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AMARILLO, Texas--(BUSINESS WIRE)-- Xcel Energy on Wednesday asked regulators to approve a reduction in electric bills for all classes of customers that would amount to a 20 percent reduction for an average residential customer beginning March 1.

The request was made to reflect lower natural gas prices and fuel-cost savings from the new Hobbs Generating Station. The reduction is about three times the amount of a recent rise in base rates.

Through a series of filings at the Public Utility Commission of Texas, the company is seeking approval to reduce fuel charges on customer bills and to remove a fuel surcharge at the end of February - one month earlier than planned. The surcharge began in April 2008 and was scheduled to end March 31. Together, these changes will drop an average bill of 1,000 kilowatt-hours, starting in March, by $20.02 on an interim basis.

The fuel charges are recovered through a fuel-cost factor that is updated two to three times per year. The company also has asked the PUCT to allow it to change the formula by which the factor is figured to reflect savings from the new Hobbs Generating Station. Once the proposed permanent fuel-cost factors are adopted by the PUCT and set in place on June 1, the decrease would be slightly less at $15.36 savings for average bills, or a 14 percent decrease from current bills.

"We have asked the Commission to expedite the approval of these changes to our fuel factors in order to reduce bills as quickly as possible," said David Eves, president and CEO of Southwestern Public Service Company, an Xcel Energy company.

A portion of fuel and purchased energy costs are collected through the base rate and also through the fuel-cost factor. Fuel costs are pass-through items, and as prices for natural gas and coal change, the costs or savings are tracked and reflected on future customer bills.

On Feb. 7 the company raised base rates to help offset rising costs of doing business, adding $6.04 to an average residential bill. This increase amounted to a $57.4 million increase in annual revenue, but the changes in fuel costs will save customers $142.7 million annually.

Xcel Energy (NYSE: XEL) is a major U.S. electricity and natural gas company with regulated operations in eight Western and Midwestern states. Xcel Energy provides a comprehensive portfolio of energy-related products and services to 3.3 million electricity customers and 1.8 million natural gas customers through its regulated operating companies. Company headquarters are located in Minneapolis. More information is available at www.xcelenergy.com.

    Source: Xcel Energy