Summary
This Form 8-K filing from Xcel Energy Inc. (XEL) on July 10, 2008, primarily concerns a regulatory decision impacting its wholly owned subsidiary, Southwestern Public Service Company (SPS), in New Mexico. SPS had initially requested a significant retail electric rate increase to cover operational costs and the costs associated with the Lea Power Partners (LPP) project. However, the New Mexico Public Regulation Commission (NMPRC) hearing examiner has recommended a lower rate increase than initially sought. Investors should note the recommended rate increase of $12.6 million, which is less than the $17.3 million initially requested and the later revised request of $16.6 million. Furthermore, the hearing examiner's recommendation includes the exclusion of certain costs, such as historical demand-side management expenses and specific operational costs. The NMPRC will issue a final order by August 29, 2008, and SPS plans to file exceptions to the recommended decision. The LPP project's power purchase agreement costs will be addressed in a future rate proceeding.
Key Highlights
- 1Southwestern Public Service Company (SPS), an Xcel Energy subsidiary, sought a New Mexico retail electric general rate increase.
- 2Initial request was for $17.3 million annually (6.6% increase), later revised to $16.6 million.
- 3A hearing examiner recommended an increase of $12.6 million, lower than SPS's requests.
- 4Recommended rate of return on equity (ROE) is 10.14%, down from the requested 11.0% and 10.7%.
- 5Hearing examiner recommended excluding approximately $3.5 million in historical demand-side management costs and certain other operational expenses from rates.
- 6Costs for the Lea Power Partners (LPP) project power purchase agreement will be considered in a future rate proceeding, not this one.
- 7SPS will file exceptions to the recommended decision, with a final NMPRC order expected by August 29, 2008.