Higher prices for the natural gas Xcel Energy uses to produce electricity at area generating plants is leading the company to seek an adjustment to the monthly fuel charges Texas customers pay.
If the adjustment to Xcel Energy’s fuel factors is approved by the Public Utility Commission of Texas, a typical residential customer using 1,000 kilowatt-hours per month will see an average monthly increase of $1.78 – or 1.6 percent. Xcel Energy has proposed this change take effect Feb. 1.
David Hudson, president – Xcel Energy Texas, said fuel costs are dollar-for-dollar pass-through charges that rise and fall depending primarily on fluctuations in the cost of natural gas used to produce close to 40 percent of the region’s electricity supply. Since September, just after the last adjustment, natural gas prices have increased approximately 14 percent. An adjustment now will prevent the company from having to surcharge customers for under-collected amounts later, he said. In the meantime, the company will continue making improvements aimed at making the most of the customer’s fuel dollar.
“Our new transmission lines to the east have enabled us to tap lower-cost power that helps offset the rise in natural gas costs,” Hudson said. “Additionally, we’ve added 840 megawatts of low-cost renewable energy in the past two years that will save hundreds of millions of dollars in fuel costs over time since there are no fuel costs associated with renewable energy,” he said.
Fuel costs make up about a third of a typical residential bill, and after falling sharply in 2014 and 2015, they began to increase last year with the rise in natural gas prices. Xcel Energy does not earn profit on fuel costs.
(Press release from Xcel Energy)
