Proposed Xcel Energy Natural Gas Rate Hike: Is the 11.4% Increase Unique to Colorado or a Nationwide Trend?
On December 29th, 2025, Xcel Energy formally filed their proposed rate hike for natural gas (“NG”) service with the Colorado Public Utilities Commission (“PUC”). We wrote about the filing of a proposed electric rate increase in December of last year. With the rate increase for electricity amounting to almost 10% (for residential customers), we wanted to take a look at the data and assess; are these rate increases unique to Colorado or a part of a nationwide trend? Before we compare Xcel’s recently proposed rate increases to nationwide data, it’s important to outline some key details.
As Colorado’s largest Investor-Owned Utility (“IOU”) Xcel Energy serves 1.6M electric customers and 1.5M natural gas customers. About 1.1M Xcel ratepayers receive both. Historically, Xcel Energy – Colorado’s (Public Service Company of Colorado or “PSCO”) residential utility rates have been significantly below the national average with current rates for electricity and NG being 37% and 18% lower respectively. However, experts are concerned about the rapid rate of growth in recent years. During the five-year period between 2019 and 2024, figures from Xcel Energy indicate that residential electricity costs rose approx. 38%. For NG, prices managed to rise 52% during the same period, even after a 22% rate price drop in 2024 (average monthly bills of $50.96 in 2019 vrs. $77.67 in Q4 2024). Statewide, electricity price increases have been less drastic but still significant, rising an average of 24% during the period between 2021 and 2024 (different timescales). Needless to say, Colorado’s energy has observed a rapidly increasing average rate of growth far outweighing the national average. While we maintain a small discount in terms of total energy services (electricity and natural gas from utilities) expenses compared to the national average, the rate of increase for the period between 2004 and 2024 (20 years) was about 82% in Colorado, as compared to the national average of approx. 54%, according to the U.S. Energy Information Administration (EIA).
Colorado energy services prices have been rising faster than the rest of the country over the last two decades. But, what about this year’s rate hikes? Through November 2025, energy services prices rose a combined 7.4% for the preceding 12 months across the entire United States. This figure is made up of inflation of 6.9% for electricity and 9.1% for utility NG service, on an annualized basis. Comparing these numbers to Xcel’s proposed rate increases, it does seem that their rates continue to rise faster than the rest of the country, and significantly so.
Not surprisingly, regulators are noticing. In a comment to The Colorado Sun, Joseph Pereira, the Deputy Director of the Colorado Office of the Utility Consumer Advocate said, “This filing in addition to an electric rate increase is a test of customers’ and decision-makers’ will”. In Pereira’s view, “the company is on a massive spending spree”. Additionally, of the $190M that consumers will pay as a result of the increase, $52M will be returned to investors. With 2025 Xcel Energy (XEL) stock price returns of almost 11% (compared to a 20 yr. average annual return of 7.15%), some might understandably ask if the rate hikes are exorbitant.
While prices continue to rise, commercial and multi-family customers should evaluate their options to save money through utility bill audits, energy reduction strategies (such as energy efficiency and conservation), and on-site generation. To start a conversation about your organization’s unique situation, feel free to reach out to Matt Jochym at the contact information below.
Contact Information:
Matt Jochym
Advisor/Founder
(M): 970-235-1098
(E): matt.jochym@peakutilityadvisors.com
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