Summary
Xcel Energy Inc. (XEL), through its wholly-owned subsidiary Southwestern Public Service Company (SPS), filed a significant rate case with the Public Utility Commission of Texas (PUCT) on May 17, 2010. The filing seeks an annual base rate increase of approximately $62 million, which, after adjustments for franchise fees, purchased capacity, and transmission costs, translates to an estimated net increase for customers of $53.5 million, or about 7 percent. The company is requesting a return on equity of 11.35% and is proposing an electric rate base of $1.031 billion. This rate case is a crucial event for investors as it directly impacts the revenue potential and profitability of Xcel Energy's Texas operations. While the company anticipates new rates could be implemented by early 2011, the process is subject to regulatory review and potential litigation, which could extend the timeline. The filing also includes a request to reconcile fuel and purchased power costs for 2008 and 2009, with a notable under-recovery of $3.3 million for fuel costs as of the end of 2009.
Key Highlights
- 1Southwestern Public Service Company (SPS), a subsidiary of Xcel Energy, filed a rate increase request with the Public Utility Commission of Texas (PUCT) on May 17, 2010.
- 2The filing seeks an annual base rate increase of approximately $62 million.
- 3The net estimated increase to customer bills is $53.5 million, representing about a 7% rise.
- 4SPS is requesting a return on equity of 11.35% on an electric rate base of $1.031 billion.
- 5The company also requested reconciliation of fuel and purchased power costs for 2008-2009, with a $3.3 million fuel cost under-recovery as of December 31, 2009.
- 6New rates are expected to go into effect early in 2011, but this is subject to the regulatory process.