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Xcel Energy to File for Natural Gas Rate Hike in Colorado

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Per a media report, Xcel Energy Inc. (XEL - Free Report) is gearing up to place a rate increase request to the Colorado Public Utilities Commission for natural gas, which would be effective for three years starting 2018.

A Detailed View

As part of the upgrade and service betterment, Xcel Energy has been changing old cast iron pipes, plastic and steel pipes. It has invested nearly $300 million per year or a total of about $1.8 billion for this purpose.

On an average, a residential customer would see a monthly rise of $2.73 in early 2018, $2.19 in 2019 and $1.74 in 2020. For small business customers, the increase would amount to approximately $10.91 per month in 2018 and would slide down to $6.95 per month in 2020.

Like other utility giants, Xcel Energy is planning to build a strong renewable energy portfolio. The company has plans to spend approximately $4.2 billion in renewables over the next few years. It will be interesting to watch the reaction of these companies after U.S decided to pull out of the Paris Climate Agreement.

Infrastructural Investment by Peers

Utility companies are investing regularly to provide better service to customers. Keeping existing consumers happy and expanding its customer base are the primary focus areas of these companies.

FirstEnergy Corporation (FE - Free Report) is working toward increasing the company’s service reliability and customer retention, which has led to the ambitious plan “Energizing the Future”. The company plans on investing nearly $1 billion in 2017 for upgrading the infrastructure and providing better customer experience.

PPL Corp. (PPL - Free Report) is primarily focusing on infrastructure construction projects for generation, transmission and distribution between the 2017–2021 timeframe. The company has a $15.9 billion capital investment plan.

Price Movement

In the last one month, shares of Xcel Energy have returned 7.1% while the Zacks categorized Utility - Electric Power Industry gained 3.3%.


The Minnesota Multiyear Rate Plan and resolved regulatory proceedings in Texas, New Mexico, and Wisconsin puts the company in an advantageous position. The sign of economic improvement is prominent across Xcel Energy’s service territories and is expected to boost the performance of the company.

Zacks Rank and Stocks to Consider

Xcel Energy currently has a Zacks Rank #4 (Sell). A better-ranked stock in the utility space is Avangrid, Inc. (AGR - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Avangrid delivered a positive earnings surprise of 7.35% in the first quarter. Its Zacks Consensus Estimate for 2017 moved up nearly 0.5% to $2.21 per share in the last 60 days.

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