DENVER — The Colorado Public Utilities Commission met Wednesday morning to discuss rising energy costs.
“For a typical Xcel customer, the electric utility bills are up maybe 20-25%, as opposed to gas bills, which have increased more like 75%,” Erin O’Neill, Colorado Public Utilities Commission Chief Economist said.
During the meeting, commissioners talked about how to help customers.
Suggestions included low-income utility programs and making sure utility companies like Xcel offer budget billing which allows customers to have the same payment every month.
But Colorado Public Utilities Commissioner John Gavan shared concerns about approving utility rate hikes while energy companies report profits.
“There’s been an awful lot in the press in the 4th quarter about the oil and gas producers taking in extraordinary profits, rewarding extremely high dividends, and doing stock buybacks that were really kind of skewing the commodity price situation. I read that there really is not a supply issue,” Gavan said.
O’Neill said some of Gavan’s concerns fall under federal government control, but the commission is thoroughly reviewing rate hike requests.
In February 2021 when a deep freeze moved through Colorado down into Texas, Xcel Energy had to pay more than $500 million to cover the surge in heating needs.
Last June, the Public Utilities Commission approved a proposal for Xcel to recover that money.
That resulted in a new fee that Xcel could collect for up to 30 months.
Then in the Fall, the PUC approved another rate hike to help Xcel kickstart a plan to upgrade its natural gas infrastructure.
“The three increases that were approved from the commission this year, are substantially lower than what the utilities had initially requested. They were lowered after having been reviewed by staff and lots of other parties including utility/consumer advocate, other consumer groups, lots of folks weigh in on those things,” O’Neill said.
O’Neill said the commission tries to strike a balance.
“I would also say in terms of the sort of record profits for Xcel in particular, they have been a partner with the state in the decarbonization on the electric side. So what that has meant is as we invest in more solar and wind resources, that's more infrastructure and plants that the company is owning, but less fuel,” O; Neill said. “And so the company does make more money on that, they get a return on that infrastructure where they don't get a return on the fuel. But overall, that’s still less expensive and it's better for the environment.”
Gene Camp, Colorado Public Utility Commission Deputy Director said we are seeing a slight decrease in utility companies returns.
“Back in the 2000s when I joined the commission, the returns of the utilities for their equity investments… was probably in the range of 10%, that they're getting a return. That's been pushed down much closer to 9%,” Camp said. “It’s a slow movement. But again, the commission is putting that downward pressure.”
O’Neill and Camp said the government does not set gas prices; the competitive market determines them.
Commissioners said they’re constantly reviewing these issues and looking at ways to provide incentives and additional help for Coloradans facing rising energy costs.