8-KOther Events

XCEL ENERGY INC 8-K Report, Corporate Update (Sep 13, 2021)

Filed September 13, 2021For Securities:XELXELLL

Summary

Xcel Energy Inc. (XEL) subsidiary, Public Service Company of Colorado (PSCo), is seeking recovery of approximately $550 million in incremental natural gas, fuel, and purchased energy costs incurred during Winter Storm Uri in February 2021. These costs were largely deferred as regulatory assets. PSCo has filed with the Colorado Public Utilities Commission (CPUC) to recover these costs over 24 months without a financing charge. However, intervenors, including the CPUC Staff, the Office of the Utility Consumer Advocate (UCA), and the Colorado Energy Office (CEO), have recommended disallowing significant portions of these costs. The proposed disallowances range from $3 million (CEO) to $131 million (UCA), with the CPUC Staff recommending disallowances totaling approximately $155 million ($99 million electric, $105 million gas) and an additional $50 million regulatory liability. PSCo maintains that the costs were prudent and in line with approved procedures, and intends to submit rebuttal testimony in Q4 2021, with a CPUC decision anticipated in Q1 2022. Investors should monitor the outcome of this regulatory proceeding as it will impact PSCo's financial recovery and potentially future customer rates.

Key Highlights

  • 1PSCo incurred approximately $610 million in net natural gas, fuel, and purchased energy costs due to Winter Storm Uri.
  • 2PSCo is seeking CPUC approval to recover $550 million ($263 million electric, $287 million gas) of these weather-related costs over 24 months.
  • 3Several intervenors (CPUC Staff, UCA, CEO) have recommended significant disallowances of the requested recovery amounts.
  • 4CPUC Staff recommended disallowing approximately $99 million for electric costs and $105 million for gas costs, totaling $204 million, plus a $50 million regulatory liability.
  • 5The UCA recommended disallowing approximately $131 million in costs.
  • 6PSCo disputes the intervenors' recommendations, asserting the costs were prudent and in accordance with approved procedures.
  • 7A final CPUC decision on cost recovery is expected in the first quarter of 2022.

Frequently Asked Questions

Xcel Energy's subsidiary, Public Service Company of Colorado (PSCo), is seeking to recover $550 million in weather-related electric ($263 million) and incremental gas ($287 million) costs from Winter Storm Uri.

Intervenors' proposed disallowances are primarily based on their assessment of PSCo's operations, including the use of fuel oil capable plants, conservation efforts, gas purchase strategies, and incremental base rate revenue collected during the event.

Xcel Energy, through PSCo, believes that the Winter Storm Uri costs were prudent and incurred in accordance with CPUC-approved procedures. PSCo plans to submit rebuttal testimony to refute the intervenors' recommendations.

The Colorado Public Utilities Commission (CPUC) is expected to make a decision on PSCo's cost recovery request in the first quarter of 2022.