Summary
This Form 8-K filing by Xcel Energy Inc. (XEL) reports on the outcome of the rate case filed by its subsidiary, Public Service Company of Colorado (PSCo), for natural gas rates. Initially, PSCo requested significant increases totaling $48.5 million for 2013, with further step increases for 2014 and 2015, aiming for a 10.5% return on equity. However, after extensive proceedings involving various parties and an Administrative Law Judge's recommendation, the Colorado Public Utilities Commission (CPUC) issued a decision on December 11, 2013. The final approved incremental base revenue increase is substantially lower than initially requested, set at $15.8 million, effective by January 1, 2014. This decision reflects a compromise, utilizing a historical test year and a lower return on equity of 9.72% than initially sought. The CPUC's decision also involved modifications to PSCo's requested adjustments to the Pipeline System Integrity Adjustment (PSIA) rider. While PSCo had sought to integrate certain integrity costs into base rates and extend the rider, the CPUC largely rejected these proposed changes to the PSIA in the base rate case. Instead, the CPUC extended the existing PSIA recovery mechanism for one year, requiring PSCo to file a separate application for full consideration of new pipeline integrity projects and acceleration. This outcome indicates a more conservative approach by the regulator, balancing customer cost impacts with necessary infrastructure investments, and limiting the immediate revenue uplift for PSCo compared to its original multi-year proposal.
Key Highlights
- 1Public Service Company of Colorado (PSCo), a subsidiary of Xcel Energy Inc., received an approved incremental base revenue increase of $15.8 million, effective January 1, 2014.
- 2The approved increase is significantly lower than PSCo's initial request of $48.5 million for 2013 and subsequent multi-year step increases.
- 3The Colorado Public Utilities Commission (CPUC) adopted a historical test year (HTY) and a return on equity (ROE) of 9.72%, below PSCo's requested 10.5% based on a forecast test year (FTY).
- 4PSCo's proposal to integrate certain pipeline integrity costs into base rates and modify the Pipeline System Integrity Adjustment (PSIA) rider was largely rejected by the CPUC.
- 5The CPUC extended the existing PSIA recovery mechanism for one year, requiring PSCo to file a separate application for future pipeline integrity projects.
- 6Interim rates, subject to refund, had been in effect since August 2013, and the final rates will be effective by January 1, 2014.