By Dan Linehan
The Free Press
The state is holding a public hearing Monday in Mankato to hear public comment on Xcel Energy's proposed 10.7 percent rate hike.
The Public Utilities Commission is expected to decide by September whether or not Xcel is entitled to raise its prices and is holding seven public hearings this month.
Xcel has 1.2 million customers in Minnesota and about 22,000 customers in Mankato and North Mankato.
Xcel's customers are already paying most of the increase, about 10 percent, but will see refunds on their bills if the proposed rate increase is reduced.
The utility is required to seek the government's permission for the rate increase because, as a public utility, it operates as essentially a monopoly. Because they lack competition, utilities such as Xcel are regulated by the government.
The company is asking for $285 million in higher prices, including $114 million for operations and repairs at its two nuclear power plants. Upgrades to the electricity grid and other power plants were expected to add $56 million in costs.
Xcel Energy Regional Vice President Laura McCarten said the Public Utilities Commission told Xcel in 2008 to focus on its investments in nuclear energy, which provides about 30 percent of Xcel's power.
A second opinion
Though Xcel has sought in lengthy filings to justify its rate increase, advocacy groups and parts of the state government have publicly opposed the move.
The Minnesota Department of Commerce recommended that Xcel Energy's proposed increase be reduced to $94 million, which is 67 percent less than Xcel proposes. The commerce department said the company shouldn't be able to charge ratepayers for cost overruns at a nuclear plant and $22 million in executive bonuses, the Pioneer Press reported.
McCarten said the bonuses are necessary to stay competitive with employee pay to "attract and retain the type of employees that our business needs to get the work done."
The Minnesota chapter of AARP also believes Xcel's request is too high and has sent a message advising its members to "Help us keep the heat on the PUC to do the right thing!"
The advocacy group has heard from its members that this increase would make it more difficult for them to live in their homes, said Amy McDonough, associate state director for advocacy.
"Our goal here is to let people know there's a chance to weigh in publicly and learn more about what Xcel proposed," she said.
But would a few extra complaints really matter to state regulators?
"We have experienced this in other states; it has made a big difference when people come forward and state their case," McDonough said.
She also said that many people are bothered that Xcel spends ratepayers' money on private jets.
The state Attorney General's Office has objected to Xcel charging ratepayers $756,000 for private jets when it could have used commercial flights.
McCarten, the Xcel vice president, said the company has operations in eight states and 100,000 square miles of service territory, and the use of private planes is sometimes the best way to move employees around.
"Overall, we think it's one tool that helps us work efficiently," she said.