Colorado businesses, consumer and senior citizen advocates and utility regulators are opposing Xcel Energy’s proposed $100 million interim electricity rate increase saying the company hasn’t proved it needs such a hike.
Xcel, the state’s largest utility with 1.3 million customers, is seeking a $142 million rate increase — a process that will take months.
But citing a 2010 law, Xcel wants the Colorado Public Utilities Commission to rule in January on an interim hike without a public hearing.
“The interim increase just isn’t justified,” said Steve Merrill, an advocate for Colorado AARP, the senior citizens organization. “This shouldn’t be put on the backs of ratepayers without a full review.”
Xcel officials say that the delay in awarding rate increases, know as regulatory lag, makes it difficult for the company to get the full return on its investments and that will impair its financial standing.
“We have not yet had time to digest the various points made, nor have we had time to research the additional issues that have been raised,” Mark Stutz, an Xcel spokesman said in a statement.
Xcel will respond to the challenges in a filing with the PUC on Jan. 5, Stutz said.
Xcel’s two largest customers — Rocky Mountain Steel and Climax Molybdenum Co. — said in a joint filing with the PUC that the utility had failed to show that it would be financially hurt by the delay.
“Because utilities are monopolies within their certificated service territories, the Commission’s duty is to protect customers from excessive rates,” the two companies said.
The Colorado Office of Consumer Counsel, which represents residential and small business customers in rate cases, also opposed the interim rate increase.
The counsel said that if the commission feels it needs to give Xcel an interim increase, it should be the minimum amount necessary to give the company its allowed return.
The utilities commission staff opposed the interim increase and challenged the $100 million figure.
The staff noted that the interim request is 70 percent of the total rate request and historically on average the commission has granted about half of amount requested in electricity rate increases.
The staff said that the commission should consider a rate increase of no more than $57.1 million.
Karen Hyde, vice president for rates in Xcel’s Colorado subsidiary, in testimony to the commission said if the final rate increase was less than $100 million the company would issue credits to ratepayers.
A refund in the spring after struggling to pay bills through the winter “does not adequately protect consumers,” AARP argued in its filing.
Xcel has one supporter for the interim rate increase, Black Hills Energy, the investor-owned utility serving Pueblo and southeastern Colorado.
Black Hills said that if the PUC approved the Xcel interim rate request, it too would file for interim rate hikes.
Mark Jaffe: 303-954-1912 or MJaffe@denverpost.com
