Sep 29, 2009 6:53 pm US/Central
Xcel Energy Granted Smaller Electric Rate Increase
MINNEAPOLIS (WCCO) ―
It was four years ago when Xcel Energy last requested an increase in electric rates. It sought and won a rate hike of nearly 5.5 percent.
Since then, the company says the increasing costs of making and distributing power make it necessary to raise rates once again. Last November, Xcel filed a request with the Minnesota Public Utilities Commission to boost electric rates 6.05 percent. That would provide the utility $156 million in needed revenue.
"Going into that [process] the whole key was what is the appropriate rate that we have to charge customers?" reasoned Xcel spokesman Steve Roalstad.
Roalstad said the company's high cost of new investments and the rising price of updating old equipment was a big part of the company's request.
But the proposed jump caught the attention of customers, public interest groups and even an attorney general's audit. After digging into the company's books, it found expenses that seemed out of line with a rate hike request.
The audit criticized Xcel for having customers share the cost of some items, such as expensive executive travel and retreats. After the audit, the company pared down the requested amount.
"We can see what's going on in this economy as well as anybody else and we said we need to trim expenses. We need to help our customers out wherever we can and that's what we did," Roalstad added.
Xcel and Administrative Law Judge Kathleen Sheehy, trimmed some $65 million off the rate hike request, cutting costs that were either out of line or inappropriate to pass along to ratepayers.
On Tuesday, the Minnesota Public Utilities Commission voted to adopt nearly all of the administrative law judge's recommendations. The result is a rate hike that will amount to about 70 percent of what the company had first proposed.
David Boyd is the commission's chairman and says the hike is, "probably we're in the neighborhood of a $90 to $95 million rate increase overall."
That will be less than what customers have been paying on their electric bills since January when Xcel was granted an "interim" rate hike of around 5.12 percent to cover a revenue deficiency of $132 million.
"The interim refund is almost certainly larger than what the final increase will be, and if that's the case the utility will return through credits what has been overcharged," said Boyd.
That credit should begin showing up on customer's electric bills after the first of the year.
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