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Martiga Lohn
St. Paul, Minn. (AP)

Xcel gets MN rate hike; customers to get refunds

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Xcel Energy was cleared on Tuesday to raise its electric rates in Minnesota, but most of the company's customers stand to get refunds and might even see their bills go down.

That's because the $90 million to $92 million rate increase approved by the state Public Utilities Commission is smaller than an $132 million interim increase that customers have been paying since January. Customers are entitled to refunds to cover the difference.

The new rates represent a 3.6 percent across-the-board increase from last year's rates, even though they're lower than the current interim rates, said Burl Haar, executive secretary of the Public Utilities Commission. Regulators will spell out the particulars for different classes of customers in a written order due within a few weeks.

"By and large I would say the vast majority should get some sort of refund," Haar said.

Xcel spokesman Steve Roalstad said the commission's written order will determine what happens to rates for different types of customers. "It might mean a slight increase or decrease depending on how the written order comes out," he said.

Minneapolis-based Xcel Energy serves 1.2 million electricity customers in Minnesota. The utility said it needed to charge more to cover rising costs and spending on infrastructure, and originally asked for a $156 million increase. That was pared back, and the Public Utilities Commission scaled the amount back even further.

Roalstad said the approved increase came in lower because of several issues, including accounting costs for the company's nuclear plants and a surcharge for a southern Minnesota wind farm. The commission dealt with the request in a series of votes in St. Paul.

"The commission agreed that with the amount of investments we've made in the last few years that a change to the rates was necessary," Roalstad said.

Haar said several procedural steps remain after the written order comes out. Xcel's new rates are expected to take effect before the end of the year.

(Copyright 2009 by The Associated Press. All Rights Reserved.)