Editorial: Xcel, regulators out of touch with times
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.
INVESTIGATION: Your Rates Go Up as Xcel Jets Soar
A 5 EYEWITNESS NEWS investigation gives new meaning to the term “flying solo.” Xcel Energy employees fly on private jets, that some days, are nearly empty and you pay millions for it. When a tip caller questioned the number of times Xcel flew its lear jets we started tracking the flights and the cost to you. We found Xcel employees were encouraged to fly the luxury jets, even as the company asked to raise your rates. While you’ve been pinching pennies, 5 EYEWITNESS NEWS has been watching Xcel Energy executives flying on, not one, but two company lear jets. 5 EYEWITNESS NEWS tracked the planes for a year–600 flights mostly between St. Paul and Denver. The lear jets seat 10 to 12 passengers each. 5 EYEWITNESS NEWS wanted to find out just how many people were on board, so we watched arrivals and departures over several weeks at Xcel’s St. Paul airport hangar. On Oct. 20, .two passengers get off a plane that arrived from Denver. The very next day, planes made two trips. One arrived with only the two-person flight crew aboard. Day after day, we saw ratepayer money being taken for a ride. In a one-week period, we counted only 20 passengers on 11 flights that could have carried as many as 110 passengers. Former Minnesota public service commissioner Kris Sanda said, “It’s ridiculous and if I were commissioner I would be all over this.” For nine years Sanda made sure Minnesotans were getting a fair deal from utility companies like Xcel. When she saw the video of the the planes she said, “It is very shocking to me as a former commissioner in Minnesota, that a utility as well known as NSP/Xcel would have two lear jets in this economy, ridiculous.” What seemed ridiculous to Sanda, seemed unbelievable to Xcel customers who have seen the company ask for and get five rate increases in Minnesota and five other states in the past year. Customer Michelle Cardinal said, “I mean they are asking for increases but they are flying. That’s money, that is my money that is paying for that, for them to fly aircraft empty.” Xcel Energy’s two major bases of operations are Minnesota and Colorado. A check of property records showed three top executives own homes in both states. And, in a recent letter to stockholders Xcel CEO Richard Kelly wrote trips back and forth for top executives “are not considered personal travel.” The company’s flight department has a $5.8 million budget. Xcel told 5 EYEWITNESS NEWS their planes flew 809 times last year. Xcel told the Star Tribune those flights averaged five passengers. So taking Xcel’s own numbers that works out to 1434 per passengers one way. Just last week, Xcel asked the Minnesota Public Utilities Commission to raise your gas rates by $16.2 million. Last year, use of corporate jets raised a red flag in a rate increase request in northern Minnesota. That’s when the state reprimanded Minnesota Power, the utility for cities including Duluth. The state called corporate aircraft “an executive perk” which “ratepayers struggling through an economic crisis should not be required to fund.” What the 5 EYEWITNESS NEWS investigation has uncovered will be reviewed by the Minnesota Attorney General’s Office as it reviews whether Xcel gets its rate increase. Rep. Keith Ellison said, “It seems to me that there is a complete lack of corporate responsibility gong on here.” Ellison wants state regulators to examine how and why Xcel uses its planes. More than 120,000 Minnesota households, including many in Ellison’s Fifth Congressional District, get financial help from the federal government to keep their heat and lights on. Ellison said, “It is disturbing because look they are a public utility and they have a public charge they have a monopoly and therefore have some public accountability.” 5 EYEWITNESS NEWS asked Xcel executives who gets to use the planes and if there is a policy. Kate Noble said, “I think it is pretty much if you have a meeting in Denver you try to get on the corporate jet first and then try an airline.” But, when she saw the video of planes that fly almost empty, Noble said, “It surprises me that they would fly it without anyone on board.” Xcel turned down our request for an on-camera interview, twice. Instead the company emailed us a statement saying the planes are available for “business-use only.” In a search for a more complete answer, 5 EYEWITNESS NEWS sought out Xcel executive Judy Poferl to ask her why planes fly near-empty so often. Poferl said, “I think we are responsible in how we we use corporate aircraft. I think it’s a good use of, it improves our efficiency.” 5 EYEWITNESS NEWS traveled to Washington, DC to speak face-to-face with Xcel CEO Richard Kelley. He declined to appear on camera, but he said he would be surprised if the planes flew with only a few people on board. He turned down an offer to view the video. Next month Xcel will be in front of state regulators asking for a natural gas rate increase. If approved, the increase could be included in your January bill.
