Summary
Xcel Energy's wholly-owned subsidiary, Southwestern Public Service Company (SPS), has filed an electric rate case with the Public Utility Commission of Texas (PUCT) seeking a base rate increase of approximately $143 million. This filing is primarily driven by significant capital investments in new and upgraded electric facilities, most notably the 522-megawatt Sagamore wind farm. Despite the overall rate request, the net increase to Texas customers is projected to be around $74 million, or 9.2%, due to offsetting factors including fuel cost savings and production tax credits from the Sagamore project. Investors should note that the requested increase is based on specific financial parameters, including a return on equity of 10.35% and a Texas retail rate base of approximately $3.3 billion. The filing also incorporates other factors such as the loss of a wholesale transmission customer and changes to depreciation rates for certain power plants. A decision from the PUCT is anticipated in the first quarter of 2022, with potential for temporary rates to be set in March 2021.
Key Highlights
- 1Southwestern Public Service Company (SPS), a subsidiary of Xcel Energy, seeks a $143 million increase in base electric rates in Texas.
- 2The net rate increase to Texas customers is estimated at $74 million (9.2%) after accounting for $69 million in fuel cost savings and production tax credits from the Sagamore wind project.
- 3Key drivers for the rate increase include capital investments, particularly the new 522-megawatt Sagamore wind farm, and other facility upgrades.
- 4The request is based on a 10.35% return on equity and a Texas retail rate base of approximately $3.3 billion.
- 5Other factors influencing the request include the loss of a wholesale transmission customer and revised depreciation rates for the Tolk power plant and Harrington facility coal handling assets.
- 6SPS is requesting temporary rates be set in March 2021, with a final decision from the PUCT expected in Q1 2022.