Xcel Energy will refund around $56 million to Minnesota residents after a 2011 power outage at the Sherburne County Generating Station Unit 3 (Sherco Unit 3). The Public Utilities Commission (PUC) ruled that Xcel must cover the costs of purchasing replacement power during the two-year outage. This decision comes after an investigation revealed Xcel’s failure to maintain the plant properly.
In November 2011, a turbine failure caused Sherco Unit 3 to go offline. Xcel had to buy more expensive replacement power from the regional grid to supply electricity during the outage. The PUC, along with the Minnesota Department of Commerce and Attorney General Keith Ellison’s office, held Xcel accountable for these additional costs. They determined that the company acted negligently by delaying critical inspections that could have prevented the turbine failure.
Xcel’s Maintenance Negligence
Investigators found that Xcel delayed inspecting the turbine, which would have revealed potential issues earlier. Because of this delay, the turbine failure occurred, leading to the outage and expensive replacement power costs. Under Minnesota law, utility companies must maintain their facilities properly. If they fail to do so, they cannot pass the cost of replacement power onto customers.
The investigation, conducted by independent engineers, confirmed that Xcel did not follow best practices in maintaining the plant. The PUC ruled that Xcel was at fault and should not charge ratepayers for the extra power costs.
Refund Details and Final Decision
Initially, an administrative law judge recommended that Xcel refund only part of the costs. The judge argued that the turbine manufacturer shared some responsibility for the failure. However, the PUC disagreed. It ordered Xcel to refund nearly $56 million to consumers, minus any non-public settlement Xcel reached with the manufacturer.
Attorney General Keith Ellison praised the decision. “Utility companies have a responsibility to maintain their infrastructure. When they fail, consumers shouldn’t be stuck with the bill,” he said. “This refund ensures that ratepayers aren’t paying for Xcel’s mistakes.”
Impact on Consumers
Minnesota customers who paid higher bills because of the outage will receive the refund, which includes interest. The PUC will finalize the refund amount in the coming months. The process for distributing the funds will also be announced soon. Commerce Commissioner Grace Arnold expressed satisfaction with the outcome. “This is a win for Minnesota consumers,” she said. “We are pleased the PUC made the right decision.”
Ensuring Accountability
Ellison emphasized the importance of holding utility companies accountable. “Xcel made costly mistakes that affected Minnesotans,” he said. “My office works to protect consumers from unfair costs, and this ruling is a step toward ensuring utility companies use their resources wisely.”
This refund highlights the role of regulatory bodies in protecting consumers. The Minnesota Department of Commerce and the Attorney General’s office remain committed to ensuring that utility companies follow the rules and do not shift the burden of their failures onto the public.
