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'The more you drink, the more you earn,' Xcel Energy critics claim

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'The more you drink, the more you earn,' Xcel Energy critics claim

Utility called on the carpet for lavish board dinners, hotel and spa retreats
By David O. Williams

November 14, 2009 —  With Xcel Energy on pace to disconnect power to some 70,000 Coloradans this year for nonpayment, energy activists are openly questioning why ratepayers should pick up the tab for lavish executive board-member dinners, hotel and spa retreats and luxury box tickets to professional sports games.

In an exhibit filed with the Colorado Public Utilities Commission on the last day of a rate-case hearing in Denver last week — in which Xcel sought nearly a $180 million rate hike — the state’s largest power provider detailed expenses totaling more than $120,000 that it hoped to pass on to its 1.3 million Colorado customers.

Some of those 2008 travel and entertainment expenses include $9,524 of a $41,890 bill for a board retreat at the plush St. Julien Hotel and Spa in Boulder; $5,410 of a $9,721 bill for Colorado Avalanche games; $19,323 of a $26,639 bill for “other employee related sporting activity”; $3,746 of an $11,958 tab at McCormick’s Fish House and Bar in Denver; and $3,458 of a staggering $15,211 bill at Frasca restaurant in Boulder.

Dennis Kelly, an attorney in Arapahoe County representing a grassroots activist group called the ArapaHOPE Community Team, tried late last month to introduce testimony from the Minnesota attorney general in a similar rate case in May for Xcel subsidiary Northern States Power Company before the Minnesota Public Utilities Commission.

Kelly said the Colorado PUC — which is in charge of state oversight of the Minneapolis-based, investor-owned utility — refused to enter the testimony from the Minnesota case into the Colorado docket but did request information from Xcel detailing whether there were similar expenses being passed on to Colorado ratepayers.

“I have no problem with travel and entertainment expenses as long as they’re reasonable and justified, but some of these go beyond the pale of what’s reasonable and what’s justified,” Kelly said. “It just seems like an awful lot of money for the ratepayers to be paying for. If the company wants to do it, that’s fine, but it should be the shareholders, not the ratepayers.”

In the Minnesota case, Xcel reportedly axed $3.9 million from its rate increase request of $156 million after Minnesota Attorney General Lori Swanson questioned how a number of expenses being passed on to ratepayers had anything to do with providing power.

“Xcel has charged Minnesota electric ratepayers — and likely Minnesota gas ratepayers — for expenses that are not reasonable or necessary for the provision of electric services,” the OAG’s office concluded. “The OAG believes it would be beneficial for the Minnesota Public Utilities Commission to order a complete review of these expenses …”

Kelly and other “interveners” in Xcel’s Public Service Company (PSCo) rate case want the Colorado PUC to set strict guidelines for such expenses in the future. They say the PUC apparently does not have any such parameters for T&E expenses. Matt Baker, one of three PUC members, said Monday he could not comment on an open docket.

“That is an active issue in the rate case, so I can’t talk about it, but it has been brought up,” Baker confirmed. Xcel’s second rate case in the last year – it received a $112 million increase just last summer – should be decided in the next two weeks after all the parties submit position statements.

In a statement issued Tuesday afternoon by Xcel in response to inquiries from The Colorado Independent, a spokesman for the utility called the expenses “a reasonable cost of doing business” and said the company has offered to remove them.

“In response to the issue raised by parties in the case, PSCo [Xcel] performed a detailed analysis to see the amount of these types of expenditures included in its historic test year. The number was small — $121,000, which is .004 percent of customer bills,” spokesman Tom Henley wrote in an e-mail.

“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. 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.”

Kelly said that at the very least the PUC should establish a rule barring alcohol costs from being passed on to ratepayers.

“These people have no sense of propriety given the current situation in our country, but they need to ask themselves if they really need all of this that they’re asking for,” Kelly said. Leslie Glustrom of Boulder-based Clean Energy Action, another intervener in the rate case, seconded that sentiment.

“In this particular case, if those expenses go into the rate base, the message it sends is the more you drink, the more you earn,” Glustrom said. “The commission can set a clear policy of, ‘Go ahead, make your deals over wine and dinner if you want, but don’t charge it to ratepayers.’ If they want to do that, let their shareholders pay for it.”



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