Summary
Xcel Energy Inc. (XEL) subsidiary, Northern States Power Company (NSP-Minnesota), is undergoing a natural gas rate case in Minnesota. The company initially requested a $36 million (6.6%) annual rate increase. Interim rates of $25 million were approved in December 2021, subject to refund. Recent filings indicate significant adjustments proposed by intervenors, notably the Minnesota Department of Commerce (DOC), which recommends a total revenue change of $17 million. This proposal includes a lower Return on Equity (ROE) of 9.15% compared to the requested 10.5% and several expense disallowances. While the final MPUC order is not expected until April 2023, the procedural schedule is moving forward with rebuttal testimony and hearings in the coming months. Investors should monitor this rate case as it will directly impact NSP-Minnesota's future revenues and profitability. The proposed $17 million increase, significantly lower than the initial request, suggests potential headwinds in achieving the company's desired profitability metrics for its Minnesota natural gas operations.
Key Highlights
- 1NSP-Minnesota, an Xcel Energy subsidiary, is seeking a natural gas rate increase.
- 2Initial request was for $36 million (6.6%) annually, with interim rates of $25 million approved.
- 3Minnesota Department of Commerce (DOC) proposed significant adjustments, reducing the total proposed revenue change to $17 million.
- 4DOC's proposal includes a lower Return on Equity (ROE) of 9.15% compared to the company's 10.5% request.
- 5Key adjustment areas identified by DOC include ROE, sales forecast, property tax, and depreciation expense.
- 6The procedural schedule indicates a final MPUC order is expected on April 26, 2023.
- 7Investors should closely track the outcome of this rate case as it impacts future earnings.