The Colorado Public Commission on Wednesday told Xcel Energy to collect half a billion dollars from its customers to cover the cost of spiraling natural gas during the winter cold of 2021 – but the commissioners were not happy about it.
The commission last month lost $ 8 million in fines from its $ 509 million settlement figure recommended by an administrative law judge and bitterly criticized Xcel Energy’s handling of natural gas prices and its failure to warn consumers to curb their energy use.
Still, the commissioners said there is not much that can be done based on economics and regulations.
Cost recovery – over the next 30 months – will be split between electricity bills and gas bills, with the average residential electricity monthly bill increasing by 2% or about $ 1.43 and residential gas bills by $ 5.67 a month, an increase of 11%.
This follows a 6.4% increase in electricity bills in April, which equates to an average bill of $ 5.24 a month. Xcel Energy is seeking an $ 188 million increase in gas rates, which adds $ 8.14 to the average monthly residential gas bill in three years.
Commission Chairman Eric Blank said the facility enables the company to pass fuel costs unless proven that the company acted negligently.
“Customers need to win when utilities win, customers lose when utilities lose,” Blank said.
As part of the settlement, Xcel said it was looking to recoup some of the costs, debts and turnover of the total $ 104 million. Blank, however, called for that estimate to be increased.
“Going forward,” Commissioner John Gavan said, “we need to work on a different model.”
The state’s utility consumer advocates, representing both residential and small commercial clients, challenged the settlement by raising questions about Xcel Energy’s management during the winter storm that hit the Southwest.
The Freeze – Winter Storm Fury – ran from February 13 to 17, and resulted in an electric blackout in Texas as prices of natural gas rose 300% to $ 190 for 1 million British thermal units.
On the President’s Day weekend, Xcel Energy went to the wholesale market to buy additional natural gas over the holiday weekend, when prices fell by $ 188 per 1 million BTUs. The company is transferring these purchases to its customers.
UCA said the company failed to effectively use its dual-firmed production plants, saving millions of dollars by switching from high-priced gas to fuel oil.
“It seems the company has not adequately planned on how to use its bi-fuel plants,” Blank said. “It’s a non-standard practice.”
Xcel Energy’s program pays business customers who are willing to cut their electricity or gas service during peak hours or extreme events, according to the UCA, “an accident and almost a catastrophe.”
“This is just another example of the operational deficiencies in the company,” Gavan said. “This company needs to focus on operational excellence across the board.”
It turned out that some customers in the program could not turn off their service for safety reasons. Xcel Energy acknowledged that customers are “having problems” with schedules that could impede their energy use.
“The interruption service is poorly planned,” Blank said. “I’m very disturbed by this.”
Administrative law judge Melody Mirbaba, who oversaw the case, ruled that the company had “failed to act prudently” without delivering protection messages.
The company was criticized for failing to warn consumers to cut their energy consumption during the holiday weekend to conserve fuel during peak periods.
“It’s troubling how seriously the company has taken conservation messaging,” Commissioner Megan Gilman said.
Despite the missteps of Xcel Energy, Gilman said in his mid-year, costs are driven by natural gas markets. “It’s very difficult for a company to predict natural gas prices, though.”
Nevertheless, Gillman said a better plan is needed in an effort to mitigate market impacts, especially as the potential risk is now clear and the prospect of such a spike is no longer unexpected.
“It only works this time,” Gilman said. “So the company is on notice. We’re all on notice.”