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Xcel customers could see higher utility bills under new rate hike proposals

Would apply to electricity and natural gas rates
xcel smart box.png
Posted at 8:34 PM, Feb 02, 2022
and last updated 2022-02-02 22:34:37-05

DENVER — Xcel Energy consumers in Colorado could see higher utility bills if a series of rate hike proposals are approved.

Last week, Xcel submitted a request to increase natural gas rates by $188.6 million over the next three years. This would gradually increase the average residential consumer’s monthly bill by $4.16 the first year, then an additional $1.83 in 2023 and an added $2.15 in 2024.

If approved, this increase would take effect in November.

Separately, the utility company also submitted a request to increase electric rates by $182 million. This proposal would raise the average residential customer’s monthly bill by roughly $5.24 per month. If approved, this increase would take effect in April.

The final decision on these rate increases, however, lies with the Colorado Public Utilities Commission (PUC).

While it is considering the proposals, the PUC is also considering a request from Xcel to increase electricity and natural gas rates by $550 million to recoup costs associated with a snowstorm and freezing temperatures from around President’s Day last year.

“If you go back to 2019 and go to 2022, it’s a 22% increase. Those numbers do not even include what is not fully determined by the PUC yet. It does not even include a $1 billion transmission project that has not yet been approved by the Public Utilities Commission,” said Cindy Schonhaut, director of the Colorado Office of the Utility Consumer Advocate.

Schonhaut commends the utility for not seeking a profit for the amounts owed or seeking interest from customers. However, she wants to know whether Xcel took the proper precautions for last year’s snowstorm and stocked up on energy or took other cost-saving measures on behalf of consumers.

“We are looking for a determination by the commissioners as to whether the expenditures by Xcel were prudent, which is a legal test for regulated utility," Schonhaut said.

That rate increase would be temporary, lasting two years in total. It would add $7.08 onto the monthly bill for most residential customers.

“It's a lot at once, and that's known as pancaking of rate increases, like a stack of pancakes," said Schonhaut. "The Public Utility Commissioners have a great deal of concern about pancaking of rate increases, and we are asking them to do something about it."

Beyond those increases, Schonhaut says consumers could eventually end up paying for Xcel’s clean energy transition, including the installation of new smart meters and other things. She’s concerned with how much of a burden the company is placing on the backs of consumers.

Bill Levis, a consultant with AARP, is worried about what this will mean for low and fixed-income families.

“My bill for gas went up 44% this month. Over last year, my bill for electricity went up about 25%. I can afford it, but there are a lot of people that this really impacts their bottom line,” he said.

Levis points out that all of these increases are only for the base rates of the utility bill and do not include the amount of energy consumers are actually using or market volatility for commodities.

He’s also worried about the fact that households and businesses are moving to renewable energy by putting solar panels on their homes, meaning fewer utility consumers could be stuck paying more for the utility company’s energy transition.

“One of our big concerns is Xcel has no skin in the game," Levis said. "That is as we're moving to renewable energy, we're closing their power plants. One of their power plants in Comanche, three in Pueblo, was supposed to have a useful life until 2070. They're now agreeing to close it in 2034. You know who's going to pay to close that plant early? Not the shareholders or the company Excel, but ratepayers."

For now, Schonhaut is urging Xcel to not propose ordinary rate increases, and she's hoping the PUC will take a closer look at the current proposals. She opposes the company’s current proposals for rate increases.

For its part, Xcel told Denver7 in a lengthy statement that is it committed to achieving its net zero greenhouse gas emissions goal by 2050, and that the rate proposal will support investments to improve the system’s safety, reliability and resiliency.

“Our rate proposal supports fundamental efforts that will help us operate the cleanest natural gas delivery system possible, while maintaining/improving safety and reliability. Our net-zero vision for natural gas aligns with the Colorado Energy Office’s Greenhouse Gas Pollution Reduction Roadmap and Colorado’s Clean Heat Standard,” the statement read.

Xcel is certainly not the only utility in the state seeking rate increases in one form or another due to last year's snowstorm. However, it does serve the most customers in the state. Some Coloradans have overlap with the utility, using both natural gas and electricity, meaning they could potentially see increases in both utility bills.

Xcel serves 1.4 million natural gas customers in the state. The utility says the funding will help add miles of new pipeline to accommodate the state’s growing population, replacing 35,000 natural gas meters each year, upgrading technology and more.

Ultimately, the PUC will have the final say on whether any or all of these proposed rate increases will be approved.