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Carlsbad, N.M.: Xcel Energy to reduce estimated bills, allow up to six months for payment, stop disconnecting for non-payment

Regulators approve plan to use each billing period’s lowest fuel costs to discount bills

CARLSBAD, N.M. - Xcel Energy has agreed to reduce the total amounts due on about 9,100 electricity bills sent to Carlsbad-area customers whose meters were not actually read and whose monthly electricity consumption and billings were estimated one or more times this past summer.

The reductions, originally suggested in a New Mexico Public Regulation Commission staff petition, will appear as credits on the next bills the customers receive.  The credits will reflect the lowest “fuel-cost adjustment factor” in effect during an estimated-consumption billing period.  For residential customers the credits typically will range from about $5 to $20--depending on the amount of electricity used, when the consumption occurred, and the number of estimated bills received (different customers received one, two, three, four, and in one instance, five estimated bills).

Customers who consumed large amounts of energy, for instance businesses and industrial customers, will see larger credits.

The price-reduction plan is among several “temporary billing measures” the Commission approved in a “show cause” order to Xcel Energy this morning.

The temporary billing measures also require Xcel Energy to allow any of the customers who received bills based on estimates of consumption to use free deferred payment plans for up to six months to make full payment for the electricity used during the summer. Residential customers can set up the plans by calling 1-800-895-4999.

The company recently suspended disconnecting electric service in the Carlsbad area for non-payment of bills. The NMPRC order requires there be no issuance of notices of disconnection of service to those receiving estimated bills, and no disconnections for non-payment in the area through Oct. 31.

Xcel Energy apologized to Carlsbad-area customers and reported to the NMPRC in early September that in May several meter readers in Carlsbad left the company, that it had too few meter readers in the Carlsbad area in May, June and July, and had over-relied on computer-generated estimates of consumption.  In many cases, the estimated bills reflected under-estimated consumption.  The company said September “true-up” billings therefore were unusually high, and that because fuel-cost adjustments have escalated in each of the metering-and-billing periods since June, customers were concerned especially about the calculation of the “true-up.”

To, “ensure that no customer is inadvertently charged more for fuel and purchased power costs than the customer might otherwise have incurred,” the order requires Xcel Energy to recalculate and reduce estimate-affected bills by pricing each kilowatt-hour consumed during a billing period at the lowest fuel-cost adjustment factor in effect during the period when consumption was estimated.

The order ensures affected customers in almost every instance will be under-billed for the actual fuel costs Xcel Energy incurred to generate the electricity they used.  It requires Xcel Energy to calculate and report the fuel costs “foregone as a result of this interim relief.”  Xcel Energy expects to make that report within weeks.  The order also specifically prohibits Xcel Energy from recouping the under-billings from customers.

Too, the order initiates an investigation into the company’s estimated-billing practices, to determine if corrective steps are needed.

Here’s an example of how Xcel Energy will calculate a fuel-cost credit: A bill for 2,180 kilowatt-hours used by a residential customer whose billing period is from July 15 to Aug. 15 normally would be calculated using both this year’s August fuel-cost adjustment factor (FCA) of $0.008003, and, for the billing period ending Sept. 15, the significantly higher September FCA of $0.015357.  Under the NMPRC staff’s plan, all of the 2,180 kWh used will be billed at the lower, August FCA of $0.008003.  The difference between the normal billing and the plan results in a credit of $16.03.