Gas Rate Cases

The Public Utilities Commission is an administrative agency of the legislature charged with the authority and duty to regulate the rates of public utilities operating within Colorado. State statute gives the Commission the power to regulate all the rates, charges, and tariffs.  As codified in state law, the rates and charges assessed for public utility service must be “just and reasonable.”

There are four regulated gas utilities in Colorado: Black Hills, Xcel, Colorado Natural Gas and Atmos. Each of these utilities must seek the PUC’s approval for the rates charged to their customers. Known informally as a “gas rate case”, these proceedings are initiated by the utility in order to recover the costs of recent investments (e.g. safety, reliability, and integrity) of the natural gas system over a certain time period. These rate cases can include multiple phases.

These gas rate cases are important however, it is important to note they do not impact the commodity cost of gas which typically accounts for 65-75 percent of a customer’s bill and can be more when prices and consumption are higher. Because natural gas is part of an international market, prices are influenced by both regional (large storms) and global (wars and conflict) events. Commission Rules require Colorado’s regulated gas utilities to adjust retail gas prices on a quarterly or semi-annual basis to reflect changes in wholesale prices. These changes are called the “gas cost adjustment” (GCA) and must be approved by the PUC.

Gas Affordability Update: During the winter of 2022-2023, Colorado experienced a perfect storm of high gas commodity prices, a deeply cold winter, and the recovery of previously deferred gas costs from events like Winter Storm Uri, leaving many customers concerned about their ability to pay their energy bills. While the commodity price of natural gas had been relatively low and stable for over a decade prior to about 2022, global events such as the war in Ukraine and the increase in US liquified natural gas exports has resulted in market volatility punctuated by periods of very high gas prices. In response to these price spikes, Gov Polis issued a letter directing state agencies, non-profits and utilities to work together to address affordability. In addition, SB23-291 was enacted.