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Utility Xcel Energy has asked the Minnesota Public Utilities Commission to authorize increases in base electricity rates over a two-year period. Xcel says it is seeking to support investment in carbon-free energy and enhance service reliability for customers.

According to the utility, average customer rates would increase by 4.6%, effective Jan. 3, 2014, when interim rates would take effect - increasing a typical residential customer's monthly bill by about $4. Average customer rates would increase an additional 5.6% during 2015, Xcel notes.

Xcel says these rates are based on the company's increased service costs of $193 million in 2014 and $98 million in 2015.

"Our objective is to moderate our request and keep the annual rate increase between four and six percent as we complete major improvements to our electric system," comments Dave Sparby, president and CEO of Northern States Power Co. - Minnesota, an Xcel Energy company. "Post-2016, we believe our costs will be at or below the rate of inflation, and customers will have the benefit of a healthy, diverse system for well into the future."

Approximately 45% of the increase is for investments that will allow continued operation and increased output at Xcel's nuclear plants for an additional 20 years, as well as for new wind resources, the utility reports. About 25% of the increase stems from the company's efforts to strengthen, refresh and modernize the electricity grid and implement technology improvements to ensure a safe and reliable system for customers.

"These investments help keep customer costs low and are essential to achieving state energy policy goals calling for a 30 percent reduction in carbon emissions by 2025," Sparby says.

Xcel notes that much of the remainder of the request stems from the cost of other power plants.

The utility says that the Minnesota commission will schedule public hearings, which are expected to be held in the spring or summer of 2014. A decision is expected in early 2015.

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