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Low natural gas costs and other reductions should lead to overall bills consistent with 2010-2011 charges
DENVER – Xcel Energy announced today a settlement agreement on the company’s 2011 electric rate case. The agreement calls for a multi-year phase in of increases annually through 2014.
If approved by the Colorado Public Utilities Commission (CPUC), the agreement would increase base rates by $114 million over the three-year period covered by the settlement. However, the company expects overall electric rates, incorporating the increases spelled out in the agreement, to remain below or very near charges to customers in 2010 and 2011 because of lower natural gas costs and other reductions.
“This is a good result for customers,” said David Eves, president and CEO of Public Service Co. of Colorado, an Xcel Energy company. “The rate increases called for under the settlement are moderate and provide for additional certainty on electric bills. When combined with forecasted lower natural gas prices, we expect to be able to more than offset base rate increases with savings. The settlement also helps the company, which is continuing to invest significantly in the infrastructure needed to improve reliability, to manage its business over a longer timeframe.”
The increase will be recovered by applying the same percentage increase to each customer’s base rates. The 2012 impact on the monthly bill of a typical residential customer would be approximately $1.68 per month. The additional impact per month would be $1.29 in 2013 and $0.73 in 2014, for a cumulative bill impact of about 5.53 percent over the three-year period. Total bill impacts and fuel savings will vary among types of customers, depending on their size, usage level and other factors.
“This multi-year plan gives customers rate stability at a time when the utility is making many investments to comply with the Clean Air Clean Jobs Act of 2010,” said Bill Levis, consumer counsel and director of the Office of Consumer Counsel (OCC). “Instead of surprising customers with unknown rate hikes each year, this plan smoothes some of those costs out over time.”
Rates from May through December this year will reflect a $73 million annual increase in 2012. Rates will increase $16 million in 2013 and $25 million in 2014. In exchange, the company agrees not to make any additional requests to raise base rates until 2015. Rates could still change as they do now, however, for certain periodic adjustments or “riders,” such as those for fuel costs or purchased power. The plan also includes an earnings test, which provides for refunds to customers in the event that certain earnings thresholds are met, which could occur if the company sells significantly more electricity than it has historically.
In January 2012, the company implemented rate reductions that will reduce purchased capacity costs in 2012 by about $26 million. The company is also projecting fuel cost reductions from 2011 to 2012 of about $83 million. These two reductions more than offset the increase in base rates from May through December 2012.
Parties to the settlement agreement include Xcel Energy; the Staff of the CPUC; the OCC; CF&I Steel, L.P. d/b/a Evraz Rocky Mountain Steel; Climax Molybdenum Company; Colorado Energy Consumers; the Kroger Co. on behalf of its King Soopers and City Market Divisions; the Federal Executive Agencies; Energy Outreach Colorado; and the American Association of Retired Persons.
Additional information on the electric rate case settlement announced today is available on the Xcel Energy website, xcelenergy.com. The website also includes electric energy savings and safety tips. Customers who anticipate or are having a difficult time paying their bill should call Xcel Energy at 1-800-895-4999.
Xcel Energy (NYSE: XEL) is a major U.S. electricity and natural gas company with regulated operations in eight Western and Midwestern states. Xcel Energy provides a comprehensive portfolio of energy-related products and services to 3.4 million electricity customers and 1.9 million natural gas customers through its regulated operating companies. Company headquarters are located in Minneapolis.