Monthly gas bills will rise after Xcel Energy wins OK of $130M hike in revenue

The bills for Xcel Energy natural gas customers are going up after the Colorado Public Utilities Commission approved an increase of $130.76 million in revenue.

An average monthly residential bill will rise by $4.57 and the average monthly bill for small businesses will rise by $17.49.

The higher rates took effect Nov. 5.

“The PUC wants Xcel Energy consumers to be aware of this increase to their bill,” PUC Director Rebecca White said in a statement. “This is especially important, as many customers use natural gas to heat their homes in the winter.”

Xcel Energy sought an increase of approximately $171 million. The PUC said in a filing that the rate increase request “prompted an extraordinary number of written public comments” objecting to the new rate.

The company said the additional revenue will go toward investments in the safety and integrity of its natural gas system and connecting new customers.

The Colorado Office of the Utility Consumer Advocate, which represents the public before state regulators, opposed Xcel’s proposed increase, saying customers have been experiencing “a pancaking of rate increases” since February 2020. A report on rate trends shows that Xcel’s gas revenues have grown from $1 billion in 2020 to over $1.8 billion in 2023, “an 80% increase in revenue in three short years,” the UCA said in a filing.

The PUC staff argued that Xcel’s rate request was unreasonably high and recommended lowering the increase. In an Oct. 25 document, the commission said it was disappointed by the “slow pace of change” in Xcel’s spending on natural gas.

Critics have argued the company should spend less on gas because the state is making a transition from fossil fuels to more renewable energy sources. They’ve warned that gas plants will become “stranded assets,” similar to coal plants that Xcel and other utilities are shutting down to cut greenhouse gas emissions.

“In an environment where sales will likely decline, large increases in capital spending will cause substantial rate and bill impacts in the future as the Company files rate cases seeking to recover the associated costs,” the PUC said in its filing.

Xcel Energy in increasingly adding solar and wind projects and battery storage to its system in Colorado, but expects to keep natural gas in its fuel mix for the foreseeable future. The company has said it still needs “dispatchable” energy, which can be turned on and off as needed when power from renewable energy sources might not be available.

Xcel is Colorado’s largest electric utility. It provides electricity to 1.6 million customers and natural gas to 1.5 million customers, with overlaps between the two groups.

For those seeking help to pay their energy bills, the PUC has the Utility Bill Help Program, which can be found at the PUC website or by visiting https://puc.colorado.gov/utilitybillhelp.