Opposition mounts to Xcel rate hike request
Xcel Energy is asking the Colorado Public Utilities Commission to approve a temporary rate increase of up to $100 million to help it to recover costs it hasn’t yet incurred.
The company said its current rates “are insufficient to cover its costs of providing electric services to its retail customers during 2012.”
Xcel is trying to persuade the commission to approve an immediate rate hike without public hearings, saying a new state law allows the panel to approve an increase on an interim basis until formal public hearings can be held later this year on a larger, $142 million rate-increase request.
The matter has drawn several groups and private companies into the fray, including AARP, which said senior citizens still impacted by the recent recession would have difficulty paying their winter heating bills because of the increase.
AARP represents more than 650,000 Colorado seniors, many of whom are among the 1.4 million Xcel customers, and it said in a filing to the PUC that the utility’s promise to reimburse customers if its costs this year turn out to be less than $100 million isn’t good enough.
“During the time that the money is being held by (Xcel), in order to keep the lights and heat on during the Colorado winter months, the consumer does not have that money to spend on groceries and other necessities such as critical prescription drugs,” AARP said.
If approved, the hike would mean a 4.03 percent increase in monthly residential bills and a 3.75 percent hike for Xcel’s commercial customers.
The Colorado Office of Consumer Counsel and the PUC’s own staff said the utility has not made a convincing case that it needs the money now. As a result, the two are recommending that the commission reject Xcel’s request when the three-member panel reviews the matter Wednesday.
“The financial condition of the company is strong,” staff said in its filing. “Accordingly, the company’s ability to provide safe and reliable service will not be impacted by rejection of the (rate-hike) petition.”
The two suggested, however, if the commissioners disagree with their assessment, an alternative solution would be to approve about half of what Xcel is requesting, but require the company to pay interest on any refunds to its customers.
Xcel says it needs the rate increase to cover numerous unexpected costs, including a $42.4 million contract the utility canceled last year to sell power to Black Hills Energy, a utility that serves Pueblo and parts of southeast Colorado.
The company also says it expects to incur a $23.2 million increase in property taxes this year, but staff says that bill won’t come due until April 2013.