Public Service Company of Colorado Seeks $343 Million Rate Hike for Retail Electric Base Rate Revenue

Strategic Insights -

The Public Service Company of Colorado, a wholly owned subsidiary of Xcel Energy Inc., has filed a request with the Colorado Public Utilities Commission seeking a net increase to retail electric base rate revenue of $343 million, or 12.4% of total revenue. This request is based on a 10.0% return on equity (ROE), an equity ratio of 55.64%, and a 2022 forecast test year.

Key Takeaways:

  • The requested rate increase of $343 million would result in a 12.4% increase in total revenue for the Public Service Company of Colorado.
  • The request includes investments in several initiatives approved by the CPUC, such as distribution infrastructure, wildfire mitigation improvements, and the 500-MW Cheyenne Ridge wind farm, which would provide enough clean energy to power approximately 270,000 average Colorado homes.
  • The avoided fuel costs and PTC benefits from Cheyenne Ridge are estimated at approximately $120 million, which would be passed back to customers through the fuel clause mechanism.
  • The request also includes the impacts of a new depreciation and decommissioning study.
  • PSCo has requested rates effective April 1, 2022.
  • Revenue Request (millions of dollars): Plant-related growth $95, AGIS $73, Updated cost of capital $53, New depreciation rates $43, Wildfire mitigation $25, Property taxes $25, Amortization of previously approved deferrals $17, Other $12, Net increase to revenue $343.
  • Roll-in of previously authorized costs: TCA rider revenues and Cheyenne Ridge costs $127.
  • Total base revenue request $470.
  • Expected average 2022 rate base (billions of dollars) $10.3.

Statistics:

  • 12.4% decrease in total revenue
  • $343 million net rate increase
  • $95 million in plant-related growth
  • $73 million in AGIS
  • $53 million in updated cost of capital
  • $43 million in new depreciation rates
  • $25 million in wildfire mitigation
  • $25 million in property taxes
  • $17 million in amortization of previously approved deferrals
  • $12 million in other
  • $120 million in avoided fuel costs and PTC benefits
  • 270,000 homes to be powered by the Cheyenne Ridge wind farm

Sources:

  • "Form 8-K Current Report" filed with the UNITED STATES SECURITIES AND EXCHANGE COMMISSION on JUL 02, 2021.