Give the PUC the power to save Coloradans money

Legislators should give PUC commissioners the financial tool of securitization in regulation of Xcel Energy

 

by Katherine Goff

Coloradans are increasingly feeling the pinch of rising utility bills. And as scary as it might seem, energy costs are likely to continue going up.

The Public Utilities Commission, which governs Colorado’s energy suppliers, is doing its best to ensure that energy bills remain affordable, but they don’t have all the tools they need to succeed. That’s why the PUC needs authority to require utilities to use a less profitable, but often cheaper, way to pay for delivering energy to people’s homes and businesses.

This method is called securitization, and it could save Coloradans serious money on their energy bills. As a member of Northglenn City Council, I’m urging state legislators to give the PUC the power to require utilities to use securitization when cost-effective. My constituents need affordable electricity.

Before we get into the financial details, let’s talk about why energy costs are going up. Interestingly it isn’t always the actual electricity or gas fuel that drives these costs. Many of the price hikes are a result of utilities building major infrastructure — the “poles and wires” — plus the healthy profits they make on these projects. The State of Colorado gives public utilities permission to make approximately 8% to 10% profit on new poles, wires, and substations. Where does that extra money come from? It gets added on to people’s energy bills.

This business model has proven immensely profitable for utility providers. For example, in 2025 Xcel Energy enjoyed a net income of $678 million dollars, even though they paid a $295 million settlement to victims of the Marshall Fire.

This trend of massive investment in infrastructure is not showing signs of slowing. Utilities are updating aging infrastructure, reducing the vulnerability of their energy networks to climate change impacts, and meeting growing energy demand from data centers. All of these things require expensive investments. We, the rate payers, are going to be on the hook for these costs.

Here’s the thing — we do need transmission updates to deal with the impacts of climate change, especially high wind days and higher fire risks. We need to update our transmission system to underground wires that don’t have these carry the same risks. But burying power lines is shockingly expensive. Every time utilities take on one of these projects, they get to add it to our energy bills, plus the 8-10% profits. What if there were an alternative, less-expensive method for financing these necessary investments?

Securitization is that other method, and it can bring costs down for you and me. Securitization is a kind of debt. The utility asks other investors to buy their bonds, and then uses that money to build the transmission projects. Once the projects are completed, the utilities pay back their investors with a small amount of interest.

This is how many private companies get their funding, but the profits usually aren’t as good for Xcel as just billing Coloradans 10% above the cost of an infrastructure project. So utilities don’t often voluntarily use securitization, even when it would save people money. And it can save us a lot. In Xcel Energy’s recent 2025-2027 Wildfire Mitigation Plan, they identified $400 million in ratepayer savings using securitization.

As long as utility profits are the main consideration for energy planning in Colorado, we won’t get the clean, safe, and reliable energy grid that we deserve. That’s why the PUC must be allowed to require securitization when cost-effective. Local governments like Northglenn have long used tools like securitization to lower costs for residents. Other states facing major wildfire mitigation expenses are also turning to securitization to manage those costs responsibly. But the PUC can’t mandate this form of funding, leaving us at the whim of utility companies and their pursuit of profit.

This session, when they reauthorize the PUC, Colorado legislators should explicitly allow the commissioners to direct investor-owned utilities to use securitization. Giving the PUC this additional tool is a practical solution for getting needed grid updates and saving ratepayers money.

Katherine Goff is a city council member in Northglenn, one of 48 towns, cities or counties that together constitute Colorado Communities for Climate Action.