Monday, Xcel Energy proposed to deliver $318 million back to Minnesota customers on their bills, with most of the refund coming from federal tax credits on the energy generated by the company’s nuclear fleet.

This is the first time customers will see savings from the federal tax credit on nuclear energy generation, which the company advocated for in recent law.

“We’re committed to supporting our state’s economic growth, investing in our communities, delivering reliable and resilient electricity, all while keeping customers’ bills as low as possible,” said Ryan Long, president of Xcel Energy—Minnesota, North Dakota and South Dakota. “Tax credits on nuclear energy generation produce savings for our customers, providing another way for our carbon-free, always-available nuclear fleet to create value for our customers and state.”

The nuclear energy generation tax credits will make up $176 million, about 55%, of the company’s overall $318 million refund as part of its annual Fuel Clause Adjustment process.

If approved by the Minnesota Public Utilities Commission, Xcel Energy estimates that the average residential customer will receive a total refund of $81, reducing their monthly bills through March 2026.

Xcel Energy uses a diverse set of energy resources to maintain reliable service while keeping customers’ bills low. The cost of fuel used to generate electricity makes up a portion of a customer’s monthly bill. If actual fuel costs are lower than expected, the company issues a refund to customers for this amount. The $318 million refund equals a 36% savings on the fuel portion of a customer’s electricity bill in 2025.

In addition to the nuclear energy generation tax credits, savings from lower fuel costs make up $94 million, or 30%, of the overall refund amount. The final $48 million is related to a 2011 outage at the company’s Sherco coal plant.

Nuclear Energy Powers Minnesota

The federal tax credit for nuclear energy generation was created under the Inflation Reduction Act. Nuclear energy enjoys broad support among policymakers and the public because it’s the only energy source available that is both carbon free and available 24/7.

Xcel Energy’s two nuclear power plants, Monticello and Prairie Island, together account for nearly 25% of the electricity used by customers across the company’s five-state Upper Midwest system.