Electric utility bills for Xcel Energy customers in Colorado could rise an average of $4.34 a month, or 7.7 percent, under a rate case settlement the utility filed Friday.
Consumers will also face late fees on unpaid utility bills for the first time if the Colorado Public Utilities Commission approves the settlement.
The higher rates would take effect Jan. 1.
Xcel initially sought to recover $172 million in additional costs, an increase it linked to $1 billion spent since 2001 to improve its electricity infrastructure, including the construction of more power plants.
The utility agreed to recover $107 million in a settlement reached with the Colorado Office of the Consumer Counsel, PUC staff and other groups.
“To be honest, we don’t like rate increases of any sort,” said Jim Greenwood, director of the Colorado Office of the Consumer Counsel. “But we believe this results in just and reasonable rates.”
Greenwood’s group initially wanted to grant Xcel only $35 million in higher costs. The gap was bridged in part when the company agreed to accept a 10.5 percent return on equity rather than 11 percent.
Squeezing an even lower return out of Xcel would have probably hurt the company’s credit rating and increased its borrowing costs, Greenwood said.
Xcel, as part of the settlement, can adjust its cost for purchased electricity every quarter rather than once a year.
The settlement also allows the company to pass on $39 million in costs associated with reserving electrical generation capacity with outside providers.
Consumers expressed resignation and disappointment when informed that higher rates were on the way in January.
“As a single-woman homeowner, I’m not pleased at all,” said Gwen Lavenue, a Broomfield resident.
Lavenue, a hospitality industry worker, said the increases chafe her more than most people because she has seen the company throw expensive parties for its employees.
Denver resident Michelle Johnson said she is resigned to rising energy costs.
“I have come to expect consistent rate hikes,” she said. “I shut off the lights and keep the heat low.”
The typical household will see its monthly electric bill rise 7.7 percent, from $56.18 to $60.52, said Xcel spokesman Tom Henley.
The typical small-business customer will see monthly bills rise, on average, from $90.01 to $96.90.
Xcel counts 1.2 million gas customers and 1.3 million electric customers in the state, Henley said.
If natural-gas costs continue to run below year-ago levels, then the 900,000 customers who receive both gas and electricity from the company may not notice the rate hike.
The average natural-gas bill for Xcel residential customers is expected to drop to $81.47 this November from $125.42 in November last year, Henley said.
Under the settlement, Xcel will also be allowed to charge a 1 percent late fee on overdue bills of $50 or more.
The late fee will be imposed if a bill isn’t paid before the next bill arrives.
The current $10 fee for returned checks will increase to $15.
The PUC, scheduled to start hearings Monday morning on the Xcel rate case, will probably shift its focus to the settlement agreement, said PUC spokesman Terry Bote.
Staff writer Aldo Svaldi can be reached at 303-954-1410 or asvaldi@denverpost.com.
