Summary
Xcel Energy Inc. (XEL) has filed an 8-K report detailing a significant rate increase request by its wholly-owned subsidiary, Northern States Power Company (NSP-Wisconsin), to the Public Service Commission of Wisconsin (PSCW). This filing on June 1, 2012, outlines NSP-Wisconsin's proposal for a 6.7% increase in annual electric rates, amounting to $39.1 million, and a 4.9% increase in natural gas rates, totaling $5.3 million, both projected to be effective from January 1, 2013. The proposed electric rate increase is based on a 2013 forecast test year and includes a requested return on equity of 10.40%. A substantial portion of the natural gas rate increase is attributed to recovering initial costs for environmental cleanup at a site in Ashland, Wisconsin, related to a former manufactured gas plant. Investors should monitor the PSCW's decision, which is anticipated in the fourth quarter of 2012, as it will directly impact the subsidiary's revenue and profitability.
Key Highlights
- 1NSP-Wisconsin, a subsidiary of Xcel Energy, filed a request for electric and natural gas rate increases with the PSCW on June 1, 2012.
- 2The requested annual electric rate increase is $39.1 million, representing a 6.7% rise.
- 3The requested annual natural gas rate increase is $5.3 million, representing a 4.9% rise.
- 4The new rates are proposed to be effective starting January 1, 2013.
- 5The electric rate filing uses a 2013 forecast test year and seeks a 10.40% return on equity.
- 6A significant driver for the natural gas rate increase is the recovery of environmental cleanup costs for a site in Ashland, Wisconsin.
- 7A decision from the PSCW on these rate requests is expected in the fourth quarter of 2012.