Colorado Utilities Rate Increase Could Cause Average Bill to Rise 40 Percent

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Colorado Utilities Rate Increase Could Cause Average Bill to Rise 40 Percent

Source: Knight Ridder/Tribune Business News Publication date: 2000-09-19

Sep. 19--Home heating bills could rise as much as $29 a month on average this winter --or more if it's cold -- for customers of Public Service Company of Colorado.

Public Service said Monday that soaring natural gas prices have forced the utility to seek a $126.2 million rate increase to pass the higher costs through to consumers.

If this winter brings normal temperatures, the increase would cause the average household gas bill to rise 40 percent from last year, when the weather was abnormally warm. For commercial customers, the average increase would be 49 percent, or about $146.

"It's obviously a big chunk for rate-payers," said Ken Reif, director of the Colorado Office of Consumer Counsel, a utility oversight agency.

Public Service said the rate in crease is simply a pass-through to consumers with no additional profit being taken by the utility.

State law allows utilities to change rates when energy costs rise or fall. The rate changes are almost always approved without debate by the Colorado Public Utilities Commission.

"I hate being the messenger of bad news, but we don't determine the cost of natural gas in the marketplace," said Cynthia Evans, vice president of Public Service parent Xcel Energy.

"We want our customers to know that this increase -- coupled with a similar increase that went into effect in July -- is likely to have a significant impact on their heating bills this winter," Evans said.

Gas prices have more than doubled since last year because of high demand and low inventories. The impact of higher prices is so great this year that Colorado utilities, regulators and consumer groups held an unprecedented meeting earlier this month to discuss ways of dealing with the expected increase. Participants at the meeting devised a three-part strategy calling for greater public awareness of rising utility bills, promotion of energy conservation techniques, and increasing the amount of money available through low-income energy-assistance programs.

Public Service had filed for a previous gas-cost adjustment in June. According to Public Service estimates, the combined increases will raise the average home's January gas bill from $72.56 last winter to $101.31 in the coming January.

Commercial bills will increase from a January average of $300.60 to $446.76.

Reif of the Office of Consumer Counsel said utility customers have enjoyed two unseasonably warm winters that kept heating bills low.

"If we have even an average winter, the difference is going to be substantial," he said. Consumer groups said they're particularly worried about the impact of higher prices on the elderly, retired and working poor.

"For low-income families, when you combine all these increases, it's pretty significant," said Karen Brown, executive director of the Colorado Energy Assistance Foundation. "It's going to be a problem for seniors and the disabled who choose to stay warm at the expense of food or medicine." Brown said state and federal bill-paying assistance, as well as home-weatherization help, are available to qualified low-income households.

Maximum incomes to qualify for the programs are $15,000 for one person, up to about $29,000 for a household of four people.

The Colorado Energy Assistance Foundation recently increased its funding for this winter from $2.5 million to $4 million.

Brown urged people to consider making contributions to the foun dation. Appeals for the group are found periodically in Public Service bills.

Consumers also can mitigate the impact of higher winter bills by using budget billing, which spreads increases evenly over 12 months.

Natural gas prices rose almost 2 percent Monday and show little sign of coming down in the near future. Monday's rise extended a monthlong rally to record highs, on concern that U.S. supplies will be too low for peak-demand winter months.

The gas rally accelerated last week on speculation that a tropical storm would disrupt output from gas rigs in the Gulf of Mexico. Even though the storm skirted the rigs, prices stayed high, with inventories running 15 percent lower than a year ago.

Natural gas for October delivery rose 8.9 cents, or 1.7 percent, to $5.30 per million British thermal units on the New York Mercantile Exchange, the highest closing price in the 10 years that gas futures have traded on the exchange. ----- http://cnniw.yellowbrix.com/pages/cnniw/Story.nsp?story_id=14023980&ID=cnniw&scategory=Utilities



-- Carl Jenkins (Somewherepress@aol.com), September 19, 2000


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