Despite growing concerns about rising utility bills, Xcel Energy is lobbying Minnesota lawmakers to make permanent a controversial program that enables it to charge customers hundreds of millions of dollars for fossil fuel infrastructure upgrades without standard regulatory review.

Passed in its current form in 2013, the Gas Utility Infrastructure Cost rider (GUIC) allows gas utilities to fast-track urgent repairs and replacements of aging pipelines. Xcel successfully lobbied to extend GUIC’s initial expiration date of June 2023 to June 2028 during the 2023 session. The legislation under consideration now, House File 3830/Senate File 3954, removes that sunset date to functionally make the rider permanent. 

The GUIC rider mirrors other state-based riders put into place around the same time in response to stricter federal oversight of pipeline safety. But more than a decade later, critics say such provisions have outlived their intended purpose and become a costly driver of utility bills. Elsewhere, states have restricted or done away with such riders altogether.

In Minnesota, Xcel is the primary user of the GUIC rider to fund a portion of its fossil gas pipeline work. Xcel projects $603 million in GUIC-related expenditures by 2030. Similar project expenses have contributed to an increase of more than 30 percent in gas service and delivery charges for Minnesota utility customers over the past 15 years, according to figures from the Minnesota Department of Commerce, a state agency focused on protecting consumers’ interests.

“Given the pace of these investments, it is necessary to improve our regulatory oversight on gas infrastructure spending to protect ratepayers,” Commerce Deputy Commissioner Pete Wyckoff told lawmakers at a March hearing on the proposed GUIC extension. Wyckoff cited rising utility costs as a drain on economic development as well as residential customers.

Absent the GUIC rider, pipeline replacement projects would face more rigorous evaluation by consumer advocates and engineering experts in rate case proceedings that are also subject to review by a third-party administrative law judge. Rider proceedings, by contrast, are more limited and do not allow for robust analysis of gas system needs. Addressing costs piecemeal through riders obscures true bill impacts, Wyckoff said.

At a March Senate hearing on the proposed legislation, Commerce Assistant Commissioner Sydnie Lieb pointed to Xcel’s ongoing gas rate case in Minnesota, in which the utility proposed an $18.7 million pipeline expansion project it said was needed to meet demand in a specific location on its system. When Commerce engineers asked Xcel for more detailed information to justify the expansion, Lieb said, Xcel did not have any of the requested data.

“These types of projects would not be adequately reviewed if they are in the GUIC rider,” Lieb told lawmakers. “A rate case assures scrutiny of a utility’s costs and provides strong motivation for the utility to control these costs between rate cases. This is why the Department feels it’s necessary at this time to allow this rider to expire.”

Other utilities forgo GUIC; PUC warns against riders

Xcel’s peers in Minnesota have demonstrated that the GUIC rider is not necessary to deliver safe and reliable gas service.

Only Xcel has heavily relied on the provision as part of its infrastructure investments. Minnesota Energy Resources and Great Plains Natural Gas have used it sparingly, but generally submit infrastructure costs for approval in rate cases. And CenterPoint Energy, the state’s largest gas utility, has never used the GUIC rider. 

“The kinds of pipe replacements that GUIC is used for are the very core business of a gas company,” Annie Levenson-Falk, executive director of the consumer advocacy nonprofit Citizens Utility Board of Minnesota, told lawmakers. “A rate case is for exactly these types of costs.”

A CenterPoint lobbyist acknowledged that the rate case process has been sufficient for the utility’s pipeline replacement work to date, but told lawmakers last month that CenterPoint supports “a resolution that keeps this option available.”

The Minnesota Public Utilities Commission, which regulates utilities in the state, has historically cautioned against the use of riders. A 2010 PUC report warned that special cost recovery mechanisms used in lieu of rate cases, like riders, “can mask the true impact on ratepayers” and force them to bear higher costs.

“The availability and use of a special recovery mechanism lightens utilities’ responsibility to manage the risk associated with the specific cost category and shifts some of that burden to ratepayers,” the report says. “In theory, this would be expected to erode incentives for efficiency and cost control, creating upward pressure on rates.” 

The report contends rate cases should be the “default” process for assigning costs to utility customers, and that riders should only be used under “extraordinary circumstances.” 

A rate case process maximizes transparency and accountability and better aligns utilities’ plans with the interests of their customers, Levenson-Falk said, a key consideration amid a broader affordability crisis.

“It gives [utilities] a budget that they know they have to work within until they choose to file their next rate case, so it gives them clarity on how much they have to spend. That’s predictability,” she told lawmakers.  “It also has, then, some motivation to save money, because if they can come in under that budget, there’s some savings for them.”

