Summary
Xcel Energy Inc. (XEL) subsidiary, Northern States Power Company (NSP-Wisconsin), has filed an application with the Public Service Commission of Wisconsin (PSCW) for a rate case settlement covering 2022-2023. This settlement proposes increases to electric base rates of 4.9% ($35 million) in 2022 and 2.5% ($18 million) in 2023, and to natural gas base rates of 8.4% ($10 million) in 2022 and 2.3% ($3 million) in 2023. These increases are primarily driven by significant capital investments in renewable energy, infrastructure upgrades, and natural gas distribution systems aimed at ensuring safe and reliable service. Key terms of the settlement include specific Return on Equity (ROE) targets of 9.80% for 2022 and 10.00% for 2023, and an earnings sharing mechanism that would return a portion of excess earnings to customers. The PSCW is expected to make a decision on this settlement in the fourth quarter of 2021. Investors should monitor the PSCW's decision as it will impact future revenue streams for NSP-Wisconsin and, consequently, Xcel Energy.
Key Highlights
- 1NSP-Wisconsin filed for a rate case settlement with the PSCW for 2022-2023.
- 2Proposed electric base rate increases: 4.9% ($35M) in 2022 and 2.5% ($18M) in 2023.
- 3Proposed natural gas base rate increases: 8.4% ($10M) in 2022 and 2.3% ($3M) in 2023.
- 4Rate increases are to support significant capital investments in renewable energy and infrastructure.
- 5Settlement includes a Return on Equity (ROE) of 9.80% for 2022 and 10.00% for 2023.
- 6An earnings sharing mechanism is included, returning excess profits to customers.
- 7PSCW decision on the settlement is anticipated in Q4 2021.