- Xcel Energy filed for a $190 million Colorado natural-gas rate hike that would start in October 2026.
- If approved, average residential bills rise about $7.59/month (11.4%) and small-business bills about $36.47/month (13%).
- The request covers $101 million in past safety and infrastructure work, $42 million in ongoing operations and maintenance, and $52 million in investor returns.
- Critics warn back-to-back gas and electric filings and climate-transition uncertainty could make bills unaffordable and increase stranded-cost risk.
Read More
Background and drivers: Xcel Energy’s latest rate case aims to fund three categories of spending: safety-related and integrity investments in its gas delivery network; inflation, labor, and ongoing operational costs; and the return demanded by investors. The company frames this as “catch-up” for past unrecovered costs (regulatory lag), especially safety work already done but rates not adjusted.
Financials and customer impact: If approved in full, the filing would lead to a monthly residentialized bill of ~$74.41, up approximately 11.4% from current levels; small commercial customers would see about a 13% increase (or ~$36.47/month). For residentials, this raises the share of household income devoted to gas costs (wallet share) from 0.64% to 0.76% on average.
Regulatory and policy context: The Colorado Public Utilities Commission (PUC) has recently approved significant rate changes for both gas and electric for Xcel, including infrastructure investments and measures to mitigate shortages in certain geographic areas. Policy pressure to decarbonize and transition customers off natural gas (e.g., via electrification incentives) complicates justifying expansion of fossil fuel infrastructure and raises risks of stranded costs.
Risk assessment: Key risks include regulatory pushback leading to a partial reduction in the requested increase; customer backlash or inability to pay, especially among middle-income households; and long-term financial exposure if demand for gas falls sharply. Balancing safety, decarbonization mandates, and economic affordability will be central.
Strategic implications for stakeholders:
- Consumers will face steeper bills, particularly in winter; low- and middle-income customers may feel disproportionate pain.
- Xcel must demonstrate that its investment plan yields tangible safety gains and aligns with state climate targets to avoid criticism and regulatory resistance.
- Opponents (consumer advocates, environmental groups) may push for denial or scaling back of base-rate increases, greater transparency, and potentially more aggressive shifts toward electrification.
- From a regulatory perspective, rate cases like this could spark changes in how utilities recover costs, including shortened regulatory lag, or more stringent cost-benefit evaluation of new gas infrastructure.
Open questions:
- Will the PUC approve the full-$190 million, or reduce it as in previous cases? What items might be cut?
- How will this interact with state policies pushing toward gas electrification—and will that erode the customer base justifying investment?
- What assistance programs (for low-income or fixed income customers) will be expanded to mitigate burden?
- How do seasonal demand shifts and wholesale gas price volatility affect actual customer bills over time beyond base rate increases?
- What is the risk of stranded assets or write-downs if gas demand falls?
Supporting Notes
- Xcel is asking for a $190 million natural gas rate hike in Colorado.
- Residential bills would rise by approx. $7.59/month (≈11.4%) starting October 2026; small commercial bills by $36.47/month (≈13%).
- The $190 million request includes $101 million for past expenditures (safety and infrastructure), $42 million for operation & maintenance, and $52 million for returns on equity.
- A recent PUC decision already approved a separate plan to address gas shortages in Summit and Grand counties, of $155 million.
- Xcel has 1.5 million gas customers in Colorado; many also are electric customers (~1.6 million), with overlap of ~1.1 million customers.
- The utility is contributing $5 million from its own funds toward programs for low-income customers to help offset bill burden.
- The “wallet share” of average residential customers’ income spent on gas would rise from 0.64% to 0.76%.
- Consumer advocates argue that increases like this add up quickly and disproportionately impact middle-income households who may lack access to assistance programs.
- Broader policy pressures: Colorado regulators have emphasized faster transition away from natural gas toward electrification to meet state climate goals, with associated utility strategies and rate implications.