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Blowback: Xcel bills confusing
20,376 Minnesota customers who signed up for Xcel Energy's Windsource program got a mixed message in their latest bills.
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When does a price cut look like a price increase?
When it's on an Xcel Energy bill.
Xcel has sent letters to 20,376 Minnesota customers who signed up for its Windsource program, trying to explain changes in bills that went out in February and this month that have provoked confusion and anger.
"It seems like people have been asking a lot of simple questions and not really getting any satisfactory answers," said Elizabeth Dickenson, a St. Paul resident and Windsource participant for more than two years.
Paradoxically, the source of the confusion was an effort by Xcel to clarify the cost of providing electricity to its Minnesota customers, including Windsource participants, who pay a voluntary charge to support Minnesota wind farms.
The effort to "unbundle" power bills was prompted by the Minnesota Public Utilities Commission, which asked Xcel to "deconstruct" the costs the last time the utility sought a rate increase. The idea was to show customers the forces that drive the price of electricity, from the standard expenses of meeting demand to the cost of buying and generating electricity in periods of peak demand.
When Xcel recalculated the numbers on the Windsource program, the net price fell slightly after fuel-cost credits were applied.
"When the smoke clears on the credits, the rate is actually lower than before," said Phil Zins, Xcel manager of pricing and planning.
But, he acknowledged, the effort to clarify electricity charges got off to a bumpy start.
"The unbundling, if anything, confuses people," Zins said.
"Many rates -- not just the Windsource rate -- changed in February, and it was challenging to explain in a timely manner all of the various changes to the many subsets of customers who were affected," said Howard Kiyota, Windsource program manager.
Here's why people were left confused by their Xcel bills:
Previously, the separate cost to Windsource customers was listed as 2 cents higher than the residential base rate of 7.8 cents per kilowatt hour. That 2-cent premium was reduced by half a penny thanks to the fuel cost credit -- money Xcel saves by not buying electricity generated by more expensive alternatives, such as natural gas. The net cost of Windsource: 1.5 cents per kilowatt hour.
In February, however, the Windsource rate was listed as 3.53 cents higher than the residential base rate. But the fuel credit was 2.5 cents. So the actual net cost of Windsource was 1.03 cents, about half a penny lower than before.
Got that?
The saving is even harder to see given the fact that overall electricity rates went up.
Consider a hypothetical customer using 500 kilowatt-hours of electricity in February. The bill would be $50.39, before sales tax, up from $49.75 under the old rates, despite the Windsource cut.
The changes may amount to only pennies, but some neighborhood groups that have promoted the Windsource program say they've had to make an outsized investment of time simply to figure out whether the cost of participating in the wind plan is going up or down.
"It seems like a poor business practice on the part of Xcel," said Justin Eibenholzl, environmental coordinator for the Southeast Como Improvement Association. "They didn't have answers to our questions at the outset."
Mike Meyers • 612-673-1746 • meyers@startribune.com
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