Summary
This 8-K filing by Xcel Energy Inc. (XEL) details the outcome of a rate increase request by its subsidiary, Northern States Power Company (NSP-Wisconsin), from the Public Service Commission of Wisconsin (PSCW). NSP-Wisconsin had initially sought annual rate increases of approximately $27.4 million for electric services (3.9%) and $5.9 million for natural gas services (5.0%), effective January 1, 2016. The PSCW, however, approved more modest increases, granting $7.6 million for electric (1.1%) and $4.2 million for natural gas (3.6%). The approved rate increases are lower than both the company's initial request and the PSCW Staff's recommendation, particularly for electric rates. This divergence is primarily attributed to a decrease in forecasted fuel and purchased power expenses, which the PSCW updated based on current market forecasts. Despite the reduced increase, Xcel Energy reaffirmed its 2015 and 2016 ongoing earnings per share guidance, indicating confidence in its financial outlook assuming constructive regulatory outcomes.
Key Highlights
- 1NSP-Wisconsin, a subsidiary of Xcel Energy, received PSCW approval for electric and natural gas rate increases effective January 1, 2016.
- 2The PSCW approved an electric rate increase of $7.6 million (1.1%), significantly lower than the company's requested $27.4 million (3.9%).
- 3The PSCW approved a natural gas rate increase of $4.2 million (3.6%), lower than the company's requested $5.9 million (5.0%).
- 4The difference in electric rates approved versus requested is largely due to updated forecasts for fuel and purchased power expenses.
- 5NSP-Wisconsin received approximately 65% of its requested non-fuel and purchased power portion for electric rate increases.
- 6Xcel Energy reaffirmed its 2015 ongoing earnings guidance of $2.05 to $2.15 per share.
- 7Xcel Energy reaffirmed its 2016 ongoing earnings guidance of $2.12 to $2.27 per share, contingent on favorable regulatory outcomes.