By Mark Jaffe, EUCI energy writer
Xcel Energy is proposing a $225 million electric rate increase in Colorado – the largest the state has ever seen – with the support of its largest corporate customers and the electrical workers union.
The tentative agreement, which is also supported by the Colorado Public Utilities Commission (PUC) staff, drew immediate pushback from consumer advocates.
“What it looks like to us is that the company, PUC staff and corporate interests have made an agreement that saddles residential customers with the largest rate increase in Colorado history,” said Joseph Pereira, director of the Colorado Office of the Utility Consumer Advocate (UCA).
Opponents are asking the utility commission to reject the settlement and move ahead with hearings on the rate increase slated to start June 11.
In November, Xcel Energy filed the rate case seeking to raise its base rate by a total of $355 million, with $327 million in new revenue from customers. The remainder involved moving separate bill charges into the base rate.
In negotiations between Xcel Energy’s subsidiary, Public Service Company of Colorado, and parties who intervened in the rate case challenging the company’s proposal, a settlement was struck for $225 million. It was submitted to the PUC for approval June 2.
“We have a good track record of working with our stakeholders in Colorado to reach a balanced outcome and this is another example of us collaborating across a variety of stakeholders to find a reasonable approach,” the company said in a statement.
Among the parties supporting the settlement are the International Brotherhood of Electrical Workers, Walmart, Climax Molybdenum, and Colorado Energy Consumers, which represents large industrial and commercial customers.
Xcel Energy said the agreement would “reduce the company’s original rate increase request, add customer protections and support continued infrastructure investment in the electric system.”
The settlement would raise the average household bill by $6.13 to $110.81 a month – a nearly 6% increase, and small commercial customers would see the cost of an average monthly bill rise 5.6% to $168, an $8.90 increase.
In addition to the utility consumer advocate, the proposed rate is being opposed by AARP Colorado, the city of Boulder, and Energy Outreach Colorado, which provides aid to low-income families.
“After years of repeated rate hikes, it is unacceptable to ask older Coloradans to shoulder another egregious electric rate increase, especially when that increase passes the buck to consumers in the form of unjustified charges, unproven investments, and costs associated with struggling power plants,” Sara Schueneman, AARP state director, said in a statement.
In preliminary testimony, Xcel Energy said it is facing a spate of challenges including meeting a rising demand for electricity, modernizing and hardening the grid, wildfire mitigation, and a host of legislatively mandated environmental and electrification programs.
Among the major investments the company has made since 2002 are the replacement of 17,771 wood poles, connecting 775 megawatts of new generation, adding 406 miles of new transmission lines, and bringing five new transmission and distribution substations online.
At the same time, the company said it is facing supply chain issues, rising interest rates and costs. Construction costs, for example, are up on average by 67%, a company filing said.
“All of this will require capital from investors. With the industry being in a heightened investment cycle, competition for capital is fierce, and investors will require returns that adequately compensate them for the risk they undertake,” Steven Berman, a company executive, said in a PUC filing.
In its filings, the utility consumer advocate raised questions about rising electric rates and their impact on households and the Colorado economy.
“A common concern was that families are already struggling with rising living expenses, and higher utility bills add to that pressure” Cory Skluzak, a UCA analyst, said in April testimony.
The settlement would also expand eligibility to programs helping financially strapped households pay their electric bills. This includes the company putting $5 million into the programs.
Energy Outreach Colorado, however, estimates that 42% of the 1,381,717 households Xcel Energy serves would be eligible for programs under the revised income qualifications, raising questions about how many customers will actually be served.
Processing…please wait
