Summary
Xcel Energy Inc. (XEL) announced on December 7, 2007, through its wholly-owned subsidiary Northern States Power Company (NSP), a filing with the North Dakota Public Service Commission (NDPSC) to increase electric rates. This filing seeks a $20.5 million increase, which translates to a 14% overall rise in electric rates. The primary drivers for this rate hike are increased capital investments and escalating operating costs necessary to maintain service quality. Investors should note the proposed effective dates. If approved without suspension, interim rates reflecting an average 11.49% revenue increase could be implemented by February 5, 2008. The company anticipates that final rates will be established and become effective in the latter half of summer 2008. The request is based on specific financial parameters, including a common equity ratio of 51.77% and a desired return on equity of 11.5%, applied to a jurisdictional rate base of approximately $242 million.
Key Highlights
- 1Xcel Energy's subsidiary, Northern States Power Company, filed a request with the North Dakota Public Service Commission (NDPSC) to increase electric rates.
- 2The requested rate increase totals $20.5 million, representing a 14% rise in electric rates.
- 3Key justifications for the rate increase include higher capital investments and increased operating costs.
- 4The filing proposes specific financial targets: a 51.77% common equity ratio and an 11.5% return on equity.
- 5The jurisdictional rate base for this filing is approximately $242 million.
- 6Interim rates, if the case is not suspended, are expected to become effective around February 5, 2008, with an average revenue increase of 11.49%.
- 7Final rates are anticipated to be effective in late summer 2008.