DENVER — The Colorado Public Utilities Commission met Wednesday morning to discuss rising energy costs.
“For a typical Xcel customer, electric bills are up maybe 20-25%, as opposed to gas bills, which are closer to 75%,” said Erin O’Neill, chief economist for the Colorado Public Utilities Commission.
During the meeting, the commissioners talked about how they can help customers.
Proposals included low-income utility programs and ensuring utility companies like Xcel offer budget billing that allows customers to get the same payment every month.
The Colorado Public Utilities Commission is discussing rate hikes
But Colorado Public Utilities Commissioner John Gavan shared concerns about approving rate hikes while energy companies report earnings.
“There was a lot in the press in the fourth quarter about the oil and gas producers taking extraordinary profits, paying extremely high dividends and conducting share buybacks that really distorted the commodity price situation. I’ve read that there really isn’t a supply problem,” Gavan said.
O’Neill said some of Gavan’s concerns fall under the federal government’s control, but the commission is thoroughly reviewing rate hike requests.
When a deep freezer moved through Colorado to Texas in February 2021, Xcel Energy had to pay more than $500 million to meet the increase in heating demand.
Last June, the Public Utilities Commission approved a proposal for Xcel to reclaim that money.
This resulted in a new fee that Xcel could charge for up to 30 months.
Then, in the fall, the PUC approved another rate hike to help Xcel embark on a plan to modernize its natural gas infrastructure.
“The three increases approved by the Commission this year are significantly lower than what the utilities were initially asking for. They were lowered after being reviewed by staff and many other parties including utility/consumer representatives, other consumer groups, a lot of people are complaining about these things,” O’Neill said.
O’Neill said the commission is trying to strike a balance.
“I would also say, in terms of the kind of record earnings for Xcel, they’ve been a partner with the state on decarbonization on the electric side. So that means we’re investing in more solar and wind resources, that’s more infrastructure and assets that the company owns, but less fuel,” O; said Neil. “And the company makes more money doing it, they get a return on that infrastructure where they don’t get a return on the fuel. But overall it is still cheaper and better for the environment.”
Gene Camp, associate director of the Colorado Public Utility Commission, said we’re seeing a slight decline in utility returns.
“When I joined the Commission in the 2000s, the utility companies’ return on their stock investments was … probably in the 10% range of them making a return. That’s been pushed a lot closer to 9%,” Camp said. “It’s a slow movement. But here, too, the Commission is exerting this downward pressure.”
O’Neill and Camp said the government does not set gas prices; the competitive market determines them.
The commissioners said they are constantly reviewing these issues and looking at ways to provide incentives and extra help for Coloradans facing rising energy costs.
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