Summary
Xcel Energy Inc.'s wholly-owned subsidiary, Public Service Company of Colorado (PSCo), filed a multi-year request with the Colorado Public Utilities Commission (CPUC) on June 27, 2017, to increase retail natural gas rates. The filing seeks to recover approximately $139 million in new revenue over three years (2018-2020), with an initial increase of $63.2 million in 2018. The request is based on a forecast test year, a 10.0% return on equity (ROE), and a 55.25% equity ratio. Notably, PSCo also proposed to convert pipeline system integrity adjustment (PSIA) revenue into base rates, which is expected to be revenue neutral initially but will incorporate future investments into base rates for recovery.
Key Highlights
- 1PSCo is seeking an increase in natural gas rates, with a total new revenue request of $139 million over three years (2018-2020), starting with $63.2 million in 2018.
- 2The rate increase request is based on a forecast test year (FTY) and proposes a 10.0% return on equity (ROE) and a 55.25% equity ratio.
- 3A significant portion of the proposed revenue includes the conversion of Pipeline System Integrity Adjustment (PSIA) revenue into base rates, impacting future recovery mechanisms.
- 4Regulatory bodies, including the CPUC Staff and Office of Consumer Counsel, have filed answer testimony, recommending a historic test year (HTY) and opposing the multi-year plan.
- 5Staff and OCC proposed lower ROE (9.0%) and different capital structures, leading to significantly reduced recommended rate increases ($23.5 million and $36.3 million, respectively) compared to PSCo's filing.
- 6Interim rates, subject to refund, are expected to be effective January 1, 2018, with a final CPUC decision anticipated in March 2018.