Facing federal complaint, Xcel says it was ‘prudent’ during winter storm

Matt Whittaker

An Xcel Energy warning sign for a high-pressure natural gas pipeline buried underground near Parshall, Colo.Photo byTony Webster via Flickr

By Matt Whittaker / NewsBreak Denver

(Across Colorado) Xcel Energy says its natural gas purchasing activities during 2021’s Winter Storm Uri were “prudent” while four Colorado electric co-ops, in a federal complaint, say the state’s biggest electricity provider bungled supply during the freezing temperatures.

The four co-operatives, which purchase wholesale electricity from Xcel, are asking the Federal Energy Regulatory commission to require Xcel to refund at least $6.9 million of the $17.5 million in fuel cost charges it passed on to them in February 2021. That was when Winter Storm Uri knocked out power to millions in Texas, resulting in utilities that serve Colorado spending more on natural gas.

The cooperatives, which provide power to more than 570,000 people in Colorado, say Xcel didn’t obtain enough natural gas resources necessary to meet its February 2021 electric requirements despite having a plan to do so. 

“This failure left Xcel suddenly and unnecessarily dependent on natural gas purchases in a volatile and expensive energy market,” the cooperatives said this week. “Xcel then passed along millions of dollars of these imprudently incurred fuel costs to its Colorado customers.”

The four wholesale customers — CORE Electric Cooperative, Grand Valley Power, Holy Cross Energy and Yampa Valley Electric — also say that Xcel didn’t credit them for a natural gas sale it made to a corporate affiliate during that time, adding that it has impeded their investigation by withholding information.

“We have serious concerns that a substantial portion of Xcel’s fuel costs were entirely avoidable,” said Grand Valley Power CEO Tom Walch. “We feel we have a duty to our members, the ones who ultimately pay Xcel’s charges, to challenge these costs.”

For its part, Xcel said its “gas purchasing practices before and during the storm were prudent, consistent with the law and our contractual obligations and ensured continued energy service for all customers — wholesale and retail — during the unprecedented storm,” according to spokeswoman Michelle Aguayo.

She said the company, which is the main natural gas and electricity provider for the Denver metro area, will respond to the federal complaint “with a full description of the prudent measures we took to serve our customers during Winter Storm Uri.”

Xcel is “disappointed” it couldn’t resolve the issue with the wholesale customers but remains “hopeful” it can do so, she said. 

“We understand and empathize with the financial challenges the changing commodity market prices bring,” she said. “However, due to our sound planning and purchasing policies, we effectively and reliably managed the system as well as the health and safety of our customers.”

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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.

Lakewood, CO

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