Xcel Energy submits rate review for Texas bills |


Increased base rates to recover costs of strengthening grid, boosting power supplies.


AMARILLO, Texas (Aug. 21, 2017) – Today, Xcel Energy submitted a rate review to Texas regulators that seeks an additional $66.4 million of revenues to cover costs associated with strengthening the regional power grid and securing ample power supplies at competitive costs well into the future. The additional revenue would increase Texas retail customer bills 7.1 percent overall.

The filing requests an adjustment to prices in 2018 that will incorporate $758 million in electric infrastructure upgrades since early 2016 as Xcel Energy continues to build an energy future that delivers reliable and plentiful energy at the lowest cost possible. These improvements include new power lines, substations and power plant upgrades that have already been placed into service for the benefit or customers. 

A second driver of the request includes a shift in costs related to delivering a larger share of low-cost energy from existing power plants to Xcel Energy’s towns and cities as wholesale contracts with regional electric co-ops expire. In 2007, Xcel Energy’s Texas stakeholders desired, and Xcel Energy agreed, to terminate wholesale power sales so that Xcel Energy’s retail customers could use the lower-cost resources. 

“Xcel Energy is committed to building an energy future that delivers value to our customers and our communities,” said David Hudson, president, Xcel Energy – Texas. “In the last year and a half, we have invested in new and upgraded lines and equipment to improve the long-term reliability our customers expect. This stability provides the basis for job creation and community development across the territory that Xcel Energy has served for more than 100 years.” 

In documents filed at the Public Utility Commission of Texas and with the 80 Texas municipalities Xcel Energy serves, the company requested an increase in non-fuel base rates that will support these long-term investments in power grid capabilities and power plant capacity. Xcel Energy is proposing to raise base revenues by $81 million and terminate the current Transmission Cost Recovery Factor by $14.6 million, resulting in a net increase of revenues of $66.4 million. If approved, the change would be effective in 2018. Impact on customer bills would vary by class, but the overall net impact across all customer classes would be 7.1 percent. Residential customers, however, would see a higher percentage increase. A typical residential customer using 1,000 kilowatt-hours per month would pay $15.61 more per month if the new rates are approved, for an increase of 13.9 percent.

Though prices are increasing, Xcel Energy bills are currently18 percent less than the U.S. average, and will remain lower even with the higher rates. 

Hudson said a strong and dependable electric utility provides opportunities for growth in every part of the region. For Xcel Energy, the foundation of Our Energy Future for the Southwest has been laid out at www.xcelenergy.com/ourenergyfuturesw, and the current regulatory review includes the following elements of that foundation:

• Room to Grow: To power the communities creating jobs and opportunities for the next generation of Texans, Xcel Energy is freeing up power plant capacity that was historically reserved by wholesale customers such as rural electrical cooperatives and municipal utilities, which are increasingly procuring their own power supplies. As power demand grows in Xcel Energy’s service area, this capacity will be made available to area towns and cities at a cost much lower than the cost of building new power plants. 

• Improving Local Service: Xcel Energy has stepped up its investment in lower-voltage transmission infrastructure and began a systematic effort in 2016 to upgrade the lower-voltage distribution network that brings power directly to customers. Conversion projects in locations such as Amarillo’s San Jacinto neighborhood and in downtown Plainview are upgrading lines to a standard voltage. These and other similar projects across the system boost capacity to serve growing demand and allow power to be restored quickly by tapping neighboring lines while repairs are being made. Related work also includes the construction of 11 new distribution substations to relieve loading on existing substations that, in the heat of the summer, were operating at maximum capacity. These conversions, upgrades and new facilities have modernized Xcel Energy’s transmission and local distribution networks and ensured delivery of stronger, more reliable service at the lowest cost possible.

• Low-cost energy for generations to come: Sound investments to extend the life of existing power plants is another lower-cost alternative to building new facilities. Xcel Energy is investing in its nine Texas and New Mexico power plants, initiating industry-leading preventive maintenance programs to enable the company to operate some of its generation facilities beyond expectations. For example, Harrington Unit 1, a coal-fired steam turbine unit in northeast Amarillo that was built to last 35 years, celebrated its 40th anniversary in 2016 and continues to be one of the lowest-cost power plants in the region. 

“Xcel Energy’s customers expect value and to be satisfied with the service they receive,” Hudson said. “We are committed to a long-term resource plan that provides affordable energy across a robust grid, supplied by the lowest-cost mix of coal, natural gas and renewable energy.”

Looking ahead to 2019 and 2020, Xcel Energy anticipates bringing two large wind farms on line, subject to regulatory approval. The company-owned wind generation will deliver savings from federal production tax credits, cost about the same as coal energy and lower overall fuel costs. These wind turbines will have no emissions and use no groundwater to cool the generation units. The wind turbine construction costs will be represented in two additional rate reviews within those respective years, and are not included in the review filed today.

Those new wind facilities, along with energy from a proposed 30-year purchased power contract of 230 additional megawatts, will deliver an expected $2.8 billion in savings over the next three decades, with the side benefit of not using our region’s precious water.

“We understand the affordability of the service we provide is a primary concern,” Hudson said. “It is Xcel Energy’s responsibility to secure the lowest-cost energy for our customers as part of Our Energy Future for the Southwest. This strategy requires upfront investment that leads to incremental price increases in the early years of implementation. But we also offer products and services that help customers manage their monthly costs.” 

Energy efficiency programs and incentives that help customers switch to more efficient lighting, heating and cooling systems are available to Xcel Energy customers. Efficiency improvements can save anywhere between 5 and 30 percent off annual utility bills, depending on the improvements made. Customers can access more information on energy efficiency programs at www.xcelenergy.com by clicking on “Programs & Rebates.” 

Xcel Energy is also giving customers more options for tracking their monthly bills through the new Xcel Energy mobile app. Customers can view account information, enjoy the flexibility of scheduling online payment and report any outage or service concern. This free app is currently available at Apple Store and on Google Play.

About Xcel Energy

Xcel Energy (NYSE: XEL) provides the energy that powers millions of homes and businesses across eight Western and Midwestern states. Headquartered in Minneapolis, the company is an industry leader in responsibly reducing carbon emissions and producing and delivering clean energy solutions from a variety of renewable sources at competitive prices. For more information, visit xcelenergy.com or follow us on Twitter and Facebook.

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