8-KOther Events

XCEL ENERGY INC 8-K Report, Corporate Update (Aug 24, 2021)

Filed August 24, 2021For Securities:XELXELLL

Summary

Xcel Energy Inc. is reporting on the progress of a rate case filed by its wholly owned subsidiary, Southwestern Public Service Company (SPS), with the Public Utility Commission of Texas (PUCT). In February 2021, SPS sought a $143 million increase in retail electric base rates, anticipating a net increase of approximately $74 million (or 9.2%) to Texas customers after accounting for fuel cost reductions and production tax credits from the Sagamore wind project. The filing details the initial request, which was based on specific return on equity (ROE), equity ratio, rate base, and a historic test year. However, various parties, including the Alliance of Xcel Municipalities (AXM), Office of Public Utility Counsel (OPUC), and Texas Industrial Energy Consumers (TIEC), have filed testimony proposing modifications that would significantly reduce the net rate increase. The PUCT Staff also filed testimony supporting a different revenue change. The proceedings are advancing with rebuttal testimony and public hearings scheduled, with a final PUCT decision anticipated in the first quarter of 2022. Current rates are in effect temporarily, with a surcharge to be requested for the period from March 15, 2021, to the effective date of new rates.

Key Highlights

  • 1Southwestern Public Service Company (SPS), a subsidiary of Xcel Energy, is seeking a $143 million increase in Texas retail electric base rates.
  • 2The net rate increase to Texas customers is projected to be approximately $74 million (9.2%), offset by $69 million in fuel cost reductions and production tax credits from the Sagamore wind project.
  • 3Key stakeholders (AXM, OPUC, TIEC, PUCT Staff) have filed testimony proposing substantial reductions to the requested net rate increase, ranging from $62 million to $110 million.
  • 4Proposed modifications by intervenors and staff target ROE, capital structure, jurisdictional allocators, depreciation expense, and other operating costs, indicating potential for a lower final rate adjustment.
  • 5The PUCT has set current rates as temporary, and a surcharge will be requested to cover the period from March 15, 2021, until new rates are finalized.
  • 6Rebuttal testimony is due September 15, 2021, followed by a public hearing from October 18-28, 2021, with a final PUCT decision expected in Q1 2022.

Frequently Asked Questions

This filing is an 8-K report detailing the progress and various stakeholder positions in a rate case initiated by Xcel Energy's subsidiary, Southwestern Public Service Company (SPS), with the Public Utility Commission of Texas (PUCT). SPS is seeking to increase its retail electric base rates in Texas.

SPS initially requested a $143 million increase in retail electric base rates. However, due to expected fuel cost reductions and production tax credits from the Sagamore wind project, the net increase to Texas customers was projected to be approximately $74 million, or 9.2%.

Yes, several parties have filed testimony proposing significant reductions to the net rate increase. These include the Alliance of Xcel Municipalities (AXM), Office of Public Utility Counsel (OPUC), Texas Industrial Energy Consumers (TIEC), and the PUCT Staff. Their proposed total revenue changes range from $62 million to $110 million, indicating a potentially lower approved rate increase than initially requested.

The next steps involve the filing of rebuttal testimony by September 15, 2021, followed by a public hearing scheduled from October 18 to October 28, 2021. The Public Utility Commission of Texas (PUCT) is expected to issue a final decision in the first quarter of 2022.