Sorry, I don’t think my rate increases should be paying for this bullshit. I’m just saying.
Sorry, I don’t think my rate increases should be paying for this bullshit. I’m just saying.
You, me, and hundreds of thousands of others agree with you l3wis. But soon enough big bidness water carriers like owk or costner will be on here telling you to…
“go work in one of the other world work systems such as China, Mexico, Russia, South America, anywhere in Africa or the Middle East, even Europe and let me know how that goes for you as well, as a worker.”
…if you don’t like it here.
Poly – until you have actually read my posts on more than two days, don’t even suggest I’m a “big bidness water carrier”. You’re apparently inability to rely upon ad hominem attacks isn’t bringing anything to the discussion here.
And please don’t attribute quotes to me that I did not write. That is incredibly childish and says more about you than the person who actually did write it.
As to the article quoted – it also mentions Xcel has raised rates in Minnesota twice in the past year… that doesn’t exactly match what has happened here in South Dakota since they have only asked to raise rates once in the past 17 years.
I don’t know how Xcel’s corporate structure works, but I don’t think it is exactly fair to cite a story from another state and a separate branch of the utility and claim it has anything to do with Xcel here.
I won’t defend their usage of corporate jets (although if you think they are the only corporation to do so, you are naive) and I’m sure there is their fair share of corporate waste just as we have found in the banking industry and on Wall Street along with the auto companies… but that is a separate issue and you cannot automatically assume a rate increase is directly tied to wasteful spending.
They are a publicly traded company afterall and they have to answer to their shareholders, but don’t let that get in the way of you forming a lynch mob before you have all the facts.
I understand they have to make a profit, something they have done very well over 17 years without a rate increase, I’m just saying.
I cannot fathom how you cannot understand how costs have risen over the past 17 years. This boggles my mind.
I don’t mean to sound sarcastic, but have you EVER taken a business or economics course? Have you ever actually looked at your wages or prices of the things you buy and wondered why they continue to rise year after year?
Can you seriously suggest a company (any company) can go an indefinite amount of time without raising prices? Ever?
How f’ing long do you think that business model is sustainable? Would it be ok in your mind if they waited 20 years before raising prices? 25? 30??
Better yet – how long would you work if your company refused to give you a raise because their logic is “you have done very well without a pay increase”?
But they have have raised prices through other fees, etc. That is the point I am making. That is how they have sustained for 17 years. It kinda sounds like they want consumers to pay for their expansion. I have often thought that the state should put up it’s own windfarms and sell the electricity to the power companies, it would be a great way to fund state government (Think Alaska) and would keep taxes low.
Yes I’m sure they have raised some of the other fees – but their core basic charge for the actual kilowatt hours used by each customer is by far the largest percentage of the bill.
If they buy electricity for 5 cents a kwh and sell it for 8 cents a kwh I’m sure they do just fine, but if they have to pay more for the electricity they purchase, obviously their charges need to be adjusted to maintain an acceptable margin.
I know that Southeastern Electric Cooperative recently went through the same thing… they are having to pay more for electricity and thus have no other alternative than to charge the customers a higher rate. This is why I don’t find this to be a bad thing and why I can easily see an increase being more than justified considering they have put it off for so long.
I like your idea of a state owned windfarm – not sure what the payback period would be on the initial investment, but it might be the only way it will ever happen. We keep hearing about wind energy in our state, but the closest we get is when the propellers stop at the truck stop on their way to another state.
Then again you might get a governor down the road who can’t balance the budget and he would just sell the wind farm to a private company just like we did with the state cement plant.