Working to keep costs low
One of Xcel Energy’s key priorities is to keep costs low for its customers as it works to provide , reliable electric and natural gas service. From adding more low-cost renewable energy and securing competitively priced fuel contracts, to making its operations more efficient, the company is always working to keep customers’ bills low.
Here are a few ways Xcel Energy works to keep costs low:
- Adding more clean energy – 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 and tax credits. Xcel Energy’s geographic advantages in wind and solar production, along with renewable tax credits and those avoided fuels costs, have enabled the company to deliver customers cleaner energy while also saving them money.
- Using a diverse energy mix – A broad range of electricity sources helps minimize the effect of natural gas price increases on electric bills. Beyond wind and solar, that includes using hydro, nuclear and coal, among other smaller sources of power generation. Xcel Energy does not make a profit the natural gas it delivers to customers or uses to generate electricity, passing on the wholesale cost to customers without a markup.
- Storing natural gas – Xcel Energy purchases a portion of its expected natural gas needs for the winter heating season between April and October, because summer pricing is almost always lower than winter prices. This practice protects against possible wholesale natural gas price spikes and locks in lower prices. That natural gas is then placed into storage for future use.
- Locking in lower prices – The company contracts for wholesale natural gas purchases before winter to lock in lower prices. Unlike the natural gas it purchases in advance to store for the winter, this process locks in a price, but the company does not receive the natural gas until it is needed. Xcel Energy uses an auction process twice a year during the warmer months to secure a portion of its natural gas needs to obtain lower pricing.
- Building an advanced grid – Xcel Energy’s advanced grid will help customers receive over a billion dollars of value through technology that brings customers cleaner, safer and more reliable energy. Initial investments in two key advanced grid systems have already saved about $28 million in avoided fuel costs and other savings, and have reduced carbon emissions by 90,000 tons, by reducing energy use during peak demand times, which can decrease the amount of fuel, generation, transmission and distribution needed to serve customers. New smart electric meters installed at homes and businesses over the next few years will also lead to increased value for customers. With smart meters and other advanced grid investments, customers will also have greater reliability, faster restoration if there is a power outage, and greater opportunities to manage their energy use to save money and positively impact the environment.
- Keeping operating costs flat – Using technology and process improvements helps make the company’s operations more efficient. Overall, those efforts have kept operating and maintenance expenses flat since 2014, as Xcel Energy continues to invest in improvement projects for customers. For example, the company has invested more than $2 billion over the past decade in a comprehensive suite of conservation programs that helps customers save energy and money. Other efficiency examples include the use of drones, optimizing purchasing, automating various work efforts, leveraging attrition and retiring coal plants.