Xcel accepts blame for blackouts during subzero February spell
DENVER – The chief executive of Colorado’s largest utility said Wednesday his company takes the blame for miscalculating energy needs during a February cold snap that resulted in blackouts, and he said Xcel Energy may need more natural gas storage around Denver.Chairman and CEO Richard Kelly told shareholders at the company’s annual meeting that depending on other energy providers and natural gas pipelines limited Xcel’s response when temperatures plunged below zero on Feb. 18, striking about 300,000 customers with rolling blackouts as the company struggled to meet demand.”We missed the forecast,” Kelly said. “We didn’t forecast it being that cold.”Kelly said after the meeting the company is considering more storage capacity near Denver.”There are lessons to be learned there,” he said.Kelly also warned customers to expect continued high energy costs.While the company announced a 3.5 percent dividend increase at Wednesday’s meeting, Kelly said the profits were not fueled by high natural gas costs. In fact, he said, spikes in customer bills hurt the company because customers missed monthly payments.Xcel has reported about one-fourth of its customers were late paying March power bills.Kelly was unapologetic for requested rate increases sought last month that could bump residential electric bills by about $3.57 a month and for seeking to hit late-paying customers with a 1.5 percent fee. Companies raise prices to remain profitable, he said. Xcel is encountering its own cost increases as it funds expansion projects, invests in alternative energy, and continues a push for increased profits.”We don’t ask for a rate increase lightly,” he said. “Nobody wants their bill to go up …. It’s not just about the customers; we do need to take care of the shareholders and we do need to take care of the environment, and that takes money.”While announcing the boost in shareholder dividends beginning July 1, Kelly also highlighted Xcel investments in Colorado. The company is adding to its coal-fired plant in Pueblo, and Kelly said coal could help provide balance in the face of volatile natural gas prices.Xcel is also poised to begin construction this year of an experimental solar power generation facility in Colorado’s San Luis Valley.Xcel is preparing to partner with consultants this year on plans for a new breed of coal-fired electric plant the company calls “clean coal” aimed at reducing emissions.Kelly said he wants to build an experimental plant somewhere in Colorado to test the technology at altitude above 4,000 feet and using Western coal. No site has been selected, he said.Kelly said he saw no technology breakthrough or supply changes that will bring relief to ratepayers.”The price of energy continues to be an issue. It doesn’t look like it’s going to get better any time soon … It’s hard to imagine it ever coming down.”Outside the shareholder meeting in downtown Denver, a coalition of protesters railed against Xcel’s proposed rate increase and late-payment fee, as well as payments to former CEO Wayne Brunetti and other executives.Michael Huttner, executive director of ProgressNowAction launched the ExposeXcel.com Web site two weeks ago and rolled out a “red carpet” of petitions protesting the increase.The petition, created online, was printed on red paper and taped together to create a red carpet.Xcel executives were already inside the building, and there was no indication they saw the petition or the handful of protesters from ProgressNowAction, the Colorado Progressive Coalition and the Colorado Public Interest Research Group.”Xcel’s massive bonuses to their top executives combined with the proposed rate increase are hurting Colorado’s children, scaring Colorado’s seniors and ruining Colorado’s small businesses,” Huttner said.
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