Public Utilities Commission slashed the utility’s request by more than half; customers will get refunds on their bills.
The scaled-back electric rate increase for Minnesota Xcel Energy customers is 3.8 percent, the company said late Friday.
Minnesota utility regulators approved the new rate Thursday, but the amount and percentage increase were not immediately computed.
Xcel had originally sought a 10.7 percent rate hike, and later scaled it back to 7.8 percent. The final rate increase ended up being less than half of Xcel’s reduced request.
Overall, Xcel said the 2013 increase amounts to $103 million, or 64 percent less than the $285 million it originally sought, the company said in its filing with the Securities and Exchange Commission.
That’s the largest percentage reduction the state Public Utilities Commission has made on any of Xcel’s rate increase requests since 1993, according to PUC data.
Xcel’s 1.2 million Minnesota electric customers have been paying 9 percent higher interim rates since Jan. 1, which means customers will get refunds, with interest, on their bills for the overpayments.
Xcel spokeswoman Mary Sandok said the company is reviewing when refunds and the lower permanent rates would be applied to bills. The timing could depend on whether anyone seeks a rehearing in the case, shes said.
“We are hoping permanent rates would take effect in December, but there is a chance final rates do not take effect until sometime in 2014,” she added.
In its filing, Xcel described how the commission’s decisions affected revenues and rates. The biggest item was the reduced return on equity of 9.83 percent, which results in Xcel getting $43 million less from ratepayers, the company said. Xcel had sought a 10.6 percent equity return.
The second-largest reduction was the decision to not allow $43 million related to the Sherco plant in Becker, Minn., to be charged to ratepayers because Unit 3 has been idle since a 2010 accident.
The commissioners also rejected the utility’s sales forecast, which had the effect of reducing the rate increase. Regulators concluded that the company will get $26 million more in sales revenue, the company said.
Xcel also was not allowed to recover all its investments in nuclear plants to upgrade and extend their operating lives, saving ratepayers about $15 million.
One other change approved by the PUC on Thursday, saving ratepayers $24 million, was a reduction in a depreciation reserve for transmission and other assets, the company said.
David Shaffer • 612-673-7090 Twitter: @ShafferStrib