8-KOther Events

XCEL ENERGY INC 8-K Report, Corporate Update (Dec 17, 2009)

Filed December 17, 2009For Securities:XELXELLL

Summary

This Form 8-K filing from Xcel Energy Inc. (XEL) reports on a significant decision by the Public Service Commission of Wisconsin (PSCW) regarding Northern States Power Company (NSP-Wisconsin), a subsidiary. In June 2009, NSP-Wisconsin filed for an electric rate increase of $30.4 million (5.7%) and no change in natural gas rates, citing a need for a 10.75% return on equity. On December 11, 2009, the PSCW approved a much lower electric rate increase of approximately $6.4 million (1.2%), with no change in gas rates. The approved return on equity was also reduced to 10.4%.

Key Highlights

  • 1NSP-Wisconsin, a subsidiary of Xcel Energy, sought a $30.4 million electric rate increase (5.7%) and no gas rate change.
  • 2The Public Service Commission of Wisconsin (PSCW) approved a significantly lower electric rate increase of $6.4 million (1.2%).
  • 3Gas rates were approved with no change, as requested.
  • 4The PSCW reduced the approved return on equity (ROE) for NSP-Wisconsin from 10.75% to 10.4%.
  • 5A portion of NSP-Wisconsin's 2009 fuel refund obligation ($6.4 million) will be used to offset the approved rate increase, resulting in generally no change to overall customer bills in 2010.
  • 6The PSCW disallowed certain employee compensation expenses and reduced the rate base related to Prairie Island nuclear plant decommissioning costs.
  • 7New rates are expected to take effect in January 2010, with a written order anticipated by the end of 2009.

Frequently Asked Questions

NSP-Wisconsin, a subsidiary of Xcel Energy, was approved for an electric rate increase of approximately $6.4 million (1.2%) by the Public Service Commission of Wisconsin (PSCW). The PSCW did not approve any changes to natural gas rates. This is significantly less than the $30.4 million increase initially requested by NSP-Wisconsin.

While an electric rate increase was approved, the PSCW directed that $6.4 million of NSP-Wisconsin's 2009 fuel refund obligation be used to offset this increase. Consequently, Xcel Energy expects that, generally, there will be no change to NSP-Wisconsin's overall customer bills in 2010. However, individual customer bills may vary based on the new rate design.

The PSCW's decision was based on several factors, including a lower approved return on equity (10.4% vs. 10.75% requested), reduced interchange agreement fixed charge billings, a disallowance of certain employee compensation expenses, and a reduction for Prairie Island nuclear plant decommissioning expense related to its life extension. The PSCW also adjusted fuel cost projections.

A written order from the PSCW is expected by the end of 2009, with the new rates scheduled to become effective in January 2010.