Xcel Customer Accounts To Increase As Regulators Refund $500M Due To Hurricane

State regulators on Wednesday voted to allow Xcel Energy-Colorado to recover hundreds of millions of dollars from customers in winter 2021 storm-related costs, but wrested $8 million from a $508 million requested after criticizing the utility’s actions before and during cold weather time.

Xcel Energy customers will eventually see a timestamp on their monthly electricity and natural gas bills to pay the bill.

The costs stem from a February 2021 hurricane that brought record low temperatures and soaring natural gas prices from Texas through the Rocky Mountains to the Midwest. Colorado hasn’t experienced the massive power outages that other regions have experienced, but Xcel Energy and other utilities have seen natural gas prices skyrocket in a fight to conserve heat and light.

The Colorado Public Utilities Commission launched an investigation into the response of utilities to the hurricane. A May 11 decision by a state ALJ noted problems with Xcel Energy’s response to the storm, but recommended approval of a settlement agreement allowing the company to charge customers $508 million in reimbursement.

“It goes without saying that no one is happy to be here today and talk about $550 million in gas spending in just a few days,” said Megan Gilman, one of the three members of the commission.

Xcel Energy agreed not to pass on some costs, including interest on loans it took out to cover the costs of the hurricane.

During the February 13–17, 2021 hurricane, natural gas prices ranged from $150 to $190/MMBtu, many times over $2 to $3/MMBtu just before the onset of cold weather and ice.

Regulated utilities such as Xcel Energy are eligible for reimbursement for the provision of services. The PUC believes this is a so-called “prudence standard” that tests whether a company’s actions were reasonable given what it knew or should have known at the time.

For the most part, the ALJ decided that Xcel Energy’s actions were prudent. But the decision drew criticism from the company for not informing customers of the terms so they could cut back on their usage to cut costs.

The decision also states that Xcel Energy’s treatment of customers who had agreed in advance to reduce electricity and gas consumption under extreme circumstances was ineffective. Some of the customers who receive lower rates for agreeing to service interruptions to help the company conserve electricity have been unable to do so.

The commissioners expressed concern about the same issues and, they said, the inability to efficiently use power plants that can run on both oil and natural gas. The utility’s Colorado consumer protection office argued that the utility did not properly plan for the use of oil so as not to buy so much natural gas.

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