As Rates Increase, Colorado Accounted For Nearly Half Of Xcel’s Record 2012 Profits
Coloradans serviced by Xcel Energy were responsible for nearly half of the company’s profits in 2012 due to rate hikes implemented last May. According to Xcel’s 2012 Year End Earnings Report released last week, Coloradans who purchased energy from Xcel paid higher rates and helped boost the company’s profit to a record $905 million dollars.
Though Xcel is based in Minneapolis and serves seven states other than Colorado, the company’s operations in the Rocky Mountain state managed to rack up nearly the same profit as in Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin combined. Xcel, through its local Public Service Company of Colorado (PSCo) division, provides 1.4 million Coloradans with electricity and 1.3 million with natural gas.
The earnings report cites increased rates and a warmer summer as the explanation for Colorado’s large profits for the company: “The [full year] increase [in Colorado] is primarily due to an electric rate increase, effective May 2012, and the impact of warmer summer weather.” The earnings statement went on to note that, “The increase was partially offset by decreased wholesale revenue due to the expiration of a long-term power sales agreement with Black Hills Corp., higher depreciation expense and operating and maintenance (O&M) expenses.”
Overall, Xcel closed 2012 with $64 million more in profits than in 2011, when the company managed $841 million in earnings. “We had an excellent year financially and operationally in 2012,” said Ben Fowke, Chairman, President and Chief Executive Officer of the company.
A week before the 2012 Earnings Report was released however, Fowke held a press conference in Minneapolis to announce that ratepayers across the country should expect to see larger increases in their energy bills than they have seen in decades. Fowke pointed to an aging energy infrastructure and slower revenue growth as reasons for the future projections on January 22 , mere days before Xcel posted its record revenues.
Most recently, Xcel has advocated for projects that would make a more diverse renewable energy portfolio one of the company’s top priorities. Several alternative energy programs launched in Colorado toward the end of the 2012 calendar year, including the Solar Reward community standard offer as well as exploration into greater spending and investment in wind power.
Xcel Energy Colorado has been suggested by the Sierra Club as a potential buyer for the Martin Drake Power Plant in Colorado Springs, which currently faces potential decommissioning pending an investigation by the city council. “Xcel Energy Colorado will retire coal fired boilers at its Arapahoe, Valmont and Cherokee plants,” the Sierra Club opinion piece notes, inferring that Xcel would do the same with the Drake power plant under its control as the company seeks to spend additional money on alternative sources of energy that have yet to prove successful in the state.
Xcel Energy has been a significant political player in local Colorado politics as well. The company contributed to 108 different political causes and candidates in the 2012 election cycle alone. While Xcel contributes to both sides of the aisle and is fairly even with their disbursements, last cycle’s donations titled slightly in the favor of liberal causes and candidates. A total of $65,600 was invested in both Republicans and Democrats last year, and some recipients were in direct competition with each other.
For example, the Xcel Energy Western Political Action Committee of Colorado gave $5,000 to the Colorado Accountable Government Alliance (CAGA), a Tim Gill backed political non-profit that specialized in negative hit pieces against local Republican candidates. Xcel also maxed out the legal candidate contribution limit on Republican Cindy Acree. Acree was one of the primary enemies and a key target of of CAGA’s 527 and IE committee. In similar fashion, Xcel also contributed to both the Colorado Democrat and Republican leadership funds.
David Eves, President and CEO of Xcel’s Colorado division, also showed the same patterns in his personal political giving. Eves has given $6,000 in 35 different contributions to opposing political sides since 2010. Key contributions went to Democratic Governor John Hickenlooper and former Republican Speaker of the House Frank McNulty.