Summary
This 8-K filing from Xcel Energy Inc. (XEL), specifically from its subsidiary Public Service Company of Colorado (PSCo), details a significant rate increase request submitted to the Colorado Public Utilities Commission (CPUC) on November 22, 2011. PSCo is seeking to raise Colorado retail electric rates by $141.9 million. This request is based on a projected 2012 test year and includes a proposed 10.75% return on equity and a rate base of $5.4 billion. The filing also outlines PSCo's intention to transfer revenue requirements from several riders, such as those for natural gas facilities acquisition and transmission costs, directly into base rates. While this specific rider transfer is revenue-neutral for customers, when combined with a prior reduction in the purchased capacity cost adjustment, the net effect of all proposed changes is an estimated 4% increase in overall customer bills. The primary justifications for this rate adjustment include a shift in jurisdictional allocation due to the expiration of a wholesale contract, increased depreciation expenses, higher property taxes, escalating distribution operating and maintenance costs, and increased pension expenses.
Key Highlights
- 1Public Service Company of Colorado (PSCo), a subsidiary of Xcel Energy, filed a request to increase Colorado retail electric rates by $141.9 million.
- 2The rate increase request is based on a 2012 fully forecast test year.
- 3PSCo is proposing a 10.75% return on equity and a rate base of $5.4 billion.
- 4The company plans to transfer revenue requirements from several riders to base rates, which will not impact overall customer bills directly but streamlines rate recovery.
- 5The combined effect of the proposed rate changes and prior adjustments is an estimated 4% increase in customer bills.
- 6Key drivers for the revenue deficiency include a change in jurisdictional allocation, increased depreciation, property taxes, operating and maintenance costs, and pension expense.
- 7PSCo has also filed a motion to implement interim rates of $100 million, expected to be effective in January 2012, pending final CPUC approval.