Summary
This 8-K filing by Xcel Energy Inc. (XEL) and its subsidiary Northern States Power Company (NSP-Minnesota) on June 21, 2012, reports on the outcome of a rate case in South Dakota. The South Dakota Public Utilities Commission (SDPUC) authorized an increase in electric rates, expected to result in approximately $8 million in additional annual revenue for NSP-Minnesota. This is lower than the initially requested $14.6 million but higher than the interim rates of $12.7 million that were being collected subject to refund. The decision represents a partial recovery of the requested rate increase, with key parameters set by the SDPUC including a return on equity (ROE) of 9.25 percent and full cost recovery for the Nobles wind project. The company will now work on submitting a final rate implementation plan for approval, which is anticipated in July 2012. Investors should note that while this rate adjustment provides some clarity on future revenues, the actual impact will depend on the final approved rates and ongoing operational factors.
Key Highlights
- 1Xcel Energy's subsidiary, NSP-Minnesota, received authorization for an electric rate increase in South Dakota.
- 2The authorized rate increase is expected to generate approximately $8 million in additional annual revenue.
- 3This outcome is lower than the $14.6 million initially requested by NSP-Minnesota.
- 4The South Dakota Public Utilities Commission (SDPUC) set a Return on Equity (ROE) at 9.25%.
- 5The SDPUC authorized full cost recovery for the Nobles wind project.
- 6NSP-Minnesota will submit a final rate implementation plan for SDPUC approval in July 2012.