Summary
Xcel Energy Inc. (XEL) reported on June 18, 2002, an "Other Events" filing regarding a significant decision by the Connecticut Department of Public Utility Control (DPUC). The DPUC denied a request by NRG Energy, Inc. (a subsidiary of Xcel Energy) and Connecticut Light and Power for an increase in the standard offer rate paid to energy suppliers. This increase, if granted, was expected to contribute approximately $5 million in net income per month to NRG. The denial is material because Xcel Energy's 2002 earnings guidance was based on an anticipated increase in this standard offer rate, which was scheduled for May 1, 2002. NRG is currently evaluating its options in response to the DPUC's decision, including pursuing cost recovery for 'must-run' units through ISO New England. Investors should monitor NRG's next steps and Xcel Energy's updated earnings outlook.
Key Highlights
- 1DPUC denied NRG Energy's request for an increase in the standard offer rate.
- 2The denied rate increase was expected to contribute approximately $5 million per month to NRG's net income.
- 3Xcel Energy's 2002 earnings guidance was predicated on this rate increase.
- 4NRG is exploring alternative avenues for cost recovery, including through ISO New England.
- 5The company included standard forward-looking statement cautionary language regarding potential risks and uncertainties.