By Chris Barge, Matthew Branaugh and Christine Reid
Camera Staff Writers

Next winter's electricity bills could rise like summer temperatures after Xcel Energy requested a rate increase Friday.

The proposed increase, which must be approved by the Colorado Public Utilities Commission, would increase bills by more than $6 a month for residential customers and almost $12 for small commercial customers.

If the newest request is approved, rate increases will not be felt by customers until early 2003.

"During the past decade, we have successfully reduced our costs and kept our prices low, while simultaneously investing billions of dollars for current and future energy needs in our state," said Cynthia Evans, Xcel state vice president for Colorado. "The price we can charge for electricity, however, no longer covers our current costs, and the time has come to ask the commission for this increase."

Xcel is also requesting a base-rate decrease for gas of 4.52 percent. That's a 71-cent decrease for residential customers and a $2.28 decrease for commercial customers, on average.

The proposals would be the first base-rate changes to both electricity and gas in more than a decade, said Xcel spokesman Steve Roalstad.

He said despite natural gas prices falling, "the gas to produce electricity is more expensive than coal, and we've been turning to natural gas a lot more over the last few years. Therefore the fuel costs just to produce electricity have gone up."

Ken Reif, director of the Office of Consumer Counsel, said Xcel "made more than its authorized profit level in four of the last five years."

"Now they're saying they need a $220 million increase in electric rates to account for growth," Reif said. "It casts some doubt in my mind of the need for an increase, particularly of this magnitude."

When Public Service Co. merged with Northern States Power in 2000, there was a provision preventing the newly formed Xcel from filing for a general rate case until May 2002.

Terry Bote, spokesman for the PUC, said, "It was expected."

Recent increases and decreases by Xcel have typically come through "cost adjustments." Those are based on variations in Xcel's costs for such commodities as gas and coal that are passed on dollar-for-dollar to the consumer at no profit to the company. Xcel Energy has 1.3 million electricity customers in Colorado.

A few months ago, a gas cost adjustment increase for electricity rates was approved. Residential bills will go up about $1.31 per month, while small business bills will go up $2.56.

June 1, 2002

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