The Free Press, Mankato, MN

March 18, 2013

Residents quiet at Xcel rate increase hearing

By Dan Nienaber
Free Press Staff Writer

MANKATO — A microphone was in place to record comments and Administrative Law Judge Jeanne Cochran sat ready to take notes, but no one turned out to voice concerns about a proposed Xcel Energy rate hike during a public hearing in Mankato Monday night.

There were a handful of regular citizens mixed in with several Twin Cities executives and public employees who were likely paid to drive down to Mankato for the hearing. A couple spoke with Xcel employees after the hearing but didn’t say anything on the record.

Cochran told the audience it’s her job to decide if the rate increase, which would result in $285 million in additional revenue for the electric utility business, is justified. Prior to giving residents a chance to speak, she asked an attorney from Xcel Energy to explain the company’s reasons for the increase. She also allowed representatives from the Minnesota Department of Commerce and the Minnesota Attorney General’s Office to state their opposition to Xcel’s proposal.

Xcel needs the 10.7 percent rate increase to pay for improvements in its system, including its nuclear plants, and maintain a power grid that serves its 1.2 million electric customers, said Kari Valley, Xcel attorney. About $114 million would be used for operations and repairs at its two nuclear plants in Monticello and Prairie Island. The investments are needed to ensure power is always available.

The increase was questioned by Ian Dobson, assistant attorney general, when he spoke. He said Xcel’s proposal increases rates more for residential customers than its other customers. Xcel estimates that residential customers currently paying about $65 for electric power, excluding taxes and other fees, would pay about $8 more per month.

“Xcel’s $285 million increase is unprecedented at a time when residents are already struggling to pay their bills,” Dobson said.

Angela Byrne, a financial analyst with the Department of Commerce, cited several reasons why the department has asked Cochran to reduce Xcel’s request by more than $191 million, or about 67 percent. She said the department has been investigating “all aspects” of the utility’s proposal.

“The Department of Commerce’s recommendation includes reductions in Xcel’s proposed cost of capital, along with overstated costs for insurance, executive compensation, pension and numerous other costs,” Byrne said. “In addition, we conclude that Xcel’s revenues will be higher than forecasted, diminishing the need for higher rates.”

She also urged residents in the audience to come forward and speak, but no one did.

After the hearing, Mike Frederick said he attended because he received a notice and wanted to hear what everyone had to say. The restaurant employee who lives in an apartment near Minnesota State University said the rate increase won’t matter much to him because he doesn’t use much electricity. He did say it would be better to increase rates over several years instead of all at once.

“I’m not making a lot where I work,” he said. “They should just ease it up a little for people who don’t make a lot of money.”

Tom Riley, new business development director for Greater Mankato Growth, spoke in favor of Xcel on behalf of the local business community. He used the microphone, so his comments were on the record.

He said Xcel worked with a local business to make a 15,000-square-foot expansion affordable. Without the assistance, the expansion wouldn’t have happened here, Riley said.

Riley also said Xcel regularly sponsors community events, including the Songs on the Lawn events that take place downtown every summer.