The Arctic blast that ripped through Colorado over the weekend and buried the mountains in feet of snow might be gone, but its effects will likely linger on utility bills for months.
Due to higher natural gas prices fueled by surging demand over a weekend of subzero temperatures, Xcel Energy plans to charge the average residential gas customers an additional $15 over 12 months, or roughly $1.25 per month. The average resident electric customers may see an increase of $1 spread over three months.
Michelle Aguayo, a spokesperson for Colorado’s largest utility, said the planned increases will compensate for a spike in wholesale natural gas prices, which led the company to spend more than usual for fuel delivered directly to customers and used for electricity generation over the weekend. State utility regulators must approve the rate adjustment before it takes effect.
“We pass the cost of fuel directly to customers without markup or profit,” Aguayo said.
While the cold weather led to a temporary increase in natural gas prices, overall energy costs remain lower due to high levels of fossil fuel production and a warmer-than-usual winter. That’s a stark contrast from last year when frigid weather and the war in Ukraine led to a prolonged increase in natural gas costs. As prices climbed, some Colorado residents reported their energy bills doubled or tripled compared to a year earlier.
Ahead of the recent cold snap, natural gas prices climbed to $3.31 per British thermal unit, according to the U.S. Energy Information Administration. Prices reached nearly triple those levels in the lead-up to last winter.
The overall impact on Xcel Energy customers also won’t approach the price increase due to the massive winter storm in 2021, which nearly knocked out the Texas power grid and led the utility to spend $509 million on natural gas.
Gov. Jared Polis later blasted the company for failing to warn customers ahead of time and ask them to conserve gas. Regulators later allowed the company to recover the cost from customers over a 30-month period.
Xcel Energy appears to have taken the criticism to heart. Ahead of the recent winter storm, it alerted customers of the natural gas price surge and asked customers to conserve energy by lowering their thermostats and keeping doors closed as much as possible.
