Public Service Company of Colorado Seeks $107 Million Rate Hike for Natural Gas

Strategic Insights -

Public Service Company of Colorado, a subsidiary of Xcel Energy, has filed a request with the Colorado Public Utilities Commission (CPUC) to increase retail natural gas rates by $107 million. The proposed base rate increase of $215 million, which includes a transfer of $108 million previously recovered from customers through the Pipeline System Integrity Adjustment (PSIA) rider, is based on a 10.25% Return on Equity (ROE) and an equity ratio of 55.66%. The company has requested a proposed effective date of November 1, 2022, with step revenue increases of $40 million (effective November 1, 2023) and $41 million (effective November 1, 2024) related to continued capital investment.

Key Takeaways:

  • Public Service Company of Colorado seeks a net increase to retail natural gas rates of $107 million, with a total base rate increase of $215 million.
  • The request is based on a 10.25% Return on Equity (ROE) and an equity ratio of 55.66%, with a 2022 current test year and a projected rate base of $3.6 billion.
  • Staff and the Office of the Utility Consumer Advocate (UCA) filed comprehensive testimony on June 15, 2022, with recommended adjustments totaling $76 million (Staff) and $95 million (UCA) to the filed base revenue request.
  • Positions on PSCo's filed gas rate request:

+ Staff: Recommended a 9% ROE and an equity ratio of 55%.

+ UCA: Recommended a 9% ROE and an equity ratio of 51.5%.

  • Next steps in the procedural schedule:

+ Rebuttal testimony: July 13, 2022.

+ Settlement: August 3, 2022.

+ Evidentiary hearings: August 17-23, 2022.

+ Statement of position: September 21, 2022.

Statistics:

  • Total base rate increase: $215 million
  • Transfer of previously recovered costs: $108 million
  • Return on Equity (ROE): 10.25%
  • Equity ratio: 55.66%
  • Projected rate base: $3.6 billion
  • Requested effective date: November 1, 2022
  • Rebuttal testimony deadline: July 13, 2022
  • Settlement deadline: August 3, 2022
  • Evidentiary hearings dates: August 17-23, 2022
  • Statement of position deadline: September 21, 2022

Sources:

  • Form 8-K (Current Report) filed by Public Service Company of Colorado with the Securities and Exchange Commission on June 17, 2022.
  • Xcel Energy's and PSCo's Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and subsequent filings with the Securities and Exchange Commission.