Polis's Utility Bills Initiative Gets Frosty Reception From Xcel, Oil and Gas

Catie Cheshire
Governor Jared Polis announced directives to help with high utility bills.
Governor Jared Polis’s signature blue sneakers were made for walkin’ alongside the thousands of Colorado residents struggling with high utility bills this winter.

At least that’s the point he tried to make on February 6, announcing directives to the Colorado Public Utilities Commission, the Colorado Energy Office and utility companies themselves to take action to get bills lower. But few of the ideas he floated will make an impact this year, when bills have skyrocketed; instead, they might have an effect next winter.

“We have the tools we need to protect Coloradans and reduce costs, and it's time to act,” Polis said at a press conference announcing his letter explaining the directives. “We want to make sure that all utilities are continuing to be increasingly accountable to ratepayers, and we want to work with all of our energy providers and the state and the federal government to provide relief and reduce rates for both gas bills and electric bills as quickly as possible.”

After a week in which Coloradans roasted the PUC for failing to protect them from high natural gas costs and bill increases, the governor reaffirmed their call to act now by directing the PUC to identify ways to support customers in dire circumstances, mainly by making sure people have access to the state’s programs already designed to help.

The state’s utilities and oil and gas industry say they want to help, too. Less than two hours after Polis’s announcement, a coalition of the state’s utilities, the Colorado Oil and Gas Association and other members of the oil and gas industry, including the Pipefitters Union, announced an approximately $1 million donation to Energy Outreach Colorado, the nonprofit organization that helps with bill assistance in the state.

Jennifer Gremmert, executive director of Energy Outreach Colorado, said the organization’s toll-free call center, for which COGA provided seed funding, has received 16,000 to 18,000 calls each week from people who need help this year.

“These are our grandmothers. These are our neighbors. This is someone who lost their job. This is a mother who has a child health crisis,” Gremmert said at a press conference convened by the American Petroleum Institute Colorado. “These are the people that we all care about.”

The groups' exact donation amount isn’t settled, but Xcel Energy plans to chip in $500,000, promising that it won’t recover that amount from customers. According to Robert Kenney, president of Xcel Energy-Colorado, the donation will be shareholder-funded dollars.

Still, it’s a small amount compared to the $1.7 billion in profits Xcel made for those shareholders in 2022, a year in which the utility implemented base-rate increases and added a rider to pay for costs it incurred during a winter storm in Texas in 2021.

Polis noted that some of his directives will be aimed at preventing such a rider from being necessary in the future.

“We need to be ready for whatever comes our way,” he said. “Whether it's a storm in Texas, whether it's additional government contracts, you need the energy security that low-cost, reliable, renewable energy can bring, and we're really aligning all of the resources we can to make that happen.”
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Xcel's CEO, Bob Frenzel, sympathizes with you (while he collects your money).
Catie Cheshire

To that end, most of the governor’s directives to the PUC relate to long-term solutions, including working to incentivize utilities to reduce consumer costs and identifying ways to improve gas contracting, gas storage and financial hedging on natural gas.

Polis also directed the Colorado Energy Office to improve building performance standards and building codes to encourage energy savings and reduce bills, as well as to expedite the creation of home energy rebate programs supported by money from the federal government in the Inflation Reduction Act, including those for transitioning from gas stoves.

“While the federal funding for these programs won't be available until the end of the year, we're committed to working with stakeholders to be ready to go,” said Will Toor, executive director of the Colorado Energy Office.

Polis’s long-term view is focused on the transition away from fossil fuels to renewable energy.

“The sooner that we can achieve independence and have a reliable, low-cost energy that's not subject to storms in Texas or wars in Europe, the better off Coloradans will be,” he said. “I'm also urging the leadership of Colorado's energy utilities for regulatory changes and relief to reduce consumers' exposure to high gas prices and, of course, working to drive the transition to lower-cost, renewable energy."
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Robert Kenney, Xcel's Colorado leader, says the utility needs to keep its rates where they are.
Catie Cheshire

Given that statement, it was ironic that Xcel and Black Hills Energy, the two investor-owned utilities that the PUC regulates in the state, teamed up with the oil and gas industry to deliver their response to high customer bills two hours later.

Dan Haley, president and CEO of COGA, said that in order to invest in innovations that allow Colorado to deliver “the cleanest energy molecules on the planet,” Colorado needs a stable and predictable regulatory environment, noting that the industry has had more rulemakings than any other state in the past ten years.

