Xcel admonished by state but wins $128 million rate hike

The Colorado Public Utilities Commission late Friday afternoon approved a $128.3 million increase in Xcel Energy electric rates that will go into effect Jan. 1.


The Minnesota-based, investor-owned utility – Colorado’s largest power supplier – had originally sought a $180 million increase, which was whittled down to nearly $136 million in a settlement with two consumer groups.

The PUC – the appointed state board with regulatory authority over Xcel (Public Service Company of Colorado) – estimates the increase will raise the average residential electricity bill by 6.5 percent, or about $4.43 a month. Just last summer the PUC granted Xcel a $112 million rate increase

“No one likes a rate increase,” PUC Chairman Ron Binz said in a release. “But we scrubbed Xcel’s request thoroughly and believe that the reduced amount is fair.”

The increase was granted to help Xcel cover the costs of building a third generating unit at the Comanche coal-fired plant in Pueblo (Comanche 3) – which is slated to come online by the end of the year — 300 megawatts of new natural gas-fired generation at the Fort St. Vrain station near Platteville, investment in the SmartGridCity project in Boulder, and other power distribution upgrades.

Not in the final rate increase were controversial travel and entertainment expenses totaling more the $120,000 that Xcel quickly pulled from the rate case when consumer activists brought them to the attention of the PUC several weeks ago.

“In the next rate case, I would expect Xcel to do a statement that said they have scrubbed their books of these kinds of expenses,” commissioner James Tarpey said a final deliberation hearing Thursday, referring to thousands of dollars in lavish board dinners and executive retreats Xcel tried to pass on to rate payers when it first requested a nearly $180 million rate increase.

The company quickly pulled the T&E expenses from the rate case and trimmed nearly $44 million from its increase request as part of a settlement with two consumer groups. But the Colorado Attorney General’s Office, filing on behalf of the Office of Consumer Counsel, said $33 million ought to cover Xcel’s recent investments – a more than $100 million discrepancy.

Consumer and clean energy advocates were pushing for a firm rule-making by the PUC on the issue of T&E expenses and other perks, but the commissioners on Thursday made it clear they would not go that route, instead opting to admonish Xcel on the record and make it clear they did not expect to see such expenses in future rate cases.

“It was a polite but powerful statement from the commissioner,” Clean Energy Action’s Leslie Glustrom said of Tarpey’s comments. Glustrom was one of 30 interveners in the rate case, and helped bring the T&E expenses to the attention of the PUC.

“Your stories really clearly had an impact on this whole wining and dining and the perk issue,” Glustrom said of ongoing Colorado Independent coverage. “[You] pointed out that there may not be a ruling, and so the commissioners all really spoke to that and said, ‘We’re not going to do a ruling, but we really question whether this is appropriate.’”

Dennis Kelly, another intervener in the rate case and the attorney for a community activist group called the ArapaHope Community Team, was dubious how effective a public admonishment will be without a firm policy on T&E expenses going forward.

“The [PUC] refused to initiate a proceeding to establish guidelines for T&E expenses that could be included in the cost of service,” Kelly said. “The [PUC’s] rationale was that it had audit authority. Of course, the problem there is that when we asked to [PUC] to look into this matter, they indicated that they did not have the resources to audit [Xcel].”

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