On December 26, 2014, the Administrative Law Judge presiding over Xcel Energy’s current rate case, Jeanne Cochran, released a report that included her recommendations to the Public Utilities Commission on a number of policy issues that were debated in the proceeding. Importantly, the judge ruled in favor of three significant policies designed to encourage and increase energy savings in Xcel Energy’s service territory.
- Decoupling: The judge recommended that the Commission approve a decoupling policy for Xcel Energy. Decoupling makes the utility financially indifferent to lost revenues from energy savings, allowing the utility to become energy efficiency champions.
- Inclining Block Rates: Traditional rate design charges customers a set rate for all the energy they use in a billing period, treating every unit of energy the same. Inclining block rates charge a higher rate when customers use significantly more energy, encouraging energy efficiency and protecting many low- and fixed-income families and individuals from rate increases. The judge recommended that the Commission open a new proceeding to further explore how inclining block rates could be implemented for residential customers in Xcel Energy’s service territory.
- Fixed charges: In its rate case, Xcel Energy proposed increasing the fixed customer charge portion of customer bills, raising the amount customers pay regardless of how much electricity they use. Higher fixed charges reduce the incentive for customers to invest in energy efficiency and distributed generation, and hit many low- and fixed-income families the hardest. The judge recommended that the Commission reject Xcel Energy’s request to raise fixed charges in this rate case, bucking a trend recently seen in other states.
The Public Utilities Commission will hold hearings and make a ruling on the rate case in early 2015, building their decision off of a deliberated legal record that includes advocacy from organizations like Fresh Energy and the judge’s report.
The Star Tribune also covered the report.