The Colorado Public Utilities Commission approved a settlement agreement earlier this month that allows Xcel Energy to impose an additional $182,235,418 on its customers, amounting to a 6.44% increase, or an average of $5.24 per month for residential customers and a 6.24%, or $6.64 increase for the average commercial customer starting April 1.

This increase precedes an expected rate increase requested by Xcel currently before the commission for the February 2021 freeze, which Xcel says cost it $550 million.

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If granted, that would add between $1.24 and $2.86 for electricity and $1.88 to $6.20 per month for gas to the average residential bill, depending on whether the commission approves a 24- or 60-month amortization.

In a paper submitted to the commission as part of the rate case, AARP Colorado said it “is extremely concerned about the impact on affordability of electricity to residential customers and especially its constituents, a large number of whom are on fixed income or are lower income.”

Xcel originally asked for an increase of $469.7 million because, says the commission, “Public Service states that the increase is necessary because it has made and will continue to make extensive capital investments in its system.”

Xcel makes a guaranteed return on investment of 9.3% on its capital expenditures, which is added on top of everything else customers pay but requested an increase to 10.5%.

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AARP says that request is “not justified” because “nothing in its filing supports that as being just and reasonable.”

The commission found that the 9.3% return on investment “is supported by the record in this Proceeding. … Taken as a whole, the Settlement reflects a reasonable compromise between the parties that will result in just and reasonable rates.”

“They always argue the costs have gone up and the number of customers has gone up,” said Bill Levis, a volunteer advocate for AARP and former counsel for the Office of Consumer Counsel (now the Office of the Utility Consumer Advocate). “Our biggest concern in all this was that the largest percentage increase, as proposed, which was over 13%, was going to be for residential customers, who make up about 90% of Xcel’s rate base.”

In a statement, Xcel spokeswoman Michelle Aguayo said: “We are always working to keep bills low for our customers, with Colorado customers’ average electric bills being among the lowest 10% in the nation. Coloradoans spend less of their money on electricity than almost any other state, with the fourth lowest spending on electric bills in the nation, as a portion of their overall spending.”

In a separate statement, the Colorado Office of the Utility Consumer Advocate said: “The final increase in rates in the Settlement is substantially lower than the increase proposed by Xcel Energy in its initial rate increase request. As a result of these factors and those set forth in greater detail in our Post-Hearing Brief, the UCA determined that the Settlement was in the public interest and would result in just and reasonable rates.”

Xcel will also have to revise its rate adviser tool so that it will “encourage behavioral changes to help ratepayers be successful on their existing rate as opposed to opting out of the TOU (time-of-use) rate that is designed to (incentivize) more environmentally-conscious usage.”

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The time-of-use billing, which increases the rate by 1.7 to 2.7 times the base rate during peak demand hours, begins for some customers April 1, and others on Oct. 1, thanks to the completion of Excel’s Smart Meter replacement program that allows Xcel to constantly monitor energy use in individual households. Customers can opt out of the time-of-use rates, but they will pay a single base rate higher than the time-of-use base rate during off-peak hours.

How much customers will eventually have to pay for the early retirement of the Craig Station Unit 2 and the Hayden Station Units 1 and 2 coal plants was “reserved for litigation and commission determination” in a future rate case by the settlement.