The Colorado Public Utilities Commission today rejected a bid by Xcel Energy for a $42 million interim electricity rate hike — the second time in two weeks the commission rejected an Xcel rate request.
The commission suggested that Xcel file an “accounting note” which would include the $42 million in costs in the full $142 million rate increase Xcel is seeking. Reviewing that request will take up to seven months.
“The way this evolved is troubling,” said Commissioner James Tarpey.
In the audience were Ben Fowke, Xcel’s chief executive officer, and David Eves, chief executive of Xcel subsidiary Public Service Company of Colorado.
“This is important to us,” Fowke said after the decision.
Citing a 2010 law, Xcel in November sought a $100 million interim rate hike, citing adverse financial impacts in the seven-month delay.
The commission rejected that proposal Jan. 11. The next day Xcel filed the request for $42 million.
In the reconsideration request, Xcel focused on one expense: absorbing 300 megawatts of generation Xcel had been selling to Black Hills Energy.
Xcel calculated the costs at $54 million and sought $42 million of that as an interim increase, because it is already beginning to assume those expenses.
“Our expenses are going up, our revenues are going down,” Tarpey said. “These aren’t extraordinary circumstances.”
Commission chairman Joshua Epel voiced concerns about setting a precedent for granting an interim rate increase based on the so-called regulatory lag in granting rate hike.
“Every rate case is going to have regulatory lag, so every rate case is granted an interim rate,” Epel said. “It is circular.”
“There is a threshold to overcome on the previous decision which hasn’t been met,” said Epel.
In an effort to be fair to the company and customers, the commissioners suggested Xcel file an accounting mote that will include the specific costs.
Rate increases are not retroactive, so if the commission were to approve a rate increase in June, previous costs would not apply, said Terry Bote, a PUC spokesman.
The accounting note would allow those costs to be considered, Bote said.
Public Service’s Eves said, “We are going to meet to consider this option.”
Mark Jaffe: 303-954-1912 or mjaffe@denverpost.com
