Xcel Energy filed a proposal with the Public Utility Commission of Texas to pass the savings of reduced fuel and purchased energy costs on to Texas customers by reducing its monthly fuel charge on customer bills, a move that reflects a continuing focus on managing fuel costs to help keep total energy costs down.
If the fuel cost decrease is approved, a typical residential customer using 1000 kilowatt hours per month would see an average monthly savings of $7.68 – a 6.9% reduction starting March 1. The longer term fuel cost decrease will substantially offset the previously announced temporary four month base rate surcharge, also set to start March 1. That surcharge, which would expire in June, has not been approved by the Public Utility Commission of Texas.
A sustained decrease in the cost of natural gas used to fuel several area power plants, less expensive power imported over new transmission lines and an increased supply of wind energy are the primary factors driving down fuel costs, which account for about one third of a residential bill. The remainder of the bill includes demand and energy charges and service availability charges that recover costs of constructing, operating and maintaining the facilities that provide safe and dependable service to the growing economies of the Texas Panhandle and South Plains regions.
“Monthly bills are impacted by a variety of factors, but customers are most interested in the bottom line,” said David Hudson, president of Southwestern Public Service Company, an Xcel Energy company. “We’re pleased that our focus on controlling fuel costs is helping to offset the cost of making our regional power grid more reliable, and that we can pass that savings on to our customers.”
In 2014, the company entered into a larger wholesale market with neighboring utilities in the Southwest Power Pool. New high-voltage transmission lines completed in 2014 provide the links to this market and its supply of lower cost power, saving between $60 million and $80 million per year.
Hudson said, “We would not have been able to access the lower cost power without the investment in new high-voltage transmission lines,” “It’s an investment in our future much like the purchase of a new car that gets better gas mileage. Your up front costs go up, but the efficiencies you gain reduce your costs in the long term.”
In addition to tapping new markets for cheaper power sources, the company has added 750 additional megawatts of wind energy since 2014, which is estimated to save almost $600 million in fuel costs over the next 20 years.