Xcel Energy received approval from the Colorado Public Utilities Commission on Wednesday for a $157 million electricity rate increase that will raise the average residential bill by about $5 a month. That figure is less than half of what the utility originally sought and the product of a lengthy contested proceeding that drew opposition from consumer advocates, AARP Colorado, the Colorado Office of Utility Consumer Advocate, Energy Outreach Colorado, and the city of Boulder.
A $356 million ask whittled down
Xcel filed its rate case proposal on Nov. 21, 2025, seeking a $356 million increase in annual revenue, which is an estimated 9.9% bill increase for average residential customers, roughly $9.94 more per month. Consumer advocates described the request as among the largest ever filed in the state.
In June, Xcel Energy and its corporate customers, electrical unions, and PUC staff submitted a settlement agreement to the commission for a $225 million rate increase, which would raise the average household bill by $6.13 to $110.81 a month, a nearly 6% increase.
The settlement was supported by the company, PUC Staff, Colorado Energy Consumers, Climax Molybdenum, International Brotherhood of Electrical Workers Local Union 111, and Walmart. It was opposed by AARP, the Colorado Office of Utility Consumer Advocate, and the City of Boulder. Energy Outreach Colorado, which provides aid to low-income families, also opposed the settlement.
The $225 million settlement was further reduced to $157 million based on managing depreciation and budget scheduling, according to Joseph Pereira, director of the state Office of the Utility Consumer Advocate.
What customers will pay
The average residential bill for 601 kilowatt-hours will rise to $109.92 a month from $104.91. The average bill for small commercial customers will rise a little less than 5% to $164.37 a month for 1,041 kilowatt-hours.
Consumer groups noted that Wednesday’s decision marks the eighth rate hike since September 2023.
The pattern is not unique to Colorado. In North Carolina, Duke Energy Progress cut its rate hike to 6.8 percent after regulators pushed back, while in New York, NYSEG sought $464 million that would add $33 to monthly residential bills. Utility rate cases are increasingly becoming prolonged, multi-party negotiations rather than straightforward commission reviews.
Why utilities say higher rates are necessary
An Xcel Energy spokesperson said increased spending was largely due to infrastructure upgrades to the electrical grid, improving reliability, preparing for growing demand, and helping the transition to clean energy sources. The underlying justification mirrors what utilities across the country are citing: capital investment in grid safety and reliability, rising transmission costs, and infrastructure upgrades.
PUC Commissioner Eric Blank noted that despite declining electricity sales since 2021, Xcel had tripled its capital spending over the same period, with further increases proposed for 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 customers,” Blank said.
As with all rate cases, this electric rate case followed a lengthy and involved process that closely scrutinized every aspect of the utility’s request. Several stakeholders formally intervened, and the PUC’s own staff of economists, engineers, and accountants conducted an independent review. The review process typically takes many months before any change takes effect.
Next steps and potential rehearing
The parties to the rate case, including Xcel Energy, the state Office of the Utility Consumer Advocate, and major business customers, have the option to ask for a PUC rehearing and reconsideration of the decision. Whether Xcel pursues a rehearing given the deep cut to its original request remains to be seen.
The LIBRE Initiative, which noted Wednesday’s order is the eighth rate hike since September 2023, is launching a letter-writing campaign asking regulators to put consumers first.
The new rates are subject to the commission’s proceeding schedule for Xcel’s case, docketed as No. 25AL-0494E , and may be reconsidered if any party requests a rehearing.
