--- title: "Xcel Energy offers to freeze Minnesota rates through 2028, paying with five battery projects' tax credits" description: "Xcel's home-state utility filed a plan to freeze base rates for 2027 and 2028, funded by pulling forward federal tax credits from five battery projects. The state commission must choose by January 2027 between the freeze and a fresh rate case." publisher: "The Inference" section: "Power" published: 2026-10-09T23:37:30.811Z modified: 2026-10-09T23:37:30.811Z canonical: https://theinference.org/article/xcel-energy-offers-to-freeze-minnesota-rates-through-2028-paying-with-five-battery-projects-tax-credits language: en keywords: "Xcel Energy, Utilities, Regulation, Minnesota, Electricity Rates, Energy Storage" --- # Xcel Energy offers to freeze Minnesota rates through 2028, paying with five battery projects' tax credits > Xcel's home-state utility filed a plan to freeze base rates for 2027 and 2028, funded by pulling forward federal tax credits from five battery projects. The state commission must choose by January 2027 between the freeze and a fresh rate case. ## The offer lands mid-fight Minnesota electricity customers have just absorbed [two years of contested increases](https://theinference.org/article/xcel-s-billing-mess-meets-the-rate-case-that-funds-its-data-center-build). On October 9, [Xcel Energy](https://theinference.org/markets/companies/xcel-energy)'s home-state utility answered with a trade: NSP-Minnesota [filed an Electric Customer Rate Stability Plan](https://www.sec.gov/Archives/edgar/data/72903/000007290326000175/0000072903-26-000175-index.htm) with the state commission that would freeze customer base rates for 2027 and 2028, in place of the rate case it had planned [1]. The filing asks for a decision by January 2027 and names the alternative itself: if the plan is refused, the utility expects to file a rate case in early 2027, with increases back on the table [1]. ## The credits do the paying The freeze has a funding mechanism, and it is the whole story. NSP-Minnesota would accelerate recognition of federal Investment Tax Credit benefits from five battery storage projects over two years, using them to offset the revenue requirement of ongoing capital improvements [1]. The filing does not state the credits' dollar value. Tax credits recognized in 2027 and 2028 will not still be in the drawer in 2029, and a rate freeze paid for with the future is a loan ratepayers make to themselves. True-up and tracker mechanisms from the last approved case continue, so bills can still move inside a frozen base rate [1]. ## A commission with two hot files The offer lands on a regulator already busy. In July the Minnesota Public Utilities Commission [allowed increases of 2.3% for 2025 and 3.4% for 2026](https://www.mprnews.org/story/2026/09/02/why-are-minnesota-electricity-bills-going-up-this-summer), far under the 13.2% over two years Xcel had sought, and lifted the utility's authorized return on equity to 9.60% from 9.25% [2]. Consumer advocates put that equity bump at $34 million to $35 million a year, and Attorney General Keith Ellison and the Citizens Utility Board have [petitioned to reconsider it](https://gcn.com/return-on-equity-minnesota-attorney-general/21981/); the commission's deadline is October 19 [3]. The case drew roughly 8,600 public comments [4]. ## The build does not pause Nothing in the plan slows the capital program the freeze has to cover. Xcel [targets $70 billion of investment through 2030 and about 11% annual rate-base growth](https://uk.finance.yahoo.com/news/rising-customer-demand-enhance-xcel-153200251.html), with 1 gigawatt of data centers operating or under construction, 1 gigawatt under signed agreements and a pipeline above 20 gigawatts [5][6]. *Chart: **Capital spending has all but doubled while Minnesota fought over rates** Line chart of Xcel Energy quarterly capital expenditures from Q3 2023 to Q2 2026, rising from about 1.6 billion dollars to 2.9 billion, with a peak of 3.44 billion in Q4 2025* *Quarterly capital expenditures in USD billions, Q3 2023 through Q2 2026, from Xcel Energy's SEC filings. The $70 billion plan runs through 2030. [7]* Quarterly capital spending has climbed from $1.64 billion in late 2023 to $2.95 billion in the second quarter of 2026, peaking at $3.44 billion [7]. Three days before the filing, Xcel announced [the sale of its 15,000 Michigan customers](https://theinference.org/article/xcel-energy-exits-michigan-selling-15-000-customers-at-no-disclosed-price-to-focus-on-a-60-billion-plan) to concentrate capital on core states, closing expected in 2027 [8]. ## Who holds the deferral Xcel says its Minnesota residential bills ran 31% below the national average in 2025 and that federal credits already offset its final rates [2][4]. The other end of the trade: if the freeze holds, new base rates in the company's flagship electric state slide toward 2029, and credits spent now cannot soften that later bill. Two dates price it, October 19 for the equity rehearing and January 2027 for the choice between the freeze and the fight [1][3]. ## Takeaway Xcel's Minnesota utility will freeze base rates for 2027 and 2028 only by spending battery-project tax credits now, deferring the next base-rate reckoning toward 2029; the commission chooses by January 2027. ## Sources 1. [SEC EDGAR, Xcel Energy Form 8-K, 9 October 2026](https://www.sec.gov/Archives/edgar/data/72903/000007290326000175/0000072903-26-000175-index.htm) 2. [MPR News, Why are Minnesota electricity bills going up?, 2 September 2026](https://www.mprnews.org/story/2026/09/02/why-are-minnesota-electricity-bills-going-up-this-summer) 3. [GCN, Minnesota attorney general and consumer board challenge Xcel Energy's 9.6% return on equity, 27 September 2026](https://gcn.com/return-on-equity-minnesota-attorney-general/21981/) 4. [KSTP, Xcel Energy customers push back on possible rate hike, 28 July 2026](https://kstp.com/kstp-news/top-news/xcel-energy-customers-push-back-on-possible-rate-hike/) 5. [Zacks Equity Research via Yahoo Finance UK, Can Rising Customer Demand Enhance Xcel Energy's Growth Prospects?, 29 September 2026](https://uk.finance.yahoo.com/news/rising-customer-demand-enhance-xcel-153200251.html) 6. [Zacks Equity Research via Yahoo Finance, Xcel Energy to Sell Michigan Asset to Sharpen Its Growth Strategy, 8 October 2026](https://finance.yahoo.com/energy/articles/xcel-energy-sell-michigan-asset-145300819.html) 7. [Xcel Energy quarterly figures from its SEC filings, retrieved 9 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000072903) 8. [Business Wire via Yahoo Finance, Xcel Energy, SEMCO ENERGY Gas Company and Upper Peninsula Power Company announce sale of Xcel Energy's Michigan operations, 6 October 2026](https://finance.yahoo.com/energy/articles/xcel-energy-semco-energy-gas-132000822.html) --- Xcel Energy offers to freeze Minnesota rates through 2028, paying with five battery projects' tax credits — The Inference. Canonical: https://theinference.org/article/xcel-energy-offers-to-freeze-minnesota-rates-through-2028-paying-with-five-battery-projects-tax-credits