When Xcel Energy began work to upgrade its nuclear reactor in Monticello, it put the cost of the project at $320 million. Five years later, the pricetag for the project to extend the plant’s life and boost its output ended came in at $655 million. The Star Tribune reports that the state's utility regulators want to know why.
Minnesota's Public Utilities Commission on Thursday announced plans to investigate the massive cost overruns. The commission will hire an expert to review whether the expenditures were reasonable. The probe is expected to take up to 6 months.
Xcel’s 1.2 million Minnesota customers will bear only a share of the higher costs; the commission voted to allow only a portion to be tacked onto rates this year. But if the investigation finds the overruns were imprudent, the utility’s investors could share in the costs, which may affect earnings.
Xcel defended the cost increase, citing a number of complications with the project. The costs are likely to become an issue in Xcel’s next rate hike request in 2014. Last week, Xcel CEO Ben Fowke said the company will file a sizable rate hike request later this year.