Summary
Xcel Energy Inc. (XEL) subsidiary, Public Service Company of Colorado (PSCo), has been involved in a multi-year natural gas rate case with the Colorado Public Utilities Commission (CPUC) seeking an approximately $139 million retail natural gas rate increase over three years. The filing on May 15, 2018, provides an update on the proceedings, particularly highlighting an interim recommended decision from an administrative law judge (ALJ) issued on May 11, 2018. This interim decision, excluding the impact of the Tax Cuts and Jobs Act (TCJA), suggests an estimated 2018 rate increase of approximately $46 million, which is lower than the initially requested $63 million for 2018. The ALJ's interim decision is based on a 2016 historic test year, a lower Return on Equity (ROE) of 9.35 percent, and an equity ratio of 54.2 percent, differing from PSCo's initial request for a 10.0 percent ROE and a 55.25 percent equity ratio. The final decision from the CPUC, which will include the TCJA impacts, is anticipated later in 2018. Additionally, the future of the Pipeline System Integrity Adjustment (PSIA) rider remains uncertain, with the ALJ indicating insufficient information to decide on its extension or expiration. PSCo has proactively filed to extend the rider through 2020 as a contingency.
Key Highlights
- 1PSCo filed a multi-year natural gas rate request for approximately $139 million over three years.
- 2An ALJ issued an interim recommended decision on May 11, 2018, suggesting a 2018 rate increase of approximately $46 million (prior to TCJA impacts).
- 3The ALJ's interim decision reflects a lower ROE of 9.35% and an equity ratio of 54.2% compared to PSCo's initial request.
- 4The final CPUC decision, including TCJA impacts, is expected later in 2018.
- 5The status of the PSIA rider is pending a separate proceeding, with PSCo filing for an extension through 2020 as a precautionary measure.
- 6PSCo reduced PSIA revenues by approximately $8 million for 2018 due to the TCJA, effective May 1, 2018.