Summary
Xcel Energy Inc. (XEL) subsidiary, Northern States Power Company (NSP-Wisconsin), has filed a request for rate increases with the Public Service Commission of Wisconsin (PSCW). Initially seeking a $40 million increase for electric rates (4.8%) and a $9 million increase for natural gas rates (5.3%), the PSCW Staff has since recommended a rate decrease of $3 million for electric (0.3%) and a smaller increase of $5 million for natural gas (3.1%). The divergence between the company's request and the PSCW Staff's recommendation, particularly for electric rates, presents a key point of focus for investors. While NSP-Wisconsin requested a net increase, the PSCW Staff's recommendation, after accounting for various adjustments including fuel and purchased power, results in a net decrease for electric rates. The procedural timeline indicates a decision is anticipated in late fourth quarter 2023, with new rates potentially effective January 1, 2024.
Key Highlights
- 1NSP-Wisconsin, a subsidiary of Xcel Energy, has requested rate increases for electric and natural gas services.
- 2The company initially sought a $40 million (4.8%) electric rate increase and a $9 million (5.3%) natural gas rate increase.
- 3PSCW Staff recommended a net electric base rate decrease of $3 million (0.3%) and a $5 million (3.1%) natural gas rate increase.
- 4Key differences between the company's request and PSCW Staff recommendation include adjustments for depreciation life extensions, ROE, O&M expenses, and fuel/purchased power costs.
- 5The PSCW is expected to make a decision on the rates in late fourth quarter 2023, with new rates effective January 1, 2024.
- 6Xcel Energy reaffirms its 2023 GAAP and ongoing earnings guidance of $3.30 to $3.40 per share, contingent on constructive regulatory outcomes.