Regulatory Update: Northern States Power Company's Test Year Electric and Gas Rate Case

Strategic Insights -

The Public Service Commission of Wisconsin has issued a regulatory update regarding the test year electric and gas rate case for Northern States Power Company. The initial data request response, submitted by Xcel Energy Services, Inc., details the supporting calculations for the common allocation or apportionment factors used in the test year for all costs split between utilities. The response also outlines the methodology used to allocate common operation and maintenance (O&M) utility costs, including the customer allocator, revenue allocator, three-factor allocator, and labor allocator.

Key Takeaways:

  • The costs for Northern States Power Company-Wisconsin are assigned or allocated based on the methods prescribed in PSC 103, with a focus on direct assignment to the utility and allocation using utility allocations when direct assignment is not possible.
  • The utility allocation statistics are updated annually in April, using calendar-year actual data from the previous year, and include a review of dollars posted by FERC account and business processes used by the utility and its affiliates.
  • The most recent update was completed in April 2024, using data from the 2023 calendar year, and these percentages are used for the 2026-2027 test years.
  • The common O&M utility allocations are applied to common costs recorded in A&G (FERC accounts 920-935) and customer accounting, customer information, and sales (FERC accounts 901-917).
  • The methods used to allocate common O&M costs include the customer allocator, revenue allocator, three-factor allocator, and labor allocator, which are developed to achieve the most cost-causative relationship with electric and gas utility operations.

Statistics:

  • The utility allocation statistics are updated annually in April, using calendar-year actual data from the previous year.
  • The most recent update was completed in April 2024, using data from the 2023 calendar year, and these percentages are used for the 2026-2027 test years.
  • The common O&M utility allocations are applied to common costs recorded in A&G (FERC accounts 920-935) and customer accounting, customer information, and sales (FERC accounts 901-917).
  • The customer allocator is used to allocate common utility costs in FERC accounts 901-903, and non-commodity bad debt portion of FERC 904 and 905-917 among electric and gas operations.

Sources:

  • Northern States Power Company, Docket 4220-UR-127 2026-2027 Test Year Electric and Gas Rate Case Initial Data Request Response - General Information.
  • PSC 103 - Public Service Commission of Wisconsin.
  • Xcel Energy Services, Inc. (2025). Initial Data Request Response - General Information.