Xcel Energy has proposed a 38-cents-per- month increase in natural-gas bills to fund a $14.2 million, 30-month financial-assistance program for low-income customers.
The pilot program will target about 7,500 customers, and much of the money would initially be used to pay overdue bills, according to documents filed with regulators.
Customers whose natural-gas expenses represent more than 5 percent of their household income would be eligible to receive financial assistance to lower their “energy burden” ratio to 5 percent. Customers who have a burden ratio of less than 5 percent may still qualify to have their unpaid bills forgiven.
The legislature passed a bill last year that gave the Colorado Public Utilities Commission authority to consider and grant preferential treatment for low-income households in rate cases. Xcel proposed the low-income program in April as part of an ongoing rate case filed in 2006.
Xcel spokesman Tom Henley said the program was spurred by “strong recommendation” from the state legislature. However, a company manager told regulators earlier this year that existing support for low-income customers is not sufficient.
“Based on the level of past-due amounts for our low-income residential gas customer segment, additional assistance and tools appear to be needed to help these low-income customers pay their energy bills,” Patrick Boland, Xcel’s manager of credit policy and compliance, testified as part of the rate case.
In 2007, Xcel had 14,000 low-income customers who owed a total of $11.7 million. The company wrote off nearly 2,300 low-income customer accounts totaling $1.5 million in bad debt. The program is expected to lower Xcel’s low-income write-offs.
Xcel is also seeking to collect more of its natural-gas-distribution costs from a fixed charge rather than basing it on consumption. The proposal would help Xcel recover all of its costs even if consumers cut their natural-gas usage. The PUC is reviewing the proposal this week, and a decision is expected this fall, said spokesman Terry Bote.
