Summary
Xcel Energy Inc. subsidiary, Northern States Power Company (NSP-Wisconsin), is seeking an electric rate increase of $20.6 million (3.2%) effective January 1, 2015. This request is primarily to update rates for anticipated increases in production, transmission, and fuel costs. Notably, the company is not seeking changes to the capital structure or the previously authorized 10.2% return on equity. As part of an agreement with stakeholders, NSP-Wisconsin has also agreed to an earnings cap for 2015, with any earnings above the authorized return to be refunded to customers. The Public Service Commission of Wisconsin (PSCW) Staff has recommended a lower rate increase of $16.1 million (2.5%). The primary difference in recommendations stems from updated fuel cost forecasts. The procedural schedule is moving forward, with key testimonies and a hearing scheduled for late October 2014, and a final PSCW decision expected by year-end 2014. Investors should monitor the final decision and its impact on NSP-Wisconsin's revenue and profitability.
Key Highlights
- 1NSP-Wisconsin, a subsidiary of Xcel Energy, filed for a 3.2% electric rate increase ($20.6 million) effective Jan. 1, 2015.
- 2The rate increase request is primarily to adjust for anticipated increases in production, transmission, and fuel costs.
- 3No changes are being requested to the capital structure or the authorized 10.2% return on equity.
- 4NSP-Wisconsin agreed to an earnings cap for 2015, with excess earnings to be refunded to customers.
- 5PSCW Staff recommended a lower rate increase of 2.5% ($16.1 million), mainly due to a revised fuel cost forecast.
- 6Key procedural steps, including rebuttal testimony and an evidentiary hearing, are scheduled for October 2014.
- 7A final PSCW decision on the rate case is anticipated by the end of 2014.