Xcel Energy plans $16 million Texas fuel cost refund

Xcel Energy plans $16 million Texas fuel cost refund

Texas customers could expect a refund that will amount to more than $14 credit on their residential bills in October, if approved by the Public Utility Commission of Texas.

The one-time $16 million refund is due to historically low prices for natural gas, which fuels about 50 percent of the region’s electricity production. Fuel costs make up between 20 and 30 percent of a typical residential bill, and these costs have fallen considerably over the past couple of years.

As of today, Xcel Energy will also be adjusting the fuel cost factor to reflect the lower costs, which will result in a 5 percent savings on residential bills. 

The factor can only be changed up to three times per year, and when market conditions change, the factor can sometimes collect either too much or too little to pay the fuel costs. If it doesn’t collect enough,  a short-term surcharge is added to make up the difference. In this case, the fuel cost factor collected too much earlier in the year when gas prices fell, and the company is refunding the money collected above the costs they paid for fuel during those months.  Xcel Energy does not make a profit on fuel costs, so costs and savings are passed on to customers dollar for dollar.

The refund does not apply to wholesale customers such as rural cooperatives or municipal systems or New Mexico customers. Fuel costs for these customers are adjusted monthly, so the fuel cost savings have already been accounted for.

The company's Hale Wind Project is officially in commercial operations as of today. It will also help further lower fuel costs because there are no fuel purchases associated with wind energy. A ribbon cutting event has been planned at Hale on July 15. More details on the event will be provided in coming weeks.

 

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