State regulators Monday approved an electric rate hike that will raise utility bills for Xcel Energy residential customers in Colorado an average of $4.34 a month.
The utility also will be able to charge late fees on unpaid utility bills for the first time.
The rate increase will go into effect Jan. 1.
Residential electric rates will rise from an average of $56.18 a month to $60.52.
Small-business customers will see an average increase of $6.89 a month, with monthly rates climbing from $90.01 to $96.90.
The three-member Public Utilities Commission agreed to terms hammered out in closed-door negotiations between Xcel, the PUC staff and a consumer-protection agency, the Office of Consumer Counsel.
The agreement approved by the commission calls for Xcel to increase base electric rates by $107 million a year – $71 million less than the $178 million the utility originally asked for. Xcel, which provides electric service to 1.3 million customers in Colorado, also can collect $39 million a year to cover costs of purchasing power from independent generators.
The commission allowed Xcel to charge residential customers a 1 percent late fee on electric and natural-gas bills greater than $50 that are not paid by the billing date. A customer can request forgiveness of the late fee once in a 12-month period. Xcel provides gas service to 1.2 million customers in the state.
“I do think that every party has compromised,” PUC chairman Gregory Sopkin said. “This is $4.34 a month. I know that is painful for a lot of people, but I also would point out that rates in Colorado are below the national average.”
He said a smaller rate increase could damage Xcel’s credit rating and increase its borrowing costs.
The utility needs the additional revenues to invest in transmission and generation capacity, he said. Xcel has invested more than $1 billion in Colorado infrastructure since 2001, the last time electric rates were increased.
Earlier this month, environmental and consumer groups packed a commission hearing room to oppose the rate increase. Some objected to Xcel’s decision to build a $1.3 billion coal- burning power plant in Pueblo.
Environmentalists said the new Pueblo coal-burning plant exposes Xcel and its ratepayers to potentially high costs in the future from coal prices and possible taxes on carbon emissions.
The project broke ground last year and is scheduled for completion in 2009. The rate settlement allows Xcel to collect $24.4 million from customers over the next two years to help finance the plant’s construction.
Tom Konrad, who represented Ratepayers United of Colorado in the rate case, said the deal doesn’t provide incentives for Xcel to increase the amount of renewable energy it uses.
“The ratepayers pay costs that aren’t on the books,” he said of the health effects and environmental damage that he said are caused by emissions from coal-fired plants.
Staff writer Tom McGhee can be reached at 303-820-1671 or tmcghee@denverpost.com.
