8-KOther Events

XCEL ENERGY INC 8-K Report, Corporate Update (May 15, 2018)

Filed May 15, 2018For Securities:XELXELLL

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.

Frequently Asked Questions

This filing provides an update on the ongoing natural gas rate case proceedings for Xcel Energy's subsidiary, Public Service Company of Colorado (PSCo), in Colorado. It details the latest developments, including an interim recommended decision from an administrative law judge.

PSCo initially requested a total increase of approximately $139 million over three years. The ALJ's interim recommended decision suggests a 2018 increase of about $46 million before considering the Tax Cuts and Jobs Act (TCJA) impacts. The final amount will be determined by the CPUC's final decision later in 2018.

The Pipeline System Integrity Adjustment (PSIA) rider is a mechanism through which certain costs related to pipeline system integrity are recovered. The ALJ has indicated that there is insufficient information to decide whether to extend or let the rider expire, and this will be addressed in a separate proceeding. PSCo has filed for an extension through 2020 as a contingency.

The Colorado Public Utilities Commission (CPUC) is expected to issue a final decision on the natural gas rate case, including the impacts of the Tax Cuts and Jobs Act (TCJA), later in 2018.