Xcel Energy’s natural gas customers will pay more this fall after the Colorado Public Utilities Commission approved a settlement on Friday that will raise the average residential bill by 8.6%, or $5.16 a month.
The settlement will also raise small-business bills by an average of 9.2%, or $22.76 a month.
The new rates are effective Oct. 6.
A final written decision is expected to be issued around Oct. 1. Once issued, any party to the rate case has 20 days to file an appeal with the commission asking them to reconsider aspects of the decision.
Xcel Energy, Colorado’s largest electricity provider, filed its natural gas rate proposal on Dec. 29. At the time, the utility said the higher rates would fund “critical infrastructure projects that modernize the system, enhance safety, and support Colorado’s transition toward a cleaner energy future.”
The approval comes after Xcel reached a settlement with multiple parties in July, reducing its original rate increase request from about $190 million to $122.7 million — roughly 35%.
Under the initial proposal, residential customers would have faced an average monthly increase of about 11.4%, or $7.59, while small businesses would have seen an average monthly increase of about 13%, or $36.47.
“I think that the settlement really did a good job in achieving balance,” said commissioner Tom Plant during Friday’s meeting.
“I thought that the company moved significantly on a couple of really key areas that, you know, were problematic and that were identified by the various different parties.”
As Xcel moves toward its goal of net-zero emissions by 2050, some customers are questioning the costs involved.
Dave Rodenbaugh, an Xcel Energy residential natural-gas customer in Littleton, opposed the proposed rate, noting that Colorado customers have been asked to repeatedly tighten their household budgets as energy costs rise.
“Households and ordinary businesses cannot respond to rising expenses by simply ordering their customers or employers to provide more money,” he said in an email comment made available on the PUC’s e-filing system.
“We cut unnecessary spending. We defer lower priority projects. We renegotiate contracts. We improve productivity. We reduce overhead. We make difficult choices. A regulated monopoly should be expected to demonstrate the same discipline.”
Denver resident Carey Marin shared a similar sentiment.
“Temperatures are starting to climb and utility bills are already high enough in Colorado. I cannot afford another rate increase,” Marin said.
Ellie Friedman, a rate analyst for the PUC, said the commission has received more than 900 comments through its website, including 502 e-filings, 370 emails, 23 telephone messages and nine letters. The comments were “generally opposed” to any increase in natural gas rates.
Xcel has said customers will benefit from the investment through improved reliability, helping to prevent outages even on the coldest days; enhanced natural gas system safety; a cost-effective energy solution; reduced emissions; and greater customer choice.
The commission also approved a $5 million shareholder-funded contribution to its Gas Affordability Program. The funding would come from Xcel Energy profits rather than customer rates. It would provide a safety net for income-qualified customers by increasing bill credits and expanding disconnection protections.
“While the Colorado Public Utilities Commission approved much of the settlement agreement, we are still reviewing several notable modifications and are concerned about how they may affect future investments needed to maintain a safe, reliable natural gas system,” said Xcel Energy Senior Media Relations Representative Michelle Aguayo.
“As we evaluate the decision, we remain focused on balancing customer affordability with the essential work required to support and modernize the system that more than 1.5 million residential and business customers rely on every day in Colorado.”
Colorado has four regulated gas utilities: Black Hills, Xcel, Colorado Natural Gas and Atmos. Each utility must obtain PUC approval for the rates it charges customers.
Last month, the PUC approved an increase in Xcel’s electricity rates following months of negotiations, though the final increase was significantly lower than what the utility originally requested.
Residential electricity customers will pay an average of $5 more per month, while commercial customers will see their average monthly bills increase by $7.29.
The decision also adopted a package of affordability protections.
“Energy affordability, particularly for low income customers, remains a priority for the Commission. No decision to raise rates is an easy one, however, this outcome is notable in the unprecedented number of provisions to keep bills affordable and prevent disconnections,” said PUC Director Rebecca White in an August news release.
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