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Xcel Seeking Fuel Cost Raise in Texas

Natural gas prices rise, but wind energy provides a hedge
AMARILLO -- Xcel Energy customers in Texas will see an increase in overall bills to cover the higher costs of natural gas used to generate 40 percent of the regions electricity. 

Xcel Energy filed a proposal with the Public Utility Commission of Texas to change its fuel cost factor to reflect higher prices for fuel, natural gas and coal, that if approved will result in higher fuel charges beginning June 1.

For a customer using 1,000 kilowatt-hours a month, a new fuel cost factor that accounts for higher fuel costs will mean an increase of $1.54 a month, or about 1.47 percent.

"By adding more wind energy and building more fuel-efficient power plants, we have managed to go a year without an increase in fuel costs despite a 7.8 percent increase in natural gas prices," said David Hudson, president and CEO of Southwestern Public Service Company, an Xcel Energy company. "We will continue to maximize our investment in natural gas and wind energy, which will help us contain fuel costs even as commodity prices rise."

Almost 10 percent of the regions energy comes from area wind farms, and that number continues to grow as new wind farms come online this year. 

Wind energy is a great hedge against rising fuel prices, as well as rising costs for environmental compliance, Hudson said. We currently have about 1,700 megawatts of wind energy on our system with 700 additional wind energy megawatts coming online. As natural gas prices rise, we save on fuel costs by displacing gas-fired generation with wind generation. 
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