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Xcel Energy requests $17.2 million funded by rate increases to recoup Colorado wildfire damage

Robert Davis | The Center Square

(The Center Square) – The commission overseeing public utilities in Colorado will hear a request by Xcel Energy that would raise $17.2 million next year to recoup wildfire damages and improve mitigation through a $.49 per month rate increase for residential energy bills.

If the Public Utilities Commission (PUC) approves the 5-year proposal, the Minnesota-based utility company would collect a "Wildfire Mitigation customer charge" that would raise residential bills by an estimated $0.49 a month for average use, while commercial bills would increase by $0.71 a month for average use.

Colorado has seen a record-breaking wildfire season with eight large fires currently active and not contained, including the Cameron Peak Fire -- the largest wildfire in state history -- that's over 206,000 acres in size and 55% contained, according to the National Interagency Coordination Center.

Under the plan, Xcel would submit "an adjustment to the rider containing the projected costs for the following calendar year" to PUC every November.

Xcel estimates the average residential bill will increase a total of 1.43% between 2021 and 2025. Small commercial customers would see a 1.39% increase.

Xcel described the proposal as a proactive measure that “can dramatically reduce the potential financial impact and physical damage associated with a large-scale wildfire ignited by utility infrastructure.”

The $17.2 million would go toward accelerating “risk mitigation actions related to inspection, repair and replacement of infrastructure, vegetation management, and increased distribution system protection measures.”

According to PUC, the proposal builds on a partial settlement for wildfire mitigation issues that Xcel reached with PUC in a 2019 electric rate case.

Under Colorado law, public utilities can submit rate cases when the cost of providing utilities to their customers is greater than what customers are paying in rates. Last year, Xcel sought a $158 million increase from state regulators because of damage caused by several wildfires. However, regulators awarded the company just $41.3 million in January. 

The settlement required Xcel to upgrade its power grid to protect it from future wildfire damages, but delayed discussions on further rate increases until August.

A two-hour remote public comment session is scheduled for October 28 at 4:00 p.m. Evidentiary hearings on the proposal are scheduled for January 14 and 19, 2021.