Colorado utilities commission approves electric rate increase

“This is a government-created monopoly. It's not your typical private company where people can just go elsewhere if the company isn't delivering or continues rate increases,” said Angel Merlos, strategic director for LIBRE Colorado, a Latino political action group that favors limited government. Merlos made the comments during a Center Square interview.

Xcel Energy is one of two for-profit electric utilities in Colorado. They provide electricity to Coloradans alongside 28 municipal utilities and 22 rural cooperatives, largely without competition, according to the Colorado Energy Office.

The average Xcel Energy residential customer in Colorado will see electric bills grow by around $5 per month, or 4.8%, PUC Rate Analyst Ellie Friedman said at the commission’s Wednesday meeting. The average commercial customer will see a $7.29 monthly increase, 4.6% of their current bill.

“At the end of the day, I remain concerned that if capital spending and rates continue to grow at levels considerably faster than inflation, electricity may simply become unaffordable for many customers,” PUC Commissioner Eric Blank said during the meeting after the revenue increase was approved.

Blank said Xcel Energy had seen declining sales since 2021, but tripled spending over the same period, with further increases to spending in 2026. 

The company had hoped the commission would have permitted a bigger revenue increase.

An Xcel Energy spokesperson said the company was "disappointed" by the reduced rate increase, adding that the increased spending was largely due to infrastructural upgrades to the electrical grid, improving reliability, preparing for growing demand and helping the transition to clean energy sources.

“The settlement reflected a balanced approach that sought to recover prudent investments already made to serve Colorado customers and comply with state priorities and regulations - all while remaining mindful of affordability concerns of our customers,” Xcel Energy spokesperson Lisa Andersen told The Center Square in an email. “The Commission’s decision not to support the infrastructure needed to deliver on Colorado’s energy policies - supported by such a broad range of stakeholders - is surprising, and we will need to evaluate our investment approach in Colorado going forward.”

Andersen added that Xcel Energy’s average Colorado residential electric bill was 39% below the national average and 27% below the state average.

But opponents to the rate increase said the move was excessive following a series of similar rate hikes for Colorado residents in recent years. Ahead of Wednesday’s PUC decision, some advocates asked the commission to flatly deny the rate increase.

“Since September of 2023, we have seen eight rate increases, including these if these come to pass,” Merlos told The Center Square. “This is something that just isn't sustainable.”

According to Xcel Energy, the average residential customer in Colorado has seen rates increase by 36.4% between 2019 and 2025, more than the national average of 31.5% over the same period.

The latest electric rate increase was first proposed by Xcel Energy back in November, at a total of $336 million – roughly a 10% addition to the average residential customer’s monthly electricity bill. After a seven-month period of public comments and testimonies, the last proposal before Wednesday’s final decision was $225 million.

Days after the electricity rate increase was proposed, Xcel Energy’s pending gas revenue increase was proposed. The hike was initially quoted at $190 million – an 11.4% increase for the average residential customer – but was brought down to $123 million after public comments and testimonies.

Merlos said the utility rate increases would hurt all Coloradans’ wallets, but that Latinos would be more likely to feel the pain because the group tends to have larger and younger families.

“When you have a large family, you're going to use more electricity, you're going to use more lights, more power,” said Merlos.