Summary
Xcel Energy Inc. (XEL) is reporting on the outcome of a rate increase request filed by its wholly owned subsidiary, Southwestern Public Service Company (SPS), with the New Mexico Public Regulation Commission (NMPRC). The subsidiary initially sought a $17.3 million annual electric rate increase, which was later reduced to $16.6 million. The NMPRC issued a final order on August 27, 2008, granting a total increase of $10.7 million, which is less than initially requested but includes a rider for $3.8 million in restructuring costs. Key adjustments made by the NMPRC include disallowing certain demand-side management costs and other expenses from the rate base. While the granted rate increase is a reduction from SPS's initial requests, it represents a partial recovery of increased costs. SPS plans to seek reconsideration of the final order, indicating ongoing efforts to secure a more favorable outcome for its New Mexico operations. Investors should monitor potential further developments regarding this rate case.
Key Highlights
- 1Southwestern Public Service Company (SPS), a subsidiary of Xcel Energy Inc., received a final order from the New Mexico Public Regulation Commission (NMPRC) on August 27, 2008.
- 2The NMPRC granted a total electric rate increase of $10.7 million, which is less than the $17.3 million initially requested by SPS.
- 3The approved rate increase includes a rider allowing SPS to recover $3.8 million in restructuring costs.
- 4The NMPRC disallowed $3.5 million in rate base for historical demand-side management expenditures and certain other expenses.
- 5The final order allows for a rate of return on equity (ROE) of 10.18%, slightly higher than the hearing examiner's recommendation.
- 6SPS intends to seek reconsideration of the NMPRC's final order, suggesting potential for future adjustments.
- 7Consideration of costs associated with the Lea Power Partners project was deferred to a future rate proceeding.