Xcel Energy is no longer laying the groundwork to hike rates for its 1.4 million natural gas customers in Colorado.
Executives with the state’s largest utility have hinted at the possibility of another gas rate hike for months. In an emailed statement sent Tuesday, Michelle Aguayo, a spokesperson for the company, said it’s now prioritizing other proposals headed for state regulators.
“Our need to file rate review is based on a number of different factors and we work with stakeholders leading up to any filing. At this time we are not taking any of these steps,” Aguayo said.
Aguayo added the company is “sensitive to current economic conditions.”
The shift comes amid growing concerns over sky-high energy costs. Over the last few months, many Xcel Energy customers in Colorado have seen their monthly energy bills double or triple compared to a year earlier, prompting calls for action from Gov. Jared Polis and state legislative leaders.
One reason for the increase is a steady rise in base rates, which is how Xcel Energy recoups money for infrastructure projects and earns a return for its investors. The company earned a record $1.74 billion in profits for shareholders in 2022 but has pinned bill increases on the rising cost of natural gas. Federal data show those prices surged to a 14-year high last summer.
Colorado utility regulators approved a $64 million gas rate hike last fall. That amount was far less than the company’s original proposal to charge customers an extra $174 million through 2024.
After the decision, Ben Frenzel, the CEO of Minneapolis-based Xcel Energy, told stock analysts in October the company would “likely have to go back” to the Colorado Public Utilities Commission with another request in 2023.
During a press conference on rising energy prices last week, Robert Kenney, the president of Xcel Energy Colorado, confirmed there was a “possibility” the company would seek another rate increase this year.
The company’s recent track record in Minnesota, its other major service territory, could be leading executives to rethink those plans. A recent request for a $122 million rate increase met fierce resistance from ratepayers and state agencies concerned about rising energy costs. In the end, the company dropped the plan entirely last December, opting for a complicated alternative to give the company more flexibility over its own budgeting process. State utility regulators quickly approved.
While rising base rates have played a role in the bill increases, a recent state economic analysis found the recent spike in natural gas commodity prices has, in fact, played the most significant role.
That price surge has subsided over the last few months, allowing Xcel Energy to propose three plans to cut prices for its customers since Dec. 1. State regulators have signed off on two of those adjustments.
The company announced its latest price cut on Tuesday, which it says will decrease a Colorado household’s average monthly gas bill by $11.60 between February and March.
Cindy Schonhaut, who advocates for ratepayers as the director of the Colorado Office of the Utility Consumer Advocate, said those decreases offer necessary relief. Nevertheless, they depend on unpredictable fluctuations in international energy markets.
Her office has pushed against rate increases to lock in long-term savings. While she’d prefer if the company did not seek a gas rate hike this year, she said its statements don’t explicitly rule it out.
“They’ve said at this time were not taking any of the necessary steps. That doesn’t mean they’re not going to file a new gas rate case in 2023,” Schonhaut said.