FOR IMMEDIATE RELEASE: May 8, 2026               
MEDIA CONTACT: Leah Mohr, South Dakota Public Utilities Commission, (605) 773-3201 or (605) 280-4327

PUC approves settlement to increase Xcel Energy electric rates below request

PIERRE, S.D. – South Dakota Public Utilities Commissioners voted to approve a settlement stipulation submitted by Xcel Energy and PUC staff that will allow Xcel to increase electric rates for South Dakota customers at a public meeting on May 8, 2026, in Pierre. The settlement authorizes the company to increase overall electric rates by $25.6 million, or roughly 9.5%. The approved rate is about 41% less than Xcel’s original request that asked the PUC to allow for a $43.6 million annual increase to overall electricity rates, or approximately 16.2%. New rates will go into effect July 1, 2026.

Xcel Energy’s last base rate increase for electric customers was approved by the PUC in June 2023. Since that time, the company has made significant investments in its generation, transmission, and distribution systems to reliably meet the electricity needs of its approximately 107,000 South Dakota customers. Xcel cites those investments, plus additional factors like inflation, as primary drivers behind their requested increase. As a result of the commission’s decision, a typical residential customer using an average of 750 kilowatt hours of energy each month will see an increase of approximately $13.48 per month based on average rates.

“I was recently asked why more customers don’t personally participate in these dockets and the answer is simple. They have busy lives and that is why South Dakotans hire us. The public hires three commissioners and our highly skilled staff to do that work,” stated PUC Chairman Chris Nelson. “Over the past year, our staff and the experts they brought in to assist have gone through this rate case with the finest tooth comb you can imagine. Today, I can confidently tell South Dakota's Xcel ratepayers that we have acted in their best interest,” he continued.

Xcel Energy implemented interim rates for South Dakota customers on Jan. 1, 2026. State law allows investor-owned utilities to collect an interim rate increase, subject to refund, while the commission considers a rate request. Due to the final rate increase being less than the implemented interim rate and as part of the settlement, Xcel will refund the difference, with interest, in August and September bills. The company estimates an average residential customer’s interim refund will be approximately $43.52.

“One of the things I appreciate most about this filing is how our staff have held Xcel Energy accountable to South Dakota ratepayers. While utilities have the opportunity to earn a fair rate of return, our team meticulously audited this filing and cut millions in costs that would have otherwise fallen on customers. By removing these line items, we’ve ensured that the new rates remain just, reasonable, and reliable, ultimately keeping more money in our citizens' pockets,” commented PUC Vice Chairperson Kristie Fiegen.

Following extensive discovery and inquiry, the company and PUC staff entered into numerous settlement discussions in February 2026. Ultimately, parties reached a comprehensive agreement on Xcel’s overall revenue deficiency and other issues presented in this case including, but not limited to, class revenue responsibilities, rate design, and tariff concerns. A residential intervenor in the docket accepted the agreement.

“I greatly appreciate all the work PUC staff put into this docket. The public did not see the hundreds of data requests, countless hours and incredible amount of effort our staff has dedicated to this filing, but I can tell you it has been as thoroughly vetted as any rate case could be. Our goal is to guarantee that South Dakotans receive safe, reliable service at the most affordable rates possible, and I am deeply grateful for their efforts,” noted PUC Commissioner Gary Hanson.

Xcel Energy filed its application to increase electric rates for customers in its South Dakota retail service territory with the PUC on June 30, 2025.

Terms of the agreement include a rate moratorium that will prevent Xcel Energy from requesting additional increases to base rates that take effect prior to Jan. 1, 2029. The settlement also makes changes to the residential customer service charge and late payment charges.

The full docket can be viewed on the PUC website at puc.sd.gov, Commission Actions, Electric Dockets, 2025 Electric dockets, EL25-024 – In the Matter of the Application of Northern States Power Company dba Xcel Energy for Authority to Increase its Electric Rates.

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