Xcel 'inadvertently' included $460K to fight Boulder utility in rate-hike requestSep 9 - Erica Meltzer Daily Camera, Boulder, Colo.
Xcel Energy "inadvertently" folded almost half a million dollars it spent fighting Boulder's municipalization efforts into its request to raise rates for customers across the state, according to documents filed with the Colorado Public Utilities Commission and obtained by the Daily Camera. The error was caught after the PUC asked the utility company to "please admit or deny" whether it had included "any expenses spent on campaigning against municipalization of utility service in Boulder" in its case to raise rates statewide. Xcel spokeswoman Michelle Aguayo said it was a simple mistake. "There was an error in including this expense in the most recent rate case, an error that will be corrected and removed, keeping with our position that campaign expenses regarding the Boulder municipalization effort will not be paid for by our customers," Aguayo wrote in an email Monday. Activists in Boulder have been writing to Xcel and the PUC to ask whether money the company has spent battling Boulder's efforts to form a municipal electric utility are included in its statewide utility rates. The company has maintained that those expenses come out of shareholder profits, and Colorado's ratepayers are not being asked to make up for them. Former Boulder Mayor Susan Osborne provided the Camera with an email response she received from PUC spokesman Terry Bote, who said Xcel's political expenses cannot be included in the "cost of service" covered by rates. But when asked directly by PUC staff onto "admit or deny" whether it included anti-municipalization costs in its current rate case -- including any amounts paid to InterMountain Public Affairs -- Xcel responded that a review of its records found a payment of $460,000 "inadvertently" had been placed in the wrong account. Xcel CFO Janet Schmidt-Petree wrote in a response dated Aug. 20 that the payment should have been included in another account that is not part of the utility's cost-of-service calculation, and that the mistake would be corrected "at the appropriate time in the procedural schedule." InterMountain Public Affairs works on a variety of political issues in Colorado. In Boulder, the firm has organized anti-municipalization efforts. Taxpayer spending on advocacy Critics of municipalization have charged that Boulder is using taxpayer money to advocate for a city-owned utility. To date, the city reports it has spent $188,023 since 2011 on "communication and outreach" related to its Energy Future effort. City officials say they need to inform the public and correct misinformation from Xcel. Boulder voters decided on two ballot measures related to municipalization in 2013. One, backed by Xcel, would have required that voters approve the entire debt limit of the utility. Backers of the utility said that measure was so onerous it would "kill" the utility, and Boulder voters rejected it by a 2-to-1 margin. The other, placed on the ballot by the city in response to the Xcel-backed measure, caps the debt the city can issue to buy Xcel's assets at $214 million. Boulder voters approved that one by the same measure. Proponents of the municipal utility spent $317,641 in that election, while Xcel spent $772,359, according to post-election campaign finance reports filed with the city. Of that, $740,000 went directly to Voter Approval of Debt Limits, the citizen committee campaigning for the debt limit measure. The money Xcel paid to InterMountain appears to be a separate expense. 'Entitled to protect their profits' Boulder Mayor Matt Appelbaum said he gives Xcel the benefit of the doubt on this one. "There's no benefit to them to be caught doing this," he said. But Appelbaum said the PUC needs to subject Xcel's legal costs to just as much scrutiny. "The bigger issue is the ongoing battle against municipalization, where they are spending millions of dollars in legal and engineering fees and we're all paying for it," Appelbaum said. "They are entitled to protect their profits, but they should be honest about it. "In terms of protecting the public interest, that's what the PUC should be doing." Xcel's Aguayo said Boulder has forced the utility to spend money to defend its interests and those of its customers. "We have incurred expenses, but the city's actions have made this a cost of doing business," she said. "Their approach to bypass the regulatory process that's needed to ensure safe and reliable service has added to these expenses." John Spitzer, a Boulder activist who supports municipalization, said he has a harder time believing it was a mistake. "It's fine for Xcel to spend money on anything they want to," he said. "They're a private company. But it's very unfair and probably unethical to charge ratepayers for fighting municipalization. Even if it is a small amount, I think it's important for Xcel to play by the rules. "I don't see how a major decision like this could be inadvertent. Somebody at some point made a conscious decision to put this in the rate base." Crystal Gray, a former City Council member who also is an active supporter of municipalization, said the revelation makes her question other Xcel filings. "How many other inadvertent mistakes have they made?" she said. 'Benefits to ratepayers' Xcel is asking for a 4.9 percent rate increase that would add $5 to the average residential monthly bill and generate $137.7 million to cover the costs of closing some coal-fired power plants and converting others to natural gas. The PUC's Bote said he could not discuss the specific request and response from Xcel because it is part of an ongoing discovery process with regards to the rate case. The Xcel document is not confidential, but it is part of the discovery process and not part of the publicly available filings. The PUC would closely examine all of the costs Xcel uses to justify its rate increase, which would give it a 10.35 percent return on investment, Bote said. "The PUC staff or any party in the case can challenge the expenses that are filed and typically do," he said. "The commission will only approve expenses that provide benefits to ratepayers." Contact Camera Staff Writer Erica Meltzer at 303-473-1355, meltzere@dailycamera.com or twitter.com/meltzere. http://www.energycentral.com/functional/news/news_detail.cfm?did=33612897& |