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.