Xcel Energy has done a poor job justifying its request for an electricity rate increase, state officials said Tuesday.
The utility asked state officials for an electricity rate increase of at least 4.7 percent, the amount an administrative law judge recommended in a ruling last month. Xcel officials told the Minnesota Public Utilities Commission they mostly support the judge's findings.
But the state Attorney General's office and Commerce Department say rate payers should not have to pay more unless the need for the hike is well documented.
"In this case, we saw that there were more disputed issues than usual, because unfortunately overall Xcel did not do a good job in supporting its request," Kate O'Connell, the Commerce Department's manager of electricity and gas, told the commission. "We were seriously considering recommending rejection of the case altogether."
O'Connell said the state agrees Xcel needs a modest increase to help pay for upgrades to the Monticello nuclear plant.
Xcel officials have defended the rate increase request on the grounds that the company needs a rate hike to make sure its employees are compensated competitively and that its nuclear plants meet all federal standards.
A representative of the Minnesota Attorney General's office told the commission that it's not fair for ratepayers to pay for bonuses for Xcel employees.
One of Xcel's attorneys, Aakash H. Chandarana, defended the bonuses.
"Our annual incentive program is critical to ensuring that non-bargaining employees receive cash compensation, which is comparable to market values," Chandarana said. "AIP is not an executive compensation program. It is available to many of our employees, including engineers, accountants, operators and call center managers, just to name a few."
The Public Utilities Commission is expected to decide the rate case on Thursday, but it could take Xcel several days to analyze how that decision will affect its customers.
Xcel customers have been paying for a 9 percent rate hike since January. They could be issued refunds on future utility bills if commissioners sign off on a smaller rate hike.