8-KOther Events

XCEL ENERGY INC 8-K Report, Corporate Update (Nov 13, 2023)

Filed November 13, 2023For Securities:XELXELLL

Summary

Xcel Energy Inc. (XEL) announced via an 8-K filing on November 13, 2023, an update on a rate increase request by its subsidiary, Northern States Power Company (NSP-Wisconsin), with the Public Service Commission of Wisconsin (PSCW). The PSCW has verbally approved a rate increase that is significantly lower than initially requested by NSP-Wisconsin. The approved increase is estimated to be approximately $1 million for electric service and $5 million for natural gas service, effective January 2024, based on a final written order expected in December 2023. This outcome represents a compromise compared to NSP-Wisconsin's revised request of $25 million for electric and $7 million for natural gas. The PSCW's decision was based on a slightly adjusted Return on Equity (ROE) of 9.8% for electric and a favorable outcome for natural gas. Xcel Energy also reaffirmed its 2023 and 2024 earnings guidance, indicating confidence that these regulatory outcomes, alongside expense reduction efforts, are factored into their financial outlook.

Key Highlights

  • 1PSCW verbally approved a rate increase for NSP-Wisconsin, with final written order expected in December 2023.
  • 2The approved rate increase is approximately $1 million for electric and $5 million for natural gas services.
  • 3This approved increase is substantially lower than NSP-Wisconsin's revised request of $25 million (electric) and $7 million (natural gas).
  • 4The approved rates are based on a 2024 forecast test year and an approved ROE of 9.8% for electric and a favorable outcome for natural gas.
  • 5Fuel costs for natural gas are subject to a reconciliation process and a 2% band for prudently incurred costs.
  • 6Xcel Energy reaffirms its 2023 ongoing earnings guidance of $3.32 to $3.37 per share.
  • 7Xcel Energy reaffirms its 2024 GAAP and ongoing earnings guidance of $3.50 to $3.60 per share, incorporating these regulatory outcomes.

Frequently Asked Questions

The Public Service Commission of Wisconsin (PSCW) has verbally approved an estimated rate increase of approximately $1 million for electric service and $5 million for natural gas service for NSP-Wisconsin, effective January 2024. A final written order is expected in December 2023.

NSP-Wisconsin had revised its request for a rate increase to $25 million for electric and $7 million for natural gas. The PSCW's verbally approved increase of $1 million (electric) and $5 million (natural gas) is significantly lower than the company's revised request.

No, Xcel Energy has reaffirmed its 2023 ongoing earnings guidance of $3.32 to $3.37 per share and its 2024 GAAP and ongoing earnings guidance of $3.50 to $3.60 per share. This suggests that the company had anticipated a constructive, albeit lower than requested, regulatory outcome and has factored it into its financial projections.

The PSCW's verbal approval is based on a Return on Equity (ROE) of 9.8% for the electric utility and an equity ratio of 52.5%. This is slightly lower than the 10.25% ROE initially requested by NSP-Wisconsin.