Gov. Jared Polis issued an all-hands-on-deck directive to state agencies Monday to find short- and long-term solutions to skyrocketing heating bills that Coloradans say are forcing them to decide between keeping warm and keeping food on the table.
In a letter and in a news conference, Polis directed the Colorado Public Utilities Commission, the Colorado Energy Office and other state agencies “to actively pursue all opportunities to reduce the energy cost burden on utility customers in Colorado.”
Polis urged agencies to pursue federal money to make homes more energy efficient; approve rules requiring more oversight of gas utilities’ costs; and continue efforts aimed at electrifying buildings to blunt the impacts of volatile natural gas prices.
“As the recent price spikes unfortunately demonstrate, Colorado remains vulnerable to unpredictable rapid increases in the regional and global costs of natural gas,” Polis said.
For the past two months, people across the state have reported their utility bills have at least doubled as cold weather hit and wholesale natural gas prices shot up.
Over the next 12 months, the governor wants the PUC to develop comprehensive strategies to reduce energy costs “for our most vulnerable Coloradans.” He asked the head of the Colorado Department of Regulatory Agencies to oversee efforts to improve long-term stability of fuel costs, explore ways utilities can guard against price swings and make sure Colorado is taking advantage of federal dollars for programs to increase energy efficiency.
State regulators said during a public meeting last week that the biggest drivers behind the soaring heating bills have been high wholesale natural gas prices and colder-than-normal weather.
The natural gas market is unregulated. For several years, prices have been fairly low and stable, but cold weather and other factors fueled increases late last year. The U.S. Energy Information Administration said wholesale natural gas prices jumped more than 53% from 2021 to 2022.
More than 60 people signed up to speak during a public forum held last week by the PUC in response to what the agency said was a level of comments and complaints it had not seen in recent history.
“As I read the comments, it seems clear that energy affordability is a crisis for many in Colorado right now, creating substantial hardship for utility customers during a time when other, non-energy costs have been increasing,” PUC Chairman Eric Blank said.
The Colorado Low-Income Energy Assistance Program, which distributes federal money, has said it’s on pace to process a record number of applications. The nonprofit Colorado Energy Outreach, which offers help with bills and weatherizing homes, has received about 20% more applications than a year ago.
When wholesale fuel costs rise, regulated utilities pass the increases through to customers without markups. Xcel Energy-Colorado and other utilities recently announced natural gas costs have declined, and, as a result, customers will see decreases in their monthly payments starting with the February bill.
Although utilities don’t profit off wholesale price increases, Cindy Schonhaut, director of the Colorado Office of the Utility Consumer Advocate, believes companies can do more to influence the price.
“The utilities have more power and influence over what goes on than they choose to say,” said Schonhaut, whose office represents the public before the PUC. “Because it’s just a pass-through for them, it doesn’t matter to them whether it’s high or low.”
State agencies can direct utilities to control their spending and emphasize customer service and bill assistance, Schonhaut said. Her office has been critical of Xcel Energy’s recent series of rate increase proposals, calling them a “pancaking” of requests.
Unlike higher fuel costs, utilities make profits from higher rates.
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