cel proposed to increase electricity costs | SummitDaily.com

cel proposed to increase electricity costs

Lu Snyder

SUMMIT COUNTY – Energy bills are said to be on the rise. But then again, maybe not.

In March, cel energy notified its customers statewide of its request to the Colorado Public Utilities Commission (CPUC) to raise electricity prices by “about $102 million between April 15 and Dec. 31.”

The request equals a $4.10 increase monthly for a customer using 625 kilowatt hours (kWh), or an average monthly bill of approximately $44.50.

“Our costs (to generate) fuel and purchase power has increased by about 50 percent over the past five years,” said cel spokesman Mark Stutz. However, rates have remained at a fixed level, he explained.

For example, the cost to cel is approximately $19 per megawatt hour (mWh), but the company can only charge $13 to its customers – a difference of approximately $150 million dollars for 2002. Prior to this, the company was able to mitigate the cost difference through energy trading – a process of buying and selling electricity for profit.

In 2001, cel made $180 million “in positive revenue through energy trading,” Stutz said. Half of that – $90 million – was shared with customers through monthly credits on their bills.

However, energy trading in 2002 has not seen such positive revenues and “the roughly $6 mWh difference is undercollected,” Stutz said. “Sometime, that does have to be paid. It’s going to be collected somehow.”

From cel’s perspective, it’s better to collect that difference now because, in January 2003, gas and electric prices will be reset, representing an estimated 7.5 percent increase.

“What we don’t want is to have our customers have that double whammy in January,” Stutz said. He added, if cel’s proposed increase is not approved until next year, customers would see an approximately 15 percent increase in their bills between January and April of 2003.

While some have expressed concern over the proposed increase, cel also has proposed some decreases as well.

Due to a fairly mild winter and adequate supplies, gas prices have dropped lower than the last heating season, Stutz said. And cel has requested the CPUC to decrease gas prices by $79.2 million – or $4.22 monthly for an average household. Additionally, it requested to discontinue the collection of a 1.33 percent electricity surcharge, “which would result in an annual decrease of $19 million.”

Both proposed decreases were approved by the CPUC and went into effect March 29, Stutz said.

For customers using both gas and electricity, the combined increase and decrease “is essentially a wash,” Stutz said.

But while the proposed increase and coinciding decreases might seem like a lot of money shuffling, Stutz said it’s necessary.

“Not everybody takes both gas and electricity from us,” he said. “They’re separate businesses.”

The CPUC approved a 1.22 percent increase on electricity prices, effective April 15. But the remainder of cel’s proposed increase has yet to be determined. According to Stutz, the increase has been referred to the administrative law judge, who is scheduled to make a recommendation to the PUC later this month or in early May.

There are a number of possibilities for the resulting recommendation, Stutz said. It could be anywhere “from the cel filing has no merit, all the way to granting us fully what we’re seeking.”

At least one Summit County resident has expressed frustration at cel’s proposed increase.

“I refuse to pay the proposed increase unless (it’s used) for the start-up costs of providing us with sustainable energy,” Silverthorne resident Michelle Gabrieloff-Parish said in a letter to cel. “We already have the technology to turn wind, water, solar or even refuse into usable energy.”

“We do have renewable energy programs in place,” Stutz said.

One such program is called Windsource, where wind power is used to generate electricity for the customer.

However, alternative energy sources still cost more than traditional sources such as coal and oil, Stutz said. And cel cannot offer incentives to its customers for such programs because it is prohibited from subsidizing energy costs to a particular group of customers. As a result, customer participation in cel’s renewable programs is voluntary.

Lu Snyder can be reached at 970-668-3998 x203 or lsnyder@summitdaily.com

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