Xcel Energy estimates it will suffer at least a $50 million revenue gap if an interim electricity-rate increase is not approved by the Colorado Public Utilities Commission.
The current rates “are insufficient to cover its cost of providing electric service to its retail customers during 2012,” Xcel said Wednesday in a commission filing.
Xcel — Colorado’s largest utility, with 1.4 million customers — is seeking an interim rate increase of $100 million — pending a full review of a $142 million rate hike.
Under a 2010 law, the utilities commission can adopt an interim rate without a public hearing.
The PUC is slated to make a decision on an interim rate by Jan. 20.
The interim increase would start this month and add about $2 to the average residential bill. The full rate request would increase the average residential bill by $4, raising it to $71 a month.
The rate increase would cover a range of costs, including salaries and pensions, upgrading power lines, closing old coal plants and absorbing costs related to an expired wholesale contract to sell electricity.
During the seven months it will take to review the full rate case, Xcel said in its filing, the company will incur a $50 million revenue deficiency.
“Failure to recover legitimate costs to provide service can have adverse financial impacts on customers, especially through higher cost of debt,” Xcel spokesman Mark Stutz said in a statement.
Xcel’s filing Wednesday was in response to opponents — including consumer advocates, senior citizens and major business customers — who oppose the interim increase.
Xcel has failed to prove the financial necessity of the increase, and in any case, the figure is too high, the opponents said in filings made last week. The group, which includes the state Office of Consumer Counsel, noted that in the past, interim rates had been granted, but only when there was clear financial hardship.
Xcel countered in its filing that the difference is there was no consumer safeguard in the past, so the commission used a tougher standard.
Under a section of the Clean Air-Clean Jobs Act, the PUC is given the power to more broadly grant interim rates, with a utility having to show it would be “adversely affected.”
The law provides for customers getting a refund if the final rate is lower than the interim.
The PUC staff also opposed the interim rate request and challenged the $100 million figure, saying that no more than $52 million should be considered in the interim increase.
Xcel said in its filing that the PUC should consider at least an $80 million rate hike.
Mark Jaffe: 303-954-1912 or mjaffe@denverpost.com
