Summary
Xcel Energy Inc. (XEL), through its subsidiary Northern States Power Company (NSP-Minnesota), has filed a request with the Minnesota Public Utilities Commission (MPUC) for an annual natural gas rate increase. The proposed increase amounts to approximately $36 million, representing a 6.6% rise, and is based on a 2022 forecast test year. This filing seeks a return on equity of 10.5% and includes a requested rate base of roughly $934 million. Additionally, NSP-Minnesota is requesting interim rates of approximately $25 million, effective January 1, 2022, which would be subject to refund depending on the final MPUC decision. Investors should note the company has also proposed a "stay-out" alternative. This would involve withdrawing the rate case if the MPUC grants deferrals for specific depreciation, maintenance, and property tax expenses. The MPUC's decision on either the rate case or the stay-out alternative is anticipated in the fourth quarter of 2021. This regulatory development is significant as it directly impacts future revenue streams and profitability for NSP-Minnesota, a key operating segment of Xcel Energy.
Key Highlights
- 1NSP-Minnesota filed for a $36 million (6.6%) annual natural gas rate increase with the MPUC.
- 2The proposed increase is based on a 2022 forecast test year.
- 3Requested return on equity is 10.5%, with a rate base of approximately $934 million.
- 4NSP-Minnesota seeks interim rates of $25 million effective January 1, 2022, subject to refund.
- 5A 'stay-out' alternative is proposed, contingent on MPUC deferring certain expenses.
- 6MPUC decision on the rate case or stay-out is expected in Q4 2021.