Xcel Energy has sent letters to its Minneapolis customers with three reasons why city's proposal to create a city-owned and operated electric and gas utility is a bad idea.
The city of Minneapolis will hold public hearings on Aug. 1 to consider the public utility plan. If the plan moves forward after public comment, a citywide vote will be held in November to decide whether Minneapolis should take over the electric and gas utilities from Xcel and CenterPoint Energy.
The vote comes one year before the city's 20-year contract with Xcel Energy expires, and some customers who spoke with FOX 9 News wonder whether they might be caught in the middle of high-stakes negotiations.
WHY DOES MINNEAPOLIS WANT IT?
The city believes it can provide cheaper utility service than Xcel and CenterPoint. Some City Council members believe the city could do a better job of keeping rates down because they don't have the profit motive of a private utility.
If the city were to provide publicly-owned utilities, it would also be responsible for maintenance, upgrades and response to outages and damage during storms.
The value of existing power lines, utility poles, pipes and substations would need to be determined so Minneapolis could purchase them from Xcel and CenterPoint.
XCEL ENERGY RESPONSE
In its letter to Minneapolis residents, Xcel Energy said "the potential change would be enormous." The company listed the following effects of a Minneapolis takeover:
1. The city would take on the sole responsibility to own and operate the utilities, set prices and policies and provide all customer service, maintenance, storm and emergency response activities. Xcel Energy could not operate in Minneapolis.
2. The city's residents and businesses would spend billions of dollars to acquire the property of Xcel Energy within the city.
3. Much of the current state regulation of utilities, including rate review and renewable energy and conservation standards, would no longer apply to energy delivered in the city of Minneapolis. This is because municipal utilities are exempt from many of the state laws that currently apply to Xcel Energy.