting the Minnesota Public Utilities Commission (PUC) reconsider a recent decision allowing Xcel to substantially increase the amount it charges to ratepayers to fund the company’s return.
The PUC’s decision was part of a broad determination on a request by Xcel to increase its electric rates. In its decision, the PUC approved a rate increase that was substantially less than Xcel had requested and took important steps to reduce late fees, reduce reconnection fees, and expand targeted affordability programs. (The PUC summarized its decision in a previous release.)
However, the PUC also allowed Xcel to significantly increase its authorized return on equity. CUB believes the decision to increase Xcel’s return was neither in the public interest nor supported by record evidence in the case. Similarly, the Attorney General stated the “decision was not supported by the record and lacked sufficient explanation.” Each party is asking the PUC to reverse this decision.
“Utility companies and their shareholders are entitled to the opportunity to earn a reasonable return on their investments, but not an excessive return,” said Annie Levenson-Falk, CUB’s executive director. “Xcel is producing a healthy profit and does not need Minnesota ratepayers to fund additional returns.”
About return on equity
Investor-owned utilities are permitted to earn a return on the investments they make (the return on equity, or ROE). This ROE is applied to a portion of every utility investment in power generation, electricity wires, meters, and more, and it is baked into the rates charged to customers. Under Minnesota law, the return should cover the utility’s own financing cost plus a “reasonable” return for the company and its shareholders.
The Xcel rate case decision
In this case, the PUC increased Xcel’s authorized return on equity from 9.25% to 9.6%. This is estimated to add $34 million to costs paid by ratepayers each year.
Xcel argued that increasing its authorized return was necessary for it to attract capital, maintain financial integrity, and provide earnings to investors comparable to those realized in other businesses which are attended by similar risk.
However, Xcel acknowledged it has not had difficulty attracting investors at its existing (9.25%) return on equity. Its parent company reported more than $2 billion in earnings in 2025, and Minnesota provided the largest share of earnings of any state in which Xcel operates.
Many of Xcel’s ratepayers, on the other hand, are struggling to afford electric service already and cannot afford the additional cost of an unnecessary increase to the company’s return.
• Xcel disconnected a record 56,823 households for nonpayment in 2025.
• Collectively, Xcel’s residential customers are roughly twice as far behind on electric bills as prior to the COVID-19 pandemic.
• Minnesota households continue to struggle with inflation on basic necessities. 59% have experienced difficulty paying for usual household expenses. 36% of Minnesota’s low-income households have kept their homes at unhealthy or unsafe temperatures to try to save on utility costs.
• More than 8,500 public comments have been filed opposing the rate increase. This compares with approximately 500 public comments received in Xcel’s most recent rate case, between 2021-2023.
• Numerous public commenters stressed that they struggle to afford electricity service, including many who earn too much to qualify for income-qualified programs.
• More than half of the public comments express unhappiness with the company’s profits or return on equity.
Every independent analyst in the case concluded that Xcel’s authorized return on equity should either stay the same or decrease. The Minnesota Department of Commerce, a coalition of large industrial customers, and CUB each conducted analyses of Xcel’s ROE, and none concluded that Xcel needs a higher ROE. The Department of Commerce recommended keeping Xcel’s return on equity steady at 9.25%; the large industrials and CUB recommended reducing the return on equity to 8.96% and 9.0%, respectively.
CUB’s filing today requests that the PUC reconsider its decision and instead set ROE at no higher than 9.25%.
What’s next
Xcel and other parties have an opportunity to respond to the petitions for reconsideration within 10 days.
Any member of the public may also file a comment by emailing consumer.puc@state.mn.us and including Docket #24-320 in the subject line, or by using the PUC’s online comment form. (Know that any identifying information included in a comment will become part of the public record.)
The PUC will then determine whether or not to reconsider its decision. It may do so with or without a public hearing.
Return on equity is a major national issue
This decision comes at a time of heightened focus on utility returns nationwide. Governors in Pennsylvania and Connecticut and a leading gubernatorial candidate in Michigan have called to rein in excessive returns on equity. The Pennsylvania House of Representatives unanimously passed a measure intended to do so, and Michigan legislators have also introduced a bill to cap ROEs. The Governor of Indiana demoted, then fired, the chair of the Indiana regulatory commission after he supported a utility rate increase.
Learn more about Xcel’s electric rate increase on CUB’s website.
About the Citizens Utility Board of Minnesota
The Citizens Utility Board of Minnesota (CUB) is a nonprofit advocate for our state’s residential utility consumers. We provide Minnesotans with free, unbiased information about their energy rights and obligations. We champion affordable, reliable, safe, and clean home energy for all Minnesotans. For more information, visit www.cubminnesota.org.
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