Xcel Energy’s Texas customers will see a credit on their electric bills this month that reflect a one-time $16 million fuel cost refund announced in June.

The refund, which has been approved the Public Utility Commission of Texas, is related to several months of lower costs for natural gas used to fuel area power plants – savings that are expected to continue with the addition of the new Hale Wind Project near Plainview, which started commercial operations at the end of June.

All of Xcel Energy’s various customer classes will receive funds. Depending on billing cycles, the refunds could be prorated over a two-month period. Residential customers using 1,000 kilowatt-hours a month would receive a total credit of $14.53, higher than the refund Texas customers received in January that amounted to $11.76 on a typical residential bill.

In addition to the one-time refund, Xcel Energy reduced the fuel cost factor on customer bills on July 1, lowering a typical residential bill by about 5 percent. The change was made to better reflect current and anticipated costs for natural gas, which is the fuel source for about half of the region’s electricity supply.

The fuel cost factor, which accounts for about 20 percent of a typical residential bill, collects revenue to pay the cost of coal and natural gas that fuel generators at area power plants, and also recovers the cost of electricity imported from outside the region. Xcel Energy does not profit from fuel costs since they are passed through to customers dollar for dollar. If actual fuel costs exceed the pre-set factor, Xcel Energy can surcharge customer bills to make up the difference. Earlier in the year, the set factor was collecting too much revenue as natural gas prices dropped, resulting in the current refund.

A proposal to increase base rates, which account for the remainder of a customer’s bill, is still being reviewed by the cities Xcel Energy serves in Texas, as well as by the Public Utility Commission of Texas. Any changes in base rates, if approved, would not occur until mid-2020.