State regulators on Wednesday approved an agreement with Xcel Energy that would lower the amount the company must refund consumers for failing to meet service standards.
The agreement between the Colorado Public Utilities Commission and Xcel would lower Xcel’s maximum annual penalty payments to ratepayers for power outages and poor service from the current $26.8 million to $19.5 million.
Xcel could also avoid paying some penalties unless it violates service-quality standards for two consecutive years. The current policy requires the utility to pay penalties each year that it exceeds state-mandated limits for complaints and outages.
Xcel officials have said that without the changes, the utility would be unfairly penalized because its newer monitoring equipment detects more outages that would never have been reported using the old system. Also, the new system is fair to ratepayers, Xcel says, because only customers who have suffered outages would share in the compensation.
The commission approved the service-quality standards on a 3-0 vote. Both the PUC staff and the Office of Consumer Counsel, which represents the interests of residential ratepayers, signed off on the new plan.
In approving the new plan, the commission reserved its right to seek reparations if the utility experiences severe service disruptions that don’t trigger automatic fines under the new agreement.
“Say there were several reliability problems in the same region and it came to light that the company didn’t deal with them until the next year, that they didn’t want to do anything because (they say) ‘We have got two years,’ ” said Gregory Sopkin, PUC chairman. “I am OK with the settlement agreement assuming that we clarify that we do have that authority.”
Fred Stoffel, Xcel’s vice president for policy development, said he doesn’t think the company would balk at signing an agreement that would guarantee the commission’s right to seek reparations.
“But we have to see the language,” he said.
The new plan provides automatic bill credits if Xcel fails to meet service-quality standards for reliability, repair, telephone response and customer complaints.
Service quality has been an ongoing issue for Xcel. It is the subject of a PUC investigation following the Feb. 18 rolling blackouts that left 371,370 Colorado customers without electricity in subzero temperatures.
The four-year agreement would go into effect Jan. 1, if Minneapolis-based Xcel agrees to the commission’s proposed changes.
Staff writer Tom McGhee can be reached at 303-954-1671 or tmcghee@denverpost.com.
