Summary
Xcel Energy Inc. (XEL) announced on February 6, 2020, that its wholly owned subsidiary, Public Service Company of Colorado (PSCo), has filed a request with the Colorado Public Utilities Commission (CPUC) for a net increase in retail gas rates of $127 million. This request is primarily driven by $145 million in proposed base rate revenue increases, reflecting significant capital investments made since 2016 to enhance the safety and reliability of the natural gas system, connect new customers, and address mandated infrastructure work. These investments total approximately $1.3 billion. The proposed rate adjustment is based on a test year ending September 30, 2020, and includes a requested rate of return on equity (ROE) of 9.95%. PSCo expects the CPUC to issue a ruling on this request in the latter half of 2020, with a proposed effective date for the new rates of November 1, 2020. Investors should monitor the CPUC's decision, as the outcome will impact PSCo's future revenue and profitability.
Key Highlights
- 1PSCo filed a request for a $127 million net increase in retail gas rates with the Colorado Public Utilities Commission (CPUC).
- 2The request includes a $145 million increase in base rate revenue, offset by $18 million previously authorized through a rider mechanism.
- 3Capital additions since the 2016 test year, totaling $1.3 billion, are a primary driver for the rate increase request.
- 4These investments are aimed at maintaining the safety and reliability of the natural gas system, customer growth, and infrastructure relocation.
- 5The filing utilizes a test year ending September 30, 2020, with a requested ROE of 9.95%.
- 6A CPUC ruling is anticipated in the second half of 2020.
- 7The proposed effective date for the new rates is November 1, 2020.