DENVER -- Xcel Energy is seeking to raise electric rates by $136 million a year, a drop from its initial $180 million request in a settlement with Colorado Public Utilities Commission staff and consumer advocates.

Xcel also cut $279,000 in executive travel and entertainment expenses from its request after critics complained that the utility was charging ratepayers for corporate perks ranging from spa retreats and eye-popping restaurant tabs to pro sports tickets and golf outings.

The energy giant said Wednesday if the commission approves the rate hike, monthly bills would rise $4.66 for typical residential customers or by $7.16 for typical small-business customers beginning in January.

The proposal would allow Xcel to recover more than $1.7 billion invested in the Comanche 3 Generating Station, which is slated to come online by the end of 2009; two new generating units at Fort St. Vrain Generating Station; and creation of a "smart grid" technology network in Boulder that will improve cost and environmental benefits.

The company also will establish an additional low-income energy assistance program and continue donations to Energy Outreach Colorado, both to benefit low-income customers in need in Colorado.

"We see this as a significant step to continuing our ability to provide reliable, reasonably priced electric service," said Tim Taylor, CEO of Public Service Co. of Colorado, an Xcel Energy company. "Comanche 3 is a great investment for customers. Being able to use low-cost coal to provide base-load power is important for our Colorado customers."

"It also allows us to take the next step and begin retiring some of our older, less efficient coal-fired power plants to continue reducing our carbon dioxide emissions," he added.