ROSWELL, New Mexico (Aug. 9, 2018) – The lower cost of natural gas Xcel Energy uses to produce electricity at area generating plants has led to an almost 9 percent decrease in New Mexico residential bills since this time a year ago.
“Fuel costs have generally made up about a third of a typical residential bill in New Mexico,” said David Hudson, president, Xcel Energy – New Mexico. “But since last year, the cost of natural gas has fallen by close to 50 percent, which is the main factor in lowering overall customer bills.”
Xcel Energy passes through the cost of coal and natural gas used to fuel its generators, and also the cost of purchasing power off system. These costs are adjusted monthly on New Mexico customer bills to reflect changes in commodity pricing. A typical bill of 1,000 kilowatt-hours in August 2017, when natural gas was more expensive, was $117.65. This August, a bill for that same amount of usage is $107.17.
In neighboring Texas, fuel costs are adjusted less frequently, but a recent reduction lowered residential bills there by close to 7 percent.
New Mexico customers also are benefitting for the next three months by a refund that Xcel Energy was able to secure from El Paso Natural Gas, a pipeline company that delivers natural gas fuel to area power plants. The Federal Energy Regulatory Commission determined Xcel Energy had been overcharged for interstate pipeline service, and El Paso returned more than $12 million to Xcel Energy, which is passing all of the refund directly on to customers in both New Mexico and Texas, further reducing fuel costs.
Natural gas price fluctuations have been the main factor in fuel cost swings over the past decade. About 40 percent of the region’s electricity supply is derived from natural gas fuel. Hudson said natural gas prices are at historic lows now, but cautioned they likely won’t stay that way. To help absorb future increases in fuel costs, Xcel Energy is working to make its generation and delivery systems more efficient. Additionally, the company is adding 1,230 megawatts of wind generation to the regional generating mix, including the Sagamore Wind Project near Portales that will be New Mexico’s largest wind generating facility when completed in 2020. These new wind resources will further reduce fuel costs to area customers.
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About Xcel Energy
Xcel Energy (NASDAQ: XEL) provides the energy that powers millions of homes and businesses across eight Western and Midwestern states. Headquartered in Minneapolis, the company is an industry leader in responsibly reducing carbon emissions and producing and delivering clean energy solutions from a variety of renewable sources at competitive prices. For more information, visit xcelenergy.com or follow us on Twitter and Facebook.
