AMARILLO, TX (KFDA) - Xcel Energy customers can expect to see an increase in their bills.
On Dec. 7 Xcel Energy reached a settlement with the Texas customer groups to increase annual revenues that will support close to $1 billion in capital improvements.
Under the settlement, an average residential bill will rise by about $3.97 per month.
The company said the rate increase will take effect on Dec.10.
This increase is needed to support about $1 billion of investments that Xcel has made through December of 2015 and to maintain, improve reliability, and import lower-cost power.
The agreements will also provide for the assured recovery of $12.6 million of annual power factor revenues, including $11 million of additional power factor revenues.
This will protect Xcel against the risk of revenue loss from potential unrealized power factor billings for a two-year period after new rates become effective.
"Our customer groups understand that the service Xcel Energy provides and the investments we're making are critical to the economic success of both Xcel Energy and the region, and we value their input throughout this process," David Hudson, President of Excel Energy Texas, said.
The new rates also account for the reduction in wholesale power sold to rural cooperatives and municipal utilities in the region.
The rates will also be implemented on an interim basis until a final order is issued by the Public Utility Commission of Texas.
Xcel Energy is also permitted to seek collection of the new rates retroactively until July 20.
They will file a surcharge in the spring of 2017 that will recover the difference between the old and new rates for the period of July 20 through Dec. 9.