Colorado Breaking News
Xcel Seeks 2.5% Electric Rate Increase 10/9
PUC Approves Large Xcel Natural Gas Rate Hike 9/29
Xcel Seeks 2.5% Electric Rate
Increase
(October 9) On Oct. 3, Xcel Energy asked state regulators to
approve a 2.5 percent hike in electric rates, to take effect in March 2004. The utility
requested the increase of roughly $31.5 million to recover the cost of purchasing 1,250
megawatts of electricity from private producers. One megawatt serves the electricity needs
of roughly 1,000 households.
Xcel serves 1.2 million customers in Colorado. Purchase of the
additional electricity is necessary to meet rising demand. Xcel said demand for
electricity in Colorado increased 60 percent over the past decade, from a high day of
4,014 megawatts in 1994 to 6,419 megawatts on July 24, 2003.
For a typical residential customer, the hike would translate into
a $1.13 increase in the electricity portion of the monthly energy bill. For a small
business, it would be a $2.09 monthly jump.
The proposed hike comes on the heels of an earlier electric rate
increase approved by regulators in June. As a result, typical residential bills jumped
$3.32 per month; small businesses saw bills rise $6.74 per month. Excel blamed it on
higher prices of natural gas in the wholesale market.
PUC spokeswoman Barbara Fernandez said the commission would
decide "whether to suspend or let the rates go into effect" only after the
filing goes on the PUC's agenda.
Colorado's Office of Consumer Counsel - the state's consumer
advocacy agency - will review all the numbers in the filing, director Ken Reif said.
Xcel generates 3,850 megawatts from its own power plants and
purchases an additional 2,950 megawatts in long-term contracts from independent producers.
Altough Xcel started buying 585 megawatts from independent producers this summer, it has
not been able to recover the money from customers. It is planning to purchase another 665
megawatts next summer from another independent producer.
Source: Rocky Mountain News
PUC Approves
Large Xcel Natural Gas Rate Hike
(September 29) State regulators have
given Xcel a stamp of approval that allows the utility to raise home heating bills by as
much as 73 percent. For small businesses, it could be a 84 percent hike.
For a typical household, the heating bill could jump to $109.36
this winter - up 73 percent from a year ago. A small business's heating bill could rise 84
percent to $524.78.
The new rates take effect Oct. 1.
Xcel is allowed to recover the money it pays to buy natural gas
from the wholesale market. "It is not an encouraging day for anyone; it is harmful
for consumers," conceded Terry Bote, spokesman for Colorado's Public Utilities
Commission. "But the commission's discretion in gas cost adjustments is very limited
. . . Unless the commission sees evidence of imprudence in the gas cost adjustment, there
is no basis for denying it."
Xcel blames the rising cost of natural gas for most of its rate
increase. The utility, which buys natural gas from the wholesale market, does not make any
profit on the commodity cost. Also, Xcel under-collected about $40 million from customers
last winter because it charged a lower-than-market price for natural gas. This amount has
been adjusted to this winter's gas rates.
In fact, Xcel sought a rate decrease last winter when it
estimated that natural gas prices would be lower than the previous year's (2001's) record-
setting gas price. Also, Xcel had over-collected $113 million from customers in 2001
which, when adjusted, led to a lower rate last year.
But that lower rate resulted in an under-collection this year,
since natural gas prices actually rose in January and February. And the March blizzard,
coupled with freezing temperatures, increased gas consumption and led to the $40 million
shortfall.
Low-income families, like small businesses, also are likely to be
hard-hit by the price hike. Colorado received $30 million in federal energy assistance
last year, which helped roughly 83,000 families. This year, officials expect the budget to
remain flat or fall even though requests could rise 5 percent.
Source: Rocky Mountain News
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