8-KEarnings & ResultsOther EventsExhibits & Filings

XCEL ENERGY INC 8-K Report, Financial Results (Jun 25, 2007)

Filed June 25, 2007For Securities:XELXELLL

Summary

This 8-K filing from Xcel Energy Inc. (XEL) on June 25, 2007, primarily announces a significant settlement regarding the Public Service Company of Colorado (PSCo) gas rate case. The settlement, approved by the Colorado Public Utilities Commission (CPUC) on June 18, 2007, allows PSCo to increase its annual revenues by approximately $32.3 million. This increase is based on an approved rate of return on equity (ROE) of 10.25% and a common equity ratio of 60.17%. The settlement also includes a modified partial decoupling mechanism for residential customers, designed to help PSCo recover revenue shortfalls related to declining natural gas usage, adjusted for weather normalization.

Key Highlights

  • 1Xcel Energy's subsidiary, Public Service Company of Colorado (PSCo), reached a settlement on a gas rate case with regulators and interveners.
  • 2The Colorado Public Utilities Commission (CPUC) has approved the settlement, allowing for an approximate $32.3 million annual revenue increase for PSCo.
  • 3The approved rate of return on equity (ROE) for PSCo is 10.25%, and the common equity ratio is set at 60.17%.
  • 4A partial decoupling mechanism will be implemented for residential customers to mitigate revenue impacts from decreased usage.
  • 5The decoupling mechanism allows for recovery of revenue differences due to changes in weather-normalized residential use per customer exceeding a 1.3% decline.
  • 6Xcel Energy plans to discuss financial information at the Bank of America Conference on June 26, 2007, with a presentation filed as an exhibit.

Frequently Asked Questions

The main event is the approval by the Colorado Public Utilities Commission (CPUC) of a settlement for Xcel Energy's subsidiary, Public Service Company of Colorado's (PSCo), gas rate case. This settlement allows for an increase in PSCo's annual revenues.

PSCo's annual revenues are approved to increase by approximately $32.3 million as part of the settlement.

The settlement approves a rate of return on equity (ROE) of 10.25% for PSCo.

The partial decoupling mechanism allows PSCo to track changes in weather-normalized residential natural gas usage compared to the test year. If usage declines by more than 1.3%, PSCo can collect or return the difference through a rate adjustment rider, helping to stabilize revenue while mitigating the impact on customers for modest usage changes.