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.
Last week, Xcel defended its use of private jets as making the best use of time as employees manage a business across eight states and 100,000 square miles -- and, yes, they also rely on videoconferencing. And what do those European trips have to do with providing power in Minnesota and elsewhere? Travel there is periodically required to "meet with current and potential institutional investors to ensure the company has access to capital markets ...,'' Xcel said in a statement Wednesday. The utility also wanted to set the record straight about an executive's much-publicized $1,699-a-night stay at London's Mandarin Oriental hotel. The bill was actually for two nights, so the nightly rate was about $849.
Really? Just $849 a night? What a bargain when joblessness is soaring and 26,979 of Xcel's residential customers in Minnesota have had their service shut off this year because they couldn't pay their bills.
Keep in mind that Xcel is a regulated monopoly. Its customers have no choice but to buy its electricity or natural gas, and sometimes both. In return for that privilege, Xcel is expected to spend judiciously and modestly. It also has the option of asking its shareholders to solely shoulder the costs of luxurious travel and private jets -- and should have. That it was planning to stick customers with a good chunk of the bill for both as it asked for a $132 million electricity rate hike suggests its leadership is shockingly out of touch with the tough times in the region the utility serves.
Thanks to the attorney general's bulldog effort, the utility trimmed $3.9 million from its electricity rate hike request, though those cutbacks apparently didn't include the Learjet bill. Regulators wound up approving a $91 million increase in September. The utility is also seeking a nearly $20 million natural gas hike in Minnesota and a $177 million electrical hike in Colorado.
The attorney general's difficulty getting Xcel to provide travel expense data does not inspire confidence about the Public Utilities Commission's previous oversight. There were long delays before Xcel turned over requested information. When it finally did, data was missing and embarrassingly disorganized. Clearly, this was not something the PUC had delved into for some time. The PUC's response to this newspaper's concerns about the jets and expenses was troubling. The commission views itself as a "quasijudicial" body, it said in a statement Tuesday. Basically, if someone raises concerns about expenses, it will look into it. If not, the PUC's mission is not to go gather outside information. Testimony by the attorney general's office earlier this year suggested that it has been more than a decade since the last deep look at utility spending.
Like Xcel, the PUC is sadly out of touch with the hard times around them. Minnesota consumers deserve regulators who aggressively question utilities' expenses instead of saying, "Sorry, not our job.'' Minnesota lawmakers last week expressed interested in providing "legislative direction" to the PUC. That intervention is welcome and long overdue.
The Opinion section is produced by the Editorial Department to foster discussion about key issues. The Editorial Board represents the institutional voice of the Star Tribune and operates independently of the newsroom.