8-KOther Events

XCEL ENERGY INC 8-K Report, Corporate Update (May 29, 2009)

Filed May 29, 2009For Securities:XELXELLL

Summary

This Form 8-K filing from Xcel Energy Inc. (XEL) on May 29, 2009, primarily details the ongoing rate increase proceedings for its wholly-owned subsidiary, Northern States Power Company (NSP-Minnesota), with the Minnesota Public Utilities Commission (MPUC). NSP-Minnesota initially requested a $156 million annual electric rate increase based on a 2009 forecast test year and a 6.05% rate hike. An interim rate increase of $132 million was approved in December 2008, effective January 2009, which was lower than requested due to a difference in the authorized versus requested Return on Equity (ROE).

Key Highlights

  • 1NSP-Minnesota initially requested a $156 million (6.05%) annual electric rate increase, with the MPUC approving an interim increase of $132 million (5.12%) effective January 2, 2009.
  • 2Key differences in the rate case revolve around the authorized Return on Equity (ROE) and the treatment of expenses related to the Prairie Island nuclear plant's life extension.
  • 3Intervenors, including the Office of Energy Security (OES) and the Office of the Attorney General (OAG), have submitted testimony recommending lower revenue increases than initially requested.
  • 4NSP-Minnesota revised its request downwards to $138 million, citing cost reductions in commodities, management initiatives, and lower projected capacity costs.
  • 5The Prairie Island nuclear plant's life extension is a significant factor, with different proposals for recognizing the resulting decrease in depreciation and decommissioning expenses.
  • 6The OAG has recommended disallowances for certain expenses and the use of different allocators for corporate costs, further impacting the potential revenue increase.
  • 7A final decision from the MPUC on the rate increase is anticipated in the third quarter of 2009.

Frequently Asked Questions

The main purpose of this 8-K filing is to provide an update on the ongoing electric rate increase case for Xcel Energy's subsidiary, Northern States Power Company (NSP-Minnesota), before the Minnesota Public Utilities Commission (MPUC).

Initially, NSP-Minnesota requested a $156 million annual electric rate increase. However, after submitting rebuttal testimony, the company revised its request to $138 million. The final decision by the MPUC is expected in Q3 2009.

The key points of contention include the authorized Return on Equity (ROE), the recognition of cost savings from the Prairie Island nuclear plant's life extension (affecting depreciation and decommissioning expenses), and proposed disallowances of certain executive and corporate expenses by intervenors.

A final decision from the Minnesota Public Utilities Commission (MPUC) is expected in the third quarter of 2009.