The agency that represents the public before the Colorado Public Utilities Commission says Xcel Energy’s proposed natural gas rate increase of $188.6 million over three years is unjustified and plans to file a protest.
Xcel Energy, which has 1.4 million natural gas customers in Colorado, filed the rate request Monday with the PUC. If approved, bills would rise Nov. 1.
The rate request comes as state regulators are considering Xcel Energy’s proposed $182 million increase in electric rates. The PUC will also decide requests by Xcel Energy and other companies to recover their costs from a February 2021 storm that plunged temperatures below zero from Texas to the Midwest and sent natural gas prices soaring.
The office of the Utility Consumer Advocate said not all Xcel Energy customers buy both electricity and natural gas from the company, but there is a significant overlap. The office signed on to a partial settlement in the $182 million electric rate case, but opposes Xcel Energy’s proposed natural gas increase.
Cindy Schonhaut, the agency’s director, said the PUC has referred to the company’s “pancaking” of proposed rate increases.
“This is a frequent thing. This is pancakes on pancakes,” Schonhaut said. “What’s kind of shocking is that there was a rate increase on the gas side by Xcel in 2020.”
The $94 million, or 19% increase, took effect in April 2021. Xcel Energy President Alice Jackson said in a letter to the PUC that the utility was required to submit the new filing to comply with agreements in previous natural gas rate cases.
However, Schonhaut said the filing could have been a formality and didn’t have to include a substantial jump in rates.
Under Xcel Energy’s proposal, the average residential customer’s monthly bill would rise by $4.16 starting in November; $1.83 in November 2023; and $2.15 in November 2024.
The average monthly increases for small businesses would be $19.09 in November; $7.30 in 2023; and $8.37 in 2024.
The current average residential monthly bill is $62.42 and the average small commercial monthly bill is $251.19. The proposed rate increases don’t cover increases Xcel Energy pays for natural gas, which are passed through to customers.
The company wouldn’t seek additional rate increases that would take effect before November 2025, Xcel Energy spokesman Michelle Aguayo said.
In her letter to the PUC, Jackson said Xcel Energy wants to ensure that its base rates accurately reflect the cost of providing service. She said the revenue will help cover the expense of meeting growing energy needs across the state, improving gas pipelines and further reducing greenhouse-gas emissions from its operations while affordably meeting customers’ needs.
“If you’re committed to affordability, what’s with all these rate increases?” Schonhaut asked.
AARP Colorado spoke against higher electric rates during a PUC hearing last week. The organization is also concerned about the proposed natural gas increases because of the impact on residential customers, especially low-income customers and ones on fixed incomes, said Bill Levis, a consultant and formerly with the Colorado office of consumer counsel.
“I just received my monthly energy bill from Xcel and my gas bill was 44% higher than last January even though I used the same number of therms (units of gas) this month and last January,” Levis said in an email.
Of particular concern to Schonhaut is Xcel Energy’s request to raise rates over three years. Instead of being based on a previous year’s costs, which can be verified, the utility’s proposed increases would be based on forecasts, she said.
“If you’re just looking at forecasts, it takes a form of guessing, especially as you go out two or three years. That’s a big problem,” Schonhaut said.
Xcel Energy has said its gas and electric rates are lower than the national average. Schonhaut agreed that they are, but she said that’s not the issue.
“They always posit it that way, as if to say they can just keep raising them as long as they’re under the national average. That just doesn’t wash,” Schonhaut said.
When proposing rates, a regulated utility should look at what increases its costs justify while making a reasonable profit, she added. “That’s the test for a regulated monopoly. It’s not a competitive business.”
