8-KOther Events

XCEL ENERGY INC 8-K Report, Corporate Update (Jun 29, 2015)

Filed June 29, 2015For Securities:XELXELLL

Summary

Xcel Energy Inc.'s subsidiary, Public Service Company of Colorado (PSCo), has filed a multi-year rate increase request with the Colorado Public Utilities Commission (CPUC). The proposed increase for natural gas base rates totals $40.5 million (3.5%) in 2015, with additional step increases of $7.6 million (0.7%) in 2016 and $18.1 million (1.5%) in 2017. PSCo is also seeking an extension of its pipeline system integrity adjustment (PSIA) rider through 2020 to recover costs related to pipeline maintenance and renewal projects, projecting incremental revenue of $21.7 million in 2016 and $21.2 million in 2017 from this rider. However, intervenors, including the CPUC Staff and the Office of Consumer Counsel, have filed direct testimony opposing the multi-year plan. The CPUC Staff recommended a base rate decrease of $14.7 million for 2015, while the OCC proposed a smaller increase of $5.8 million for the same year. Both intervenors also proposed modifications to the PSIA rider request. Settlement discussions are anticipated in the third quarter of 2015, with a CPUC decision expected in the first quarter of 2016. Interim rates are slated to be effective no later than October 1, 2015.

Key Highlights

  • 1PSCo filed a multi-year natural gas base rate increase request with the CPUC, seeking $40.5 million in 2015, $7.6 million in 2016, and $18.1 million in 2017.
  • 2The company also requested an extension of its PSIA rider through 2020 to recover pipeline integrity costs, expecting significant incremental revenue from it in 2016 and 2017.
  • 3CPUC Staff recommended a base rate decrease of $14.7 million for 2015, opposing PSCo's proposed multi-year plan.
  • 4The Office of Consumer Counsel recommended a base rate increase of $5.8 million for 2015, also expressing reservations about the multi-year approach.
  • 5Key disagreements exist regarding the proposed Return on Equity (ROE), equity ratios, and the treatment of certain expenses and riders.
  • 6Settlement discussions are scheduled for Q3 2015, with a final CPUC decision anticipated in Q1 2016.
  • 7Interim rates will be implemented no later than October 1, 2015.

Frequently Asked Questions

This 8-K filing informs investors about a significant rate case filed by Xcel Energy's subsidiary, Public Service Company of Colorado (PSCo), with the Colorado Public Utilities Commission (CPUC). It details the proposed increases in natural gas base rates and a request to extend a pipeline integrity rider, while also noting the opposition from key intervenors and the procedural timeline.

PSCo is requesting a total base rate increase of $40.5 million in 2015, $7.6 million in 2016, and $18.1 million in 2017. Additionally, the proposed extension of the PSIA rider is expected to generate incremental revenues of $21.7 million in 2016 and $21.2 million in 2017. However, these are proposed figures, and the final outcome may differ significantly due to intervenor positions and the CPUC's decision.

The main disagreements revolve around PSCo's proposal for a multi-year rate plan, with intervenors like the CPUC Staff and the Office of Consumer Counsel (OCC) favoring different approaches, including a rate decrease or smaller increase for 2015. Specific points of contention include the proposed Return on Equity (ROE) and equity ratios, the overall methodology for determining rates, and the treatment of certain operational and capital costs, particularly concerning the PSIA rider.

A final decision from the CPUC is anticipated in the first quarter of 2016. In the interim, PSCo is authorized to implement interim rates no later than October 1, 2015, pending the final ruling.