Summary
Xcel Energy Inc. (XEL), through its subsidiary Public Service Company of Colorado (PSCo), announced a significant regulatory development regarding its electric rates in Colorado. On March 16, 2022, the Colorado Public Utilities Commission (CPUC) approved a comprehensive settlement for a net electric rate increase of $177 million. This settlement represents a substantial reduction from the initially requested $343 million increase, reflecting a negotiated outcome with key stakeholders. The approved rate increase will become effective on April 1, 2022. The settlement also outlines several key financial parameters for PSCo, including a Return on Equity (ROE) of 9.3% and an equity ratio of 55.69%. The proceeding utilized a 2021 test year and incorporated specific investments at year-end rate base, such as the Cheyenne Ridge, Wildfire Mitigation Plan, and Advanced Grid Intelligence and Security projects. The approval of depreciation adjustments and the continuation of certain deferral mechanisms are also notable outcomes of this regulatory process.
Key Highlights
- 1PSCo secured CPUC approval for a net electric rate increase of $177 million, effective April 1, 2022.
- 2The approved rate increase is significantly lower than the initial request of $343 million, reflecting a successful settlement.
- 3The settlement includes an agreed-upon Return on Equity (ROE) of 9.3% and an equity ratio of 55.69%.
- 4The regulatory proceeding adopted a 2021 test year and included specific investments in the rate base.
- 5The CPUC approved all of PSCo's proposed depreciation adjustments.
- 6Certain important deferral mechanisms, including for Advanced Grid Intelligence and Security and the Wildfire Mitigation Plan, will continue.
- 7The settlement was unopposed, indicating broad agreement among parties involved in the rate case.