State commission unlikely to set Xcel expense policy at Dec. meeting
Friday, November 20, 2009 at 11:21 am
Consumer advocates who want the Colorado Public Utilities Commission to establish a firm policy cracking down on Xcel Energy charging ratepayers for lavish board retreats and travel and entertainment expenses likely won’t get their wish anytime soon, according to a commission spokesman.
The PUC is set to begin final deliberations on Xcel’s latest rate-increase request — its second in the last year — on Dec. 3, but PUC spokesman Terry Bote said the commissioners will probably only consider the merits the of the $136 million rate hike and not delve into rule changes for travel and entertainment expenses.
“The commission can’t set a rule by deliberation in a rate case, so if they were going to make a rule, they would have to go into a rule-making proceeding to do that,” Bote told The Colorado Independent. “If they choose to, they can put language in the order that says, ‘We don’t expect these types of expenses to be included in future rate cases,’ but that’s not binding, obviously.”
The issue first came up during testimony in the nearly $180 million rate case in Denver earlier this month (Xcel has since reduced that amount in a settlement with consumer groups by nearly $44 million). Clean energy and consumer advocates pointed out Minnesota Attorney General Lori Swanson had a serious problem with excessive Xcel travel and entertainment charges last summer.
Some of those charges included a $113,753 Xcel board of directors retreat at the posh Ritz-Carlton Bachelor Gulch hotel near Beaver Creek in Colorado’s Eagle County — of which Xcel tried to pass $36,149 on to Minnesota ratepayers, according to testimony by the state AG’s office. Other items included first-class airline tickets and luxury hotel stays for top Xcel executives during conferences in Europe.
That testimony prompted Xcel, which is headquartered in Minnesota but provides power to 5 million customers in eight states, including Colorado, to trim $3.9 million in travel and entertainment expenses from its $132 million rate case in Minnesota last summer. Regulators ultimately allowed for an overall $91 million increase in that state.
The Minnesota rate case caught the attention of Colorado energy activists who tried earlier this month to introduce the Minnesota AG’s testimony into the Colorado rate-case docket. The Colorado PUC rejected that move but did request more information from Xcel on whether similar charges were being included the Colorado rate case. Xcel introduced an exhibit on the final day of testimony detailing more than $120,000 in expenses.
The tab included dinner bills in excess of $10,000 and board retreats at luxury spas in Boulder for more than $40,000. Xcel immediately offered to remove those expenses from its rate-increase request.
“The commission has never disallowed these sorts of expenditures in the past and the company finds that these occasional expenses are a reasonable cost of business, but offered to remove the costs from its historic test year during the hearings,” a company spokesman said. “The company will offer to remove the same amount from its forecasted test year, meaning that customers in Colorado will not be paying for these types of expenses.”
However, attorney Dennis Kelly, an “intervener” in the rate case on behalf of a grassroots Arapahoe County group called the ArapaHOPE Community Team, said his organization and others fought hard to get the Minnesota case into the record because they want the Colorado PUC to establish a firm policy on exorbitant travel and entertainment expenses.
“One of the reasons we really wanted to get this into the docket is because I don’t think that these costs had ever really been reviewed by the Colorado Public Utilities Commission, and I don’t think they really have set guidelines on any of this,” Kelly said.
Now activists in Minnesota are calling out Xcel for its annual $5.8 million corporate aviation budget, according the Minneapolis Star Tribune. The company maintains two eight-passenger Learjets — which cost about $1,200 an hour to fly – mostly for company executives to travel between Minneapolis and Denver, its two largest markets.