Summary
This Form 8-K filing by Xcel Energy Inc. reports on the latest developments in a retail electric general rate case for its wholly owned subsidiary, Southwestern Public Service Company (SPS), in New Mexico. On March 6, 2008, intervenor and NMPRC staff testimony was filed, presenting significantly lower rate increase recommendations than what SPS originally requested. Key parties, including the NMPRC staff and the Attorney General, have recommended a much smaller annual increase, ranging from approximately $8 million down to a $2 million decrease, with lower rates of return on equity (ROE) compared to SPS's request. Concerns were also raised regarding the disallowance of prepaid pension from rate base and the recovery mechanism for future purchased capacity costs related to the Lea Power Partner project. The proceedings are advancing with rebuttal testimony due and a hearing scheduled in April 2008.
Key Highlights
- 1Southwestern Public Service Company (SPS), a subsidiary of Xcel Energy, requested a 6.6% ($17.3 million annually) retail electric rate increase in New Mexico.
- 2NMPRC staff recommended a substantially lower increase of approximately $8 million annually, with a 9.1% ROE, and proposed disallowing prepaid pension from rate base.
- 3The New Mexico Attorney General recommended a rate decrease of $2 million annually, citing a 9.2% ROE and additional tax adjustments.
- 4NMPRC staff questioned SPS's proposed recovery method for future purchased capacity costs from the Lea Power Partner project, suggesting it should be addressed in the next general rate case.
- 5Occidental Permian, a major customer, recommended a 9.9% ROE and did not oppose the Lea Power cost recovery rider.
- 6Rebuttal testimony is due on March 28, 2008, and a hearing is scheduled for April 9-23, 2008, indicating continued progress in the rate case.