Energy Advocates Ask Residents to Flame Xcel Amid Push for Higher Rates

Amid public pressure to get energy bills down, the Colorado Legislature passed a utility regulation bill during the 2023 session — but the job's not finished yet, according to energy advocates.

Now it's time for residents to turn up the heat on Xcel Energy — and they'll have two chances to do that during upcoming public hearings about the energy provider's attempt to raise electric rates through a formal request process with the Colorado Public Utilities Commission.

Customers will have the opportunity to weigh in at meetings on May 31 and July 11 via Zoom.

Leslie Glustrom, of the Boulder nonprofit Clean Energy Action, has been paying close attention to Xcel’s rate cases since 2007. She says there have been letters written continuously to the commission, requesting that it not let the utility giant raise rates.

“I've always felt that there were a lot of letters, but frankly, nobody was paying attention,” she says. “Now people are, and that's amazing. It's important for people to turn out.”

Glustrom has seen how the utility sausage is made — and the way large companies like Xcel typically get most of what they ask for — but she hopes things will change this time around because of the increased attention. “It actually is shifting the system,” she says. “We've got to show up to create enough of an impact that we very slowly shift the way the system works.”

She was one of those who worked on the 2023 bill to help shift the system to align more with what people need, including clean-energy priorities. Danny Katz, executive director of the Colorado Public Interest Research Group, says that while the final version of the legislation — SB23-291 — doesn’t require quite as much action as originally proposed, it will help protect people from paying for unnecessary expenses like the company's tax penalties or political contributions.

Xcel agrees that the bill, which Governor Jared Polis signed on May 11, will help customers.

“There are a couple of items within the bill that I think will really help with stabilizing and offering more manageable, affordable rates and not necessarily having a high price impact during extreme weather,” says Hollie Velasquez Horvath, regional vice president of state affairs and community relations for Xcel.

SB23-291 gives permission for utility companies to defer high commodity prices over a five-year period so that the impact of fluctuations in the natural gas market don’t hit customers all at once. Because Xcel depends on the global energy market, it is beholden to those fluctuations, and Velasquez Horvath believes that having additional management tools will benefit customers.

However, Katz argues that the best way to make sure that people aren’t constricted by natural gas and its fluctuations is by transitioning away from it as an energy source.

“The good news is we have the technology,” he says. "We can produce energy and heat with cheaper fuel, reliably. We can reduce waste throughout the system, and that's going to save people money, but there is more that needs to be done than just this bill.”

Still, the bill will help with provisions that prevent utilities from recovering the costs of hooking up new homes or businesses to gas pipelines. Instead, that responsibility will now rest with developers, which could mean that more developments decide to go all-electric, according to Katz.

Velasquez Horvath notes that part of the conversation around SB23-291 focused on how to better invest in the electric distribution system if customers continue to adopt electrification.

“When I say distribution system, it's the poles and wires that you see potentially in your backyard or in your neighborhoods,” she explains. “That, we have seen, has capacity constraints on it and will have to be something that we need to proactively invest into.”

She adds that Xcel will continue talking to lawmakers between legislative sessions to work on ways to make electric distribution and adoption easier. SB23-291 also requires that studies be conducted on several topics related to electrification — including an examination of how to treat new gas infrastructure buildouts and depreciation of gas assets.

“We want to make sure we're avoiding a situation where we're investing in some big power plant or other key infrastructure that we're then planning on turning off before we pay it off,” Katz says.

The PUC and Xcel have been negotiating over how much customers should pay to help Xcel recover costs from coal plants being shut down early, and the legislation could help to keep gas from going that way, too. The commission is also considering an electric rate case to join the gas rate increase Xcel implemented in November 2022. That same month, Xcel applied to increase electric rates by $312 million across the board — about a $7-per-month increase for the average residential customer.

“It's appalling,” Glustrom says of the company’s attempt to raise rates. But Xcel argues that’s not the case.

Velasquez Horvath claims the rate hikes are needed to help invest in the electric distribution system, to keep it running safely, and to prepare it for coming system changes.

“Rate cases are a normal business practice,” she says. “It's all about transformer replacements, pole replacements, making sure that the distribution wires are maintained and we don't have a system that is not updated and upgraded for delivery.”

But Glustrom points out that Xcel sells about as many kilowatt hours as it did twenty years ago but makes millions of dollars more than it used to. She says the fact that sales aren’t increasing but profit is indicates that the company could be taking more than it should.

She also notes that raising electric rates did contribute to high bills this winter, despite the spike in natural gas prices driving most of the cost. In the past, Xcel has argued that bills would be flat even if electric rates increased. That, Glustrom says, is because the price of natural gas has been low over the past decade. Now that it’s high, those bills aren’t flat anymore.

“It's that underlying increase in electric rates that I'm also very concerned about,” she continues. “People that for whatever reason are using air conditioning — they also have really high summer bills, and that's going to be an issue.”

Velasquez Horvath says that the future is bright on the summer energy front, with other utility partners in the region also forecasting that the West is more prepared for heatwaves than in years past. “We've also been actively making plans to maximize our own generation just so that we can secure those resources for our customers even if and when we get an extreme high-heat day,” she adds.

Xcel has been working on short-term energy contacts and is currently in the testing phase — with two utility-scale solar farms that are scheduled to go online July 1. Plus, Velasquez Horvath says that about 50 percent of Xcel customers now have Time of Use rates. These are determined based on when people use energy, with higher rates during times that people tend to use the most electricity.

The program is designed to help Colorado residents be conscious of the energy load on the system, with the incentive of saving money by waiting a few hours to run the dishwasher or turn on the AC outside of the peak hours of 3 to 7 p.m.

“We'll see how our customers are adopting this rate structure, and hopefully we'll see a financial benefit as well if they can figure out how to manage their energy use differently,” Velasquez Horvath says, noting how she and her family have begun waiting until later in the evening to turn on their AC.

Regardless of how much it costs, this summer is gearing up to be a hot one for Xcel at the PUC. Those wanting bring the heat can register for the May 31 public comment hearing on Zoom.