News Releases

Xcel Energy to reduce charges to some 280 Hobbs customers with estimated summer bills

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

HOBBS, N.M. - Xcel Energy will reduce the total amounts billed for electric service this past summer to about 280 Hobbs customers whose meter readings inadvertently were not “loaded” into the company’s billing system since April, and whose monthly electricity bills have been based on estimated consumption.

The reductions, suggested by the New Mexico Public Regulation Commission staff and ordered by the Commission, will appear as credits on the customers’ October or November bills.  The credits will reflect the lowest “fuel-cost adjustment factor” in effect between April and September.  For residential customers the credits typically will range to about $20--depending on the amount of electricity used.

Customers who consumed large amounts of energy, for instance businesses and industrial customers, will see larger credits. Only the estimated 280 of some 20,600 customers Xcel Energy serves in Hobbs will see credits.  Xcel Energy is communicating with affected customers directly.

The price-reduction plan is among several “temporary billing measures” the Commission approved in a “show cause” order to Xcel Energy Thursday. The order relates to both the estimated 280 Hobbs customers and about 9,100 customers in the Carlsbad area.

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 has suspended disconnecting electric service for non-payment of bills by customers on the affected meter-reading route in Hobbs and in the Carlsbad area. The NMPRC order requires there be no disconnections for non-payment in the affected areas through Oct. 31.

Xcel Energy reported to the NMPRC in early September meter reading problems in Carlsbad and the computer-entry problems for the group of Hobbs customers. The company said it had over-relied on computer-generated estimates of consumption, and that in many cases the estimated bills reflected under-estimated consumption.  The company said outgoing “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.