Colorado regulators approve Xcel Energy rate increase, raising monthly electric bills

Some Coloradans can expect to pay more on their monthly electricity bills after the Colorado Public Utilities Commission approved an Xcel Energy rate increase Wednesday.

Under the approved plan, residential customers will see an average increase of about $5 per month, while commercial customers will pay about $7 more each month. The rate hike goes into effect at the end of December of this year. 

The increase is significantly smaller than Xcel's original request. The utility initially sought a revenue increase of $356 million but later reduced that request to just over $150 million following feedback from regulators and customer opposition.

"The revised revenue requirement increase means an estimated residential average monthly bill increase of $5," Xcel staff member Ellie Friedman told commissioners during Wednesday's hearing.

While commissioners approved the rate increase, some expressed concerns about the long-term affordability of electricity.

Public Utilities Commission Chairman Eric Blank noted that despite declining electricity sales since 2021, Xcel has sharply increased its capital spending, from $1.6 billion in 2021 to $5.4 billion in 2025.  He says the utility is proposing to spend nearly $6 billion in 2026.

"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," Blank said.

Xcel uses something called "share of wallet" to argue its rates are affordable, claiming that Colorado residents spend less than 1% of their household income on electricity. 

CBS Colorado reached out to Xcel for a comment on the price hike during a summer that has broken heat records in Colorado. The company provided the following statement in response:

"For more than 100 years, we have invested in safe, reliable, and clean energy for Colorado, and we carefully evaluate every investment to ensure it delivers value and meets the long-term needs of the communities we serve.

While we are awaiting the Commission's written decision, we are disappointed that it did not fully approve a settlement agreement reached with a diverse group of stakeholders, including the Colorado Public Utilities Commission staff. 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. 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.

We also disagree with characterizations of our current capital investment levels. Many of the investments included in the 2025 electric rate case were driven by Colorado energy policy and focused on strengthening the electric grid, improving reliability and resilience, preparing for growing demand, and enabling the continued transition to cleaner energy resources.

Through this case, we sought to recover costs for investments already serving Colorado customers, including:

• 17,771 wood poles replaced
• 17,854 service transformers in use on the distribution system
• 775 megawatts of new generation interconnected to transmission
• 459 new transmission circuit miles
• 306 miles of distribution cable replaced
• 50 new distribution feeders
• 5 new transmission and distribution substations placed into service

These investments address the needs of a growing and evolving energy system. They help improve reliability, strengthen the grid against increasingly severe weather, reduce outage risk, and support the delivery of cleaner energy resources that customers and state policy demand.

Though these investments have been extensive, we have remained focused on preserving affordability for our customers.  Our Colorado customers continue to pay among the lowest electric rates and bills in the nation. In 2025, the average residential electric bill was 39% below the national average and 27% below the state average, while Colorado households spent about 1% of their income on electricity, among the lowest levels in the country.

We remain committed to balancing affordability with the investments necessary to provide safe, reliable, and increasingly clean energy. As we evaluate the Commission's decision, we will continue working to manage costs responsibly while maintaining the level of service Colorado customers expect."