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Electric bills may rise 7.7% in Jan.

Utility commission hears case Monday

Gargi Chakrabarty, Rocky Mountain News

Published October 21, 2006 at midnight

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Electric bills for Xcel Energy customers could jump 7.7 percent beginning next year.

Residential bills, on average, could climb $4.34, to $60.52 a month, and small-business bills by $6.89, to $96.90 a month.

Late customers with balances of $50 or more could pay a 1 percent late fee, or $6.05 on average per billing period, after 30 days from their due date. Xcel would donate the collections to Energy Outreach Colorado, a nonprofit agency that helps needy families pay utility bills.

Those are some highlights of a settlement filed late Friday by Xcel, state regulators and a handful of interested parties. For weeks, the parties negotiated - often contentiously - to find a compromise to Xcel's proposal to raise $209 million more from its electric customers.

The settlement reduces Xcel's original request by $65 million. If approved by the Colorado Public Utilities Commission, the settlement will take effect Jan. 1.

"This is what industry calls a 'black box' settlement," said Jim Greenwood, director of the Office of Consumer Counsel, which participated in the settlement. "What it means is that although the parties could agree on a revenue number, they disagreed on certain principles."

For example, the settlement reduces Xcel's rate of return to shareholders to 10.5 percent from the current 10.75 percent. The utility had asked for 11 percent.

It allows Xcel to collect $24.4 million in upfront financing costs for its $1.3 billion coal power plant in Pueblo.

The settlement lowers Xcel's request of a base rate increase by $65 million. Base rates are fixed costs customers pay each month, regardless of the amount of electricity they use. Xcel spends the money on power lines, substations and equipment to improve the reliability of electric service to its 1.3 million customers.

"This is an opportunity for us to begin to recover some of the $1 billion we paid in electrical infrastructure investments in the state since 2001," said Xcel spokesman Tom Henley.

Henley said the late fee and a $15 bounced check charge were "general reminders to allow customers to come current with their bills." Xcel will forgive customers once a year if asked to.

In past years, the utility has encountered a record number of delinquent customers and millions in unpaid bills.

Skip Arnold, executive director of Energy Outreach Colorado, said those provisions combined with a rate increase would be a double whammy for needy families this winter.

"Low-income seniors do not take medicine or eat in order to pay utility bills," Arnold said, adding that low-income assistance will be cut in half this winter. "It will be extraordinarily difficult for many."

Meanwhile, protesters plan to gather outside the PUC office Monday during a public hearing on the rate case.

Michael Huttner, executive director of advocacy group ProgressNowAction.org., criticized the settlement for being a "closed-door" agreement without any input from the general public. He said , a Web site where Xcel customers can lodge complaints, has received 5,000 responses so far.

"We are concerned that when the public hears about the back-room settlement, they might feel their input doesn't matter," Huttner said, "and they might not turn up at Monday's hearing."

Customer impact

What Xcel's settlement means for the average residential customer:

• Electric bills would jump $4.34 per month, down from Xcel's proposed $6.40 monthly increase.

• Xcel would impose a 1 percent late fee, or $6.05 on average per billing period. The late fee would be charged on balances of $50 or more after 30 days from due date.

• Customers of WindSource, a voluntary wind power program, would see lower bills; Xcel will file the reduced rate on Dec. 1.

• Charges for bad checks would increase to $15 from $10.

• The rate of return to Xcel shareholders would be lowered to 10.5 percent from the current 10.75 percent.Note: If The Plan Is Approved By The Colorado Public Utilities Commission, The Settlement Will Take Effect On Jan. 1.

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