The governing body and the power company came to an agreement on a rate change. Xcel Energy customers will notice the difference starting in July.

The South Dakota Public Utilities Commission voted Monday to allow Xcel Energy to raise its electric rates by four percent above 2014 levels. The PUC issued its decision at an ad hoc meeting June 15 in Pierre, where it accepted a joint settlement agreement presented by Xcel Energy and PUC staff.

Starting July 1, 2015, the average customer in Xcel’s South Dakota territory should experience the change in electric rates. Xcel’s original request asked for an increase of eight percent. Laura McCarten who is the Regional Vice President of Xcel Energy says the two parties were able to negotiate in good faith. “There was give and take on both sides. What the commission approved will work for us over the next several years and we think it’s good for our customers that we serve in South Dakota as well.”

Because of how the deal is structured and because of state law, the proposed eight percent boost was already is in place. Xcel Energy implemented an interim rate increase on Jan. 1, 2015, reflective of its initial rate increase request.

The company will subsequently refund to customers the difference between the interim rate and the final approved rate, with interest, during a monthly billing cycle beginning no later than Aug. 1, 2015. McCarten says customers will see a difference. “Our customers will get a refund. A typical residential customer will likely see a refund between $25-30.”

The agreement outlined a recommendation that the company be allowed to increase base rates and implement an infrastructure rider to raise approximately $7.795 million in additional annual revenues. Xcel representatives have stated that investments to the company’s generation, transmission and distribution facilities and property taxes are among the drivers of the rate increase request.

The commission agreed to allow the company to continue utilizing the infrastructure rider, a mechanism to recover specific costs related to investment in infrastructure. The company must submit a request to the commission for annual review and approval of the rider for rates effective in 2016 and 2017. Xcel Energy also agreed to hold off on any future base rate increase until 2018, which would require commission approval before implementation.

In a press release, the members of the commission stated their reasons for accepting the change. “I have spent a great deal of time contemplating my decision in this case,” said PUC Chairman Chris Nelson. “There are intricacies and complexities that make up this comprehensive request from Xcel Energy such as safety and power upgrades to nuclear facilities, new generation sources, and costs incurred as a result of federal mandates. In the end, I agree that the deal negotiated by PUC staff and the company is fair for both customers and the company,” he concluded.

“The final question that needs to be answered in any rate increase request is, does this increase allow for the production of reliable and safe electricity to the consumer at an affordable rate?” PUC Vice Chairperson Kristie Fiegen said. “After thoroughly studying the case, reading and hearing testimony from PUC staff, consultants and Xcel Energy representatives, I am confident the answer is yes and the decision made today is the right one,” she continued.

“I am appreciative of the negotiations between Xcel and the PUC staff,” Commissioner Gary Hanson stated. “It is clear that the extensive research, discussions and give-and-take involving both entities were conducted professionally and with the goal of keeping the financial impact on consumers as low as possible.”

Xcel Energy has approximately 85,000 customers in its South Dakota service territory. Most of them are in Sioux Falls.

 

More From KYBB-FM / B102.7