The Cost of Energy Keeps Going Up

Posted on 04/25/22 by Bill Levis

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Xcel’s 1.5 million electric and 1.4 million gas customers, over 90 percent of whom are residential, already pay three clean-air surcharges and more have been written and passed into law since 2019. This year has been especially hard hit with rate hikes.

But, wait, there's more. In addition to most of the new electricity rate increases, Xcel is now asking the Public Utilities Commission for another $188.6 million for gas. Xcel Energy wants residential customers to shoulder more burden by paying nearly $100 more a year ($97.68 a year, or $8.14 a month) on their bills.

Xcel Energy in Colorado has hiked utility bills for residential electric and gas customers year after year, filing one rate case after another – a practice called “pancaking” that stacks costs onto customers.

1.4 million Coloradans count on Xcel Energy for natural gas. Many also count on Xcel for electricity; these customers face increased bills for both electric and natural gas bills.

Here's what you can do about it:
Raise your voice before they raise your rates! AARP is mobilizing Coloradans to fight back against Xcel Energy’s unfair natural gas rate hike proposal. Visit action.aarp.org/COutilities for more information, and to contact the Public Utility Commission.

The current surcharges are:

  • The Clean Air-Clean Jobs Act Rider passed into law in 2010 to promote a coordinated approach to achieving multiple air emission requirements. The CACJA Rider is subject to annual changes effective on January 1 each year.
  • Colorado Energy Plan Adjustment, a 1% of an electric bill, funds the early voluntary retirement for Xcel Energy's Comanche coal units.
  • Renewable Energy Standard Adjustment, one percent of an electric bill, to fund the renewable energy program as required by Colorado law under which utilities must generate or purchase increasing portions of their electricity from sun, wind or biomass.
  • Xcel offers Windsource, a voluntary program providing customers with a choice to have their electricity generated from renewable generation sources. The Windsource Charge is subject to annual changes effective January 1 each year.

In addition, several new clean-energy surcharges will be implemented with the passage of two bills in 2019 and a number of additional surcharges were adopted by legislation last year.

Consider the following:
• As the result of the passage of SB19-77, Xcel and Black Hills will be able to charge their monopoly customers up to ½% of their revenue requirement to develop electric vehicle charging stations. They also can put the cost of providing those facilities into their base rates.
• With the passage of SB19-236, the Commission can allow Xcel and Black Hills to add up to a 1-1/2% clean energy plan revenue rider on the annual total electric bill, including surcharges and franchise fee. Following the final implementation of the clean energy plan in 2030, any remaining costs and savings associated with the clean energy plan will be incorporated into base rates.
• SB21-072 will most likely require Xcel and Black Hills to join a regional transmission organization (RTO) by 2030. Should that happen, the Public Utilities Commission may allow recovering of RTO subscription fees and other participation costs through rates or a transmission rider.
• Under SB21-246 concerning the transition to electric appliances, furnaces and hot water heaters, Xcel and Black Hills will be entitled to a higher rate of return, accelerated depreciation, retaining part of the net economic benefit, the collection of cost through a rider or cost adjustment clause and any other incentive mechanism the Commission approves.
• Under HB21-1105, electric and gas investor-owned utilities, most prominently Xcel and Black Hills, will collect a monthly charge from consumers beginning in October 2021 for energy assistance. The charge will start at $0.50, then increase to $0.75 in October 2022 and then increase based on the consumer price index beginning in October 2023. Low income customers may request an exemption. The bill also provides for voluntary water utility contributions.

Utility Bill Money Picture

• Under HB21-1238, investor-owned gas utilities will be able to add a cost adjustment mechanism to consumer bills to collect the cost of a demand side management program without filing a rate case.
• SB21-261 removes the net metering cap for consumers with solar panels currently at 120 percent of historic usage.
• Under SB21-264, gas distribution utilities can add a cost recovery cap up to 2% for all customers to reduce greenhouse gas as well as request a possible rate adjustment clause for clean heat plan costs.
• SB21-272 removes the .25% fee cap collected on a public utility’s gross intrastate revenues to fund the PUC and the Office of Consumer Counsel (which becomes the Office of Utility Consumer Advocate as of September 2021 pursuant to SB21-103). This fee is ultimately paid by the utility’s customers.

Yes, many of the fees already passed in the Colorado Legislature. But you still have a chance to make your voice heard in the gas rate case, so, please do so.

Visit action.aarp.org/COratecase to find out how to protect this most recent rate hike that is coming up for consideration by the PUC.

_Bill Levis is an AARP Colorado volunteer advocate, specializing in utilities.

This story is provided by AARP Colorado. Visit the AARP Colorado page for more news, events, and programs affecting retirement, health care, and more.

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