Southwestern Public Service Company Files Electric Rate Case with Public Utility Commission of Texas

Strategic Insights -

Southwestern Public Service Company (SPS), a wholly owned subsidiary of Xcel Energy Inc., has filed an electric rate case with the Public Utility Commission of Texas (PUCT) and its 81 municipalities. The company is seeking an increase in base rates of approximately $143 million, with a net rate increase of $74 million, or 9.2%, for Texas customers. This rate increase is primarily driven by additional capital investment in new and upgraded electric facilities and equipment since SPS' previous rate case in 2019.

Key Takeaways:

  • SPS is seeking an electric rate increase of approximately $143 million, with a net rate increase of $74 million, or 9.2%, for Texas customers.
  • The rate increase is driven by additional capital investment in new and upgraded electric facilities and equipment since SPS' previous rate case in 2019.
  • The request includes the loss of 400 megawatts from a wholesale transmission customer and changes to depreciation rates to reflect a reduction in the service lives of SPS' Tolk power plant and the coal handling assets of the Harrington facility.
  • The Public Utility Commission of Texas (PUCT) is expected to render a decision in the first quarter of 2022.
  • SPS' net rate increase to consumers is expected to be approximately $74 million.
  • The company will file to update estimates to actuals through Dec. 31, 2020, in March 2021.
  • The rate increase will be subject to a surcharge from March 15, 2021, through the effective date of new base rates.

Statistics:

  • Rate increase requested: $143 million
  • Net rate increase: $74 million, or 9.2%
  • Capital investment in new and upgraded electric facilities and equipment: approximately $67 million from the Sagamore wind project, $25 million in other capital investments
  • Fuel cost reductions and production tax credits (PTCs): $69 million
  • Return on equity: 10.35%
  • Equity ratio: 54.60%
  • Texas retail rate base: approximately $3.3 billion
  • Historic test year: 12-month period ended Dec. 31, 2020

Sources:

  • UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
  • Xcel Energy Inc. annual reports on Form 10-K for the years ended Dec. 31, 2019 and subsequent filings with the Securities and Exchange Commission