Xcel Energy’s trading operations are being targeted for study by Colorado state regulators, who said they don’t expect to find anything wrong. A report last Thursday in the Denver Post said the state utilities commission wants to probe how the trading impacts retail utility customers in the state.

While Minnesota-based Xcel is the subject of a federal probe for alleged false reporting of wholesale natural gas trading prices to industry publications in the past, Colorado officials said the state investigation will be centered on power trading. Regulators are looking to find out more about the financial impact of energy trading on the retail utility customers to help establish rules governing the practice.

“We just want to make sure the accounting is accurate,” said the head of Colorado’s consumer counsel office, Ken Reif, in the Post report.

Under current interim rules from the Colorado PUC, trading profits by Xcel are to be shared equally with utility customers, and any losses are to be absorbed entirely by the holding company’s shareholders. For the five-year period of 1996-2001, the consumer counsel’s records indicate that utility customers received about $150 million in credits from the Xcel trading profits, with the biggest chunk ($93 million) coming in 2001 when wholesale energy markets spiked throughout the western states.

The Colorado PUC has a request for proposal outstanding for private firms to bid on conducting the investigation. Xcel has said it will cooperate with the audit and that there “is no problem” prompting the investigation. The state officials are looking for outside expertise in getting the job done, however, since they told news media that they lack in-house trading expertise.

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