Minnesota Public Utilities Commission strengthens consumer protections as state prepares for new very large electricity customers

St. Paul, MN — The Minnesota Public Utilities Commission (Commission) approved a comprehensive set of safeguards for how Xcel Energy may serve any future very large electricity customers, as required by the Minnesota Legislature. The actions help protect Minnesota households and businesses as the state considers potential high‑demand users, including new data centers and industrial facilities.

Minnesota law requires very large customers to pay the full costs they create and to be served in a way that allows the utility to achieve the state’s renewable‑energy and carbon‑free electricity standards. The Commission adopted Xcel Energy’s proposed tariff framework for very large customers but strengthened it in several key areas to better implement these statutory requirements. The Commission emphasized that these decisions reflect ongoing stakeholder input – particularly recommendations from the Office of the Attorney General (OAG) and the Citizens Utility Board (CUB) – and represent its best effort to balance fairness, transparency, and readiness for emerging energy demands.

“Very large loads can bring economic benefits, but they must do so on terms that are fair, transparent, and protective of all Minnesotans,” said Commissioner Hwikwon Ham. “We listened closely to the full range of stakeholders and acted to prevent cost shifting while keeping Minnesota competitive for responsible business investment.”

Key approvals

• Stronger cost protections for ratepayers: The Commission approved Xcel’s Incremental Cost Test (ICT) but adopted new requirements recommended by the OAG, including requiring Xcel to file clearer assumptions, supporting data, and cost estimates. These improvements make the ICT more transparent and ensure very large customers fully cover all of the system, generation, and transmission costs they create.

• Defining “very large customers”: The Commission defined “very large customers” for purposes of Xcel’s tariffs as new loads sized 100 megawatts (MW) or greater. Additionally, based on a proposal from CUB, this new customer class will include any new customer with at least 20 MW but less than 100 MW of load if the customer is “system intensive” – meaning the customer will require significant system modifications, design, engineering, or other expenditures prior to starting service.

• A balanced contract structure: The Commission approved Xcel’s proposed 15-year default contract term and 24 month exit notice period. Considering input from the OAG and the Department, the Commission increased the minimum bill and exit fee proposed by Xcel to 80% of the customer’s contracted capacity to strengthen ratepayer protections. This ensures that if a very large customer reduces its usage or leaves early, the costs of the infrastructure built to serve it aren’t shifted onto everyone else.

• Creation of a new very large customer class: Rather than placing these customers in the existing Commercial and Industrial class, the Commission created a standalone customer class. This structure aligns with recommendations from the OAG and other stakeholders, bolsters transparency, improves cost allocation and reduces the risk of cross subsidization.

• Requiring customer-funded system upgrades: All transmission and distribution upgrades needed to serve very large customers must be paid directly by those customers through Contributions in Aid of Construction (CIAC). At the same time, all additional revenue these customers generate will be shared across all customer classes to help offset overall system costs.

• Clean energy compliance for every very large customer: For each new customer, Xcel must demonstrate that the electricity provided will meet Minnesota’s renewable and carbon free energy benchmarks without delaying statewide progress.

The Commission emphasized that today’s actions reflect extensive input from consumer advocates, utilities, labor organizations, environmental groups, and industry. The final decision incorporates recommendations from multiple stakeholders and strengthens Minnesota’s framework for managing rapidly growing electricity demand.

“Our responsibility is to Minnesota consumers,” said Commissioner Ham. “By listening closely to stakeholders, we’ve ensured that any future very large customers will pay their full costs and that Minnesota will stay on track toward a carbon-free grid.”

Full record information is available in Docket 25-289.