8-KOther Events

XCEL ENERGY INC 8-K Report, Corporate Update (Jun 21, 2023)

Filed June 21, 2023For Securities:XELXELLL

Summary

Xcel Energy Inc. (XEL) subsidiary, Public Service Company of Colorado (PSCo), has reached a near-comprehensive settlement with various stakeholders regarding its electric rate increase request. Initially seeking an $262 million net increase (8.2%), the settlement proposes a retail revenue increase of $95 million (2.96% customer bill increase) based on a 2022 historic test year. An alternative proposal of $47 million (1.46% bill increase) is contingent on CPUC approval of depreciation expense deferrals for coal assets. The settlement includes a weighted-average cost of capital of 6.95% with a 9.3% return on equity, early termination of a revenue decoupling pilot, and continuation of existing trackers. The Colorado Public Utilities Commission (CPUC) is expected to issue a decision in the third quarter of 2023, with new rates potentially effective in September 2023. Xcel Energy has reaffirmed its 2023 earnings guidance of $3.30 to $3.40 per share, indicating that this guidance incorporates expectations of constructive regulatory outcomes.

Key Highlights

  • 1Public Service Company of Colorado (PSCo) reached a near-comprehensive settlement on its electric rate request, significantly lower than the initial ask.
  • 2The settlement proposes a retail revenue increase of $95 million (2.96% customer bill increase) under a 2022 historic test year, or $47 million (1.46% bill increase) with specific depreciation expense deferrals.
  • 3The settlement includes a weighted-average cost of capital of 6.95% and a 9.3% return on equity.
  • 4A decision from the Colorado Public Utilities Commission (CPUC) is anticipated in Q3 2023, with rates potentially effective in September 2023.
  • 5Xcel Energy reaffirms its 2023 GAAP and ongoing earnings guidance of $3.30 to $3.40 per share.
  • 6The settlement does not include the City of Boulder, which opposes it, indicating potential for continued discussion or dissent.
  • 7The Transmission Cost Adjustment (TCA) revenue of $12 million collected in 2023, previously suspended, is part of the settlement, with prospective changes for 2024 subject to review.

Frequently Asked Questions

The main outcome is a near-comprehensive settlement reached between PSCo and most intervenors for an electric rate increase. This settlement proposes a significantly lower increase than initially requested, with a retail revenue increase of $95 million (2.96% customer bill increase) or an alternative $47 million (1.46% bill increase) under specific conditions.

Xcel Energy has reaffirmed its 2023 GAAP and ongoing earnings guidance of $3.30 to $3.40 per share. This guidance is based on assumptions that include constructive regulatory outcomes, which this settlement appears to support.

The Colorado Public Utilities Commission (CPUC) is expected to make a decision in the third quarter of 2023. If approved, new rates are anticipated to be effective in September 2023.

Yes, the City of Boulder opposes the settlement. While most intervenors have agreed, this opposition could lead to further discussions or a more complex regulatory process, although the settlement is described as 'nearly comprehensive'.