26 October 2005

Do We Need Electricity Rate Increases?

I'm generally inclined to give public utitilies the benefit of the doubt on their rates. So, when they asked for a 20% increase in electricity rates based on rising electricity costs, I believe them. Now, I have doubts:

Xcel Energy Inc. on Wednesday said warm summer weather and higher profit margins for electricity sparked a more than fourfold jump in its third-quarter earnings, but warned that fourth-quarter profit will likely fall short of forecasts.

Net income came to $196 million, or 47 cents a share, in the latest period, compared with $46.7 million, or 12 cents a share, a year ago, the Minneapolis-based utility company said.

The results beat a Thomson Financial average of analysts' estimates at 44 cents a share.

Earnings were helped by a lower effective tax rate and sales growth.

Revenue climbed 16 percent to $2.29 billion from $1.97 billion.

Xcel serves 3.3 million electricity and 1.8 million natural gas customers across 10 Western and Midwestern states.

Regulators and shareholders shouldn't be getting different stories on electricity costs.

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