Minnesota
Breaking News
Xcel Admits to False Outage Reports, Will Pay Customers
$1 Million
(September 26) After denying for a year that it falsified
electrical service outage records, Xcel Energy admitted on Sept. 24 that the service
quality reports it has been submitting to the state have little basis in fact, and agreed
to remedies that could cost the company more than $21 million.
Under the terms of a settlement agreement reached with state
regulators, Xcel will refund $1 million to customers who have suffered the longest
blackouts. It will also spend up to $20 million more than it has currently budgeted to
upgrade its system and to reverse a trend of more and longer power failures.
The settlement also requires the company to add a new position:
An ombudsman to hear customer complaints about repeated outages. In addition, the company
agreed to hold customer meetings "in areas with frequent outages to hear concerns,
present information and discuss action plans for improvements. The utility also said it
would accept all the recommendations made by an independent auditor whose August report to
the state labeled Xcel's system for recording outages as "corrupt."
The settlement reached by Xcel, the attorney general's office and
the state commerce department is contingent, however, on all of the parties agreeing in
the next 30 days on new reliability standards -- and on what punishment the utility will
face if it fails to meet those standards.
The settlement is the latest step in a state investigation that
began last year after current and former Xcel employees told the Pioneer Press that the
company routinely altered its outage records. Since Northern States Power and Denver-based
New Century Energies merged in 2000 to create Xcel, the company has been required to meet
state standards insuring that its 1.3 million customers in the state will have reliable
power. The company can be fined if customers suffer frequent or lengthy outages.
The workers who talked to the Pioneer Press claimed that outages
were on the rise because of the company's deep cuts in service personnel, elimination of
critical maintenance and a lack of investment in new equipment. Records they provided
showed managers slashed minutes and even hours off outage times. For instance, a June 2002
outage in Watertown lasted 8 hours, but had been recorded as having lasted 22 minutes.
The company has slashed spending in several areas, some of them
directly related to reliability. According to documents Xcel filed with the Federal Energy
Regulatory Commission, the utility's Minnesota work force has been cut 35 percent since
the 2000 merger.
Source: Saint Paul Pioneer Press
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