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For Immediate Release:
October 16, 2024
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Minnesota Public Utilities Commission
Contact: Cori Rude-Young, 651-201-2241
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Public Utilities Commission orders Xcel Energy to refund customers from 2011 Sherco shutdown
St. Paul, Minn. – The Minnesota Public Utilities Commission (PUC) ordered Xcel Energy to provide refunds to ratepayers related to the November 19, 2011, catastrophic failure of a turbine at the Sherco generating facility that resulted in the prolonged shutdown of Sherco Unit 3 for almost two years.
Xcel’s ratepayers will receive a refund based on total energy replacement costs, including interest, of approximately $58 million, subject to a reduction for credits ratepayers have already received from a settlement the company secured from General Electric, the turbine manufacturer.
The PUC agreed with the Administrative Law Judge’s conclusions that Xcel failed to operate and maintain Sherco Unit 3 reasonably and prudently resulting in the extended outage. Due to the outage, Xcel Energy needed to purchase replacement power and additional fuel from alternative sources to meet demand which resulted in additional ratepayer costs.
Over the past decade, the PUC held off on determining prudency as Xcel was in litigation with General Electric. Once the companies settled for an undisclosed amount, the PUC met in 2022 and ordered a contested case hearing to determine the amount of additional replacement costs Xcel incurred because of its imprudent operation.
The next step is 30 days after the Commission issues its order, Xcel will make a compliance filing detailing the final refund calculation, including interest.
The PUC remains dedicated to fostering transparency and protecting consumers from undue financial burdens resulting from unexpected operational challenges.
About
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.
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