Minnesota Approves 4.8% Natural Gas Rate Hike
Xcel Energy natural gas customers will pay a smaller increase than requested and receive refunds for temporary rates paid since January.
Updated on Nov. 7, 2026 in Utilities
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Minnesota regulators approved a 4.8 percent natural gas rate increase for Xcel Energy customers, below the 8.2 percent Xcel originally requested. Customers who paid higher temporary rates since January will receive a refund of the difference once it is calculated.
Why it matters
The commission cut the shareholder return on natural gas investments, which limits how much of Xcel's capital and maintenance spending is passed to ratepayers. For businesses that buy natural gas for heating and processes, the approved hike means a modest increase in fuel-related operating costs, with the refund timing still to be determined.
The approved 4.8 percent increase is about 3.4 points below Xcel's requested 8.2 percent, which would have added $63.4 million. The Citizens' Utility Board estimated residential rates would rise about 4.1 percent under the earlier settlement, which proposed 4.88 percent.
The players
Xcel Energy
A large investor-owned electric and natural gas utility serving customers across several states, including Minnesota.
Minnesota Public Utilities Commission
The state regulator that sets utility rates and allowed shareholder returns for investor-owned utilities in Minnesota.
Citizens' Utility Board
A consumer advocacy group that represents residential utility customers in rate proceedings before Minnesota regulators.
The details
Xcel Energy customers have been paying higher temporary natural gas rates since January while the rate case was pending. The commission set the final rate at 4.8 percent, lower than the company's request, and ordered Xcel to refund the difference between the temporary rates paid and the approved rate. The commission also reduced the allowed return on Xcel's natural gas investments, which lowers the earnings Xcel can earn on that capital.
Timeline
January: Customers began paying higher temporary natural gas rates.
May: Xcel reached a settlement with consumer groups proposing a 4.88 percent increase.
Earlier this year: The commission approved a higher allowed return on Xcel's electric investments.
This week: The commission approved the 4.8 percent natural gas rate increase.
Earlier this month: Xcel proposed keeping electric rates steady for the next two years.
Market Landscape
The commission's cost-of-service rate-case process sets allowed returns that determine how much utility capital spending reaches customer bills. This decision cuts the natural gas return while approving a higher electric return earlier this year, showing regulators treating the two business lines differently.
Minnesota businesses that buy natural gas should budget for a modest increase in fuel costs and track the refund calculation on their own bills. Operators with large natural gas loads should review how the lower shareholder return affects utility pricing in future rate cases.
The takeaway
Minnesota operators with significant natural gas usage should calendar the coming refund calculation and compare it against their own bills. Review future Public Utilities Commission filings to see how the reduced natural gas return shapes subsequent rate requests.
What happens next
The refund amount for customers who paid temporary rates since January will be calculated in the coming months.
Further reading
For more on how state regulators set these prices, explore Utilities coverage.
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