New Pilot Reduces Electricity Costs in “Energy Burdened” Neighborhoods

Xcel Energy customers in certain Minnesota neighborhoods may soon see a reduction on their electric bills through a new Automatic Bill Credit (ABC) Pilot Program approved by the Minnesota Public Utilities Commission (PUC).

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What Is the Automatic Bill Credit Program?

The ABC Program is a two-year pilot designed to help households facing higher-than-average energy costs. Instead of requiring customers to apply, Xcel will automatically provide a bill credit to eligible households.

The program focuses on lowering the “energy burden”—the percentage of household income spent on energy. In Minnesota, the average energy burden is about 2%. When it exceeds 6%, it is considered high. The program sets a target of about a 4% energy burden for participating neighborhoods.

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Who Is Eligible?

Eligibility is based on where a customer lives, not on individual income applications.

• Xcel reviewed census data and energy usage to identify neighborhoods (called census blocks) where residents face higher energy burdens.
• About 17,000 households in 63 census blocks are expected to qualify.
• Every eligible household in the same census block will receive the same bill credit.

Customers do not need to apply—the credit will appear automatically on their bill if their address is included.

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How Much Is the Credit?

The credit amount is calculated by comparing:

1. The average electricity bill in an eligible census block; and
2. The “target” bill amount that would equal a 4% energy burden for that neighborhood.

The difference becomes the annual credit, applied evenly to each household in the block. Individual usage may vary, but the credit is uniform within each area.

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How Is the Program Funded?

The two-year pilot will cost about $4.1 million annually. Funding will come from federal settlement payments that Xcel receives, which are normally refunded to all customers.

As a result, households outside the program may see slightly lower refunds—estimated at less than $1.50 per year.

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Key Takeaways for Customers

• Automatic Relief: If you qualify, you do not need to apply—the credit will be added to your bill.
• Neighborhood-Based: Eligibility depends on your census block, not individual household income.
• Pilot Program: The program is temporary (two years) and may change based on results and regulatory review.
• Minimal Broader Impact: Non-eligible households will see only a very small change in future refunds.

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Next Steps

• Customers who want to confirm eligibility can check updates from Xcel or the PUC.
• Questions about bills or credits should be directed to Xcel Energy’s customer service.
• Community organizations may wish to track the program’s outcomes, as regulators will decide later whether to continue or expand it.

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Bradley Werner, LLC

Michael Bradley and Nancy Werner are nationally recognized and respected local government attorneys. Our firm is dedicated to representing local governments on broadband, cable, telecommunications, utilities, and right-of-way management issues. Our firm has decades of experience representing municipalities on communications and utilities matters.