Xcel: ‘Higher gas prices are likely to continue’
ALAMOSA — Customers of Xcel Energy were hit with an unexpected and unwelcome surprise when opening their utility bills for December with some residents in the San Luis Valley reporting bills that were as much as $200 higher (and in some cases more) than what they had paid during the same time period in 2021. Similar stories were being reported throughout the state.
The Valley Courier reached out to Xcel for some answers, ultimately connecting with Tyler Bryant, Xcel’s media relations representative out of the company’s Denver office.
Bryant, in an approved response, attributed the increase to the rising cost of natural gas. “Natural gas costs are the bulk of customer energy bills and they remain higher than in recent years,” he wrote in an email. “The natural gas commodity price has nearly doubled in price compared to winter 2021-2022. The wholesale price of natural gas is not determined by Xcel Energy but by the global supply and demand.”
Bryant then sited an example. “A residential natural gas customer bill in November 2021 averaged $91, compared to last month, where an average residential natural gas customer bill was $144 – assuming the customer used the same amount of natural gas.”
That last phrase – “assuming the customer used the same amount of natural gas” – provided the basis for what Bryant attributed as the second cause for the increase.
“November 2022 was colder than November 2021, and customers likely used more natural gas to heat their homes.” He went on to add, “It’s important to note the cost of natural gas is paid directly by customers without any markup from Xcel Energy.”
Xcel has “taken a number of steps” as natural gas prices have climbed over the past year, including “including storing natural gas for use during the heating season, contracting for natural gas in advance, and purchasing financial hedges, which act like insurance to protect customers from significant price changes. For its electric customers, the company has a diverse energy mix, with many energy sources that can be used to minimize the effect of natural gas price increases on electric bills.”
According to the U.S. Energy Information Administration, more than 35% of all electricity is generated via natural gas.
Bryant said that, even in the midst of shockingly high utility bills, there has been some “positive news.”
On Nov. 15, the company announced that, due to lower-than-anticipated prices, bills in December (invoiced in January) will be lower with residential customers’ bills being an average of $33 less and small business customers an average of $140 less.
But that’s likely just a temporary reprieve.
“Higher wholesale natural gas prices are likely to continue to affect energy bills,” Bryant said.
While, in an approved statement, Xcel blames the soaring utility bills on the rising cost of natural gas, it should also be noted that the company has reported rising net profits over the last years. According to federal documents filed with the United States Securities and Exchange Commission, Xcel Energy made $660 million in net profits in Colorado in 2021, preceded by $589 million in 2020 and $588 million in 2019.
Xcel Energy has also sought and been approved for multiple rate hikes over the past several years, something critics have called “pancaking” or stacking one rate hike upon another. Recently, Xcel requested an additional hike to electric rates.
As described on the Xcel website, “Under the proposal, a typical residential bill would increase by approximately 8.20%, or $7.33 more per month compared to bills today. Typical small-commercial customers can expect a 7.77% increase, resulting in a $10.16 monthly bill impact. If approved by the CPUC, these rate changes would not go into effect until fall 2023.”
The purpose of the rate hike is “to provide an increasingly clean energy mix and maintain and strengthen our infrastructure across the state. The result is a power grid that is better protected from increasing risks, including cyberattacks, wildfires and extreme weather. These investments also establish a technology platform for enhanced customer experiences, new products and programs and a more reliable, resilient system to serve customers.”
When asked to consider how soaring utility bills are impacting customers already facing higher costs due to inflation, Bryant wrote, “We recognize that inflation is hitting everyone hard. We work with state and local agencies and advocates for income-qualified customers to provide energy assistance to those in need. Energy Outreach Colorado, the Colorado Energy Office and the Colorado Low-income Energy Assistance Program help income-qualified Colorado customers with bill payment assistance, free weatherization and energy-efficiency upgrades and HVAC repair and replacement.
“We encourage our customers to reach out directly if they’re having trouble paying their bills with options such as payment plans, energy assistance programs or an Averaged Monthly Payment,” he stated.
To learn more about energy assistance options, customers can visit xcelenergy.com/EnergyAssistance or call 1-800-895-4999.”