Summary
Xcel Energy Inc. (XEL) subsidiary Northern States Power Company (NSP-Minnesota) received a verbal order on June 1, 2023, from the Minnesota Public Utilities Commission (MPUC) regarding its 2022 electric rate case. The MPUC's final order, expected by June 30, 2023, is estimated to result in an annual incremental revenue increase of approximately $101 million in 2022, $89 million in 2023, and $121 million in 2024, totaling $311 million over three years. This is lower than the initial requested increase and reflects a reduced authorized Return on Equity (ROE) of 9.25% compared to the company's request. In response to the lower-than-anticipated ROE and disallowed expenses, Xcel Energy has reaffirmed its 2023 GAAP and ongoing earnings guidance of $3.30 to $3.40 per share. However, the company will need to implement management actions, including evaluating programs, staffing levels, and operating expenses, to offset the impact of the regulatory decision.
Key Highlights
- 1MPUC issued a verbal order on the NSP-Minnesota electric rate case, with a final written order expected June 30, 2023.
- 2Estimated annual incremental revenue increase of $311 million over three years (2022-2024) from the MPUC final order.
- 3Authorized Return on Equity (ROE) set at 9.25% by the MPUC, lower than the company's request.
- 4Specific revenue adjustments were made, including for Sherco 3 and A.S. King, property tax, ROE changes, operating expenses, and tax credits.
- 5Xcel Energy reaffirms its 2023 GAAP and ongoing earnings per share guidance of $3.30 to $3.40.
- 6Company will undertake management actions to offset the financial impact of the lower ROE and disallowed expenses.
- 7Interim rates approved in December 2021 remain subject to refund.