Summary
Xcel Energy's subsidiary, Public Service Company of Colorado (PSCo), has received a decision on its Colorado electric rate case. While PSCo initially sought a significant net increase of $262 million (8.2%), a settlement agreement was reached with various parties, which has now been orally approved by the CPUC. The approved settlement results in a more modest retail revenue increase of $95 million, representing a 2.96% rise. This decision impacts PSCo's cost of capital, setting a weighted-average cost at 6.95%, with a 9.3% return on equity. The settlement also includes provisions for the early termination of a revenue decoupling pilot, the continuation of existing trackers and deferrals, and specific limits on future transmission capacity recovery. The new rates are anticipated to be effective in September 2023, pending a formal written decision. Importantly, Xcel Energy is reaffirming its 2023 GAAP and ongoing earnings guidance of $3.30 to $3.40 per share, indicating that this regulatory outcome aligns with their existing financial projections.
Key Highlights
- 1PSCo's Colorado electric rate case settlement approved by CPUC, resulting in a $95 million (2.96%) retail revenue increase, lower than initially requested.
- 2Weighted-average cost of capital set at 6.95%, with a 9.3% return on equity.
- 3Revenue decoupling pilot to be terminated early with new rates implemented.
- 4Existing trackers and deferrals will continue, but future transmission capacity recovery will be limited to projects increasing capacity starting 2024.
- 5Collection of $12 million of previously suspended 2023 TCA revenues is approved.
- 6New rates are expected to become effective in September 2023.
- 7Xcel Energy reaffirms its 2023 GAAP and ongoing earnings guidance of $3.30 to $3.40 per share.