Summary
Xcel Energy Inc.'s subsidiary, Northern States Power Company Minnesota (NSP-Minnesota), filed a significant three-year electric rate case with the Minnesota Public Utilities Commission (MPUC) on November 2, 2015. The filing seeks an overall revenue increase of approximately $297.1 million, or 9.8%, over three years, beginning with a $194.6 million increase in 2016. This request is driven by several factors, including the amortization of excess depreciation reserves, the absence of prior Department of Energy settlement proceeds, and capital investments related to the Monticello Life Cycle Management/Extended Power Uprate project. Investors should note that NSP-Minnesota has also requested interim rates totaling $163.7 million for 2016 and an additional $44.9 million for 2017, subject to refund. The company is also proposing a five-year alternative plan to the standard rate case. The MPUC's decision on interim rates is expected in December 2015, with a final ruling anticipated in the first quarter of 2017. The outcome of this rate case could materially impact Xcel Energy's future revenues and profitability in Minnesota.
Key Highlights
- 1NSP-Minnesota filed a three-year electric rate case with the MPUC, requesting a total revenue increase of $297.1 million (9.8%) by 2018.
- 2The initial 2016 revenue increase requested is $194.6 million (6.4%).
- 3NSP-Minnesota is seeking interim rate increases of $163.7 million for 2016 and $44.9 million for 2017, subject to refund.
- 4Key drivers for the rate increase include the Monticello LCM/EPU project, reduced amortization of excess depreciation reserves, and absence of DOE settlement proceeds.
- 5The company is proposing a five-year alternative rate plan in addition to the standard rate case.
- 6A decision on interim rates is expected in December 2015, with a final decision anticipated in Q1 2017.
- 7The requested return on equity (ROE) is 10.0% with an equity ratio of 52.50%.