Summary
This Form 8-K filing from Xcel Energy Inc. (XEL) on April 8, 2013, provides an update on a significant multi-year natural gas rate increase request by its wholly-owned subsidiary, Public Service Company of Colorado (PSCo), with the Colorado Public Utilities Commission (CPUC). PSCo initially sought a $48.5 million increase for 2013, with further step increases planned for 2014 and 2015, primarily to fund pipeline integrity efforts and infrastructure upgrades. The filing details the procedural timeline, including the suspension of the initial tariff and the subsequent requirement for PSCo to file historic test year data. Crucially, the report outlines the differing recommendations from intervenors. The CPUC Staff recommended a rate reduction of $14.4 million, citing a lower return on equity (ROE) and other adjustments. Conversely, the Office of Consumer Counsel (OCC) recommended a slight rate increase of $0.5 million. These divergent perspectives highlight key areas of contention in the rate-setting process, particularly regarding cost recovery for pipeline integrity, ROE, and capital structure assumptions. PSCo's rebuttal testimony and a hearing are scheduled for April and May 2013, respectively, meaning the final outcome of this rate case remains uncertain but will have a material impact on PSCo's future revenues.
Key Highlights
- 1Public Service Company of Colorado (PSCo), a subsidiary of Xcel Energy, filed a multi-year natural gas rate increase request for $48.5 million in 2013 with the Colorado Public Utilities Commission (CPUC).
- 2The proposed rate increase is intended to cover costs associated with pipeline integrity efforts and accelerated system renewal projects, including adjustments to the Pipeline System Integrity Adjustment (PSIA) rider.
- 3The CPUC suspended the initial tariff filing and ordered PSCo to submit a Historic Test Year (HTY) filing to aid in the evaluation of the multi-year rate request.
- 4CPUC Staff recommended a rate reduction of $14.4 million, proposing a lower ROE of 9% and a 52% equity ratio, along with other adjustments.
- 5The Office of Consumer Counsel (OCC) recommended a modest rate increase of $0.5 million, with a proposed ROE of 9% and a 51.03% equity ratio.
- 6PSCo's requested rates are set to go into effect on August 10, 2013, subject to refund based on the final CPUC order.
- 7PSCo's rebuttal testimony is due on April 26, 2013, with a hearing scheduled for May 2013, indicating the rate case outcome is still pending.