Summary
Xcel Energy Inc.'s wholly-owned subsidiary, Public Service Company of Colorado (PSCo), has filed a request with the Colorado Public Utilities Commission (CPUC) to increase Colorado retail natural gas rates by approximately $27.5 million. This rate hike, expected to be effective in summer 2011, is primarily to recover increased capital and operating expenses related to pipeline integrity programs, deferred costs since 2006, and higher pension, benefit, and property tax expenses. PSCo is also proposing to implement a new rider mechanism for ongoing recovery of pipeline integrity costs and to adjust how costs for gas in underground storage are recovered.
Key Highlights
- 1Public Service Company of Colorado (PSCo), a subsidiary of Xcel Energy, filed a request for a $27.5 million increase in Colorado retail natural gas rates.
- 2The requested rate increase is expected to be effective in summer 2011.
- 3The primary drivers for the rate increase are capital and operating expenses for pipeline integrity programs.
- 4PSCo also seeks to recover deferred costs from previous years and increased pension, benefit, and property tax expenses.
- 5A new 'Pipeline System Integrity Adjustment' rider is proposed for ongoing recovery of pipeline integrity costs.
- 6PSCo plans to adjust the recovery mechanism for gas in underground storage, moving it to the Gas Cost Adjustment rider.
- 7The request is based on a 2011 forecast test year with an expected return on equity (ROE) of 10.90%.
Frequently Asked Questions
The primary reasons are to recover increased capital and operating expenses associated with pipeline integrity programs, deferred costs from prior years (since 2006), and higher pension, benefit, and property tax expenses.
The proposed rate increase is expected to be effective in the summer of 2011.
PSCo is proposing a new rider mechanism called the 'Pipeline System Integrity Adjustment' for ongoing recovery of pipeline integrity costs. Additionally, they plan to recover the return on gas in underground storage through the Gas Cost Adjustment rider, rather than base rates.
This filing specifically concerns Public Service Company of Colorado's retail gas rates. While the $27.5 million increase aims to recover costs and support operations, the ultimate impact on Xcel Energy's consolidated financial performance will depend on regulatory approval, the actual costs incurred, and the rates set by the Colorado Public Utilities Commission. Investors should monitor regulatory outcomes and the company's subsequent financial reporting for detailed impacts.