Regulators Approve 4.8% Xcel Gas Rate Hike

Minnesota regulators approved a smaller natural gas rate increase than Xcel Energy requested, with customers set to receive refunds for higher temporary rates.

Updated on Nov. 7, 2026 in Utilities

Flat-color editorial illustration of a steel gas pipe rising from a snowy prairie into a utility regulator housing, set against a pale winter sky. — Minnesota regulators approved a 4.8 percent natural gas rate increase for Xcel Energy customers, below the amount the utility requested, with refunds owed for higher temporary rates. AI Illustration. Upload story photo >

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The Minnesota Public Utilities Commission approved a 4.8 percent natural gas rate hike for Xcel Energy customers. Customers have paid higher temporary rates since January and will be refunded the difference once the approved rate is applied.

Why it matters

The decision sets natural gas rates for Xcel Energy customers across Minnesota and reduces the increase Xcel originally sought. Regulators also trimmed the shareholder return on gas investments, shifting part of the cost burden away from ratepayers.

The approved 4.8 percent increase is lower than the 8.2 percent, or $63.4 million, Xcel requested and slightly below the 4.88 percent settlement proposal. The refund amount owed to customers for the difference between temporary and approved rates has not yet been determined.

The players

Xcel Energy

Xcel Energy is a major investor-owned utility holding company that provides electricity and natural gas across several Midwestern and Western states, including Minnesota.

Minnesota Public Utilities Commission

The Minnesota Public Utilities Commission is the state regulatory body that oversees utility rates and service in Minnesota and approved the natural gas rate decision.

Citizens' Utility Board

The Citizens' Utility Board is a Minnesota consumer advocacy group that represents ratepayers in utility proceedings and estimated the residential impact of the settlement.

The details

The Public Utilities Commission approved the rate hike this week, below the amount Xcel Energy originally requested to cover rising capital and maintenance costs, including new transmission infrastructure and fire safety systems. The Commission also reduced the shareholder return on natural gas investments and declined to reconsider that decision.

January: Customers began paying higher temporary natural gas rates.
May: Xcel Energy reached a settlement with consumer groups.
Earlier this year: The Commission approved a higher allowed return for Xcel's electric investments.
This week: The Commission approved the 4.8 percent natural gas rate hike.
Earlier this month: Xcel proposed keeping electric rates steady for the next two years.

Roadmap

The commission's split treatment, trimming the return on gas investments while allowing a higher return on electric investments earlier this year, reflects how Minnesota regulators are weighing ratepayer costs against utility infrastructure spending. The outcome follows the regulatory pattern of approving rate increases below utility requests when settlements with consumer groups are in place.

Xcel Energy customers on natural gas service will see the approved 4.8 percent rate increase applied, but they will also receive refunds for the difference between higher temporary rates paid since January and the final approved rate. Residential customers should watch for refund calculations in the coming months.

The takeaway

Minnesota customers should expect a modest gas bill increase after refunds offset earlier overcharges, and the commission's lower shareholder return signals tighter oversight of utility spending.