Xcel Energy customers may see short-term price increases in their electric and natural gas bills, as natural gas prices continue to climb.
Xcel Energy — the state’s largest utility — provides electricity and natural gas service to customers. Some of the electricity the company generates also comes from burning natural gas. Every financial quarter, the company submits price adjustments to state regulators based on the commodity price of natural gas, which fluctuates up and down. Those increases, or savings, are passed onto customers in a “Gas Cost Adjustment.”
In an adjustment announced Friday, Xcel Energy estimated that residential customers would see an average monthly increase of $2.64 in their gas bills, while small commercial customers would see a $14.07 spike. For electric bills, the company estimates that residential customers will see a monthly average increase of $2.56, while small businesses would see a $5.15 increase.
If approved by the state’s Public Utilities Commission, the rates would go into effect on April 1 and stay in effect for three months, according to the company.
The Henry Hub, a natural gas distribution hub in Louisiana, is considered a key natural gas price indicator. Last week, the U.S. Energy Information Administration estimated that the “spot price” — or current market price — at the hub will be significantly higher this year and in 2026 compared to 2024. The agency attributes the spike to increased demand for gas to heat buildings and generate electricity, while the country will also have less natural gas in storage.
Natural gas prices sharply climbed in 2022 compared to the past few years, driven by factors including the war in Ukraine, spiking summer demand and an increase in natural gas exports.
While Colorado customers end up paying for changes in the market price, Xcel Energy says it does not profit from recouping those costs.
