Xcel Energy Colorado has asked the Colorado Public Utilities Commission to pass through some significant increases in natural gas costs, as well as higher electricity costs, to its customers in the third quarter.
Every quarter, in a perfunctory request, Xcel Energy asks the PUC to pass through its cost of purchasing natural gas and electricity. And as is the case with so many items this year, those commodities are marching higher.
“This change is due to increases in natural gas commodity prices as well as increases in contracted purchased electricity costs. Xcel Energy does not profit from an increase in natural gas or electricity fuel prices,” the company said in a news release.
Natural gas costs on the average residential bill are expected to rise from $23.68 a month in the second quarter to $25.01 a month in the third quarter, an increase of $1.33 or 5.6%. Compared to the third quarter of 2020, residential customers can expect to pay $4.73 or 23.3% more a month.
Part of that reflects an unwinding of the drop that natural gas prices suffered during the early months of the pandemic when demand was depressed. But it also reflects a reduction in drilling activity and less domestic production.
On the electric side, residential customers can expect average costs of $76.72 in the third quarter, an increase of $2.17 a month or 2.9% compared to the second quarter. Compared to the third quarter of 2020, residential users are facing a 7.7% increase in their electricity costs on average.
The fuel price adjustments will take effect July 1 and last for three months if approved by the PUC, which is almost always the case.
Consumer inflation in metro Denver was running at a 3.2% annual clip in May, according to the U.S. Bureau of Labor Statistics. Higher transportation costs drove much of that gain, with gasoline prices up 68.8%, used car prices up 28.6% and auto insurance costs up 27.3%.
Household energy costs were up a more modest 3.1%, but that rate of increase is likely to tick up in the coming months as utilities pass through higher commodity costs.