The fall and winter of 2025 reset the rate environment for every Xcel customer in Colorado. Two large rate filings landed five weeks apart. The Colorado Public Utilities Commission is now working through both cases on a schedule that puts decisions in the third quarter of 2026 and an effective electric increase in August.

This post breaks the two cases down in plain English, models the bill impact at three usage tiers, and walks through what the increases actually do to solar payback math for an Apollo Energy customer on the Front Range. Two deadlines matter this year. The August 2026 rate effective date is the soft deadline. The December 31, 2026 Colorado storage credit cliff is the hard one.

On November 21, 2025 Xcel filed Proceeding 25AL-0494E, an electric rate case asking the Colorado PUC to approve $356 million in new annual revenue. Five weeks later on December 29, 2025 the company filed Proceeding 25AL-0499G, a parallel gas rate case asking for $190 million more. The two filings together represent the largest back to back regulated revenue ask in Xcel Colorado’s recent history.

The commission opened both proceedings and set public comment periods running through spring and summer 2026. Remote public comment hearings on the electric case are scheduled for May 19 and June 16, 2026. Final decisions are expected in the third quarter, which lines up with Xcel’s August 2026 target effective date on the electric side.

The political environment around the cases is sharper than the last cycle. PUC staff and the Colorado Office of the Utility Consumer Advocate have both recommended that the commission approve only half or less of the request. Consumer groups and editorial pages have pointed out that residential bills have already climbed roughly 33 percent since the last general electric rate case settled in 2022. Whatever the commission ultimately approves, the math for any homeowner pricing a 2026 project starts with the assumption that Xcel retail rates are higher at the end of this year than they are today.

The headline number on Proceeding 25AL-0494E is $356 million in additional annual electric revenue. For the average residential customer that translates to about 9.9 percent on the total bill, or roughly $9.94 a month. The average small commercial bill goes up about 9.48 percent, or roughly $14.22 a month.

Xcel’s stated driver is distribution system investment since 2022. That covers grid hardening for wildfire mitigation, transformer and conductor replacement, and capacity upgrades for new load growth and electrification. The counter argument, reflected in the PUC staff recommendation to cut the request roughly in half, is that not every line item in the rate base belongs in customer rates at full recovery on this schedule.

The mechanics matter as much as the percentage. A 9.9 percent increase applied to a 700 kWh a month household adds roughly $10 to the bill. A 1,400 kWh a month household adds closer to $20. The dollar impact scales with use, which is also why the rate case lifts solar payback math. Every kilowatt hour your array offsets is now offsetting a more expensive kilowatt hour than it was offsetting in 2022.

Proceeding 25AL-0499G is the gas side of the same story. Xcel filed for $190 million in new annual gas revenue, about 11.4 percent on the average residential gas bill, or roughly $7.59 a month. Public comment is open and the commission expects to act in the third quarter of 2026.

Xcel’s stated drivers include pipeline inspections, regulator station overhauls, distribution rebuilds, and wildfire mitigation. The wildfire mitigation overlap with the electric case has drawn comment from intervenors who argue that some shared costs are being recovered twice if the commission approves both cases as filed.

For a Denver homeowner who heats and cooks with gas, the practical effect is straightforward. The 11.4 percent uplift on a $80 winter month becomes about $9 more, and the same uplift on a $25 shoulder month becomes about $2.85 more. Households that have already electrified the furnace and the stove are largely insulated from the gas case, which is one of the quieter arguments for moving toward heat pumps and induction in parallel with a solar plus battery decision.

The combined effect of both cases is the number that will land in mailboxes. For an Xcel customer on both electric and gas service the average monthly hit lands near $17.53 if both cases pass as filed. That is $210 a year, every year, layered on top of the 33 percent that has already piled up since 2022.

The table below models three usage tiers for a Denver household. Each row shows the current bill, the projected bill after both cases, and the projected bill if the homeowner installs a 100 percent offset solar array. The solar offset row applies full retail net metering credit, which Xcel’s current Colorado solar tariff still provides for new residential installs interconnected in 2026.

The high usage row is where the rate case math is most visible. The pre-case bill on a 1,400 kWh and 90 therm household is around $382 a month. After both cases that household pays roughly $419 a month, an extra $444 a year. A 100 percent solar offset on the electric side cuts the bill to roughly $74, and an electrified home that retires the gas line eventually pulls that closer to the standby minimum. The relative scale of the rate case is small. The relative scale of solar plus electrification is order of magnitude larger.

Solar payback math is sensitive to one variable above all others, which is the price of the electricity your array is offsetting. When that price rises, payback falls and lifetime savings rise. The Xcel 2026 rate case is a step change in that price for every customer on the system.

Apollo Energy designs solar systems against your actual 12 months of utility usage, which produces a tighter payback number than a generic per kilowatt assumption. On a representative 9 kW Denver system priced around $30,000 installed in 2026, the 25 percent up front federal incentive trims roughly $7,500 off the price right away. The Colorado sales and use tax exemption removes state sales tax from the equipment line, and the Colorado property tax exemption keeps assessed value flat. With those layers in place the project starts at a net cost in the low $22,000s before any utility level credits.

