8-KOther Events

XCEL ENERGY INC 8-K Report, Corporate Update (Dec 13, 2012)

Filed December 13, 2012For Securities:XELXELLL

Summary

This 8-K filing from Xcel Energy Inc. (XEL) reports that its wholly-owned subsidiary, Public Service Company of Colorado (PSCo), has filed a request with the Colorado Public Utilities Commission (CPUC) for significant rate increases for both natural gas and steam services. For natural gas, PSCo is seeking an increase of $48.5 million in 2013, followed by subsequent step increases in 2014 and 2015, totaling approximately $72.5 million over three years. This increase is primarily attributed to system investments made since 2010 and rising operating and maintenance expenses, including costs associated with accelerated pipeline integrity efforts. In addition to the base rate adjustments, PSCo is also requesting an extension of its Pipeline System Integrity Adjustment (PSIA) rider mechanism to recover accelerated pipeline renewal costs. For steam services, the requested increases are $1.6 million in 2013, with further increases in 2014 and 2015, driven by higher operating expenses and the need to fund a new boiler to replace retiring electric generation capacity. PSCo is proposing a multi-year rate plan with a stay-out provision and an earnings test through 2015 and a long-term plan to stabilize steam rates by combining gas and steam rate setting starting in 2016.

Key Highlights

  • 1Public Service Company of Colorado (PSCo), a subsidiary of Xcel Energy Inc., filed for rate increases with the Colorado Public Utilities Commission (CPUC).
  • 2PSCo seeks a $48.5 million increase in Colorado retail natural gas rates for 2013, with additional step increases of $9.9 million in 2014 and $12.1 million in 2015.
  • 3The natural gas rate increase is driven by system investments since 2010 and higher operating/maintenance expenses.
  • 4An extension of the Pipeline System Integrity Adjustment (PSIA) rider is requested to fund accelerated pipeline integrity efforts, with estimated increases of $26.8 million in 2014 and $24.7 million in 2015.
  • 5PSCo also requested a $1.6 million increase in Colorado retail steam rates for 2013, with subsequent increases in 2014 and 2015, to cover operating expenses and a new boiler.
  • 6A regulatory plan is proposed, including a stay-out provision and earnings test through 2015, and a consolidation of natural gas and steam rate setting starting in 2016 to stabilize long-term steam rates.

Frequently Asked Questions

The main purpose of this 8-K filing is to inform investors that Xcel Energy's subsidiary, Public Service Company of Colorado (PSCo), has formally requested approval from the Colorado Public Utilities Commission (CPUC) to increase its natural gas and steam rates.

PSCo is requesting a $48.5 million increase in annual natural gas rates for 2013, with further step increases in 2014 and 2015. For steam rates, PSCo is asking for a $1.6 million increase in 2013, also with subsequent step increases planned for 2014 and 2015.

The natural gas rate increase is primarily driven by system investments made since the last rate case in 2010 and increased operating and maintenance expenses. A significant portion is also for accelerated pipeline integrity efforts. The steam rate increase is due to higher operating and maintenance expenses and the cost of constructing a new boiler to replace retiring steam capacity.

The final rates are expected to be effective in the third quarter of 2013. PSCo is proposing multi-year rate increases with a stay-out provision and an earnings test through the end of 2015. Additionally, they propose to combine the natural gas and steam systems for rate-setting purposes starting in 2016 to stabilize long-term steam rates.