Electric and gas utilities serving the Front Range and eastern Colorado asked the Colorado Public Utilities Commission to impose $678.4 million in rate hikes on their customers to cover the costs of Winter Storm Uri that froze the central part of the nation from February 12-16, 2021.

Uri washed up against the Front Range on the 14th and continued south, dropping temperatures all over the central U.S. to record lows as far south as Houston, Texas and killing more than 200 people nationwide, mostly in Texas.

And it’s not just Front Range ratepayers potentially being hit with large increases in their gas and electric bills during skyrocketing inflation and energy uncertainty.

Public Service Company of Colorado, an Xcel subsidiary that is asking for $550 million in “extraordinary” fuel costs, sells wholesale electricity to smaller cooperatives outside the Front Range, including Grand Valley Power in Grand Junction, and already sent the co-op a fuel-cost adjustment bill that will have 18,000 GVP customers paying as much as $93 per month extra for residential customers.

Other co-ops including Yampa Valley Electric Association, Holy Cross Energy and Intermountain Rural Electric Association are in the same position.

At the height of the storm, due to capacity and delivery problems and extraordinary demand for natural gas, prices leapt from $2.00-$3.00 per thousand cubic feet (Mcf) to in some cases as much as $600 per Mcf.

After the storm the commission opened an inquiry into the amounts of gas Colorado utilities had to buy and how much they had to pay for it at demand-based inflated prices.

Six utilities filed to recover extraordinary fuel costs: Atmos Energy Corporation, Colorado Natural Gas, Public Service Company of Colorado, Black Hills Gas and Black Hills Electric.

In the year following the deep freeze, complex negotiations and commission hearings resulted in settlement agreements over who should pay and how much, but the commission hasn’t approved all the requests yet.

PSCo Steam’s settlement was finalized Nov. 3, 2021, Atmos Energy’s on November 12, Colorado Natural Gas on December 1 and Black Hills Gas on Feb. 28.

Black Hills Electric’s settlement was granted Jan. 19, but has been appealed by one of its customers, Holcim, a nationwide building materials company with a cement plant in Florence.

Holcim says the settlement proposes to charge the company 3.6 times the amount it should be paying for electricity and gas it used during the freeze.

The proposed charge, said Holcim’s witness, “would result in Holcim paying roughly $2.1M in ECRR revenues, despite Holcim’s share of February event costs being $588,896. A rate design that produces roughly 3.6-times over-recovery of costs is egregious and should not be allowed and should be rejected by the Commission.”

The company argues in its exception that the costs proposed against Holcim are neither fair nor reasonable, are structured to “protect residential consumers” at Holcim’s expense and that they violate the company’s Fifth Amendment against taking private property without due process.

In PSCO’s case, the Office of the Utility Consumer Advocate submitted a scathing 31-page statement of position that says PSCo should not be allowed to recover all it is requesting because, it says, the utility did not act prudently in buying natural gas at inflated prices and mismanaged its fuel supplies.

The OCA said the company, knowing that deep cold was impending, “imprudently” failed to plan ahead and secure additional supplies of gas before the storm hit and failed to properly operate its dual-fuel plants during the emergency. Those plants can operate on both natural gas and fuel oil.

PSCo argued it did not have sufficient oil supplies to run the plants 24 hours a day during the depth of the freeze, so it use natural gas instead.

The OCA rebutted that argument, saying if PSCo had run the plants even for only a few hours a day, during the peak price periods, it would have saved customers “millions” of dollars by shaving off the highest-priced gas.

The OCA also faulted PSCo for not topping-up its oil storage tanks before the cold snap.

“The Company’s inadequate plans and procedures led to a series of inactions that ultimately left it incapable of making timely decisions and unable to effectively use its fuel oil capabilities under the circumstances.”

Gov. Jared Polis urged the commission to consider not allowing Colorado utilities to pass excessive fuel costs on to customers.

In a Feb. 23, 2021 letter he said, “Some Colorado utilities might have purchased natural gas at exorbitantly high market prices and may now seek to pass the cost of the market gas prices along to customers…Consumers should not be expected to shoulder unexpected exceptional costs without first being advised to reduce usage.”

PSCo’s failure to notify customers of an impending jump in prices was another of the UCA’s justifications for recommending the commission reduce the requested $550 million cost pass-through to consumers.

Once the Administrative Law Judges rulings come down the cases return to the PUC for final approval…sometimes.

The laws are complex, and it is possible for either a commission decision or an ALJ decision to become final without any further action. If the commission issues a decision and no one challenges it, it becomes final after a statutory period. If an ALJ hands down an opinion and the commission does not take the case up for a formal final decision, it too becomes final on its own.

Dean said that rate hikes in the contested cases that were supposed to start on either January or April 1 will be delayed until the cases are finalized and no interest will accrue.

“There will be no accrual, so the result is simply a delay in when Xcel starts to recover the costs,” said Dean in response to a query by The Denver Gazette. “And the Settlement does not include a rate of return on the fuel cost balance, so the amount that Xcel will ultimately collect is not increasing as a result of the delay.”

The Black Hills settlement has just been returned to the commission by Administrative Law judge Conor Farley.

PSCo’s settlement has also just been returned by ALJ Melody Mirbaba.

According to Doug Dean, Director of the PUC, the deadline for the final decision by the PUC is in July.

Both cases are on the Commission Weekly Meeting agenda for this coming week of April 6.

Interested persons will have opportunity to provide comments to the commission.