While energy bills continue to climb for customers in the Denver area, Xcel Energy reported a net income, or profit, of $1.74 billion for the 2022 calendar year, an 8.7% increase over the previous year.
Xcel posted its 2022 fourth quarter and year-end earnings and held a conference call Thursday morning to discuss the numbers.
READ MORE: Colorado Public Utilities Commission discusses rate hikes
For the full year, Xcel pulled in more than $15 billion in revenue. The company’s profit in the fourth quarter alone was $379 million.
In breaking down those numbers, the company reported that natural gas revenue increased 44% last year, while electric revenue grew 8%. In a statement, Xcel said the company does “not make a profit on the increased wholesale price of natural gas.”
During the past decade, Xcel’s profits have nearly doubled. In 2012, the company reported a profit of $905 million for the calendar year.
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Xcel Chairman, President and CEO Bob Frenzel said in a statement the company delivered earnings of $3.17 per share and noted this is the 18th consecutive year that the company has met or beat its financial projections.
“Xcel Energy also delivered strong reliability for our customers and communities in 2022 despite increasingly volatile weather causing high energy demand events during hotter-than-normal summers in Colorado and the Upper Midwest, and Winter Storm Elliott which knocked out critical electric and gas service across the country,” he said.
On the call, company executives made no mention of the growing anger from Colorado customers who have seen significant increases in their bills. In fact, they called their bills “affordable.”
“We remain confident we can continue to deliver long term earnings and dividend growth within the upper half of our 5% to 7% objective range as we lead the clean energy transition and keep bills low for our customers,” said Brian Van Abel, executive vice president and chief financial officer.
READ MORE: As customers see big jumps in their bills, Xcel reports massive profits
In a lengthy statement to Denver7, Xcel said the driving factor for higher bills is an increase in fuel costs, noting colder temperatures late last year compared to 2021, which led to a rise in natural gas use.
“Even with the high cost of natural gas, we work to keep customer bills low by purchasing and storing natural gas when it’s less expensive. This helps protect against possible wholesale natural gas price spikes by locking in lower prices. We also contract for natural gas in advance of winter to lock in prices,” part of the statement read.
Xcel has asked the state’s Public Utilities Commission for another electric rate increase, a decision likely will come at a hearing next month.
Full Xcel statement:
We understand inflation is hitting everyone hard, and we want to help our customers who are facing challenges. Our goal as their energy provider is to provide safe, reliable, clean, and affordable energy.
The driving factor for high energy bills is the increase in fuel costs. The wholesale price of natural gas makes up the largest portion of most customers’ bills and is driven by global supply and demand market forces. Natural gas is used to heat customers’ homes and businesses and to generate electricity. We pass this cost directly to customers, without mark-up from the company. To be clear, we do not make a profit on the increased wholesale price of natural gas.
This year’s cold weather is also impacting customer bills with higher-than-average natural gas use. Customers used 35.5% more natural gas in November 2022 than they did in November 2021 and 31% more in December 2022 than 2021. Customers can find information on their electricity and natural gas use and the changes year over year on the first page of their bill, along the left-hand side.
The Colorado Public Utilities Commission affirmed this in its Affordability Hearing yesterday, showing that the largest contributors (nearly 70%) of high energy bills are the wholesale cost of natural gas (40%) and increased usage (30%) due to this year’s cold winter season, year-over-year.
Even with the high cost of natural gas, we work to keep customer bills low by purchasing and storing natural gas when it’s less expensive. This helps protect against possible wholesale natural gas price spikes by locking in lower prices. We also contract for natural gas in advance of winter to lock in prices.
Also, you may know that we submitted a natural gas cost adjustment, lowering customer bills for February and March, when we saw the wholesale cost of natural gas drop. The change means residential natural gas customers will pay an average of $17.79 less in February than they would under the company’s currently effective natural gas costs previously approved by the Commission, which took effect in January. Small business customers will pay an average of $83.14 less in February. We made a similar adjustment in December.
We also use a broad range of electricity sources to help minimize the effect of natural gas price increases on electric bills. Adding renewable energy to the grid saves customers money because wind and solar power generate electricity without fuel costs. From 2017 through 2021, the company’s wind farms alone saved customers $1.8 billion in avoided fuel costs – money we would have had to pay to purchase natural gas and coal – and tax credits.
Bringing our customers the clean, reliable, safe and low-cost energy they need takes investment in the grid, investments that go through rigorous review by the Commission with input from consumer advocates and other stakeholders. It’s an advantage to all our customers that we remain a financially healthy company, because a strong financial company is able to borrow money for projects at a lower rate. As you know, after we complete approved projects and customers are benefiting from those projects, we are then allowed to ask for cost recovery from the Commission.
Given the economic challenges we face now, we want our customers to know we’re doing all we can to keep costs low for our customers while delivering the safe, reliable energy they depend on. We also encourage customers to take steps to save energy and money to reach out if they’re having difficulty paying their bills. We will help connect them to payment and assistance programs. To learn more about energy assistance options, customers can visit xcelenergy.com/EnergyAssistance [nam04.safelinks.protection.outlook.com] or call 1-800-895-4999.
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