Sep. 29--After nearly a year of negotiations and criticism from state agencies concerning Xcel Energy's spending -- including executive trips to lavish hotels in Europe and Colorado -- the state Public Utilities Commission (PUC) is to vote today on a rate increase that would raise most Minnesotans' average monthly electricity bills by 6 to 7 percent.

But customers already have been paying most of that, because of an interim rate increase early this year. Depending on the final number decided today, customers could see a small increase or possibly even a credit in their bills, reflecting the change from the interim boost.

Minneapolis-based Xcel Energy Inc., which serves 1.2 million electricity customers in Minnesota, is seeking an annual rate increase totaling $138 million starting this year. Its original request for a $156 million increase has been shaved over the past year, after the utility trimmed some costs and state consumer-protection agencies objected to some expenses coming out of ratepayers' pockets, including the pricey trips, golf outings and concerts.

The rate request is a long, complicated process that started nearly a year ago, when Xcel cited the need to maintain a safe and reliable electricity system in the face of escalating costs.

Material costs rising

In making its request, Xcel has acknowledged the "challenging economic times" facing its customers, but said that costs for materials -- such as transformers, wire, steel and cable -- have risen dramatically in the past few years, prompting the need to raise rates.

It also said it has invested more than $1.2 billion in its electrical system and is working on a long-term plan to reduce costs at its nuclear power plants.

The PUC, which is voting on the request today, in December approved an interim rate increase totaling $132 million.

The debate about the expenses often comes down to whether consumers or shareholders should foot the bill.

As part of the process to determine whether the rate bump was needed -- and if so, how much -- at least two consumer-protection agencies, the Office of Energy Security (OES) and the state attorney general's office, audited the request and investigated expenses.

The attorney general's office came down hard on Xcel. In one example, a report by the office found that customers paid about $41,000 of a $100,000-plus trip for a 2007 board retreat at a luxury resort in Beaver Creek, Colo. It also said that ratepayers picked up the tab for about $13,000 of another board retreat, this one to the St. Julien Hotel and Spa in Boulder, Colo., in 2008.