DENVER (KDVR) — In the second meeting of Colorado’s Joint Select Committee on Rising Utility Rates, lawmakers pressed utility companies for answers about rates, profits and expenses.
Representatives from Xcel Energy and Black Hills Energy agreed with previous reports from the Public Utilities Commission that their customers have experienced higher-than-usual bills due to high natural gas prices during an unusually cold winter.
“To heat a house when it is 30 degrees takes less energy than it does when it’s 10 degrees, so just the difference in cold weather has had a major impact on usage,” said Nick Wagner, Black Hills Energy vice president of Colorado regulatory affairs.
Despite lawmakers, the PUC and Colorado’s Office of the Utility Consumer Advocate reporting unprecedented complaints from constituents saying their bills are double or triple, Xcel said its customers are paying the lowest electricity bills among the country’s 50 largest investor-owned utility companies.
“Even with the recent price spikes that we’ve seen and with the addition of the renewables and everything else that we’re seeing, we’re still able to maintain some of the lowest if not the lowest bills in the United States,” said Robert Kenney, president of Public Service Company (Xcel Energy).
Can Colorado help control high utility bills?
Lawmakers on the committee are trying to dig into the business practices of Colorado’s utility companies in an attempt to understand why bills have been so high and whether the legislature needs to consider changes to protect customers in the future.
At the root of the investigation is this question asked by Senate President and Committee Chair Steve Fenberg, D-Boulder: “Why are we simultaneously living in a time where people are struggling the most to pay their bill and at the same time the utilities are making the most profits they’ve ever made?”
“We’re living in a high inflationary period,” Kenney said. “We’re seeing increased costs with respect to groceries and gasoline and everything else, and so I think that’s part of the reason why it becomes very noteworthy and newsworthy.”
Xcel and Black Hills do not make profits from higher natural gas prices, as the wholesale cost is passed directly on to the customer. Both Kenney and Wagner said they attributed higher profits to Colorado’s population growth and because their companies are attractive to investors.
“If we weren’t an attractive place for capital to go and if we weren’t able to raise the capital that we need, two things would happen. Mr. Wagner alluded to one of them: We would not be able to run a safe, reliable system. We also wouldn’t be able to make the investments that we’ve made in renewable infrastructure,” Kenney said.
Lawmakers also questioned the amount of money utility companies spend on legal and consultant fees to present proposed rate increases in front of the PUC.
“I would estimate it can be anywhere on the low side less than a million dollars. It could be as much as $2 million,” Kenney said. “That might be for experts that we hire, whether that’s economists, engineers and then legal fees.”
Fenberg raised concerns over a 2019 rate case in which Xcel spent $4.2 million fighting to get approval for its Time of Use program and $3.3 million for five other rate cases combined.
“We’re talking about $8 million to make the argument to raise people’s rates,” Fenberg said. “Something just feels wrong to me about that whole setup.”
“There’s this notion that we go in and ask for the sun, the moon and the stars,” Wagner said. “We don’t do that. We go in and look for and ask for what we think is appropriate to operate the business in a safe and reliable manner.”
How energy companies could control utility bills
When asked if there are areas utility companies can reign in spending, Kenney said, “Are there things that we could do to improve that process? I suspect there are.”
Sen. Barbara Kirkmeyer, R-Weld County, also pressed the utility companies, not only on their current practices but also on their ideas to protect customers from outrageous surprise utility bills in the future.
“You can’t control Mother Nature. You can’t control the natural gas prices. But we certainly can control multi-year plans, rate reform, stabilization. I want to know how we get to clean, affordable, reliable energy,” Kirkmeyer said.
Black Hills suggested adding storage facilities for natural gas in Colorado so utilities can purchase more when prices are lower. Xcel is pushing for a multi-year rate plan to make bills more predictable over the long term.
The committee will meet again Tuesday, March 20, to discuss concrete ideas to consider in the legislature.