Xcel Energy files for lower fuel costs

Xcel Energy has filed for lower fuel costs in the state of Texas.Yesterday, the company submitted plans to the Public Utility Commission of Texas (PUCT) for a revised fuel cost formula and factor that will reduce residential bills of 1,000 kilowatt-hours by an average of $1.83, or about 1.8 percent, starting April 1.The fuel factor is a pass-through charge on customer bills to recover the cost of fuel used by generation plants and energy purchased from other generators. The factor on customer bills can be adjusted up to three times a year in Texas to reflect rising and falling costs along with fuel mix changes.A drop in natural gas prices over the past year has offset higher natural gas usage in the company’s generation fleet.Another factor that is holding down fuel costs this year is the delay of a costly new federal emissions rule that was set to take effect at the start of this year. Xcel Energy’s only viable short-term compliance option to the Cross-State Air Pollution Rule was to reduce the output of lower-cost coal-fueled power plants and depend on natural gas-fueled plants for the bulk of power generation.Compliance would have increased costs of all fossil fuel generation despite lower natural gas prices. A federal appeals court issued a stay of the Cross-State rule Dec. 30, which temporarily delayed the effective date of the rule until the court takes up the merits of lawsuits filed in opposition.“We’re pleased to announce the reduction in the fuel cost factor, and that our joint efforts to oppose the Cross-State rule have helped contain expected increases in bills,” Riley Hill, President and CEO of Southwestern Public Service Company, an Xcel Energy company, said. “Moving forward, investments in new, more efficient generating units and new transmission lines will help us keep downward pressure on fuel costs.”