Xcel Energy Thursday filed for state approval of a settlement with consumer groups in its ongoing rate case before the Colorado Public Utilities Commission (PUC), knocking nearly $44 million from its rate-increase request.
In a settlement with Energy Outreach Colorado and the Colorado Energy Consumers, Xcel agreed to only seek an annual electric rate increase of $136 million, mostly to cover more than $1.7 billion the company invested in the new Comanche 3 coal-fired power plant near Pueblo, two new gas-fired power plants at Fort St. Vrain, a smart-grid project in Boulder and other power line and distribution expenses.
If approved by the PUC at final deliberations set for Dec. 3, the average residential customer will see an increase of $4.66 a month beginning Jan. 1, and small business customers will see an increase of $7.16 a month. Xcel had originally sought a nearly $180 million increase, which would have upped typical residential rates by nearly $5 a month.
This settlement is similar one last summer when Xcel reduced its rate-increase request from nearly $160 million to $112 million, but critics at the time claimed even that amount was too much given the company’s ill-advised investment in coal, which may spike in price if the Obama administration successfully pushes through climate change legislation.
Xcel, however, defends the state-of-the-art Comanche 3 project, which is set to come on line by the end of the year.
“We see this as a significant step to continuing our ability to provide reliable, reasonably priced electric service,” said Tim Taylor, CEO of Public Service Co. of Colorado, an Xcel Energy company. “Comanche 3 is a great investment for customers. Being able to use low-cost coal to provide base-load power is important for our Colorado customers. It also allows us to take the next step and begin retiring some of our older, less efficient coal-fired power plants to continue reducing our carbon dioxide emissions.”
Xcel has also taken heat for trying to pass on questionable travel and entertainment expenses to ratepayers – a move it quickly backpedaled on when consumer groups brought the charges to the attention of the PUC.