St. Paul, Minn. – On Thursday, the Minnesota Public Utilities Commission (Commission) approved a proposal to move approximately 700 legacy Xcel Energy Community Solar Gardens (CSG) to a rate that is in line with newer gardens.
Initially established by the Legislature in 2013, the CSG program allows Xcel customers to subscribe to a small solar farm run by a developer. Xcel is required to buy the power at a set rate, known as the value-of-solar (VOS), and pay a bill credit to subscribers in return for their share of energy. When the program began, a temporary rate was given to subscribers until the VOS was approved by the Commission. Program costs are shared by all Xcel's customers.
Since that time, the customers on the temporary rate have received a benefit increasing at a more rapid rate than the societal value of the energy production as measured by the VOS rate. Over the years, the temporary rate compounded, creating a growing gap between early CSG subscribers and newer customers. The Commission acted today to protect ratepayers from these escalating costs and provide an equitable credit for all subscribers.
The Commission moved legacy customers to year eight of the VOS schedule. To minimize the impact, they approved a $0.01/kWH adder from April 1, 2025, to January 1, 2026, for the large CSG general service class and a $0.03/kWH adder for the residential and small CSG general service classes. For the residential and small classes, their adder will not change unless a future Commission makes that decision. Moving the legacy customers to the VOS saves Xcel ratepayers approximately $30 million the first year and $41 million each year for the next 16 years, or about $687 million.
“At the core of our mission is fair and equitable rates. Today we worked to reduce an inequity in our Community Solar Garden program by transitioning these gardens to a rate specified in statute,” said Commissioner Joseph Sullivan. “I understand there will be impacts to individuals, cities, and companies who subscribed to the temporary rate, but given the size of the escalating costs, that rate was no longer in the public interest.”
To view the full Commission meeting, visit our website.
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The Minnesota Public Utilities Commission regulates three cornerstone service industries in Minnesota's economy: electricity, natural gas and telephone. The Commission’s mission is to create and maintain a regulatory environment that ensures safe, adequate and efficient utility services at fair, reasonable rates consistent with State telecommunications and energy policies. It does so by providing independent, consistent, professional and comprehensive oversight and regulation of utility service providers. Learn more at mn.gov/puc.
