Summary
Xcel Energy Inc. subsidiary Southwestern Public Service Company (SPS) is undergoing a rate case in New Mexico. SPS initially requested a $168 million (16.0%) increase in electric rates, based on a future test year ending November 30, 2027, and proposing a 10.5% return on equity (ROE). However, on May 1, 2026, several intervenors, including the NMPRC Staff and New Mexico Department of Justice, filed testimony that significantly reduces the requested revenue adjustment. The intervenors' proposed adjustments, which focus on factors like jurisdictional allocators, ROE, capital structure, and purchased power costs, suggest a much lower total proposed revenue change ranging from $48 million to $113 million. The NMPRC Staff, in particular, recommends a revenue change of $48 million and a lower ROE of 9.75%. The procedural schedule includes rebuttal testimony by May 29, 2026, a hearing in July 2026, and an anticipated NMPRC decision in the fourth quarter of 2026, with final rates likely implemented around November 30, 2026, if approved.
Key Highlights
- 1Southwestern Public Service (SPS), a subsidiary of Xcel Energy, is in an electric rate case with the New Mexico Public Regulation Commission (NMPRC).
- 2SPS initially sought a $168 million revenue increase, representing a 16.0% rise in rates.
- 3Multiple intervenors have filed testimony, proposing significantly lower revenue adjustments than SPS requested.
- 4The NMPRC Staff recommended a revenue increase of $48 million and a return on equity (ROE) of 9.75%, considerably less than SPS's initial proposal.
- 5Key areas of disagreement among intervenors and SPS include ROE, capital structure, and purchased power capacity costs.
- 6The procedural timeline anticipates a final NMPRC decision and implementation of rates in the fourth quarter of 2026.
- 7The final outcome of the rate case could materially impact SPS's future revenues and profitability.