Provided by Xcel Energy
Xcel Energy is seeking a base rate increase for Texas retail customers to support investments that improve electric reliability and capacity while providing area communities an economic boost from dozens of regional construction projects.
Between July 2012 and June 2013, Xcel Energy has invested more than $386 million on new and upgraded power lines, substations and generating units in and around communities across the region in response to continued growth in electricity demand, said David Hudson, president and CEO of Southwestern Public Service Company, an Xcel Energy company.
"Our customers and community partners expect us to invest wisely to meet this growing demand and provide the reliable service necessary to sustain economic growth," Hudson said. "This case is largely driven by these investments, which provide great value to our customers over the long term."
These investments not only have boosted the value of power generation and delivery systems, they also support job growth in area communities, Hudson added.
A proposal presented today to the 80 Texas towns and cities served by the company, and to the Public Utility Commission of Texas (PUCT), seeks to increase revenue by a net of $52.7 million per year. Impacts on each customer class vary, but for residential customers using 1,000 kilowatt-hours per month, the increase would average $10.94 per month, or 10.5 percent, with fuel costs factored in. For all customer classes combined, the total increase is 5.8 percent accounting for base rates and fuel costs.
Xcel Energy has asked that the increase be approved in two steps. Interim rates would go into effect March 1 that would increase a 1,000 kilowatt-hour monthly residential bill by $5.07 per month, or 4.9 percent, with fuel costs factored in. The remainder of the increase would then be added in July.
Another factor affecting pricing is the gradual departure of wholesale customers such as rural cooperatives and municipal utilities. As these customers leave the system, remaining customers bear a larger portion of costs to supply power. However, the departure of wholesale customers also benefits retail customers because it frees up more resources for future retail growth.
A separate charge on customer bills known as the transmission cost recovery factor will go away once new rates go into effect.
Even with higher base rates, Xcel Energy continues to rank as one of the lowestcost electricity providers in Texas, Hudson said. A key strategy in holding down rising costs is to manage fuel costs, which can account for up to half a typical residential bill. The company maintains a diverse mix of generating resources, and new wind energy acquisitions will save an estimated $590 million in fuel costs over the next 20 years.
Customers can realize further savings by taking advantage of energy-efficiency programs and tips offered by Xcel Energy that can reduce bills by as much as 10 percent or more. Information on energy efficiency tips and programs can be found at www.xcelenergy.com on the "Save Money & Energy" tab.