Even before Front Range temperatures have bottomed out in the single digits amid the current wave of intense cold and promising snow, Xcel Energy is recalculating your utility bill. Guess what? It’s not going down.
Xcel warned its 1.6 million Colorado customers Friday afternoon that the cold wave in the Southwest had already spiked the for-profit company’s costs for wholesale natural gas, and that consumers will face up to a dollar a month extra on their bills for the rest of the year just because of this storm.
That will come on top of more than a half-billion dollars in electric and natural gas rate increases Xcel has requested from state regulators to catch up on infrastructure and renewable energy costs.
Xcel told customers Friday that they could try to save money on their bills by lowering thermostats over the next few days, opening blinds to let day sun in and shutting them at night to close off drafts, and more. But the utility also noted the sudden jump in wholesale gas it must buy to deliver directly to customers for furnaces, or to burn in its power generating stations.
Extreme cold temperatures can also interfere in supply, the production and distribution of natural gas from wellheads, Xcel noted, as it did during the notorious Winter Storm Uri freeze-out in Texas in 2021. Colorado Xcel customers wound up paying hundreds of dollars each in natural gas surcharges from that storm, over two years, prompting government reviews and consumer backlash.
Although not as dire so far, Xcel said similar signs are visible this week.
“We wanted to let you know about a short-term increase in the price of wholesale natural gas we purchase from our suppliers. We pass along the wholesale cost of natural gas to customers, and we do not make a profit on it. Customer bill impacts from the higher natural gas prices over the next few days are not expected to be significant and will add less than a dollar per month to the average residential customer’s bill over the coming year,” the company said.
Indeed, federal price trackers show the price of a standard unit of natural gas at a key Louisiana distribution hub shooting from about $3 in early January to above $8 this week.
The surcharges Xcel will seek for this storm will come on top of two recent major company requests for longer-term cost increases.
In November, Xcel asked for a 9% increase in electricity rates, about $10 on the average monthly residential bill, to raise $356 million for infrastructure investments, operating costs and lost revenue sources during the energy transition.
In late December, Xcel asked for a natural gas price increase where average residential customers would see their monthly gas bill rise 11.4% to $74.41, beginning this October, the start of the next heating season. That will raise a total of $190 million, the company told regulators.
The rapid-fire increases, coming on top of years of other utility price jumps, were “out of touch” with consumers’ inflation pain, the Colorado Office of the Utility Consumer Advocate said at the time.
The current storm spike in natural gas prices will show up in customer bills this spring, when Xcel Energy files its quarterly “Electric Commodity Adjustment,” which passes all fuel costs directly to customers.