Other states rein in “blank check” pipeline programs

Colorado, where Xcel is also a major gas utility, scrapped a similar pipeline rider after the utility charged customers nearly $610 million—three times the original estimate—prompting backlash. Xcel ultimately dropped its push to extend the program. 

The Colorado Public Utilities staff highlighted “the use and abuse of riders” and the state’s utility consumer advocate and energy office also criticized Xcel. In hearings this session on the Minnesota bill, Xcel representatives largely dodged Minnesota lawmakers’ questions about why Colorado ended its equivalent rider. But there is a robust record in Colorado regulatory filings.

“As the saying goes, if you put a frog into boiling water, it will jump out. But if you put the frog in tepid water that is brought to a boil slowly, then the frog will not perceive the danger. The same is true for riders such as [the Colorado pipeline rider],” Colorado PUC economist Fiona Sigalla wrote in testimony filed as part of the rider debate in that state. Colorado officials also raised concerns about accelerated investment in fossil fuel infrastructure that could become obsolete as the state transitions to clean energy.

In Illinois, regulators halted a Peoples Gas pipeline replacement program after projected costs skyrocketed to $8 billion – quadruple its initial estimate. Consumers advocates pegged the actual cost to customers as high as $12.8 billion, and one lawmaker lambasted the program as a “blank check for utility companies.” After an investigation, Illinois utility regulators allowed utilities to resume pipeline work last year but with stricter oversight and narrower criteria for eligible projects.

Elected officials and consumer advocates in Maryland, meanwhile, continue to push for the repeal of a pipeline replacement program that one state lawmaker last month called “a tremendous money grab by our monopoly utilities.” The controversial program has sent bills soaring, and Maryland People’s Council David Lapp previously warned that it could take until 2100 for customers to finish paying for pipeline work done this decade.

“The gas companies are pursuing their economic interests, aggressively, for the benefit of their investors,” Lapp wrote in a 2023 op-ed. “They are spending large amounts on their systems, because they make money by recovering their capital investments — along with a return for investors that more than triples the total costs for customers — through utility bills.”

It’s a similar story in Massachusetts, where Attorney General Andrea Campbell has criticized a decade-old pipeline replacement program for allowing utilities to overbuild their systems rather than conducting thoughtful, targeted infrastructure improvements. Costs associated with the program spiked 40 percent in 2024, outpacing inflation, according to a December 2025 report from state regulators. Utilities’ self-interest is coming at a cost, Campbell has said.

“Ratepayers should not have to foot the bill for widespread gas line replacements, especially as we aim to transition to clean energy,’’ she told WGBH last year. “Sweeping replacements only serve to entrench the gas distribution system and generate profits for gas companies.”

Changing needs for gas infrastructure

In the years since Xcel and other utilities nationwide began using riders to accelerate pipeline projects, the policy and technology surrounding such infrastructure has changed dramatically. Like other states, Minnesota has adopted decarbonization policies, increasingly prioritized investment in electrification, and opened regulatory dockets to chart a broad-based transition away from fossil fuels. 

These policy and regulatory actions are bolstered by the scientific consensus that avoiding the most catastrophic impacts of climate change requires a rapid wind-down of fossil fuels, including gas. They also coincide with price shocks affecting Minnesota gas utility customers, reverberating from severe winter storms and poor planning by utilities as well as supply disruptions due to global conflicts like Russia’s war in Ukraine.

At the same time, technologies that displace gas – like electric heat pumps – are viable and increasingly cost-effective in markets across the U.S., including Minnesota, Caitlin Eichten, director of building energy transition at the nonprofit Fresh Energy, told lawmakers at a March hearing on the GUIC bill.

“Gas customers are facing rising energy bills and there is growing uncertainty about the future size and cost of the gas system,” Eichten said. “In this environment, accelerating spending on gas infrastructure through automatic riders is increasingly misaligned with Minnesota’s energy policies and market trends.”

Rick Evans, then a top Xcel lobbyist in Minnesota, acknowledged these concerns during his remarks at a 2023 legislative hearing where Xcel pushed to extend the GUIC rider to 2028.

“The gas utility is under a great deal of scrutiny in terms of how long are we going to have a gas utility and what changes might come in future years,” Evans said at the time, arguing in part that these looming questions would justify another look at the rider in five years.

But now, three years later, Xcel representatives sidestepped those concerns while urging lawmakers to keep the controversial rider in place in perpetuity.

The House energy committee laid over its bill while the Senate energy committee passed its version. It is unclear whether the legislation will be rolled into potential forthcoming omnibus bills, or come up for a floor vote, before lawmakers’ expected adjournment in May.

Photo credit: Ken Wolter via Shutterstock