50% increases on electric bills due to higher natural gas prices Xcel Energy passes on to YVEA
Whether members should expect similar hikes next month remains to be seen
Eva Vaitkus has watched her electricity bill for her Steamboat Springs home climb throughout the end of 2022.
Over the summer, it was around $150. Then it was $200 in November, followed by $230 in December. But the hike this month that brought her bill from Yampa Valley Electric Association into the $450 range caught her off guard.
“That’s absolutely outrageous,” Vaitkus said. “We’re lucky enough we can afford it, but I really don’t want to be paying this much money.”
The increase stems from the highest power cost adjustment the electric co-op has ever assessed to its members — an adjustment that directly correlates to natural gas cost increases passed along to YVEA from its power supplier, Xcel Energy Colorado.
The power cost adjustment, or PCA, has been consistently appearing on member’s electric bills since last April. Some months it has been around 1 cent per kWh, roughly 10% of the total power cost for the average home in the co-op’s service area. Other months it has been higher, such as the 4 cents per kWh assessed in July. On bills received in December, there was no PCA at all.
But the 5-cent adjustment per kilowatt-hour assessed on the bills received this month is the highest the charge has ever been, according to YVEA spokesperson Carly Davidson. When added to the 10.2 cents per kWh a typical member pays for power, the latest PCA equates to a roughly 50% increase in electricity costs.
“We cannot control the power cost adjustment,” said Megan Moore-Kemp, YVEA’s member relations manager. “We can’t control Xcel’s business decisions or any other factors that come from those increases.”
On Dec. 21, Xcel sent YVEA a notification that natural gas prices were climbing as temperatures dropped and demand increased. The co-op passed this message along to members that day, warning that higher electricity costs loomed.
“Due to this systemwide storm that is not only affecting Colorado and Wyoming, but many other states, we expect natural gas price escalation to impact electricity prices for our membership,” the message read.
Xcel even sending YVEA this notice is new and occurred for the first time in December. It’s a change put in place following the February 2021 winter storm that caught utility providers in Texas and other states unprepared and led to last year’s rounds of cost adjustments.
YVEA filed a lawsuit against Xcel challenging those charges earlier this month. The latest cost adjustments are not related to that lawsuit, YVEA officials said. Rather, they are connected to the storm that affected several states starting Dec. 21.
But the volatility in energy prices that led to the latest PCA is a significant part of why YVEA is looking into finding a different power supplier, a process that will take years. Xcel, which operates in several states beyond Colorado, currently supplies almost all of the co-op’s power.
“The vulnerability that this creates for our membership has been what’s motivating us to request proposals for new power suppliers,” Moore-Kemp said. “We understand that it’s not ideal in the context of increased volatility in fuel costs, so we’re working hard to try to get a better deal for our membership.”
How about February?
Members will still see the line item on their bill for Xcel’s PCA in February, but whether that will be the same 5-cent charge, a lesser assessment or nothing at all remains to be seen. Moore-Kemp said YVEA won’t know until the co-op gets a bill from Xcel closer to the end of the month.
“We know right before the billing cycle, so we truly are communicating (with members) as soon as we know,” Davidson said.
YVEA has not gotten another notification from Xcel about increased natural gas prices since the December notification. Officials at Xcel wrote in a news release on Tuesday, Jan. 17, that natural gas commodity prices have decreased since last month and residential customers should expect lower bills in February and March.
Still, natural gas prices are higher now than they were at this time last year, despite recent drops. Another factor is the weather, Moore-Kemp said.
“We have seen colder temperature this December versus last December,” she explained, adding that the average temperature was 12 degrees colder compared to last year and the lowest overall temperature was 14 degrees lower.
“If you have electric heating, just keeping your thermostat the same as you did year over year, you’re going to be using more energy,” Moore-Kemp said.
What if customers can’t pay their bills?
Davidson emphasized that if a member is having trouble meeting these increased energy costs, they should reach out to YVEA as soon as possible.
“The best thing a person can do is to not wait if they have concerns about paying their bills,” Davidson said. “Pick up the phone, come into the office, reach out to us because we can work with them on paying bills.”
One option is the co-op’s budget billing process, which if a member qualifies, allows them to pay a steady monthly bill and true up charges at the end of the year. Davidson said YVEA can help get members in touch with outside entities that can provide support as well.
One of those entities could be LiftUp of Routt County, which has seen a roughly 25% increase in requests for utility assistance compared to a year ago, according to Executive Director Sue Fegelein.
LiftUp is providing more assistance this year too, with the total cost of that assistance for this January exceeding last January’s total by 54%. These payments go directly to the vendor and have a limit of $500 a year per client.
This is funded through Energy Outreach Colorado, as well as the Steamboat Springs Board of Realtors’ Community Utility Support Program with the Yampa Valley Community Foundation and the Rocky Mountain Health Foundation, among others.
Fegelein welcomed more donations for this and other emergency financial assistance funds through LiftUp’s website at LiftUpRC.org.
“The utility assistance fund is to be used for whatever heats the client’s home and may also be used for water,” Fegelein said. “The client must be in an emergency situation and have an income of 300% or lower the federal poverty level.”
Xcel’s power portfolio
Some residents who don’t use natural gas might wonder why the rising cost of gas will affect them. While YVEA provides electricity and not natural gas, about 30% of Xcel’s power mix in Colorado comes from gas-fired power plants.
Overall, more than 60% of Xcel’s Colorado power mix comes from nonrenewable resources such as coal or natural gas, according to the company’s website. Across all the states where Xcel provides power, 26% of its mix comes from natural gas power plants, 25% from coal and 29% from wind energy.
Is Texas to blame?
While YVEA has occasionally assessed PCA charges to members as far back as 2007, the added charge grabbed many members’ attention last year following the 2021 winter storm.
Had that PCA been assessed in one month, it would have equated to about 15 cents per kWh, Moore-Kemp said. That threshold was too much to assess at once, so the PCA was split out over seven months.
But that has ended now, and the latest PCA charges are not related to the 2021 storm. While YVEA and other power co-ops have sued Xcel for that storm, that lawsuit does not relate to the latest charges.
If a monthly PCA were to be higher than this month’s 5 cents, Moore-Kemp said the co-op would likely consider spreading that out over multiple billing cycles. Still, not assessing the charge now could lead to larger charges down the road.
“We’d probably look at spreading them out because we really don’t want to impact the membership in that way,” Moore-Kemp said. “But we want to do the responsible thing with not delaying the recovery of these costs and impacting later bills.”
To reach Dylan Anderson, call 970-871-4247 or email danderson@SteamboatPilot.com.
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