Payback on that project ran in the 9 to 11 year range under 2025 rates. After the 2026 electric case lands, payback compresses by roughly 9 to 12 months across most usage profiles. The lifetime savings number, measured against the full 25 year production curve, moves up by $3,000 to $5,000 on a typical residential project because the avoided kilowatt hours are now worth more for every year of the array’s life. For a tighter number on your specific roof, run the Apollo Energy solar savings calculator.

The math is even sharper on larger homes with heavy electric load. A 12 kW system serving an EV household with a heat pump produces enough kilowatt hours that the 9.9 percent rate increase moves several hundred dollars of value per year. Across 25 years that compounds materially. Our deep dive on sizing for your specific load profile lives on the how to size a solar system for your Denver home post.

Xcel’s residential customers are by default on a time of use rate. That structure splits the day into on peak, mid peak, and off peak windows with different prices in each. The 2026 rate cases preserve the time of use framework and lift the price of every window, but the on peak window absorbs more of the lift than the off peak window in dollar terms.

The on peak window is where a paired battery earns its keep. A battery that charges off the array during the day and discharges into the home during the on peak window in the evening is effectively buying kilowatt hours at the production cost of solar and selling them against an on peak retail rate. The wider the gap between off peak and on peak, the better the battery looks. The 2026 case widens that gap.

That dynamic is the reason every Apollo design for an Xcel customer in 2026 includes a battery sizing conversation, even when the customer is not asking for one upfront. With the time of use structure, the rate case lift, and the Colorado 10 percent residential storage credit expiring December 31, 2026, the value stack on storage in 2026 is the strongest it has been since the credit went into effect. The full mechanics live on our whole home battery backup in Colorado post.

The August 2026 target effective date on the electric case is the practical deadline homeowners need to know about. There are two reasons the timing matters.

The first is interconnection queue. Xcel residential interconnection runs between four and ten weeks from application to permission to operate, with seasonal swings. Projects that sign contracts in May and June 2026 are in production and earning credits before the rate case lands. Projects that sign in July and August can still hit the deadline if the design is straightforward and the queue holds, but the runway tightens. Projects that sign in September or later push permission to operate into late 2026 or early 2027, which means they are absorbing post case rates from the start.

The second is the Colorado 10 percent residential energy storage credit. That credit, claimed on form DR-1307, expires December 31, 2026. It is non-refundable, cannot be carried forward, and applies to systems placed in service in 2026. The basis includes battery equipment, sales tax, and freight. Labor and permit fees are excluded. On a typical 13.5 kWh battery the credit is worth roughly $1,200 to $1,500. Customers who sign and install in Q1 or Q2 2026 capture the credit cleanly. Customers who push into late 2026 risk a queue slip that costs them the entire credit because there is no carryforward.

The 2026 rate case does not change the Colorado state incentive stack, which continues to apply on top of every utility level rate or rebate. For an Xcel customer the stack works in four layers.

The first layer is the 25 percent up front federal incentive on residential solar. It applies to panels, inverters, racking, wiring, labor, permits, and interconnection. Battery storage qualifies when the battery is charged primarily from the on site array. On a $30,000 solar plus battery project the federal layer alone is worth $7,500.

The second and third layers are the Colorado sales and use tax exemption on solar equipment and the Colorado property tax exemption for residential solar. The sales tax exemption keeps the state sales tax line off your equipment invoice, and the property tax exemption keeps your county assessor from raising your assessed value to reflect the array. Those layers do not appear as a check or a credit, but they save real money at the project line and over the life of the system.

The fourth layer is the Colorado 10 percent residential energy storage tax credit. That credit applies to battery purchases placed in service through December 31, 2026 and is claimed on the Colorado Department of Revenue form DR-1307. The credit is non-refundable, cannot be carried forward, and the basis includes battery equipment, sales tax, and freight. Labor and permit fees are excluded.

For an Xcel customer in Denver, Aurora, Lakewood, Thornton, Arvada, Westminster, Centennial, Boulder, Longmont, Castle Rock, or any of the metro service areas Apollo Energy serves, every one of these layers stacks on top of the rate case dynamics. The case raises the avoided cost of a kilowatt hour. The state stack reduces the up front cost of capturing those kilowatt hours. The combination is the strongest case for a 2026 install we have seen since the credit went into effect.

The PUC has not issued final orders on either case as of this writing, and the commission could land closer to the staff recommendation than to Xcel’s ask. Either outcome leaves the avoided cost of a kilowatt hour materially higher than it was at the start of 2026. The Colorado state incentive stack is unchanged and continues to apply, with the 10 percent residential storage credit expiring on December 31, 2026.

If your home is on Xcel in Denver, Aurora, Lakewood, Thornton, Arvada, Westminster, Centennial, Boulder, Longmont, or Castle Rock, the practical move is to pull your 12 months of usage, model a system against your actual roof, and put the project on a timeline that lands permission to operate before August 2026. Apollo Energy runs that workup at no cost.