Retail Energy Buyer

Subscribe to the free weekly newsletter written just for retail energy buyers

Xcel to Refund $18.6M to Texas Retail Customers

September 16, 2015 By Cheryl Kaften

Lower natural gas prices and cheaper power imports into the Panhandle and South Plains – the latter, made possible by new transmission line connections – are making it possible for Xcel Energy to refund $18.6 million to its Texas retail customers, the utility announced on September 10.

The company reduced its fuel and purchased power cost factors in March, which resulted in ongoing residential customer savings of $7.68 per month on a typical bill. Therefore, beginning in November, residential Xcel ratepayers who use 1,000 kilowatt-hours (KWh) of power per month will enjoy a one-time credit of $34.42 prorated over two billing cycles.

David Hudson, president of Southwestern Public Service, an Xcel Energy company, said hundreds of millions of dollars have been invested in the transmission system, and that the new lines connecting Xcel Energy with the Southwest Power Pool have expanded the purchase of competitively priced power. In addition, natural gas prices remained very low through the first part of this year.

“Investments in the power grid are expensive and have led to increases in the base rate portion of a monthly bill,” Hudson said. “But the good news is these investments are leading to savings in fuel and purchased power costs, which can account for as much as 25 percent of a residential customer’s monthly electricity costs. It’s a strategy we’ve been following for several years now, and it’s helping to offset the costs of investing in the system.”

With the new transmission lines, Xcel s ability to import from that market increased from a little more than 400 megawatts (MW) two years ago to as much as 1,700 MW today. The regional peak demand is about 6,000 MW.

Xcel Energy does not mark up the cost of coal and natural gas used to fuel area power generating stations, nor does it mark up the power purchased from wholesale suppliers and markets. These costs are collected through a fuel cost factor on monthly bills, and the factor can be adjusted three times a year in Texas.

If the factor is too low to cover these costs, Xcel Energy sometimes adds a short-term surcharge to bring the account into balance. In this case, the fuel account has built up a surplus of $18.6 million, and that is the amount of money being redistributed to customers through the one-time bill credits.

Leave a reply


*