Summary
Xcel Energy Inc. (XEL) announced a significant regulatory development concerning its wholly owned subsidiary, Public Service Company of Colorado (PSCo). Following an initial request for a net electric rate increase of $343 million (12.4%), PSCo has reached a comprehensive, unopposed settlement with the Colorado Public Utilities Commission (CPUC) Staff and various intervenors. This settlement, expected to be finalized in the first quarter of 2022 with rates effective April 2022, results in a more modest net increase to retail electric rates of $177 million. The settlement reflects a lower authorized return on equity (ROE) of 9.3% compared to the initially requested 10.0% and incorporates a current 2021 test year. The company has also reaffirmed its 2022 earnings guidance, indicating confidence in its financial outlook despite the revised rate increase.
Key Highlights
- 1PSCo reached an unopposed settlement for a net electric rate increase of $177 million, a reduction from the initially requested $343 million.
- 2The settlement includes a 9.3% authorized return on equity (ROE), down from the initial request of 10.0%.
- 3The settlement incorporates a current 2021 test year, adjusting the rate base for specific investments.
- 4Key investments such as Cheyenne Ridge, Wildfire Mitigation Plan, and Advanced Grid Intelligence and Security (AGIS) will be included in the rate base.
- 5The settlement continues deferral mechanisms for AGIS and Wildfire Mitigation Plan investments, with specific return parameters.
- 6Hearings for the settlement are scheduled for January 2022, with a CPUC decision expected in Q1 2022 and rates effective April 2022.
- 7Xcel Energy reaffirms its 2022 GAAP and ongoing earnings guidance of $3.10 to $3.20 per share.