Xcel Energy to Charge Customers 35% Less for Natural Gas in January

Strategic Insights -

Colorado's harsh winter has taken its toll on natural gas prices, leading Xcel Energy to expect a 35% reduction in charges for residential customers in January compared to the same month in 2006. Despite this relief, low-income households are expected to bear the brunt of reduced federal and state energy assistance, resulting in a 35-40% increase in their own pocket expenses for natural gas.

Key Takeaways:

  • Xcel Energy customers can expect a 35% reduction in natural gas charges in January compared to January 2006, mainly due to lower prices and reduced consumption.
  • The projected rate reduction reflects a 1% decrease in typical residential consumption, with bills expected to be around $112 in January 2007, down from $173 in January 2006.
  • Small-business customers can expect a decrease in bills from $806 in January 2006 to $522 in January 2007, a reduction of 35%.
  • Xcel Energy's projected wholesale natural gas costs for January 2007 are 14.6% lower than the December 2006 forecast due to mild weather and high inventory levels.
  • The utility does not make a profit from commodity gas prices, passing them on to customers without markup.
  • Energy Outreach Colorado's executive director, Skip Arnold, warns that low-income households will experience a 35-40% increase in their natural gas expenses as a result of reduced federal and state energy assistance.
  • The reduction in energy assistance has resulted in a cut of about $25 million from last winter's budget.

Statistics:

  • Xcel Energy expects a 35% reduction in natural gas charges for residential customers in January 2007 compared to January 2006.
  • Typical Colorado residential customers paid $173 to heat their homes in January 2006 and are expected to pay around $107 in January 2007.
  • Small-business customer bills are projected to decrease from $806 in January 2006 to $522 in January 2007.
  • Xcel Energy's projected wholesale natural gas costs for January 2007 are 14.6% lower than the December 2006 forecast.
  • Reduced federal and state energy assistance has resulted in a cut of about $25 million from last winter's budget.
  • Low-income households are expected to experience a 35-40% increase in their own pocket expenses for natural gas.

Sources:

  • Xcel Energy spokesman Tom Henley
  • Energy Outreach Colorado executive director Skip Arnold
  • Colorado Public Utilities Commission
  • Xcel Energy press release
  • "Utility completes rate filing" in the Rocky Mountain News, 22 January 2007