Xcel's billing mess meets the rate case that funds its data center build
Xcel files its answer at the Minnesota PUC today while the same commission weighs whether to keep a 9.6 percent return worth $34 million to $35 million a year. St. Paul's mayor and the attorney general want an outside audit; Xcel says there is nothing systemic to audit.
Vincent Jiang · 4 min read
No payment all year for one solar rooftop
A print shop on West 7th Street in St. Paul has been paid nothing this year for the surplus power its rooftop solar sends the grid, months after Xcel confirmed it qualified 1. "The inaccuracies in billing have completely undermined the financial viability of (the) commercial solar investment," owner Todd Turfler told state regulators this month 1.
Today Xcel files its latest defense with the Minnesota Public Utilities Commission 2. St. Paul Mayor Kaohly Her (22 September) and Attorney General Keith Ellison (24 September) both asked the commission for an independent third-party review of the utility's billing 2. Xcel, through spokesperson Megan Boldt, declines: "We do not see systemic issues warranting a third-party investigation" 1.
The same regulators hold the yield
The commission that would order the audit also holds the richest number in Xcel's Minnesota rate case. Its 31 July order lifted the authorized return on equity to 9.60 percent from 9.25 percent, worth $34 million to $35 million a year by advocates' count 3. The loop runs through the bill: Xcel recovers what it builds from customers, plus an authorized return, and a higher return collects more profit through those same rates 3.
Ellison and the Citizens Utility Board petitioned to reconsider on 20 August; the commission must answer by 19 October, and its chair has already filed to keep the 9.6, against more than 8,600 public comments, most of them opposed 34.
The receipts on the table
Roseville went unbilled on one property for eight months, then took a $15,000 catch-up bill 1. A St. Paul facility holds more than $20,000 in credits that Xcel returns only at its April cycle, and one Roseville streetlight account drew five invoices in three days 2. Complaints rose from about 200 in 2019 to roughly 1,200 in 2025, and Xcel's own filing blames a meter-inventory swap, its Itron billing upgrade and staff turnover 2.
Capital spending has outrun operating cash flow for eight straight quarters
- Capital spending
- Operating cash flow
Data
| Capital spending | Operating cash flow | |
|---|---|---|
| Q3 '24 | $1.78B | $1.74B |
| Q4 '24 | $2.22B | $0.66B |
| Q1 '25 | $1.99B | $1.03B |
| Q2 '25 | $2.43B | $1.08B |
| Q3 '25 | $3.06B | $1.77B |
| Q4 '25 | $3.44B | $0.21B |
| Q1 '26 | $3.02B | $1.7B |
| Q2 '26 | $2.95B | $1.1B |
The spending the errors ride on is the business model: capital expenditure outran operating cash flow in all eight quarters on file, Q3 2024 through Q2 2026 5.
Colorado grades the bargain
Colorado's commission heard its own review on 23 September: outages ran above average every month of 2024, 2025 and the first half of 2026, with 89 outage-minutes per customer by June against a 95-minute annual average for 2015 to 2023 6. Chairman Eric Blank's verdict on the trade: the utility "tripled its capital spending from 2021 to 2025, increased its earnings by hundreds of millions of dollars and yet seems like it may be struggling to provide the most basic customer service" 6. Xcel's answer there is $17.6 billion more of Colorado capital through 2030 6.
The defense, and the calendar
Xcel's counts do improve: review-pending residential cases are down nearly 90 percent 2, and cancelled invoices fell from 7,098 in July to 4,812 in August, a two-year low 1. Ellison's office answers that Xcel is "selectively defining" what counts as a billing error, and so "undercounting" them, and has asked the commission to make the utility explain which errors it excluded from its reporting 1. Its second-quarter call reaffirmed 2026 guidance of $4.04 to $4.16 a share on a $70 billion plan with a data-center pipeline above 20 gigawatts 7. This month it broke ground on an 185-mile line carrying up to 4,000 megawatts and a 420-megawatt gas peaker, both due in 2028 8.
What the open doors cost a holder
For XEL holders, every open door touches the same math: the 35-basis-point bump is worth $34 million to $35 million a year 3, a granted reconsideration would reopen the order after further hearings 3, and management itself counts the pending tariffs and approvals as execution risk 7. Thursday the commission meets on the return 4; 19 October closes the window 3; Colorado may rule on a tariff that decides who pays for 2 gigawatts of new data-center demand by 2031 and more than $1 billion of wires by year-end 9. The build is the bull case. The billing system that cannot close a streetlight account is the audit trail.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
