Xcel Energy recently announced a two-year pilot program that could provide substantial relief on electric bills for thousands of Minnesota households. The program aims to reduce the financial burden of energy costs for low-income and marginalized communities.
Xcel plans to offer automatic bill credits to qualifying households in certain low-income areas, identified using U.S. census data. The credits will average over $450 per year, and households will not be required to meet specific income requirements or enroll in the program.
This initiative was developed in collaboration with Xcel’s equity advisory group, established to address energy cost disparities faced by low-income and BIPOC communities. The group recognized that existing government energy subsidies often reach only a small fraction of eligible individuals due to burdensome enrollment processes or the stigma associated with seeking financial assistance.
Xcel’s pilot program targets households with an electric energy burden exceeding 4% of their yearly income. Using median income metrics for eligible census blocks, the company will calculate bill credits that vary depending on location. While some households with lower energy burdens may also receive credits, Xcel acknowledges that enrolling participants based on income could deter participation.
The company emphasizes that the pilot program is designed as a community-level investment, recognizing that many households with energy burdens below the 4% threshold could still benefit from assistance. Xcel believes that over-inclusion is preferable to excluding potential beneficiaries who may face other financial challenges.
If approved by the Public Utilities Commission (PUC), the pilot program would cost Xcel approximately $10.8 million over two years. The company intends to fund the initiative using settlement payments from the U.S. Department of Energy, related to unfulfilled nuclear waste storage commitments.
This pilot program comes after Xcel recently withdrew its lawsuit challenging the PUC’s limitation on a key profit measure in its latest electric rate case. This move is expected to result in lower overall bills for customers. The company has also requested a 9.6% rate increase for its natural gas service in 2024, which is currently under review by regulators.
