If you are a resident of Minnesota and your home’s energy is supplied by Xcel Energy, you’ll want to keep reading. With the arrival of the new year comes an increase in this company’s natural gas bill following its approval by the Public Utilities Commission (PUC). The provisional increase will be 6.8%, which the company intends to use to cover operating costs, maintain infrastructure, and adjust employee wages. This new measure will affect 492,000 customers, representing an average additional cost of $70 per year. This adjustment is temporary and subject to review by the Public Utilities Commission, which could lead to refunds.
Increase in heating prices in Minnesota
The year 2026 begins with bad news for the financial economy of thousands of households in Minnesota. Xcel Energy, established as the second-largest gas provider in the region with a customer base of 492,000, has had its request to increase the price of its services approved. This decision was ratified by the Minnesota Public Utilities Commission (PUC) with a unanimous 3-0 vote in early December of last year, 2025.
The approved increase—provisionally—is 6.8%, which means that the average household would see an annual rise of $70 in their bills. However, this figure may not be final, as there is a second request from the company that the PUC is still reviewing. If approved, the increase would reach up to $85.32 per year per customer, which would generate revenue of $63.4 million for Xcel Energy.
Reasons for this increase
According to the company, this adjustment is not made arbitrarily, but is based on the fact that, in order to offer a comprehensive system, it must receive constant investments. Among the main reasons for requesting the increase are: The rise in maintenance costs to ensure safety during peak consumption seasons, especially in winter. The increase in property taxes and the need to renew the fleet of old vehicles. New labor agreements that have resulted in higher wages for its employees. A modernization plan that covers 10,000 miles of transportation and distribution infrastructure.
According to statements by Amy Liberkowski, regional vice president of regulation and pricing in Minnesota, the company “does not expect any further significant cost increases after January in the coming years.” In addition, the legal framework protects the consumer, since if, after the final review, the PUC determines that the necessary increase is less than 6.8%, consumers must receive a refund for the difference charged, along with the corresponding interest.
National Energy Crisis
This is not the first time that Xcel has requested an increase in its rates, as it already did in October 2025 requesting an 8.2% hike, making two requests in less than three years. The response to this increase has been negative from users due to the vulnerable and delicate moment the U.S. economy is going through. According to a report from the National Energy Assistance Directors Association (NEADA), heating costs in the United States are expected to rise by 9.2% during the winter months.
The average monthly electricity bill has already increased by 10% this year, and it is estimated that during the winter period, households that rely on electricity will pay around $1,223, while those using natural gas will spend about $704. The seriousness of the situation is reflected in the fact that nearly four million American households face the risk of power outages this winter due to unpaid bills. In light of this outlook, experts suggest household savings measures that, with minimal investments of just $6 in basic materials, could generate savings of up to $225.
Strategies such as precise thermostat adjustment and efficient use of ceiling fans are presented as the most accessible tools to mitigate the impact of this new cycle of rising energy costs.
Frequently asked questions
How much will rates increase and who is affected?
The 6.8% increase affects Xcel Energy’s 492,000 customers in Minnesota, which amounts to an average additional cost of $70 per year per household.
Is it possible to receive a refund for this increase?
Yes. Since it is a provisional increase, if the PUC decides after its review that the percentage should be lower, users will receive a refund for the difference plus interest.
Why is the price of gas going up?
Xcel Energy justifies the increase due to the maintenance of 10,000 miles of infrastructure, higher taxes, vehicle renewal, and wage increases following new labor agreements.
