Governor explodes on finding Xcel Energy can recoup $509 million in storm costs from customers

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An administrative law judge’s recommendation that Xcel Energy-Colorado be allowed to recover approximately $509 million from customers for the costs of a 2021 winter storm has led Governor Jared Polis to speak out against letting the utilities “balance their financial loss on the backs of consumers”.

The Colorado Public Utilities Commission will decide whether Xcel Energy, the state’s largest electric utility, can pass on some of the costs through a temporary monthly fee on customer bills. The company proposed to spread the payments over 24 months for electricity and 30 months for natural gas.

Utilities in Colorado and the region were hit by sky-high natural gas prices in mid-February 2021 when temperatures from Texas to Colorado and the Midwest dipped below freezing for several days. Gas prices have gone from 2 to 3 dollars per thermal unit to 150 to 190 dollars per thermal unit, according to the decision of administrative judge Melody Mirbaba.

Mirbaba said in the ruling, released Wednesday, that Xcel Energy tried to reduce the impact on ratepayers and took prudent action during the storm “even though the costs were extraordinary.”

However, Polis said he’s disappointed that Colorado consumers are seeing their bills go up. He said in a statement on Friday that additional costs could have been avoided with better early warnings of the coming storm and systems for people to voluntarily reduce their energy use.

“This decision recognizes that Xcel did not properly prepare or warn Coloradans ahead of the storm, but consumers are now literally being forced to pay the price,” Polis said.

If the PUC accepts the judge’s recommendation, residential electricity customers will see a monthly increase of $1.43 for 24 months and residential natural gas customers will see an increase of $5.67 per month for 30 months, said Xcel Energy spokeswoman Michelle Aguayo in an email.

“We believe the judge’s recommended decision to approve the proposal that minimizes the cost impact of Winter Storm Uri on our customers is reasonable, appropriate and in accordance with the law,” Aguayo said.

The company worked with a diverse group of stakeholders, including the governor’s office, on the plan to reduce the cost impacts of the historic storm, she added.

The Colorado Office of the Utility Consumer Advocate will submit its objections to the judge’s recommendation to the PUC, said Cindy Schonhaut, the director. It’s unclear when the PUC might make a decision.

Schonhaut’s office said the $509 million should be cut from $50 million to $150 million because Xcel Energy failed to take some of the steps it might have to prepare for the ice and snow storm. . This includes better communication with customers so they can reduce their electricity and gas consumption.

The bulk of the bad weather took place during the Presidents Day holiday weekend in 2021.

Xcel Energy has agreements with larger industrial customers that would allow the utility to shut down service in an emergency to save energy. But Schonhaut said some of the entities covered by the agreements could not have their service shut down because it could have threatened public safety.

The judge’s ruling noted some of what Schonhaut called reckless actions by Xcel Energy, but did not reduce the amount of money it could recover from customers.

The Consumer Advocate’s Office has criticized Xcel Energy’s recent rate filings. The utility said a $182 million power rate increase that took effect April 1 will help pay for previously approved projects as well as efforts to prevent wildfires caused by downed power lines. .

An agreement between the utility and some of the parties involved in the proceedings provides that Xcel Energy will waive certain expenses it may seek to recover, such as financing costs.

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