What is the total expected increase in annual revenue from these two rate cases?

The Texas rate case settlement is for an $88 million increase in retail electric base rates, and the New Mexico rate case settlement is for a $31 million base rate revenue increase. In total, these settlements are expected to contribute approximately $119 million in additional annual revenue.

When will the new rates from these cases take effect?

In New Mexico, the new rates and tariffs will be effective beginning May 28, 2020. In Texas, final rates are anticipated to be retroactively applied as of September 12, 2019, subject to the Public Utility Commission of Texas (PUCT) taking up the settlement, which is expected in the third quarter of 2020.

Were these rate increases fully approved as initially requested by SPS?

No, both rate cases resulted in settlements that were lower than the amounts initially requested by SPS. In Texas, the settlement is for $88 million, down from the initial request of $141 million. In New Mexico, the settlement is for $31 million.

What are the key financial terms agreed upon in these settlements?

Both settlements outline specific authorized rates of return on equity (ROE) and equity ratios. For the Texas case, the ROE for Allowance for Funds Used During Construction is 9.45% with a 54.62% equity ratio. In New Mexico, the approved ROE is 9.45% with a 54.77% equity ratio. Both also include specific provisions for depreciation rates and, in the Texas case, significant 'ring-fencing' measures to protect the subsidiary's financial health.

XEL/XELLL 8-K SEC Disclosure

Summary

Xcel Energy Inc. (XEL) reported on May 20, 2020, significant developments in two key electric rate cases involving its subsidiary, Southwestern Public Service Company (SPS). In Texas, SPS reached an uncontested settlement for an $88 million increase in retail electric base rates, a reduction from its initial request of $141 million and revised request of $130 million. This settlement also includes specific terms on depreciation rates and financial ring-fencing measures, with final PUCT approval anticipated in Q3 2020, and rates expected to be retroactive to September 2019. In New Mexico, SPS also secured approval for a $31 million base rate revenue increase based on an uncontested stipulation, which was recommended for approval by the Hearing Examiner and subsequently approved by the NMPRC on May 20, 2020. The New Mexico rates will become effective on May 28, 2020. Both settlements represent a resolution of rate increase requests, with the final amounts being lower than originally sought, providing some clarity on future revenue streams for SPS.

Key Highlights

1Southwestern Public Service Company (SPS), an Xcel Energy subsidiary, reached a settlement in its Texas electric rate case for an $88 million increase in retail electric base rates.
2The Texas settlement is lower than SPS's initial request of $141 million and revised request of $130 million.
3The Texas settlement includes specific terms for depreciation rates on generating units and transmission assets.
4SPS also received approval for a $31 million base rate revenue increase in its New Mexico electric rate case.
5The New Mexico settlement was approved without modification by the New Mexico Public Regulation Commission (NMPRC) and new rates are effective May 28, 2020.
6Both rate cases involved uncontested settlements or stipulations among SPS, regulatory staff, and intervenors.
7Final rates for the Texas case are expected to be applied retroactively to September 12, 2019, pending PUCT approval in Q3 2020.

XCEL ENERGY INC 8-K Report, Corporate Update (May 20, 2020)

Summary

Key Highlights

Frequently Asked Questions