Colorado Gov. Polis wants to find solutions to high natural gas bills

Gov. Jared Polis issued an all-hands-on-deck directive to state agencies Monday to find short- and long-term solutions to soaring heating bills that Coloradans say are forcing them to choose between keeping warm and keeping food on the table.

In a  news conference, Polis said he has directed the Colorado Public Utilities Commission, the Colorado Energy Office and other state agencies “to actively pursue all opportunities to reduce the energy cost burden on utility customers in Colorado.”

Polis urged agencies to improve Coloradans’ access to assistance programs and do more to identify people who need help now.

Longer-term solutions cited by the governor include pursuing money to make homes more energy efficient; requiring more oversight of gas utilities’ costs; and continuing efforts aimed at electrifying buildings to blunt the impacts of volatile natural gas prices.

“We all know a bit about what’s happening. Due to international conflict, extreme weather, home heating costs have skyrocketed for Coloradans and of course across the country,’’ Polis said.

While Colorado’s natural gas costs are lower than the national average, Polis said that’s little consolation for people who are paying hundreds of dollars more to heat their homes each month. One long-term answer is to keep increasing the use of renewable energy, which costs less to generate power than fossil fuels, he added.

The Polis administration’s goal has been to get 100% of the state’s electricity from renewable sources by 2040.

“The truth is renewable energy lowers cost. The sooner we can move off high-cost coal energy and volatile natural gas energy, the sooner we can pass these savings along to consumers,” Polis said.

However, oil and gas producers and trade organizations have placed part of the blame for high fuel costs, including at the pump and in the home, on state and federal politicians for what they see as policies discouraging more drilling. Colorado ranks fifth in the country for oil production and seventh for natural gas.

Lynn Granger,executive director of the American Petroleum Institute-Colorado, said she was disappointed that Polis’ letter to agencies and utilities detailing his recommendations didn’t include reaching out to energy producers about incentivizing production in the state to increase natural gas supplies.

“At the end of the day, this is a supply and demand issue and supply is low,” Granger said.

API-Colorado, the Colorado Oil and Gas Association, Energy Outreach Colorado, a nonprofit that helps people with heat expenses, joined Xcel Energy-Colorado and others Monday to announce a $1 million contribution to boost assistance to those having trouble paying their utility bills. Granger said API members who regularly contribute have committed to additional donations.

In 2021, lawmakers approved surcharges of 75 cents each on investor-owned utilities’ gas and electric bills to help low-income customers.

For the past two months, people across the state have reported their utility bills have at least doubled as cold weather hit and wholesale natural gas prices shot up.

Simone Renee was one of four Denver-area residents who spoke during the news conference. The Aurora single mother said she works full-time but is struggling to pay her utility bills as costs have risen.

“Every month, I am faced with the choice of what I can pay given the increased cost of living and cost of energy,” said Renee, adding that she had to take her son out of preschool because of the expense.

Over the next 12 months, Polis said he wants the PUC to develop comprehensive strategies to reduce energy costs “for our most vulnerable Coloradans.” He asked the head of the Colorado Department of Regulatory Agencies to oversee efforts to improve long-term stability of fuel costs, explore ways utilities can guard against price swings and make sure Colorado is taking advantage of federal dollars for programs to increase energy efficiency.

State regulators said during a public meeting last week that the biggest drivers behind the soaring heating bills have been high wholesale natural gas prices and colder-than-normal weather.

The natural gas market is unregulated. For several years, prices have been fairly low and stable, but cold weather, fallout from the war in Ukraine helped fuel increases late last year. The U.S. Energy Information Administration said wholesale natural gas prices jumped more than 53% from 2021 to 2022.

Granger with API-Colorado said it’s dangerous to try to move away immediately from natural gas when it continues to provide reliable power, especially during frigid winter weather.

More than 60 people signed up to speak during a public forum held last week by the PUC in response to public feedback about heat bills. PUC Chairman Eric Blank said the large volume of complaints and comments the agency has fielded show “that energy affordability is a crisis for many in Colorado right now.”

The Colorado Low-Income Energy Assistance Program, which distributes federal money, has said it’s on pace to process a record number of applications. Energy Outreach Colorado, which also helps to weatherize homes, has received about 20% more applications for assistance than a year ago.

When wholesale fuel costs rise, regulated utilities pass the increases through to customers without markups. Xcel Energy-Colorado and other utilities recently announced natural gas costs have declined, and, as a result, customers will see decreases in their monthly payments starting with the February bill.

Although utilities don’t profit off wholesale price increases, Cindy Schonhaut, director of the Colorado Office of the Utility Consumer Advocate, believes companies can do more to influence the price.

“The utilities have more power and influence over what goes on than they choose to say,” said Schonhaut, whose office represents the public before the PUC. “Because it’s just a pass-through for them, it doesn’t matter to them whether it’s high or low. It doesn’t change the amount of money they get, which is no profit.”

State agencies can direct utilities to control their spending and emphasize customer service and bill assistance, Schonhaut said. Her office has been critical of Xcel Energy’s recent series of rate increase proposals. Unlike with fuel costs, utilities do make profits when rates increase.

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