Denver, CO

Colorado seeks comment on climate plan that may increase natural gas bills

Matt Whittaker

By Matt Whittaker / NewsBreak Denver

(Denver, Colo.) State regulators this week will take public comments on a plan requiring natural gas utilities to reduce greenhouse gas emissions at a time when high energy costs are top of mind for many residents amid a global natural gas shortage.

The Colorado Public Utilities Commission is adopting rules that require natural gas distribution utilities with more than 90,000 retail customers to use "clean heat resources" to reduce greenhouse gas emissions by 4 percent from 2015 levels by 2025 and 22 percent by 2030.

The commission has set aside time from 9 a.m. to 5 p.m. Thursday and Friday for online meetings to hear public comments on the rulemaking, which involves natural gas utilities submitting plans to hit the targets and manage costs. 

To implement their plans, utilities can charge up to 2.5 percent of annual natural gas bills for all of their full-service customers.

Natural gas prices rise in Colorado

The plans to let utilities charge more for natural gas come as prices for the commodity in the state have been on the rise. 

In November, residential natural gas customers in Colorado paid 31 percent more than they did the same month in 2020, according to the latest numbers from the U.S. Energy Information Administration. The price of $10.89 per thousand cubic feet is the second highest for a November period going back to at least 1989.

Earlier this year, state officials warned utility customers that a recent winter storm could lead to sharply higher energy prices similar to last year during Winter Storm Uri

Even without recent severe weather, Coloradans already face sharply higher energy bills this winter as global demand for natural gas outstrips supply. Customers of Xcel Energy, the largest utility in the state and the main natural gas and electricity provider in the Denver metro area, saw January energy  bills jump 37%, or about $100 for Denver residents.

Why natural gas prices are up

Natural gas prices have been rising as the worldwide economic recovery from the pandemic generates more demand for natural gas to power businesses and homes. 

At the same time, supply hasn’t recovered, partly because there is less drilling for oil, which is often pumped out of the ground alongside natural gas. 

Prices abroad are generally much higher than they are in the United States, which thanks to the shale fracking boom, is the largest producer of natural gas in the world.

That price difference has foreign companies eager to buy natural gas in liquid form from U.S. exporters, helping keep the domestic supply tight. 

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Matt Whittaker writes about natural resources industries, including oil and gas, mining, renewable energy, agriculture and cannabis. He's been based in the Denver metro area since 2013. You can follow him on Twitter @mattswhittaker.

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