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My personal musings about anything that gets on my radar screen--heavily dominated by politics.

2006-05-05

Not Often I Agree With These Guys . . .

but when they're right, they're right.

Xcel Energy, owner of Colorado’s largest utility, just reported a 25 percent increase in profits over the previous year. Xcel’s huge profits come at a time when customers have been reeling from skyrocketing bills all winter. Home heating bills, on average, rose 25 percent to 40 percent in Colorado during the peak winter months.

What’s worse is that two weeks ago Xcel requested an electric rate increase by 19 percent, a $209 Million overall increase on residential customer and small business bills. This morning Xcel admitted that this is likely to be the first in a series of hikes on consumers.

I just got the notice in the mail yesterday that Xcel was going to ask for a massive rate hike on home electricity. My first comment to the wife was "weren't they just telling us how nice they were going to be by cutting rates this winter?"

Well, I guess the nice thing went away.

Look, I'm no economist, but I think I have a passing knowledge of economics; and I think I understand the market forces that play on things like this. But to raise rates last Fall in anticipation of one thing, then to cut during the winter when that event didn't come to pass, then to ask again for a rate hike during peak air conditioning season, only to follow that up with an announcement of unusually strong profits, strikes me as either complete befuddlement among management or distinct incompetence.

In either case, the consumer loses.
Posted by: Michael / 5/05/2006 12:02:00 AM

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