Energy users will see an increase in their Xcel Energy bills as the Public Utilities Commission has approved a rate hike.

The commission’s decision includes an interim rate increase for all Xcel Energy customers, raising bills by an average of $5.84. Additionally, the Minneapolis City Council approved an increase to its gas and electric franchise fee, adding about $1 a month to energy bills.

“I don’t think it’s sustainable, right? We’re going to have to figure out a solution,” said Seton McClellan, a Minneapolis homeowner, expressing concern over the rising costs of homeownership.

McClellan also mentioned that property taxes are one of the toughest financial burdens, and now energy bills are becoming more challenging. He worries about the payoff as the bills continue to rise.

“Here’s a tax that I’m paying, and I might not ever get a benefit for it,” McClellan said, referring to the franchise fees used to retrofit homes for energy efficiency.

Despite some opposition, the fee increase passed the council with a 10-3 vote and has significant community support.

Council member Katie Cashman emphasized the importance of addressing climate change. “The cost of not addressing climate change is much greater than the cost that we’re paying right now to try to get ourselves off fossil fuels,” she said.

Cashman also highlighted the benefits for those participating in city programs.

“For those who participate in our city programs and make these upgrades to their homes, their energy bills go way down,” she said.

Over the last two years, 700 homes have been retrofitted in Minneapolis, and the franchise fee is larger for industrial customers.

Ahead of the council vote, Linea Palmisano acknowledged the burden on residents: “Let’s be mindful that this is a significant burden for residents, especially those with lower or fixed incomes,” she said.