Xcel Energy-Colorado seeks rate increase of $343 million for cost of improvements, updates
On the heels of seeking a temporary rate increase to recover costs from a February storm, Xcel Energy-Colorado is asking regulators for another increase to pay for improvements it has made and for updates to its system needed to serve the growing number of customers.
If the new request is approved, residential customers would see their monthly electric bills rise by an average of $9.46 and a typical small-business customer’s monthly bill would increase by $14.46. The increases, which would generate $343 million, likely wouldn’t take effect until September 2022, Xcel Energy-Colorado President Alice Jackson said Friday.
“We definitely recognize that customers are looking at the total impacts on their pocketbook and their budget,” Jackson said.
Jackson said Xcel Energy’s rates in Colorado are roughly 35% below the national average and will be 25% below the national average if the Colorado Public Utilities Commission approves the application.
However, the state Office of Consumer Counsel, which represents the public before the PUC, is concerned about the company’s “pancaking” of rate cases and the impact on customers.
“At this point, we just see this huge pancake stack of rate increases for customers,” said Joseph Pereira, deputy director of the office.
Consumer and business representatives recently reached an agreement on how to divide a rate increase between the different groups of customers, Pereira said. “Before we even have approval of the settlement, the company is proposing another” case.
Typical monthly bills for Xcel Energy electric customers are $74 for households and $112 for small businesses.
Jackson said about 65% of the investment driving the rate proposal is for projects previously approved by the PUC. From 2019 through 2022, the company will have spent more than $4 billion, she said.
The improvements include transmission upgrades and installation of smart meters that will allow customers to track their energy use in real time to lower costs. Xcel Energy will be able to monitor what’s happening at the household and business level so crews can quickly respond to outages.
In addition, Jackson said, the revenue will help pay for preventing wildfires by ensuring trees and other vegetation don’t fall on lines and spark a fire. Xcel Energy uses drones to check transmission lines, poles and other equipment.
Nearly 19% of the request covers the utility’s investment in the Cheyenne Ridge wind farm in Kit Carson and Cheyenne counties on the Eastern Plains. The 500-megawatt facility started producing last year. Jackson said it’s expected to save customers $28.7 million in 2022 because there are no fuel costs.
The Minneapolis-based company was the first electric utility in the country to set a goal of eventually being carbon-free. It has pledged to cut its greenhouse-gas emissions 85% by 2030.
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