The Colorado Public Utilities Commission slashed Xcel Energy’s latest natural gas rate increase request by 70% Tuesday – from $214.6 million to $64.2 million.
The new base rate will take effect Nov. 1.
The regulatory agency also denied the energy company's request for $81 million for future, unspecified capital expenses.
Xcel had originally proposed to add another $295.6 million over three years to customer’s natural gas bills, including the $81 million in capital expenditure increases. Those sat atop other recent gas and electric rate increases by the company, including at least $2 billion to build up to 650 miles of new high-voltage power lines to serve remote windmills and solar farms, and $500 million in natural gas and electricity costs for the February 2021 winter storm Uri.
In a statement to The Denver Gazette Tyler Bryant, a spokesperson for Xcel, defended the request.
“We understand our customers are experiencing price increases in all areas of their lives. We’re committed to doing all we can to keep costs low for our customers while delivering the safe, reliable energy they depend on. This rate proposal supports essential investments that will improve system reliability, strengthen safety and inspection programs, and take meaningful steps to operate the cleanest natural gas system possible, benefiting all our customers. It also supports our growing communities as we build the system to deliver service to those new homes and businesses.”
The commissioners rejected Xcel's request capital expenses.
“We are concerned that the company has not demonstrated sufficient restraint in its proposed capital spending and agree with Conservation Advocates’ characterization that authorizing the capital step increase is akin to signing a 'blank check,'” they said.
The original proposed rate increase from 2022 to 2024 would have amounted to a more than 13% rate hike for both residential and small commercial customers– $8.13 for residential customers and $34.76 for small commercial customers.
The approved increase for residential customers is now 2.9 %, or a monthly bill increase of approximately $2.09, and 3.1% or about $12.95 for small businesses, according to the PUC’s written decision.
“It is important to note that most of the cost customers see on their bills are caused by the rising cost of natural gas on the global market, which has more than tripled since January 2021. Customers pay the wholesale cost of the natural gas delivered to them, and Xcel Energy does not make a profit from it,” Bryant continued.
The PUC also denied Xcel’s request to recover the costs over three years, instead requiring the company to recover the $64.2 million over only one year.
The AARP Colorado fought the rate hike, and some 10,000 of its 670,000 Colorado members sent post-cards provided to the energy commissioners, objecting to the rate hike.
In its conclusion, the commissioners took note of the public input, saying it was “mindful of the public comments submitted in writing and offered orally at a public comment hearing on Aug. 18, 2022.”
Angela Cortez, who speaks for AARP Colorado, said her group welcomes the commissioners' decision, although AARP had argued for rejecting the rate increase entirely.
“I know that we helped in sending the PUC so many people and so many postal cards," Cortez said. “And I know that there were others who called and went online to voice their opposition.”
AARP is defending people who cannot afford another rate hike, she said.
“Our concern is that they're going to make really hard choices, give up their medications or reduce their food or not pay their rent because they're trying to pay the heat bill,” said Cortez.
