The North Dakota Public Service Commission has approved a settlement agreement with Xcel Energy concerning the effect of the 2017 corporate tax cuts on North Dakota Xcel electric customers.
Under the settlement, Xcel customers will get a bill credit for tax year 2017. It will average $46. Xcel will get to keep those revenues that would have gone toward taxes for tax years 2018 and 2019, in exchange for a two year rate increase moratorium, meaning the utility can’t file for a rate increase until the end of 2020. Also, if Xcel makes more money than an allowed 9.85 percent rate of return, it has to give the over-collections back to customers.
PSC Chairman Brian Kroshus called it a “good deal” for North Dakota Xcel customers.
"It holds rates constant," Kroshus said. "The company was looking at a potential rate case. In that case, interim rates would have immediately gone into effect, and rates would have gone up."
Xcel said without the deal, it would be short of revenue by about $15 million over the next two years. Xcel’s Dave Sederquist said that’s because the utility has made a number of investments to its nuclear power plants in Minnesota.
"We've also made transmission investments," Sederquist said in an interview. "In North Dakota, we're making a number of improvements to the transmission system."
Xcel said it spent $50 million in Minot, upgrading lines there.
"We're just trying to make sure our systems are running reliably and safely," Sederquist said. "That is causing continual cost pressures for us."
Sederquist said North Dakota Xcel customers should see the $46 bill credit within a month or so.