The average monthly residential electric bill for Xcel Energy customers will rise a total of $1.57 over three years under a rate settlement filed Friday with Colorado regulators.

The first-year increase of 96 cents a month is far less than the monthly increase of $3.96 that Xcel had requested when it filed for the rate hike in June 2014.

Coloradans can thank marijuana cultivation, in part, for the less-than-proposed increase.

Xcel is forecasting more power sales than the utility initially predicted. A surge in marijuana cultivation is one of the reasons that electric sales are rising, Xcel officials said Friday.

Cannabis growing uses large amounts of electricity for indoor lighting.

Xcel officials said the higher forecast for 2015 power sales led the utility to reduce its original increase for a rate hike from $137.7 million to $107 million.

Settlement negotiations with regulators and large industrial customers brought a further decrease in the rate hike to a proposed $41.5 million in net cost increases for customers in 2015.

Terms of the settlement call for rates to increase an additional $26.4 million in 2016 — an average of 72 cents more a month on residential bills — then drop $4 million, or 11 cents a month, in 2017.

The settlement’s approval is pending a review next month by commissioners of the Colorado Public Utilities Commission. The rate increase would take effect shortly after approval.

Much of the increased rates will be used to fund power-plant conversions mandated by the 2010 Colorado Clean Air-Clean Jobs Act. That legislation calls for Xcel and other utilities to retire some coal-fired plants and replace them with generation from cleaner-burning natural gas. The conversions will reduce pollutants by an estimated 80 percent.

“Clean energy is expensive. We’ve certainly learned that,” said Cindy Schonhaut, director of the Colorado Office of Consumer Counsel. “But the settlement is in the consumers’ interest because it very significantly reduced the increase originally sought by Xcel. There will be bill impacts, but relatively small.”

David Eves, president and chief executive of Xcel subsidiary Public Service Co. of Colorado, described the rate hike as “a pretty modest cost increase for customers when you consider what they’re getting.”

But utility analyst William Yeatman of the Competitive Enterprise Institute, a free-market think tank, said Xcel customers must gird for higher fuel costs in the shift to natural gas. Changes in Xcel’s fuel costs are passed directly to customers, independent of base rates.

Yeatman said Xcel’s natural gas fuel costs in Colorado are about twice as high per unit of power compared to using coal.

Steve Raabe: 303-954-1948, sraabe@den-verpost.com or twitter.com/steveraabedp