Agency: Xcel misled customers on rate hikes

Officials allege energy firm responded to concern with attempts “to cloud the issue”

Staff for the state Public Utilities Commission has found that Xcel Energy improperly notified customers about proposed rate increases, and alleges the utility responded to the concern with attempts “to confuse and cloud the issue.”

In a filing to the commission that recommends Xcel be required to renotice customers of the proposed changes, staffers wrote of “great disappointment” in Xcel’s conduct.

“Sadly, with all its means and capability, the company will not acknowledge the legitimacy of the concern staff has called to its attention,” the staff filing reads.

PUC staff found “factual inaccuracies,” a “lack of clarity” and “inscrutability” on Xcel’s behalf.

Xcel in October proposed an increase in rates annually for the next four years, with yearly bumps of about 2 percent on customer bills.

The information that Xcel relayed to cus- tomers in recent weeks was “consistent with (state) rules and regulations,” the company said in a statement.

“Communication with our customers is very important,” Xcel said, adding that it will file a response by the end of next week.

The root cause of the confusion, PUC staffers assert, is that Xcel’s notification to customers has inaccurately stated the total cumulative rate increase. In its notices, Xcel proposed “a total increase in revenues of $244,900,661” through 2021.

“The notices understate the rate increase … by $433,334,343,” the PUC staff’s filing reads, alleging that Xcel failed to factor in the cumulative incremental increase.

The staff’s assertion is based on the fact that the rate increases build on one another. For example: Xcel has proposed a 4.35 percent change in 2018 over 2017 levels. But the 2.25 percent change that customers could see in 2019 would be on top of a base figure that already includes the 4.35 percent change.

Instead of calculating the increases with respect for these continual base adjustments, PUC staffers stated, Xcel added up each year’s increase based on how they compared with current rates.

Thus, according to the filing, the company undersold the projected total statewide increase through 2021 by almost half a billion dollars.

Many customers have submitted public comments to the PUC that indicate significant confusion, the staff said.

PUC staff has recommended that the commissioners, which must sign off on any rate increases, require a renotice of the proposal. But staffers aren’t confident that Xcel will agree with their logic.

“The company will attempt to cloud the renotice issue by arguing that renoticing will create greater ratepayer confusion,” the filing reads. “That fact is ratepayer confusion already exists and has been reported on by the local news.

“More importantly, this concern should not trump providing ratepayers with accurate information.”