Summary
This Form 8-K filing by Xcel Energy Inc. (XEL) and its subsidiary, Public Service Company of Colorado (PSCo), provides updates on the resolution of PSCo's Colorado retail electric rate case and the expected in-service date for the Comanche 3 power plant. The Public Utilities Commission of Colorado (CPUC) approved a settlement that allows PSCo to increase base electric rates by approximately $128.3 million, a reduction from the initially requested amount. Key aspects of the settlement include the recovery of investments in new generation and grid modernization projects like Comanche Unit 3 and SmartGridCity, along with provisions for cost recovery of plant retirements and a donation of late payment fees to support low-income customers. The filing also addresses the delay in the in-service date of the Comanche 3 coal plant due to boiler tube weld issues. Initially expected to come online by the end of 2009, its commissioning is now postponed into 2010. In response, PSCo proposed and the CPUC approved a phased-in rate increase, rather than a full increase followed by a customer refund, to align revenue recovery with the plant's actual operational timeline. This approach aims to prevent adverse financial impacts on PSCo and Xcel Energy. Additionally, Xcel Energy reaffirmed its 2010 earnings guidance.
Key Highlights
- 1Public Service Company of Colorado (PSCo) received approval for a $128.3 million increase in Colorado retail electric base rates, effective January 1, 2010, as part of a settlement agreement approved by the CPUC.
- 2The approved rate increase is lower than the initially requested $180.2 million, reflecting negotiations and CPUC adjustments, including a 10.5% return on equity (ROE) and adjustments to rate case expenses and cash working capital.
- 3The delay in the in-service date of the Comanche 3 coal plant into 2010 necessitated a phased-in rate increase approach, with an initial increase of approximately $67.0 million on January 1, 2010, and further increases as the plant becomes operational.
- 4The settlement includes provisions for the recovery of investments in significant projects such as Comanche Unit 3, Fort St. Vrain, air quality improvements, and SmartGridCity.
- 5PSCo agreed to a rate stay-out provision until December 31, 2011, for its next general rate case, subject to limited exceptions.
- 6The CPUC approved specific terms for the Electric Commodity Adjustment (ECA), maintaining existing customer/company sharing of trading margins and rejecting certain proposed ECA incentives.
- 7Xcel Energy reaffirmed its 2010 earnings per share (EPS) guidance of $1.55 to $1.65.