Minnesota’s electricity prices are lower than just one state in the Midwest, according to data reported by the Center of the American Experiment.
Second only to Michigan, Minnesota’s electricity prices increased 22% from 2011 to 2021, reaching 11.12 cents per kilowatt-hour. This makes Minnesota’s electricity prices the 14th highest in the country — compared to 2001, when Minnesota held the position for 14th lowest in the country.
Twenty years ago, Minnesota was the fourth-least expensive state for electricity prices in the Midwest; Michigan still led the charge then, followed by Illinois, while Wisconsin had the sixth-lowest prices, American Experiment reported.
Minnesota’s electricity prices have now surpassed Wisconsin’s for the first time since electricity prices have been recorded by the U.S. Energy Information Administration (EIA).
Minnesota’s prices increased four-times faster than Wisconsin’s prices from 2011 to 2021, EIA reported. In that timeframe, Wisconsin’s electricity prices were the 11th-fastest growing prices in the U.S. That same period saw Minnesota’s prices growing at the sixth-fastest rate in the nation.
Minnesota also boasts the highest industrial electricity prices in the Midwest.
“When businesses pay more for electricity, Minnesota consumers pay more for products,” American Experiment reported.
These increasing prices in Minnesota have to do with “poor energy policy,” according to American Experiment policy analyst Mitch Rolling.
State policy in Minnesota has focused on wind and solar energy rather than on coal-fired power plants, Rolling wrote.
Additionally, in Minnesota law, utility companies must hit 25% renewable energy by 2025, which has spurred the increased investment in wind and solar power energy sources.
Since 2015, electricity rates in Minnesota have increased by 17%, making it the fourth-fastest growing rate in the country, American Experiment wrote. Wisconsin’s prices increased by 3% in the same time.
Currently, the only stipulation for raising electricity prices in Minnesota is that the price be “just and reasonable” — a price cap does not exist, which could “go a long way” in lowering costs, according to Rolling.
The Minnesota Public Utilities Commission approved price increases in December for three utility companies. Minnesota Power received approval for a 7.1% increase, and CenterPoint was approved for a 3.9% increase for natural gas. Xcel Energy received approval for a 6.4% increase in electric prices and 3.9% for natural gas customers.