Summary
Xcel Energy Inc. (XEL) announced that its wholly-owned subsidiary, Southwestern Public Service Company (SPS), has filed an electric rate case with the New Mexico Public Regulation Commission (NMPRC). SPS is seeking an increase in its retail electric base rates of approximately $42.5 million. This request is primarily driven by significant capital investments in new and upgraded electric facilities totaling approximately $756 million since the last rate case in 2015, as well as operating costs. The filing also addresses decreased sales from wholesale customers and a proposed adjustment to the service life of SPS' Tolk power plant. Investors should note that the requested rate increase is subject to NMPRC review and approval, which could involve a suspension period of up to nine months. A final decision and implementation of new rates are anticipated in the second half of 2018. The company is seeking a rate of return on equity of 10.25 percent. While SPS is requesting new rates effective November 26, 2017, the actual implementation date may be significantly later.
Key Highlights
- 1Southwestern Public Service (SPS), a subsidiary of Xcel Energy, filed a rate case seeking a $42.5 million increase in retail electric base rates in New Mexico.
- 2The rate increase request is to recover approximately $756 million in capital investments in electric facilities and equipment made since 2015, along with operating costs.
- 3SPS is proposing a rate of return on equity of 10.25 percent and an equity ratio of 53.97 percent.
- 4The filing accounts for reduced sales from wholesale customers and proposes adjusting the service life of the Tolk power plant, impacting revenue.
- 5New rates are requested to be effective November 26, 2017, but are subject to a potential suspension period of up to nine months by the NMPRC.
- 6A final decision from the NMPRC and implementation of new rates are expected in the second half of 2018.
- 7The company has included forward-looking statements and outlines various risks and uncertainties that could impact actual results, including economic conditions, regulatory changes, and operational factors.