Colorado remained the biggest earnings producer among the eight states where Xcel Energy operates, according to the utility’s second-quarter financial results posted Thursday.
Minneapolis-based Xcel reported a 14 percent earnings increase to $159 million in the second quarter of 2011, compared with the same quarter in 2010.
Colorado accounted for 42 percent of profits, according the company.
And in a conference call with analysts, Ben Fowke, who becomes the chief executive in August, predicted that the city of Boulder’s plan to replace Xcel with a municipal utility will fail on the fall ballot.
“The bottom line is, we believe, municipalization would be a bad thing for the citizens and customers,” Fowke said.
Boulder is considering replacing Xcel with a city-owned utility to boost renewable energy, stabilize rates and provide local control.
“The facts will speak for themselves, and they won’t vote for municipalization,” he said.
Fowke said if voters approve the measure, “be assured that we will make sure that we will get a fair price” for Xcel assets. “We’ll make sure we get the price we are entitled to.”
Xcel operates in eight states, but 78 percent of profits in the second quarter came from Colorado and Minnesota — the utility’s two biggest states.
As a result of rate increases that went into effect in 2009 and 2010, Xcel received its highest rate of return for electricity investments in 2010 in Colorado — 10.23 percent, according to company data.
The next highest rates were at Xcel’s subsidiaries in Minnesota, 8.78 percent; and Wisconsin, 8.74 percent.
“It’s a question of timing” as investments are made and rate increases awarded, said Paul Johnson, Xcel’s assistant treasurer.
The Minnesota return was low, in part, because of investments made in a large regional transmission project and upgrading nuclear power plants that were not yet part of customer rates, Johnson said.
The Minnesota Public Utilities Commission has granted an interim $123 million rate increase pending a final rate ruling later this year.
“So 2011 will look different,” Johnson said.
Xcel also operates subsidiaries in parts of Michigan, Texas, North Dakota, South Dakota and New Mexico.
“Colorado and Minnesota are Xcel’s largest service areas, and it is imperative that they provide good earnings,” said Travis Miller, an analyst with Morningstar Investment Services.
Mark Jaffe: 303-954-1912 or mjaffe@denverpost.com
