As monthly power costs could rise again for many households, Colorado regulators are challenging Xcel Energy's claim that its electricity service remains affordable because of a controversial metric.
As The Colorado Sun reported, the debate raises questions about whether a company serving 1.6 million customers is relying on a rosy statewide average to downplay the financial strain on families.
What happened?
Wednesday's discussion focused on Xcel Energy's use of "share of wallet" as the Colorado Public Utilities Commission considered the utility's proposed $225 million electric rate increase.
As the Sun reported, Xcel said the metric shows customers on average spend less than 1% of their income on electricity. The Colorado Office of the Utility Consumer Advocate argued that the statewide figure reflects Colorado's high earnings as much as it reflects utility bills.
With the median household income ranging from $97,000 to $106,000, the office said, Xcel's assertion that the 1% figure is about half the national average makes utilities appear more affordable than they are for many people, the Sun reported.
"There's no perfect metric," Robert Kenney, CEO of Xcel Energy's Colorado subsidiary, said. "Customers don't pay rates; they pay a bill. And so that's why we've been focused on where our bills stand as a percentage comparison to the rest of the country."
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Those concerns came as regulators also reviewed the proposal's effect on a typical bill. For a customer using 601 kilowatt-hours a month, the Sun reported the monthly total would rise from $104.68 to nearly $111.
"With wallet share, when they are using the number generically across their rate base ... the percentage of wallet share is kind of a meaningless number," Commissioner Tom Plant said, according to the outlet.
Why does it matter?
Rate increases can place a particularly heavy burden on low-income households, renters, and people living on fixed incomes.
The Sun reported that, according to PUC staff, the proposal would be the eighth increase to Xcel Energy's Colorado electricity rates since September 2023, for a combined rise of about 22%.
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The dispute also concerns how companies frame affordability in ways that sound reassuring without fully reflecting what many customers actually experience.
A metric tied to Colorado's relatively high incomes may obscure the reality for households cutting back on other essentials simply to keep the lights on.
What's being done?
Regulators indicated they wanted to see a broader measure of affordability that captured how rates change over time instead of a single statewide snapshot, according to the Sun.
Commission Chair Eric Blank said it would be better to track average residential rates. Plant put Xcel's framing in colorful terms.
"It is kind of like if Elon Musk walks into a bar in La Junta, the average income of everybody in the bar is over a billion dollars, which doesn't really tell you anything," he said, per the Sun.
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