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Xcel Seeks Rate Hike For Colorado NatGas Upgrades

Xcel Energy’s Denver-based combination utility has asked the state regulatory commission to approve a rate hike to pay for safety and reliability improvements on its natural gas utility system and to cover the costs to run it.

The utility is seeking $109.1 million cumulatively over the three years through 2017. If it were to receive an OK from the Colorado Public Utilities Commission (PUC), residential and small business customers would face monthly bill increases of about 3.5% this year and 3% in 2016 and in 2017.

The proposed program calls for enhanced safety for the gas pipeline system and related facilities, including replacing older pipes. Late last year, Xcel, operator of utilities in eight states, finished replacing utility cast iron pipe in Colorado (see Daily GPI, Nov. 14, 2014).

Future programs also would include expanded efforts to identify and quickly repair leaks; improve response to emergency situations, and remove existing interior meters, according to Xcel’s David Eves, CEO of Public Service of Colorado.

"The company also will continue to focus efforts to monitor and improve the condition and operations of its pipeline system, including assessing the health of pipelines so repairs can be made, adding redundant equipment in key locations, and standardizing practices and procedures," Eves said.

The cumulative base rate increase includes $66.2 million for system work and customer service operations and $42.9 million to extend and modify its current pipeline system integrity adjustment (PSIA) rate-setting mechanism, the company said.

"Customers will pay no more and no less than the actual costs of the pipeline integrity work. We have forecasted the level of pipeline integrity work over the next three years, so that the PUC can see what the impact on customers may look like, if it agrees that the rider [PSIA] should be extended,” the company said.

The PSIA pipeline funding mechanism would be extended from Dec. 31, 2015 to Dec. 31, 2020.

Xcel’s Colorado operations include more than 2,100 miles of transmission pipelines and 21,600 miles of distribution pipe. It serves more than 1.3 million gas utility customers in 30 counties.

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