Xcel Energy made several blunders during costly winter storm last year, regulators say

Hart Van Denburg/CPR News
The Fort St. Vrain Generating Station west of Platteville in rural Weld County on Wednesday, November 3, 2021.

Colorado’s largest public utility failed to take steps during a winter storm last year that could have lowered natural gas costs and saved customers money, state regulators said Wednesday.

The Colorado Public Utilities Commission expressed disappointment in Xcel Energy for what it said was an inadequate response to the cold weather over President’s Day weekend in 2021. While power stayed on throughout that weekend, the commissioners said Xcel could have used its existing programs and resources to spend less on extremely high natural gas prices.

“There is ample evidence of failure here,” Commissioner John C. Gavan said. “I think there needs to be some penalty for these cumulative failures.”

Those failures included not cutting power for customers registered for interruptible service; not recommending customers conserve energy to potentially lower costs; and using natural gas to run generators that could have been powered by fuel oil that would have been cheaper to use, commissioners said.

In a statement, Xcel Energy spokesperson Michelle Aguayo said the company acted in the “best interest” of its customers during the storm, which she said presented unprecedented challenges for the utility. “We learned valuable lessons and have already implemented policies to work more closely with our customers to help lessen the impact of future extreme weather events,” she said. 

Xcel had proposed raising bills to recoup $509 million from customers to cover costs from the storm. The commissioners on Wednesday voted to penalize excel and lower that amount by $8 million. They will revisit the proposal before the company is allowed to charge customers for those costs.

Commissioner Megan Gilman said the reduction is small given that Xcel had little control over the natural gas market. The company should expect commodity prices to jump in future extreme weather events, she said.

“Right now the company is on notice, we're all on notice, that this certainly could happen again,” she said. “Any future occurrences would be viewed very differently.”

The commission stopped short of reversing an earlier decision by an administrative law judge, who approved the settlement despite saying Xcel mishandled some of its operations. 

The state’s Office of the Utility Consumer Advocate, which represents consumer interests, had initially raised allegations of Xcel’s inadequate performance. Director Cindy Schonhaut said she would now look to see whether the decision leads to regulatory changes.

The commissioners also disputed what Xcel said was more than $70 million in financing costs. The commission and consumer advocacy office said the company’s calculations inflated the amount significantly. 

Xcel had said it would not charge that interest to customers, which Schonhaut called “disingenuous.” 

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