Xcel Energy, Colorado’s largest electric utility, has asked state regulators for an increase of $355.5 million to its rate base, which would boost the average residential electric bill by nearly 10% per month.
Xcel filed the proposal Friday with the Colorado Public Utilities Commission, which will take testimony from the company and various intervening parties and hold a public hearing. If approved, the increase would take effect in September 2026.
Xcel Energy-Colorado President Robert Kenney said the utility’s last increase to the rate base was in 2022. The average residential bill rose by 3.2%, according to an Xcel statement after an agreement was reached with all the parties
The rate base is a utility’s investments to provide services and on which it’s allowed to earn a regulated rate of return.
“This rate case is to recover costs associated with investments that we’ve made over the last three years,” Kenney said.
The Utility Consumer Advocate, or UCA, which represents the public before state regulators, said the proposed increase is “too big of an increase.”
“It’s an especially large increase given the context of the economic times,” said Joseph Pereira, UCA deputy director.
The increase is largely related to Xcel’s expanded capital spending on distribution, transmission and generation, Pereira said.
“It’s unclear to parties in the UCA that the company is prioritizing investments that are the biggest bang for the buck, that increase reliability and that adopt an intelligent approach to how they’re using the grid,” Pereira said. “It still appears that the company is using a crude blanket approach to replacing and investing in new infrastructure.”
Kenney said Xcel has invested in safety, reliability, making the system more resilient, electrifying transportation and buildings, meeting increased demands from growth and taking steps to significantly reduce carbon emissions.
Xcel has said it has reduced carbon emissions by 57%. The state’s target is to cut greenhouse gas emissions by 80% from 2005 levels by 2030.
Xcel is upgrading its electric grid with a $1.7 billion transmission project. The Colorado Power Pathway includes transmission lines, power substations and other equipment stretching over 12 counties, mostly in eastern Colorado.
“We’ve added a tremendous amount of renewable energy over the last several years,” Kenney said. “And we’ve done all of this while keeping bills as low as possible.”
Xcel has faced criticism from the Office of the Utility Consumer Advocate, or UCA, which represents the public before state regulators, and customers over the past few years for what the UCA has called “a pancaking of rate increases.”
The criticism of Xcel and other regulated utilities heated up in 2023 after a cold winter and high natural gas prices sent costs soaring statewide. A legislative committee held hearings and approved a bill intended to protect customers against future price shocks and level what some see as a playing field tilted in the utilities’ favor.
Kenney said Xcel Energy’s rates have been well below state and national averages for approximately the last 10 years. But, he added, the company recognizes that some customers face challenges to paying their bills. He said Xcel is expanding its programs to help people struggling to pay their bills and adding $10 million in assistance. People can also call 800-895-4999.
In the past, Xcel required people to show proof of income to apply for help, but now will accept their statements of need. And those receiving other aid, such as Supplemental Nutrition Assistance Program, or SNAP, will be automatically eligible.
Under Xcel’s proposed rate hike, the average monthly residential bill would rise 9.9%; small commercial bills would go up 9.3%-9.4% per month; and large commercial monthly bills would increase 7.3%-8.6%.
Get more business news by signing up for our Economy Now newsletter.