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XCEL ENERGY INC 8-K Report, Corporate Update (Nov 14, 2011)

Filed November 14, 2011For Securities:XELXELLL

Summary

This 8-K filing from Xcel Energy Inc. (XEL) on November 14, 2011, primarily concerns Northern States Power Company (NSP-Minnesota), a subsidiary, and updates investors on a significant electric rate case settlement. The settlement, agreed upon by NSP-Minnesota and various stakeholders including large industrial customers and the Minnesota Chamber of Commerce, proposes an annual electric rate increase of approximately $58.0 million for 2011 and an additional $14.8 million for 2012. This represents a considerable reduction from the initially requested increases, driven by factors such as a revised return on equity (ROE) of 10.37% and adjustments to depreciation and compensation expenses, as well as the delay of a nuclear plant upgrade. The filing also reaffirms Xcel Energy's earnings guidance for both 2011 and 2012. For 2011, the company expects ongoing earnings per share to be in the upper half of the previously issued range of $1.65 to $1.75. For 2012, the guidance remains between $1.75 and $1.85 per share. Investors should note that the rate case outcome is subject to final approval by the Minnesota Public Utilities Commission (MPUC), with a decision expected in the first quarter of 2012. The settlement's approval would also prevent NSP-Minnesota from filing another electric rate case before November 1, 2012.

Key Highlights

  • 1NSP-Minnesota has reached a settlement agreement on its electric rate case, proposing a $58.0 million increase for 2011 and $14.8 million for 2012.
  • 2The settlement represents a significant reduction from the initial rate increase request of $150 million for 2011.
  • 3Key factors contributing to the reduced rate increase include a lower requested ROE of 10.37% and expense adjustments.
  • 4The settlement includes provisions for deferred accounting of future incremental property tax increases, projected at $17 million for 2012.
  • 5Approval of the settlement would preclude NSP-Minnesota from filing a new electric rate case before November 1, 2012.
  • 6Xcel Energy reaffirms its 2011 earnings guidance in the upper half of the $1.65-$1.75 per share range.
  • 7Xcel Energy reaffirms its 2012 earnings guidance of $1.75-$1.85 per share.

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