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Xcel Energy asks for increase in the basic monthly charge for natural gas

Public Service Commissioners Randy Christmann (l), chair Julie Fedorchak, and Brian Kroshus
Dave Thompson, Prairie Public
Public Service Commissioners Randy Christmann (l), chair Julie Fedorchak, and Brian Kroshus

Xcel Energy has filed for a natural gas rate increase.

It would be on the base rate – that is, the basic monthly charge for natural gas service. It would go from $18.48 a month to $24.28. Utilities do not make money on the gas itself – that’s just a pass-through cost from natural gas producers.

But at least one North Dakota Public Service Commissioner wasn’t happy to see this filing.

"Frankly, the timing is not good," said Commissioner Brian Kroshus.

Kroshus said Xcel has the right to file for an increase. But he said this comes on the heels of natural gas price spikes because of the February cold spell in Texas and other southwestern states. Because of issues with natural gas production in Texas, prices spiked.

"This does show a disconnect, to be presenting a rate case at a point in time when gas prices are rising," Kroshus said. "I don't know if that's going to change in the coming heating season."

Kroshus said regardless of the provider, heating costs are bound to rise this winter.

The PSC decided earlier this year to spread out the gas costs over a 17 month period, instead of having those costs collected in one month. Kroshus said because Xcel is allowed by state law to have an interim rate increase, the Commission will hold a hearing to see if by extending the gas cost collection over 24 months, in an attempt to soften the blow of interim rates to Xcel customers. Kroshus proposed that 24 month period earlier, but the other two commissioners didn’t agree.

Xcel Energy issued the following statement about the proposed rate increase:

At Xcel Energy, we work every day to provide the reliable, affordable energy that our customers depend on. Our natural gas rate proposal to the North Dakota Public Service Commission includes investments that will allow us to continue to provide this reliable natural gas service to more customers as North Dakota grows.

Since our last rate proposal filing in 2006, the number of natural gas customers we serve in North Dakota has increased by almost 40%. Between 2007 and 2020, we added over
260 miles of new natural gas lines in North Dakota to serve more than 16,000 new customers. In the Fargo area alone, the number of natural gas customers we serve increased by 45%
between 2010 and 2019. We are also adding a 4.5-mile-long new 12” natural gas line – the largest natural gas distribution expansion project ever in North Dakota. The project is underway now
and we expect to complete construction this year.

In 2019, our average residential customers’ natural gas bills in North Dakota were 24% below the national average, and 18% below the North Dakota average. The average residential customers’ bill would increase $5.80 under this proposal, keeping residential customers’ average monthly natural gas bill among the lowest in the region. We know this continues to be a challenging economic time for many customers. If any customer is having trouble paying their bill, we encourage them to contact us as soon as possible. We will always work with our customers to set up a payment plan and connect them with other resources to help with bills. We look forward to working with the Public Service Commission, stakeholders and our customers as our proposal is reviewed in the coming months.