“In order to continue to produce those things, we need markets and everyone to know that we're going to continue to invest in these resources in Colorado, that we're going to continue to responsibly develop oil and natural gas,” Haley said. “Part of that is just, in our opinion, letting the rules work. … Let those rules work before we continue to introduce more into the process.”

Polis’s new directives introduce more rules into the process, however, especially when it comes to considering the consumer and being more aggressive in the energy transition. Lynn Granger, executive director of American Petroleum Institute Colorado, said she was disappointed that none of Polis’s directives considered working with the oil and gas industry to incentivize production and provide more supply to drive down cost.

But according to Polis, increased production in Colorado wouldn’t impact people’s bills. “The price of natural gas, it's a global commodity. So Colorado is a producer, but we are not a producer that our policies drive global pricing,” he said. “If granting more permits worked, we wouldn’t have had this price spike, because we actually granted more permits. But clearly, that did not impact the price of natural gas.”

Granger said that oil and gas representatives weren’t consulted prior to Polis’s announcement. “We have to be at the table,” she added. “Our energy future is absolutely an all-of-the-above energy mix, but it cannot be a none-of-the-below, nor will it be a none-of-the-below. And the sooner we're able to have that realistic conversation as a state, as a nation, as a world, the better we'll all be.”

Kenney said that Xcel has had communication with Polis’s administration about bringing down costs for customers and already does some of the things Polis directed.

“We're empathetic, or sympathetic, to the challenges that our customers are experiencing,” said Bob Frenzel, chairman, president and CEO of Xcel, at the API CO press conference. “We’re trying to provide access through our programs, through the state programs, through the federal programs, to direct our customers to all the assistance that they need to manage their homes, their lives and make sure that they don't have to make tough decisions.”
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Colin Wong had to wait to buy textbooks to afford his utility bills.
Catie Cheshire

But customers are having to make tough decisions, and Polis brought several to share their stories at his press conference.

Colin Wong, a senior at the University of Colorado Boulder, said his last bill went up $40 from last year in the same month.

“While that doesn't seem like much, and I've heard stories of people's bills tripling, to college students $40 is our groceries. It's our internet, and it's our textbooks,” he said, adding that he had to wait to buy a textbook this semester because his utility bill was so high.

Wong is paying his own way through college and says that from the time he started until now, there’s been a noticeable overall increase in the cost of living. He keeps his apartment as cold as possible, bundling up rather than turning on the heat, and he thinks high utility costs are negatively affecting many Coloradans in school right now.

“The fact is, it's hard to study when, for example, we're worried about having our power shut off,” Wong said.

For Simone Renee, a single mother of three. the worries about having her power shut off led to her taking her youngest son out of preschool this year.

“Every month I'm faced with the choice of what I can pay given the increased cost of living and cost of energy,” she said. “I'm doing the best that I can, but the reality is that it's becoming harder and harder to keep up. It's hard to plan and budget when bills keep changing.”

Her older children, who are in high school, have been impacted, too. They each play multiple sports, and she’s recently had to consider whether she can afford to keep paying for those sports because of her utility bills.

“Those are incentives to keep their grades up,” Renee added. “It's having to decide, okay, am I going to pay this $300 for a uniform and this $50 pay-to-play? Or am I going to pay the light bill and stop the lights from getting turned off?”

Her daughter recently considered asking her school for financial assistance in order to keep playing basketball. That’s something Renee never wanted her children to even think about, she said.

It’s made worse by the fact that there isn’t much that people can do to change the size of their energy bills.

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Simone Renee is one of many people impacted by high energy bills this winter.
Catie Cheshire

“What we're hearing from folks across our state is: Your utility and your energy bills are basically fixed costs,” Polis said. “Can you impact them a little bit by setting your thermostat down? You can, but not a lot.”

Despite that, representatives from both Black Hills and Xcel lauded their energy saving tips for customers. Kenney said that Xcel needs to keep rates where they are, and potentially increase them, to further its investments in the safety of the energy system and the transition to renewable energy.

Still, he insisted the company does what’s best for customers, particularly when it comes to purchasing the least expensive gas possible.

“We have an inherent incentive, because we want to do right by our fellow Coloradans,” Kenney said. “We have 4,000 people that work for this company. That’s our friends, neighbors, family members, so we have an inherent incentive to do right by our customers.”

If Polis’s directives gain any traction, the PUC might provide a more tangible incentive to the company to decrease costs for customers, he suggested.

In the meantime, the Xcel executives said that the company will go forward with its current request to the commission to increase electric rates and could apply for a gas rate increase in 2023 as well, indicating that its reception to Polis’s ideas might match the weather: frigid.