Minnesota-based Xcel Energy, the holding company for the largest utility in Colorado, last Tuesday proposed an 11% increase for natural gas to cover its increased wholesale costs for the fuel. Together with the expected large increase in gas consumption with the outset of the winter months, the utility said customer bills could zoom up by 104% for typical residential customers and 94% for small businesses. If approved by state regulators, the higher rates would be effective Nov. 1.

Noting that the request to the Colorado Public Utilities Commission anticipates continued high wholesale prices, Xcel asked to increase the residential/small business retail rate to $1.013/therm, from the current charge of 90.68 cents/therm.

“Projected natural gas prices for November are higher than the forecast used for October,” an Xcel spokesperson said. “Gas prices remain high due to a continued tight balance between supply and demand,” along with the Gulf of Mexico hurricanes that have put further upward pressure on wholesale prices, he said. “Currently, some 5.3 Bcf/d of production is still unavailable due to storm-related damage, and the cumulative production curtailed since late August is about 310 Bcf.”

Adding to the problems looking ahead, Xcel said that weekly national storage injection volumes have declined compared to last year’s rate at this time.

This coming month, typical residential customers are expected to increase their consumption in Colorado by 100%, compared to this month, Xcel’s spokesperson said, putting the average overall monthly bill at about $131 for about 105 therms of gas, compared with an average bill this month of $64 based on a use of 52 therms; in November last year the average residential bills were about $94 for the month. Small business average bills will hit about $626 for November, Xcel said, compared with an average in October of about $324; last November, the small business average bills were $433 for the month.

“All costs associated with increases or decreases in the commodity price of natural gas are passed along to customers on a dollar-per-dollar basis,” the spokesperson said.

Despite these increases, Xcel said it could have been worse without the company’s active hedging and storage programs for natural gas. Combined those programs so far have resulted in natural gas wholesale costs that are $23.5 million less than would have occurred otherwise this month, the spokesperson said.

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