Why does Excel need to raise rates? (H/T – Helga)

l3wis January 7, 2010 6Comments

Editorial: Xcel, regulators out of touch with times

Utility customers shouldn’t foot the bill for luxury travel.

As one of its own top officials put it this week, a fundamental duty of the Minnesota Public Utilities Commission is to “set rates that are just and reasonable and that allow utilities to furnish safe, adequate, efficient and reasonable service.” So as Xcel Energy seeks its second rate hike in Minnesota this year, why are the toughest questions about the utility’s eyebrow-raising travel expenses coming from an unlikely pair of watchdogs — a Lakeville dad and the Minnesota attorney general?

Xcel’s gas and electric customers deserve answers. They’re picking up part of the tab for near-daily weekday use of two Learjets that ferry employees around the country at $1,200 an hour. Recent revelations about that came courtesy of Dan Pomrenke of Lakeville, who grew curious, then irate, about the Xcel jets he and his son often saw flying over their house.

Earlier this year, a rate-increase request by Xcel prompted some much-needed digging by Attorney General Lori Swanson. Her office discovered a plethora of posh perks for Xcel executives. A $113,753 retreat at a Ritz Carlton in Colorado. “Cash perquisite allowances” totaling $518,000 in 2008 given out to execs for the vague purpose of promoting efficiency. Stays at five-star at European hotels. One executive’s dinner at Paris’ Le Grand Vefour restaurant must have been especially delicious: The check came to $814.

INVESTIGATION: Your Rates Go Up as Xcel Jets Soar

A 5 EYEWITNESS NEWS investigation gives new meaning to the term “flying solo.” Xcel Energy employees fly on private jets, that some days, are nearly empty and you pay millions for it. When a tip caller questioned the number of times Xcel flew its lear jets we started tracking the flights and the cost to you. We found Xcel employees were encouraged to fly the luxury jets, even as the company asked to raise your rates. While you’ve been pinching pennies, 5 EYEWITNESS NEWS has been watching Xcel Energy executives flying on, not one, but two company lear jets. 5 EYEWITNESS NEWS tracked the planes for a year–600 flights mostly between St. Paul and Denver. The lear jets seat 10 to 12 passengers each. 5 EYEWITNESS NEWS wanted to find out just how many people were on board, so we watched arrivals and departures over several weeks at Xcel’s St. Paul airport hangar. On Oct. 20, .two passengers get off a plane that arrived from Denver. The very next day, planes made two trips. One arrived with only the two-person flight crew aboard. Day after day, we saw ratepayer money being taken for a ride. In a one-week period, we counted only 20 passengers on 11 flights that could have carried as many as 110 passengers. Former Minnesota public service commissioner Kris Sanda said, “It’s ridiculous and if I were commissioner I would be all over this.” For nine years Sanda made sure Minnesotans were getting a fair deal from utility companies like Xcel. When she saw the video of the the planes she said, “It is very shocking to me as a former commissioner in Minnesota, that a utility as well known as NSP/Xcel would have two lear jets in this economy, ridiculous.” What seemed ridiculous to Sanda, seemed unbelievable to Xcel customers who have seen the company ask for and get five rate increases in Minnesota and five other states in the past year. Customer Michelle Cardinal said, “I mean they are asking for increases but they are flying. That’s money, that is my money that is paying for that, for them to fly aircraft empty.” Xcel Energy’s two major bases of operations are Minnesota and Colorado. A check of property records showed three top executives own homes in both states. And, in a recent letter to stockholders Xcel CEO Richard Kelly wrote trips back and forth for top executives “are not considered personal travel.” The company’s flight department has a $5.8 million budget. Xcel told 5 EYEWITNESS NEWS their planes flew 809 times last year. Xcel told the Star Tribune those flights averaged five passengers. So taking Xcel’s own numbers that works out to 1434 per passengers one way. Just last week, Xcel asked the Minnesota Public Utilities Commission to raise your gas rates by $16.2 million. Last year, use of corporate jets raised a red flag in a rate increase request in northern Minnesota. That’s when the state reprimanded Minnesota Power, the utility for cities including Duluth. The state called corporate aircraft “an executive perk” which “ratepayers struggling through an economic crisis should not be required to fund.” What the 5 EYEWITNESS NEWS investigation has uncovered will be reviewed by the Minnesota Attorney General’s Office as it reviews whether Xcel gets its rate increase. Rep. Keith Ellison said, “It seems to me that there is a complete lack of corporate responsibility gong on here.” Ellison wants state regulators to examine how and why Xcel uses its planes. More than 120,000 Minnesota households, including many in Ellison’s Fifth Congressional District, get financial help from the federal government to keep their heat and lights on. Ellison said, “It is disturbing because look they are a public utility and they have a public charge they have a monopoly and therefore have some public accountability.” 5 EYEWITNESS NEWS asked Xcel executives who gets to use the planes and if there is a policy. Kate Noble said, “I think it is pretty much if you have a meeting in Denver you try to get on the corporate jet first and then try an airline.” But, when she saw the video of planes that fly almost empty, Noble said, “It surprises me that they would fly it without anyone on board.” Xcel turned down our request for an on-camera interview, twice. Instead the company emailed us a statement saying the planes are available for “business-use only.” In a search for a more complete answer, 5 EYEWITNESS NEWS sought out Xcel executive Judy Poferl to ask her why planes fly near-empty so often. Poferl said, “I think we are responsible in how we we use corporate aircraft. I think it’s a good use of, it improves our efficiency.” 5 EYEWITNESS NEWS traveled to Washington, DC to speak face-to-face with Xcel CEO Richard Kelley. He declined to appear on camera, but he said he would be surprised if the planes flew with only a few people on board. He turned down an offer to view the video. Next month Xcel will be in front of state regulators asking for a natural gas rate increase. If approved, the increase could be included in your January bill.

Sorry, I don’t think my rate increases should be paying for this bullshit. I’m just saying.