Summary
Xcel Energy Inc.'s subsidiary, Public Service Company of Colorado (PSCo), has filed a multi-year request with the Colorado Public Utilities Commission (CPUC) seeking an increase in natural gas base rates. The initial request for 2015 is for a $40.5 million (3.5%) increase, followed by step increases of $7.6 million (0.7%) in 2016 and $18.1 million (1.5%) in 2017. This filing outlines the proposed rate base, return on equity (ROE) targets (ranging from 10.1% to 10.3%), and includes an earnings test mechanism for 2016-2017 where both PSCo and customers would share in excess earnings.
Key Highlights
- 1PSCo filed a multi-year rate increase request with the CPUC totaling $40.5 million for 2015, with subsequent annual increases planned for 2016 and 2017.
- 2The proposed rate increases are driven by historic test year data adjusted for known expenses and capital additions.
- 3PSCo is requesting ROE targets between 10.1% and 10.3% for the period.
- 4A new earnings sharing mechanism is proposed for 2016-2017, where PSCo and customers would split earnings if ROE falls within specified ranges.
- 5The company also seeks to extend its pipeline system integrity adjustment (PSIA) rider through 2020 to recover pipeline renewal costs.
- 6The PSIA rider extension is expected to have a negative revenue impact of $0.1 million in 2015 but generate incremental revenues of $21.7 million in 2016 and $21.2 million in 2017.
- 7A decision from the CPUC and implementation of final rates are anticipated in Q4 2015.