Xcel Energy exits Michigan, selling 15,000 customers at no disclosed price, to focus on a $60 billion plan

Fifteen thousand customers change landlords

Fifteen thousand customers in Michigan's western Upper Peninsula are getting new utility owners. Xcel Energy▲+0.36% — Xcel Energy, up 0.36 percent today agreed on October 6 to sell its Michigan natural gas operations↗, 6,000 customers, to SEMCO Energy Gas Company, and its 9,000 electric customers in Gogebic and Ontonagon counties to Upper Peninsula Power Company, with closing expected in 2027 after state and federal approvals ¹². "We are committed to ensuring a smooth transition for our customers and employees," said Karl Hoesly, who runs Xcel's Wisconsin and Michigan operations ¹.

A $10 billion fund buys the wires

Neither deal carries a disclosed price↗ ³⁴. What changes hands is 470 miles of distribution line and 110 miles of transmission, immediately adjacent to the buyer's territory ⁵. UPPCO's owner, Axium Infrastructure, has held the utility since June 2021 and says it manages more than $10 billion; the purchase adds about 17% to UPPCO's 52,000-customer base ⁵⁴. SEMCO, serving more than 325,000 customers across Michigan, takes the gas side ².

The exit Xcel can afford

The divestiture is 0.2% of Xcel's 3.9 million electric customers, and Michigan drops off its eight-state map once the deals close ³⁶. That is the strategy. The capital plan behind it runs $60 billion through 2030↗, about $13.8 billion of it this year, targeting roughly 11% annual rate-base growth, nearly 4 gigawatts of data-center contracts by 2027, and 6-8% or better annual EPS growth ⁷³.

The AI math is still contested

The load at the center of that plan is disputed on the record. The Inference reported on October 2↗ that Xcel claims more than $1.1 billion in net benefits to other customers from its Google Pine Island data-center deal, while the Minnesota attorney general's ratepayer division counts about $1 billion in net costs, with the deciding dollars blacked out ⁸. The build already outruns the cash it generates: capex has exceeded operating cash flow in 11 of the last 12 quarters ⁹. Customers carry the difference elsewhere, as with the $1.2 billion Lamar DC Tie upgrade, which passes 80% of its costs to electric bills on top of a $250 million federal grant ¹⁰.

Two dates decide what the pruning was worth

Xcel's answer: Google funds 1,900 megawatts of new generation at no cost to existing customers, and Michigan customers see no immediate rate or billing change ⁸¹. The dates that matter are the Pine Island review challenge on November 16, before a commission that just raised Xcel's allowed return to 9.6%, then the sale approvals ahead of a 2027 close ⁸¹. Until Minnesota rules, every data-center number in the $60 billion plan is a claim, not a measured fact ⁸.