Summary
Xcel Energy's wholly-owned subsidiary, Northern States Power Company (NSP-Wisconsin), has filed a request with the Public Service Commission of Wisconsin (PSCW) for a $20.6 million, or 3.2%, increase in electric service rates. This rate adjustment is proposed to be effective January 1, 2015, and is intended to primarily account for anticipated rises in production and transmission fixed charges, as well as fuel and purchased power costs. The company expects a decision from the PSCW by the end of 2014. Investors should note that a significant portion of the requested increase is tied to investments in transmission infrastructure, new wind power, and plant upgrades, many of which have already received regulatory approval. Partially offsetting these increases are credits related to transmission depreciation and deferrals for nuclear plant upgrades. Notably, NSP-Wisconsin has agreed to an earnings cap for 2015 and will refund earnings above the authorized return on equity to customers, a measure taken as part of an agreement to limit the scope of this rate case.
Key Highlights
- 1NSP-Wisconsin is seeking a 3.2% ($20.6 million) increase in electric rates, effective January 1, 2015.
- 2The rate increase is primarily driven by higher production/transmission fixed charges and fuel/purchased power costs.
- 3Investments in transmission, new wind facilities, and power plant upgrades are key components of the requested increase.
- 4Credits for transmission depreciation reserve amortization and deferral of nuclear plant upgrade costs will partially offset the increase.
- 5No changes to the authorized return on equity (10.2%) or capital structure are requested.
- 6NSP-Wisconsin agreed to an earnings cap for 2015, refunding excess earnings to customers.
- 7A decision from the PSCW is anticipated by the end of 2014.