State Accuses Xcel Energy Of Overcharging Customers

MINNEAPOLIS (WCCO) - The state is stepping in to help Xcel Energy customers who aren't happy about a recent rate hike. Right now many homeowners are paying 11-percent more on their electric bills, or about $8 extra a month.

The Minnesota Department of Commerce says Xcel Energy customers are paying too much. It wants to chop Xcel's proposed $285 million rate increase by $191 million - cutting it by two-thirds.

Laura McCarten, Xcel Energy's regional vice president, says the rate increase is needed to repair an aging infrastructure. It's an increase she says most customers can live with.

"We do need to invest in our system, the poles and wires and power plants, so we can meet our customer's needs," McCarten said. "A typical home owner spends something under $3 a day to meet all their electric needs in their home. Our request would add about another 30 cents to that."

McCarten says making improvements at Xcel's nuclear plant is driving most of the rate increase. Commerce Commissioner Michael Rothman says Xcel's request is excessive.

He believes cost overruns at the nuclear plants and $22 million in incentive bonuses for Xcel executives should not be paid for by its customers.

"We agree investments are important. When we look at what those investments would be, the amount requested was way too high," Rothman said.

Rothman says part of Xcel's rate increase proposal makes up for money it lost because customers are conserving energy.

"We rejected Xcel's notion that the reduction, because of conservation in energy, meant that they could increase rates for people," he said.

The commerce department made its recommendation to the Public Utility Commission. If they agree, the rate hike will be lowered and customers will get refunds. A decision should be made by September.