8-KOther Events

XCEL ENERGY INC 8-K Report, Corporate Update (Apr 13, 2011)

Filed April 13, 2011For Securities:XELXELLL

Summary

This Form 8-K filing from Xcel Energy Inc. (XEL), filed on April 13, 2011, pertains to its wholly-owned subsidiary, Public Service Company of Colorado (PSCo), and its ongoing natural gas rate case before the Colorado Public Utilities Commission (CPUC). PSCo initially requested a $27.5 million increase in Colorado retail gas rates, later revised to $25.6 million, based on a 2011 forecast test year, a proposed 10.90% return on equity, and a $1.1 billion rate base. The filing details that intervenors, including the CPUC Staff and the Colorado Office of Consumer Counsel (OCC), have filed answer testimony. The CPUC Staff recommended a rate decrease of approximately $20.1 million, while the OCC proposed a $1 million decrease, each citing different assumptions for test year, return on equity, and various cost components.

Key Highlights

  • 1Public Service Company of Colorado (PSCo), a subsidiary of Xcel Energy, filed a rate case with the Colorado Public Utilities Commission (CPUC).
  • 2PSCo initially sought a $27.5 million increase in retail gas rates, subsequently revised to $25.6 million.
  • 3The CPUC Staff recommended a rate decrease of approximately $20.1 million, differing significantly from PSCo's request.
  • 4The Colorado Office of Consumer Counsel (OCC) also recommended a rate decrease, estimated at $1 million.
  • 5Key areas of contention include the test year methodology (forecast vs. historic), return on equity (ROE), and treatment of pipeline integrity costs and gas in underground storage.
  • 6PSCo's proposed ROE was 10.90%, while the CPUC Staff proposed 9.375% and the OCC proposed 9.0%.
  • 7A final decision from the CPUC is expected in the summer of 2011, with hearings scheduled for late May 2011.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report on the progress of a natural gas rate case initiated by Xcel Energy's subsidiary, Public Service Company of Colorado (PSCo), before the Colorado Public Utilities Commission (CPUC). It details the opposing positions of PSCo, the CPUC Staff, and the Colorado Office of Consumer Counsel regarding rate adjustments.

Xcel Energy's subsidiary, PSCo, initially requested a $25.6 million increase in retail gas rates. In contrast, the CPUC Staff recommended a rate decrease of about $20.1 million, and the Colorado Office of Consumer Counsel recommended a decrease of about $1 million. These substantial differences stem from disagreements on test year, return on equity, and how certain costs should be recovered.

A final decision from the Colorado Public Utilities Commission is expected in the summer of 2011. Hearings are scheduled for late May 2011, and PSCo's rebuttal testimony is due on May 6, 2011.

The main factors influencing the proposed rate changes include the methodology for the test year (forecasted versus historical), the allowed rate of return on equity (ROE), the total rate base, the equity ratio, and the treatment of pipeline integrity costs and gas inventory in underground storage. The CPUC Staff and OCC propose lower ROE and different cost treatments compared to PSCo's proposal.