The Colorado Public Utilities Commission approves an Xcel Energy rate increase raising average residential bills by $5 a month starting in October.
The Colorado Public Utilities Commission approved an Xcel Energy rate increase that will raise average residential electric bills by $5 a month, a 4.77% increase, and commercial bills by $7.29 a month, a 4.64% increase. The increase, smaller than the $355 million revenue boost Xcel originally requested in November, will add $157 million in annual revenue for the utility and could appear on customer bills as early as October pending a formal commission order.
Xcel Energy customers across Colorado will pay more for electricity starting as early as October after state regulators signed off on a rate increase that is far smaller than what the utility originally wanted.
The Colorado Public Utilities Commission approved the increase on Wednesday, raising average residential bills by $5 a month, a 4.77% jump, and commercial bills by $7.29 a month, a 4.64% increase. The commission still needs to issue a formal order to finalize the decision, but the numbers are set after months of negotiations between Xcel, state regulators and consumer advocates.
The approved increase will add $157 million to Xcel's annual revenue, according to Ellie Friedman, a rate analyst for the PUC. That's far less than the $355 million in additional annual revenue Xcel asked for when it filed its request in November. The original proposal would have raised average residential bills by nearly 10% a month.
Michelle Aguayo, a spokeswoman for Xcel, said the company was disappointed with the outcome. "The commission's decision not to support the infrastructure needed to deliver on Colorado's energy policies, supported by such a broad range of stakeholders, is surprising, and we will need to evaluate our investment approach in Colorado going forward," Aguayo said in an email.
Xcel is Colorado's largest electricity provider and had argued it needed the additional revenue to pay for upgrades to its power supply system, including transmission work tied to projects like the Colorado Power Pathway, a $1.7 billion effort to expand transmission lines across the eastern plains. But the size of the request drew objections almost immediately after it was filed last fall.
The Colorado Office of the Utility Consumer Advocate, a state watchdog agency, along with groups including AARP Colorado and the nonprofit Energy Outreach Colorado, pushed back on the original proposal, saying it would hit household budgets already stretched by rising grocery and gas prices. Xcel lowered the size of its request in May and again this month before the commission settled on the final figures.
Even with the reduction, some consumer advocates said the increase still lands hard on Coloradans living on fixed incomes. Sara Schueneman, state director of AARP Colorado, said the group was relieved the original 10% proposal didn't survive negotiations but remained critical of how often Xcel comes back asking for more.
"Frankly, I think that Xcel has a strategy to continuously propose rate increases," Schueneman said. "We've seen these proposals year after year. We're pleased with the latest proposal. I don't think the year-after-year rate increases are keeping the consumer in mind."
Andrew Bennett, vice president of advocacy for Energy Outreach Colorado, said the increase will land on families who are already behind on utility payments. The nonprofit, which helps low-income households cover energy bills, ran out of the money it had set aside for Xcel customers on July 27 and won't have new funds until its budget year starts Oct. 1.
"Even with a mild winter, we saw that much demand for energy assistance," Bennett said. "There are that many people who couldn't afford their energy bill. We are helping more families with more money than ever, yet we are still running out."
The agreement approved Wednesday does include additional money for Xcel's energy affordability program, which caps monthly bills for low-income households based on income thresholds. Those income thresholds will be lowered once the new rate structure takes effect. Fewer households may qualify for the capped rate even as more people report needing assistance.
Xcel isn't finished asking regulators for more money this year. The company has also filed for an increase to its natural gas rates, and those proceedings are set to begin later this year, separate from the electricity case decided Wednesday.
The commission's formal order on the electricity rate increase is expected in the coming weeks. Xcel customers should expect to see the higher charges reflected on bills as soon as October.
