The first hike of 3.3% will go into effect this month, and another jump of 1.8% will occur in January of 2012. The overall increase is less than the 7% increase that Xcel originally asked for in May of 2010.
"Normally we just go ahead and institute the rate increase at once, but in working with our cities we realize it's hard to put all this out there at one time. Our cities agree that it'd be better to put most of the increase this year and a smaller increase next year that'd allow the economy to sort of absorb those extra costs," said Wes Reeves, Xcel Energy Spokesman.
What does that mean for the average residential customer?
An 8.2% increase, or $6.94 more on your bill this month, with an additional $2.51 tacked on in the first month of 2012.
"When you have an economic growth you start seeing an increase need for electrical infrastructure. If you don't keep up with that need you can actually hinder our regional economic growth, so we're very concerned about that. We need to put in more transmission lines and more power generation sources in order to keep up and exceed that growth," said Reeves.
Beginning February 16th the first increase will take place on an interim basis until the PUCT issues their final order.
Xcel cites the need to invest $2 billion in infrastructure in the region over the next four years to meet forecasted demand as the main reason for the rate increases.
"Investing in our power infrastructure is vitally important to the region's economic success and our ability to meet growing customer needs," said Riley Hill, president and CEO of Southwestern Public Service Company, an Xcel Energy company. "Our rates must generate enough revenue to maintain strong credit ratings and raise capital to fund new generating plant capacity, new power lines, new substations and the related facilities required for a dependable power grid."