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Judge recommends Xcel be allowed to increase rates to absorb costs of 2021 cold snap

Xcel Energy
Posted at 9:16 AM, May 15, 2022
and last updated 2022-05-16 07:36:34-04

DENVER — A ruling from an administrative judge in Colorado recommends that Xcel Energy be allowed to add a temporary fee for Colorado customers. The fee would help absorb $509 million in costs from a historic ice storm in Texas and a cold snap across the country in February 2021.

While the ruling is not final, it serves as recommendation to Colorado’s Public Utilities Commission to vote to allow an extra monthly cost — referred to by the company as an Extraordinary Gas Cost Recovery Rider — for up to 30 months.

“I was shocked, basically,” said Brian Treacy, an Xcel customer living in Westminster. “I’ve never seen an incident like this happen. I’ve seen the rate increases, but nothing paying for a shortfall for a cold freeze that we prepared to pay for a year, but not for another state.”

This is not the first time Coloradans have been asked to shoulder the increased energy costs from last year’s cold snap. In April of last year, several customers with other utility companies reached out to Denver7 reporting bills that were hundreds and even thousands of dollars higher than normal.

The rate increases would not be that high under this temporary rider for Xcel Energy. Still, Treacy said he’s angry.

“We get cold weather here, and we’re prepared to pay for it, but not because somebody else doesn’t get cold weather,” Treacy said, referring to Texas’s grid failure during the ice storm.

Gov. Jared Polis criticized the judge’s decision in a statement, saying he is “disappointed that utility providers are able to balance their financial loss on the backs of consumers when extra costs could have been avoided by better early warning systems for customers to voluntarily reduce energy usage.” He called on the Public Utilities Commission to establish specific usage reduction plans to avoid “any extraordinary fees for future events.”

Colorado’s Office of the Utility Consumer Advocate plans to appeal this decision.

Late Sunday night, Xcel confirmed the impact to residential customer would be, on average, an additional $5.67 per month for gas customers and an additional $1.43 per month for electric customers. The utility company provided the following statement:

"We believe the judge’s recommended decision to approve the proposal that minimizes the impact of the costs of Winter Storm Uri on our customers is reasonable, appropriate and consistent with the law. We worked with a diverse group of stakeholders, including the governor’s office, to develop this plan that decreases the effect of the high cost of natural gas purchased during the historic cold weather event in February 2021. We thank the Commission for their thoughtful consideration. We also want to remind customers to reach out to Xcel Energy if they are having difficulty paying their bill, so we can help them with resources for financial assistance or setting up a payment plan."