8-KOther Events

XCEL ENERGY INC 8-K Report, Corporate Update (May 30, 2014)

Filed May 30, 2014For Securities:XELXELLL

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.

Frequently Asked Questions

The primary reason for the requested rate increase is to reflect anticipated increases in production and transmission fixed charges, as well as fuel and purchased power costs. These increases are largely driven by investments in infrastructure such as transmission systems, new wind power facilities, and power plant upgrades.

No, not entirely. While NSP-Wisconsin is requesting a $20.6 million increase, this is partially offset by credits related to the amortization of NSP-Minnesota's excess transmission depreciation reserve and the deferral of certain costs associated with the Monticello nuclear plant's extended power uprate project. Additionally, NSP-Wisconsin has agreed to an earnings cap for 2015, where any earnings above the authorized return on equity will be refunded to customers.

Xcel Energy anticipates a decision from the Public Service Commission of Wisconsin (PSCW) by the end of 2014 regarding this rate increase request.

No, the application does not request any changes to the capital structure or the previously authorized 10.2 percent return on equity by the PSCW in the 2014 rate case.