- Associated Press - Tuesday, February 3, 2015

MINNEAPOLIS (AP) - A Minnesota judge says Xcel Energy mismanaged a major renovation of a nuclear power plant in Monticello, finding the utility at fault for $402 million in cost overruns.

Judge Steve Mihalchick, who headed a state investigation, found Xcel misjudged the project’s complexity, which more than doubled its cost, the Star Tribune (http://strib.mn/1zy4jnC ) reported.

“Xcel has failed to demonstrate that the cost overruns it seeks to recover were prudently incurred and are reasonable,” Mihalchick wrote in a 38-page report.

The Minnesota Public Utilities Commission will decide how much Xcel will pay for extra costs and how much will be passed on to customers. The judge in the investigation backed a recommendation from the state Commerce Department that Xcel should account for $71 million.

The commission is expected to vote in March on a proposed rate increase for 1.2 million Xcel customers. Chris Clark, president of Xcel’s Minnesota regional unit, said in a statement that it’s reviewing the judge’s decision and then will respond to the utilities commission.

Xcel had argued that it was surprised by the project’s complexity, which required workers to install large equipment in small spaces with sometimes-high radiation levels. But Mihalchick, referring to testimony from outside nuclear experts, said Xcel should have foreseen these issues.

The $748 million project was finished in 2013 and increased the plant’s potential output by about 12 percent. But ramping up to the higher output has been delayed repeatedly.

The nuclear plant is 45 miles northwest of the Twin Cities and powers the equivalent of about 500,000 homes. It opened in 1971 and has an extension on its original operating license to 2030.

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Information from: Star Tribune, http://www.startribune.com

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