Jan 25, 2023 - Business

Why your electricity and gas bill is skyrocketing in Colorado

Animated illustration of a thermometer in the shape of a dollar bill sign, with temperature rising rapidly

Illustration: Annelise Capossela/Axios

You're paying more to stay warm this winter in Colorado β€” way more: double or triple the cost of a year ago.

  • "I thought there had to be some kind of mistake," Howard Manresa told 9News. "Like what the hell is happening?" added Pam Manresa.

What's happening: Chilly weather, higher energy costs and a new pricing structure are leading to steep spikes in utility bills, particularly for the 1.6 million people with Xcel Energy in Colorado.

  • The base rate Xcel charges to provide service tripled since 2020 with the most recent hike coming in November after approval from state regulators.
  • More to the point, the cost to generate electricity and buy natural gas is much higher than a year ago and utility providers pass that added expense to customers.

By the numbers: Natural gas costs for consumers this month are $2.95 more per thermal unit compared to a year ago, Xcel reported.

  • In October and November, the per unit cost was $4.73 higher than in 2021

Of note: Utility bills include a litany of additional costs that are hard to understand, from fees related to the crippling 2021 winter storm and retiring coal-fired power plants to added costs that cover renewable energy projects and rebates.

  • The Minneapolis-based company says the charges are needed to make energy more reliable and safe.

Be smart: One new factor increasing your power bill is time-of-use pricing, which charges you extra β€” as much as 58% more in the winter and 142% more in the summer β€” for using electricity when you are most likely to use it, between the hours of 1-7pm.

  • About 300,000 customers with new smart meters are paying these new rates.

What they're saying: Among Xcel Energy's eight states, Colorado provided the largest increase in profit in the third quarter of 2022. And that's drawing plenty of critics.

  • "I think that Xcel Energy is unreasonably, outrageously greedy. They are in this for the profit," says Cindy Schonhaut, the director of the Office of Utility Consumer Advocate.

What's next: Expect to keep paying more. Xcel has signaled they will seek another rate hike this year after regulators pared back their 2022 request.

avatar

Get more local stories in your inbox with Axios Denver.

🌱

Support local journalism by becoming a member.

Learn more

More Denver stories

Denverpostcard

Get a free daily digest of the most important news in your backyard with Axios Denver.

🌱

Support local journalism by becoming a member.

Learn more