Wholesale natural gas prices continue to decline, which means Xcel Energy-Colorado customers will see lower bills in March.
The utility has submitted a price fuel adjustment to state regulators to reflect the lower prices. Xcel said the average residential monthly bill will drop 11.50%, or $11.60 from February.
The average bill for small businesses will decrease 13.15%, or $57.15 compared to February.
The lower-than-expected bills will provide some relief for Coloradans whose heat bills have shot up because of high wholesale natural gas prices and cold weather. The war in Ukraine also helped drive up fuel costs heading into winter.
Utility customers have flooded state regulators and the Colorado Office of the Utility Consumer Advocate with complaints. The Colorado Low-Income Energy Assistance Program and the nonprofit Energy Outreach Colorado have been swamped with applications for help to cover heat bills.
Last week, Gov. Jared Polis sent a letter directing state agencies to come up with immediate and longer-term solutions to help blunt the impact of gas price swings on utility customers.
Eric Blank, chairman of the Colorado Public Utilities Commission, said in a meeting Wednesday that regulators nationwide are reporting that utility customers are struggling because of historically high natural gas prices. In a hearing in January, the PUC staff said typical gas bills in the state were about 75% higher in December than in December 2021.
However, wholesale prices have started to decline. Xcel Energy and other regulated utilities pass through fuel price increases to customers without a markup. They also adjust rates when prices drop.
Xcel Energy said in a statement the decrease that will take effect March 1 will be the company’s third recent decrease based on what it pays for natural gas.
Electric rates will also be lower than expected, with average residential bills dropping 2.34%, or $2.08 for the month, and average small business bills decreasing 2.43%, or $3.16 a month.
Lower gas prices affect electric bills because some of the power to generate electricity comes from natural gas.
Xcel has 1.5 million electric customers and 1.4 million natural gas customers in Colorado, with substantial overlap between the two. A utility’s base rate, which includes capital and operating expenses, and surcharges for specific programs also affect customers’ bills.
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