Xcel Energy Texas bills to drop with lower fuel costs


AMARILLO, Texas (KAMR/KCIT) — The cost of electricity will drop for all Xcel Energy customer classes on April 1 this year as monthly fuel cost factor to reflect historically low natural gas prices and the increased use of low-cost wind energy.

For Texas residential customers using 1,000 kilowatt-hours a month, the total bill will decrease by $4.35, or 4.3%. The lower fuel costs are being implemented on an interim basis pending final approval by the Public Utility Commission of Texas.

“Natural gas is as cheap as it has been in decades, and this is good for our customers because it fuels about half our annual supply of electricity,” said David Hudson, president, Xcel Energy – Texas. “And the new Hale Wind Project near Plainview uses the power of the free and abundant wind to make electricity, further driving these savings.”

In addition to the lower fuel costs, the company is moving ahead with its plan to refund $39.4 million to Texas customers in June – the third time Xcel Energy has refunded fuel costs since January 2019.

The fuel cost factor collects the pass-through costs of coal and natural gas that fuel area power plants, as well as the cost of electricity imported into the area from other suppliers. The factor was last changed in July 2019, resulting in a 5% drop in typical residential bills.

The 2019 fuel cost reduction was put in place after the Hale Wind Project began supplying electricity from its 239 turbines in Hale County.

Since then, construction started on Xcel Energy’s Sagamore Wind Project near Portales. Wind energy from Sagamore will benefit both New Mexico and Texas customers and reduce fuel costs even further in 2021.

New transmission lines are also helping to lower fuel costs by building efficiencies into the regional grid and creating additional pathways for the import of less expensive energy from the wider power market outside the area.

More details:

  • Fuel costs currently make up about 17% of a typical residential bill and is passed through dollar-for-dollar to customers with no profit to Xcel Energy. Base rate charges account for the remaining share of a monthly bill, and a separate proposal to increase base rates to cover grid enhancements is pending with the Public Utility Commission of Texas.
  • From 2017 through 2019, the Texas average residential rate per kilowatt-hour declined 7.6% because of lower fuel costs.
  • Xcel Energy’s business and industrial customers in Texas also will see lower bills related to the April 1 change in fuel cost factors.
  • The fuel cost factor in Texas can be adjusted up to three times per year to reflect changing market conditions.
  • Fuel costs for New Mexico customers and wholesale customers such as electric cooperatives and municipal utilities are adjusted monthly, and already reflect the savings that will reduce Texas bills.
  • Xcel Energy passes along 100 percent of the wind energy federal production tax credits generated by the Hale Wind Project to customers through the fuel cost factor, further enhancing savings from using more wind energy.
  • Both the Hale and Sagamore wind energy plants will play large roles in helping Xcel Energy reduce carbon emissions by 80 percent by 2030.
  • Preliminary analysis shows that Xcel Energy’s Texas-New Mexico generating mix in 2019 was 47% natural gas, 25% coal, 26% wind and 2% solar.

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