8-KOther Events

XCEL ENERGY INC 8-K Report, Corporate Update (Jun 8, 2015)

Filed June 8, 2015For Securities:XELXELLL

Summary

Xcel Energy Inc. (XEL), through its wholly owned subsidiary Southwestern Public Service Company (SPS), filed an electric rate case with the New Mexico Public Regulation Commission (NMPRC) on June 8, 2015. The filing seeks a net increase in base rates of $1.4 million for its New Mexico retail customers. This proposed increase is a result of a significant rise in non-fuel base rates ($31.5 million), offset by a decrease in base fuel revenue ($30.1 million) that will affect the fuel and purchased power adjustment clause. The rate case is based on a 2016 forecast test year and requests a return on equity (ROE) of 10.25 percent. Key drivers for the non-fuel base rate increase include capital investments in transmission and distribution, adjustments for a 2014 base period deficiency, and higher operating expenses, partially offset by revenue associated with load growth. The NMPRC is expected to make a decision and implement final rates in the summer of 2016.

Key Highlights

  • 1Southwestern Public Service Company (SPS), a subsidiary of Xcel Energy, filed an electric rate case in New Mexico.
  • 2The proposed net rate increase is $1.4 million for the New Mexico retail jurisdiction.
  • 3The filing includes a $31.5 million increase in non-fuel base rates and a $30.1 million decrease in base fuel revenue.
  • 4The rate case utilizes a 2016 forecast test year.
  • 5SPS is requesting a return on equity (ROE) of 10.25 percent, an increase from the current 9.96 percent.
  • 6Jurisdictional electric rate base is requested at $777.9 million with an equity ratio of 53.97 percent.
  • 7A decision and implementation of final rates are anticipated in the summer of 2016.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce that Xcel Energy's subsidiary, Southwestern Public Service Company (SPS), has filed an electric rate case with the New Mexico Public Regulation Commission (NMPRC) seeking an increase in base rates.

This rate case proposes a net increase of $1.4 million in electricity rates for SPS's New Mexico retail customers. While non-fuel base rates are set to increase significantly, there will be a corresponding decrease in base fuel revenue that will impact amounts collected through the fuel and purchased power adjustment clause. The net effect on individual customer bills will depend on the final NMPRC decision.

The NMPRC is anticipated to make a decision and implement the final rates in the summer of 2016.

The requested increase in non-fuel base rates is driven by several factors, including capital investments in transmission and distribution infrastructure, a recognized 2014 base period deficiency, increased depreciation, higher operating and maintenance expenses, and a requested increase in the return on equity (ROE) from 9.96% to 10.25%. These are partially offset by revenue reductions associated with load growth.