AMARILLO, Texas (Oct. 7, 2024) – Xcel Energy submitted a proposal to refund $53.3 million in fuel costs to Texas customers that will result in a one-time credit against electricity charges during the December billing cycle.
If approved by the Public Utility Commission of Texas (PUCT), customers will receive billing credits based on the amount of electricity a customer uses during December. Residential customers using 1,000 kilowatt-hours a month, for example, would see a total bill credit of $36.84. The refund could be spread over two months depending on when a customer’s meter is read.
“The cost of fuel is a pass-through charge on customer bills, and when fuel costs fall, our customers realize the savings,” said Adrian J. Rodriguez, president, Xcel Energy – Texas. “Lower natural gas prices have helped keep a large portion of our power generation costs down for much of this year. Additionally, customers have benefited from low-cost energy generated by local wind farms, which harness the wind as fuel.”
Xcel Energy’s costs for fuel and power purchase agreements are passed through to customers without markup via a fuel cost factor on their bills. Although natural gas prices fluctuate daily, the fuel cost factor collects a fixed amount. Over time, this generally balances out, but it can sometimes lead to over- or under-collection of the actual fuel costs.
While a fixed fuel factor aids in providing price predictability for customers, if natural gas prices remain lower than anticipated for an extended period, the resulting surplus is refunded to customers with interest.
“Our customers enjoy cost-savings from our diversified mix of generation resources and access to competitive market pricing for electricity,” Rodriguez said. “We are dedicated to investing in innovative energy solutions that consistently provide value to our customers and bolster a strong economy.”
About 41% of the electricity delivered to Xcel Energy’s Texas-New Mexico customers in 2023 was powered with natural gas, another 22% with coal. Overall, about 37% of the energy area customers used last year was carbon-free (35% wind plus 2% solar).
Investments in the generation, transmission and distribution of electricity ensure a resilient grid built to deliver the most economical power to Xcel Energy’s customers — a modern grid ready to integrate technologies of the future and fuel the Southwest’s economy.
Transforming the region’s generation fleet is part of that journey. Through August of this year, company-owned Hale and Sagamore wind farms delivered Texas customers a net savings of $95.9 million – that’s total fuel savings minus costs to build and operate the wind farms. And moving the retirement of the Tolk Generation Station coal operations up to 2028 will save customers about $100 million and help preserve the region’s water supply.
Xcel Energy is capitalizing on three new company-built solar power projects to tap into some of the nation’s best solar resources. Scheduled to come online in 2026 and 2027, these plants will more than double Xcel Energy’s Texas-New Mexico current solar capacity to 418 megawatts, delivering peak power during the day when it’s most needed.
As regional electricity demand rises, these projects offer substantial benefits from federal solar tax credits, avoided fuel costs, and community reinvestment and job creation.
Over a 35-year lifespan, these solar plants are projected to save Texas and New Mexico customers between $900 million and $2 billion in fuel costs and provide $500 million in customer value through tax incentives. Additionally, by utilizing existing infrastructure, Xcel Energy can keep costs low.
New Mexico customers are already enjoying lower fuel costs on their bills as the state’s regulatory framework allows amounts collected for fuel costs to be adjusted month-to-month.
About Xcel Energy: Xcel Energy (NASDAQ: XEL) provides the energy that powers millions of homes and businesses across eight Western and Midwestern states. Headquartered in Minneapolis, the company is an industry leader in responsibly reducing carbon emissions and producing and delivering clean energy solutions from a variety of renewable sources at competitive prices. For more information, visit xcelenergy.com or follow us on X and Facebook.
