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Xcel customers expected to see 37% increase on utility bills this winter

The energy company said there is greater demand for natural gas, leading to higher wholesale prices nationwide.

COLORADO, USA — When Katherine Conyers opened her Xcel energy bill in January, the price shocked her. 

"It made my stomach turn," she said. "It was – let me see – $312." 

Their latest bill was close to $250, which she says was unexpected price jump and much more than in years past. 

She says her family didn't really change their normal amount of energy usage in their 1,000-square-foot West Denver home, and got a new furnace two years ago. 

“My hope would honestly be just that it goes back to where it was last year. I mean, even that seemed high to me. But at least it’s not this exorbitant amount that you just feel is just flushing money down the toilet," she said.

This is just one case, but due to a nationwide increase in the cost of natural gas, Xcel Energy customers are seeing an increase in their monthly bills this winter.

"The average residential bill increase is approximately 37% higher this winter compared to last winter, and the impact to small commercial customers is similar," said Xcel spokeswoman Michelle Aguayo.

According to a press release from Xcel, natural gas prices have increased heading into the winter because production has not yet rebounded from the pandemic and there is greater demand for natural gas, leading to higher wholesale prices nationwide.

>Video above from 2021: Understating inflation: Why are prices going up?

Credit: Mike Grady

The energy company purchases natural gas at wholesale and the cost of the natural gas provided to customers, and used to generate electricity, is passed along to customers without markup. 

According to Aguayo, Xcel began telling its customers about the upcoming higher natural gas prices back in November. 

"An average Colorado customer using the same amount of energy this winter compared to last winter, could anticipate their monthly natural gas bill to be about $28 higher than last year, and their monthly electric bill to be about $1.50 higher," Xcel says in a press release. 

To protect against market fluctuations in the price, Xcel takes a number of steps, including storing natural gas for use during the heating season, contracting for natural gas in advance, and purchasing financial hedges, which act like insurance to protect customers from significant price changes.

The energy company shared the following tips to save on energy bills this winter: 

  • Lower your thermostat a few degrees, ideally to 68 degrees or lower.
  • Adjust your programmable thermostat to automatically lower the temperature while you are away or while you sleep.
  • During daylight hours, open drapes and blinds to maximize heat from direct sunlight. To retain heat, keep them closed when it is dark.
  • Run ceiling fans in a clockwise direction to push warm air down from the ceiling, adding comfort and savings.
  • Keep interior doors open to help circulate air more freely and maintain constant heating levels.

Aguayo said that there are options available for those that may not be able to pay their bills.  

"We remind our customers that if they’re having trouble paying their bill, to contact us as quickly as possible so we can help set up a payment plan," she said.

Customers are asked to call 800-895-4999 or call the LEAP help line at 866-432-8435.

Credit: Mike Grady

Colorado State University Economics Professor Stephan Weiler, who is also the director of the university's Regional Economic Development Institute, says there are a few reasons that could cause the rise in prices, locally.

"I think the usual answer that you get from economists is it's supply and demand. And then in this case, it is. It does happen to be also supply and demand," he said. "Thirty percent of natural gas in Colorado is actually used to make electricity. And so it also affects the summer. So when you're air conditioning, 30% of that comes from natural gas itself. So both in the winter when it's cold and in the summer when it's hot, we're pushing the demand for natural gas."

He added that since Xcel purchases the gas off the market, they're not immune to supply and demand fluctuations. 

"And if those wholesale rates go up, then the prices go up. There's just there's no way around that," he said. 

Overseas, the price of natural gas could be rising in part due to the conflict going on in Ukraine. 

"Russia is a huge supplier of gas and with their Nord Stream pipeline, they can have the ability to supply a good chunk of Western Europe with natural gas," he said. 

But overall, demand is rising locally due to more people staying home, Weiler said. 

"So even that extra little bit of demand tends to push up prices as well," he said. 

As for how long the public could see these types of prices, Weiler says it'll depend a little bit on how the winter goes and how supply lines are feeding. 

"Whether they put more capacity online – most of the experts seem to be thinking that it should settle down a little bit by towards the end of the year," he said.

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