Colorado’s energy regulators approved Xcel Energy’s request to recover $500 million from its customers for the company’s extraordinary fuel costs during a four-day winter freeze in 2021, even as they expressed misgivings at how Colorado’s biggest utility company handled the cold snap.

In granting Xcel’s request to charge customers half a billion dollars, the Public Utilities Commission also ignored Gov. Jared Polis’ frustration at the enormous bill his constituents will have to pay at a time of soaring inflation.

The latest decision brings the total amount that Xcel and other utilities can charge their customers to recoup the unplanned energy costs to roughly $530 million. If the PUC also grants Black Hills’ rate hike request – the commissioners have yet to deny a request – Colorado’s energy customers would have to shell out nearly $630 million.

The PUC granted Xcel’s request as Coloradans face the highest inflation in decades, including steep increases in prices at the gas pump, and America’s economy verges on a recession.

While the final numbers have not been made available, an earlier May estimate predicted that, over 30 months, Xcel residential customers would see their gas bills jump 11% or $5.67 per month, and 2% or $1.43 per month for electricity for 24 months as a result of the four-day freeze. That would wipe out any savings from a new law legislators approved that sought to save each Coloradan about $5.55 in annual vehicle registration fees and $7.20 in gas money.

Xcel’s electric and gas customers got about a 1.6% discount on the original bill of $508 million after the PUC imposed an $8 million fine on the company for not notifying customers of the skyrocketing cost of natural gas so they could reduce their energy usage during Winter Storm Uri, for improper operation of dual-fuel power plants to reduce the cost of fuel, and for failures to properly handle customers with interruptible service.

“I am disappointed that utility providers are able to balance their financial loss on the backs of consumers, when extra costs could have been avoided by better early warning systems for consumers to voluntarily reduce energy usage,” Polis said in May, when an administrative law judge ruled in favor of Xcel’s $508 million rate hike request.

Polis also urged the state’s energy regulators to take action to avoid steep hikes in energy bills resulting from future extraordinary events like storm Uri.

In the PUC’s decision, commissioners criticized Xcel’s actions during the storm and voiced interest in examining how to better regulate utilities to avoid such consequences in the future.

Commissioner Mark Blank expressed skepticism of Xcel’s claims that storm Uri was an unusual and unpredictable event.

“I was here in the 90s when this happened, and I was here in 2006 when this happened. So, I don’t know how unforeseeable this was,” Blank said.

Commissioner Megan Gilman warned that the PUC will not look kindly on such failures of planning and preparation for future events.

“I would just note that that only works this time,” Gilman said. “Right now, the company’s on notice. We’re all on notice that this certainly could happen again. And so, any future occurrences would be viewed very differently by myself.”

Commissioners also criticized Xcel’s response to records requests.

In the hearing, Ellie Friedman, an advisory staff of the PUC, cited the Office of the Utility Consumer Advocate, a government office tasked with representing the consumers’ interest before the PUC, as saying that, in response to a request for records, Xcel originally denied having any responsive documents from Winter Storm Uri, saying most of the communication occurred through telephone calls.

“When asked for emails between key company witnesses, Public Service responded that the information no longer existed because of company data retention policies,” Friedman said. Public Service is Xcel’s Colorado branch.

But when the UCA drafted a motion seeking sanctions against Xcel from Administrative Law Judge Melody Mirbaba, Xcel came up with some 1,500 pages of emails and attachments in October last year, Friedman noted.

Friedman said Mirbaba admonished Xcel to do better in preserving evidence in the future.

“I think it goes without saying nobody’s happy about being here today talking about a $550 million expenditure on gas for only a handful of days,” Gilman said. “I think we can all agree that’s an outrageous result by any measure. I guess the silver lining is that for Colorado, it’s only an economic event.”

More than 200 people died as a result of power and gas failures in other parts of the country.

Blank lamented that the review process, in which customers bear 100 percent of costs from extraordinary events unless a utility is proven to be “imprudent” is a “little broken to me.”

“And I don’t know what the right number for risk sharing is. Maybe somewhere between 2 and 30% for me, but I don’t think it should continue to be zero (for the company),” Blank said.

Aside from Xcel, five utilities filed to recover extraordinary fuel costs: Atmos Energy Corporation, Colorado Natural Gas, Public Service Company of Colorado’s steam division, and Black Hills’ gas and electric divisions.

Xcel also agreed to absorb nearly $105 million in other expenses not directly related to the freeze, including $14.3 million in estimated costs for the shutdown of the Comanche 3 coal-fired power plant near Pueblo.