Xcel customers who owe thousands to get help settling their debt

Minnesota utility regulators on Thursday approved a novel $17.5 million plan to aid Xcel's most indebted customers, whose difficulties have been exacerbated by COVID-19.

The plan will provide bill credits to Xcel's customers with an average balance of $1,000 to $4,000 — either for electricity bills alone or electricity plus gas. The credits would cover up to 75% of customer liabilities.

"I think this has an incredible potential to help a lot of families — those who are struggling most," said Pam Marshall, head of Energy Cents Coalition, a nonprofit advocacy group for low-income utility customers.

Xcel shareholders will pick up the tab for the program, not its ratepayers as the company originally proposed in September.

The Minnesota Public Utilities Commission (PUC) voted 5-0 for the plan. "It is significant and it is meaningful for customers," Katie Sieben, PUC chair, said at Thursday's meeting.

Xcel said it plans to roll out the program immediately.

Xcel proposed the plan as arrearages for all Minnesota utilities — gas and electric — have been rising over the past year as COVID-19 has battered the economy.

Minneapolis-based Xcel is Minnesota's largest electric utility with 1.3 million customers; it's also the state's second-largest gas utility, but its gas-only customers aren't included in the relief plan.

More than 11,000 of Xcel's customers are eligible for the new bill-credit program.

They would get an upfront 25% credit on their arrearage. Another 50% of their balance would be issued in equal monthly credits for the remaining period of the repayment plan. A customer who drops out of a plan doesn't have to repay credits.

"It's basically to wipe the slate clean from a lot of the economic stress that COVID has caused," Marshall said in an interview.

For Xcel, it's a way to recover some bad debt — even with the cost — that would otherwise be uncollected.

The Minnesota Attorney General's Office and the Minnesota Department of Commerce, which represent the public interest before the PUC, opposed that plan, saying Xcel should pick up at least 50% of the tab.

As part of a rate agreement in December, Xcel said it would pick up the full tab.

Due to COVID-19 economic damage, investor-owned utilities such as Xcel have not been allowed to disconnect past-due customers by order of the PUC. That prohibition runs for 60 days beyond Gov. Tim Walz's emergency COVID-19 order, which is still in place.

Consumer groups and Xcel and other utilities are working on "transition plans" for when the PUC's disconnect order expires.

Energy Cents Coalition and three other groups have proposed that customers be informed of disconnection resumptions in May, with formal disconnect orders starting in June. Actual disconnections wouldn't start until August, under their plan before the PUC.