Colorado regulators upset about Xcel executives' expensive, high-flying ways

Categories: Business
Xcel jet.jpg
Colorado regulations don't believe ratepayers should pay the tab for Xcel's private jet use.
Minneapolis-based Xcel Energy is the largest electrical utility in Colorado, with about 1.4 million customers. Xcel is currently seeking a $142 million electricity-rate increase in Colorado to cover the rising costs of pensions and operations.

The utility's "operations" include use of two corporate jets that cost more than $4,600 an hour. Xcel hopes to stick Colorado ratepayers with a tab of $1.1 million for the private flights, and officials aren't happy about it.

Says a review of the rate-increase request put together by the Colorado Public Utilities Commission staff: "The Company's ratepayers do not benefit by these [employees] commuting via the two corporate jets to their primary place of employment... The Company has not demonstrated that its corporate aircraft costs are reasonable and necessary."

The controversy harkens back to the winter of 2009, when Xcel was seeking a $132 million electricity rate hike in Minnesota. While the state was considering Xcel's request, the Star Tribune wrote a scathing editorial criticizing Xcel's leadership for being "shockingly out of touch with the tough times in the region the utility serves."

Said the editorial:
xcel logo.jpg
Xcel created a similar controversy in Minnesota in late 2009.
Last week, Xcel defended its use of private jets as making the best use of time as employees manage a business across eight states and 100,000 square miles -- and, yes, they also rely on videoconferencing. And what do those European trips have to do with providing power in Minnesota and elsewhere? Travel there is periodically required to "meet with current and potential institutional investors to ensure the company has access to capital markets ...,'' Xcel said in a statement Wednesday. The utility also wanted to set the record straight about an executive's much-publicized $1,699-a-night stay at London's Mandarin Oriental hotel. The bill was actually for two nights, so the nightly rate was about $849.

Really? Just $849 a night? What a bargain when joblessness is soaring and 26,979 of Xcel's residential customers in Minnesota have had their service shut off this year because they couldn't pay their bills.

Keep in mind that Xcel is a regulated monopoly. Its customers have no choice but to buy its electricity or natural gas, and sometimes both. In return for that privilege, Xcel is expected to spend judiciously and modestly. It also has the option of asking its shareholders to solely shoulder the costs of luxurious travel and private jets -- and should have. That it was planning to stick customers with a good chunk of the bill for both as it asked for a $132 million electricity rate hike suggests its leadership is shockingly out of touch with the tough times in the region the utility serves.
Ultimately, the Minnesota Public Utilities Commission end up cutting about $4 million in un-judicious funds from Xcel's request, though those cuts didn't include the private jet bill. And now that a similar controversy has arisen in Colorado, the utility is again arguing that private jet access is necessary for Xcel executives.

According to the Denver Post, two Xcel executives use the jets to commute weekly between Denver and and Xcel headquarters in Minneapolis. Some Colorado officials are wondering why the executives can't just live in Minneapolis, cut out the weekly round trips and save ratepayers $1.1 million, but Xcel says the private jet request only covers "the value of regained employee productivity and effectiveness from shorter travel times."

Hearings about Xcel's Colorado rate increase request begin April 11.

The controversy serves as more evidence that just because Xcel isn't purely a private sector entity doesn't mean the utility is particularly capable of policing itself against corporate excesses.

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8 comments
Kirk the Conservative Jerk
Kirk the Conservative Jerk

They're upset with executives jet setting?I'm willing to bet that is not the primary reason for the increase. Lets try "regulation" and "environmental mandates"

Joe
Joe

Prove it, jackass.

Jody
Jody

Not to mention the fact that the cost of operating the jets are less than 1% of the proposed rate increase.

Jody
Jody

.008% to be exact.....less than 1/10 of 1%.

HurdyGurdy
HurdyGurdy

Jody: Mark Dayton drives a car he bought with his own money. Xcel has a monopoly, so they are buying plane rides with the money of customers who don't have another choice in energy companies. But regardless, this has nothing to do with Dayton. Nothing at all. Though it is nice to hear that you support wealth redistribution, because I agree with you that the wealthy should be contributing much more to social services and education.

Me
Me

 I'm glad to see Mr. Strawman could make a appearance!  Thanks Jody.

Jody
Jody

Hurdy: I wonder what kind of car Mark Dayton drives?  Maybe he could donate it to a charity and give some of his trust money that's sitting in a tax-free South Dakota bank and donate it to social services and education.

HurdyGurdy
HurdyGurdy

Actually, that's 8/10 of one percent, so nearly one, and almost one dollar for every customer. In reality, it doesn't matter what the percentage is - because in the end it's customer money being spent pretty obviously on inessential activities. It's always surprising to hear so-called conservatives describe millions of dollars to already-healthy corporations as a miniscule burden while they simultaneously rant about "bloated" public employee salaries and fill budget gaps with hundreds of thousand-dollar cuts to social services & education 

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