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Xcel Energy received approval from the Colorado Public Utilities Commission on Wednesday for a $157 million electricity rate increase that will raise the average residential bill by about $5 a month.
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The average residential bill for 601 kilowatt hours will rise to $109.92 a month from $104.91. When Xcel Energy originally filed the rate request in 2025 it said the average monthly bill was about $100.
The average bill for small commercial customers will rise a little less than 5% to $164.37 a month for 1,041 kilowatt-hours.
The parties to the rate case, including Xcel Energy, the state Office of the Utility Consumer Advocate and major business customers have the option to ask for a PUC rehearing and reconsideration of the decision.
The utility initially sought a $365 million increase, which utility advocates said would have been the largest in history.
That increase would have raised the average residential bill for 601 kilowatt-hours by 10% or $10 to $110 a month. Xcel Energy, the state’s largest electricity provider, has about 1.6 million residential customers.
In June, Xcel Energy and its corporate customers, electrical unions and the PUC staff submitted a settlement agreement to the commission for a $225 million rate increase, which would raise the average household bill by $6.13 to $110.81 a month — a nearly 6% increase.
The settlement was opposed by the utility consumer advocate, the city of Boulder; AARP Colorado, representing people 50 and older; and Energy Outreach Colorado, which provides aid to low-income families.
“The settlement was a compromise between large users and the company,” said Joseph Pereira, director of the utility consumer advocate office. “It was a deal that left all the other customers out.”
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The $225 million settlement was further reduced to $157 million based on managing depreciation and budget scheduling, Pereira said.
“While we are awaiting the Commission’s written decision, we are disappointed that it did not fully approve a settlement agreement reached with a diverse group of stakeholders, including the Colorado Public Utilities Commission staff,” Xcel Energy said in a statement.
The company also said it disagreed with concerns voiced by the commission over the size of its capital spending, which included hundreds of miles of transmission and distribution lines, transformers, distribution feeders and substations to meet customer needs.
“We just are engaged in this process where the company puts these astronomical numbers out and the commission whittles it down to the historically expected range, and then customers are stuck with a $157 million increase,” Pereira said.
Affordability became an issue in the rate case as Xcel Energy’s electric rates have risen 22.2% since September 2023 — more than three times the rate of inflation, according to a PUC staff report.
Xcel Energy estimates that as many as 385,000 customers may be paying at or above the 2.5% target for income spent on electricity.
As part of the rate request the company said it would expand its aid to income-qualified families and seniors.
“The PUC is supposed to stand up for ratepayers, but instead is nickel-and-diming them while allowing Xcel Energy to perpetually increase rates little by little when people can least afford it,” Caitlin Gallagher, a spokesperson for the consumer interest group Stand Together. “This is the eighth increase in three years.”
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