Summary
Xcel Energy Inc. (XEL), through its subsidiary Northern States Power Company (NSP-Minnesota), filed an 8-K on July 19, 2013, detailing a rate case in North Dakota. NSP-Minnesota initially requested an approximate $16.9 million annual retail electric rate increase. Following an interim approval of $14.7 million in January 2013, the company revised its request to $16.0 million in June 2013. However, the North Dakota Public Service Commission (NDPSC) Advocacy Staff has recommended a rate reduction of approximately $2.1 million, driven by adjustments to revenue requirements, including a lower return on equity (ROE) and disallowance of certain purchased power costs. The filing outlines the key adjustments proposed by the NDPSC Staff, which largely offset NSP-Minnesota's requested increase. The staff's recommendations include a lower ROE of 9.0% (compared to the company's requested 10.6%) and exclusion of certain purchased power agreement costs from customer rates. The procedural schedule indicates that a final decision from the NDPSC is anticipated in the fourth quarter of 2013. Investors should monitor this rate case closely as it will impact NSP-Minnesota's future revenue and profitability in North Dakota.
Key Highlights
- 1NSP-Minnesota, a subsidiary of Xcel Energy, filed a request for a ~9.25% ($16.9 million) electric rate increase in North Dakota in December 2012.
- 2An interim rate increase of $14.7 million was approved in January 2013, subject to refund.
- 3In June 2013, NSP-Minnesota revised its requested rate increase to $16.0 million.
- 4NDPSC Advocacy Staff filed testimony recommending a rate reduction of approximately $2.1 million.
- 5Key staff recommendations include a lower Return on Equity (ROE) of 9.0% and exclusion of certain purchased power agreement costs.
- 6The procedural schedule includes rebuttal testimony in August 2013, hearings in late August 2013, and briefs in September/October 2013.
- 7A final decision from the NDPSC is expected in the fourth quarter of 2013.