8-KOther Events

XCEL ENERGY INC 8-K Report, Corporate Update (Jun 8, 2012)

Filed June 8, 2012For Securities:XELXELLL

Summary

This Form 8-K filing from Xcel Energy Inc. (XEL) on June 8, 2012, details the outcome of a petition by its subsidiary, Northern States Power Company (NSP-Minnesota), regarding deferred accounting for 2012 property tax expense. Following a settlement agreement from a November 2011 rate case, NSP-Minnesota sought to defer approximately $24 million in incremental property taxes that would not be recovered in base rates, or alternatively, to implement a property tax rider. However, on June 7, 2012, the Minnesota Public Utilities Commission (MPUC) verbally denied both the deferred accounting request and the property tax rider. A formal written order is expected soon. In response to this denial, NSP-Minnesota is exploring its options, including potentially accelerating a planned electric rate case filing to implement interim rates in the fall of 2012. This development is significant for investors as it indicates a potential delay in cost recovery for NSP-Minnesota and may impact future earnings or require adjustments to rate structures. The company is actively reviewing strategies to address the financial implications of the MPUC's decision.

Key Highlights

  • 1NSP-Minnesota's request for deferred accounting of approximately $24 million in incremental 2012 property taxes was denied by the MPUC.
  • 2The MPUC also denied NSP-Minnesota's alternative proposal for a property tax rider.
  • 3The decision by the MPUC occurred on June 7, 2012, with a written order anticipated shortly.
  • 4This denial stems from a petition filed in December 2011, as part of a November 2011 settlement agreement in a Minnesota electric rate case.
  • 5NSP-Minnesota is considering accelerating its planned electric rate case filing to seek interim rate implementation in Fall 2012.
  • 6Key stakeholders like the Minnesota Department of Commerce and Office of the Attorney General recommended denying the request.
  • 7Other parties, such as the Xcel Large Industrials and Minnesota Chamber of Commerce, had supported deferred accounting over a rider.

Frequently Asked Questions

The primary issue was the Minnesota Public Utilities Commission's (MPUC) decision on whether Northern States Power Company (NSP-Minnesota), a subsidiary of Xcel Energy, could defer approximately $24 million in incremental 2012 property tax expenses or implement a property tax rider due to these expenses not being fully recovered in existing base rates.

The MPUC verbally denied both NSP-Minnesota's request for deferred accounting of the incremental property taxes and its proposal for a property tax rider on June 7, 2012. A written order is expected soon.

NSP-Minnesota is reviewing its alternatives, which include the possibility of accelerating a planned electric rate case filing. This could allow for the implementation of interim rates in the fall of 2012 to potentially recover some of the costs.

The Minnesota Department of Commerce and the Office of the Attorney General recommended denying NSP-Minnesota's request. However, the Xcel Large Industrials and the Minnesota Chamber of Commerce supported the deferred accounting treatment as a preferred alternative to a rider mechanism.