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United States. Securities and Exchange Commission

Xcel Energy and Southwestern Public Service Company Request Rate Increases in Texas

Strategic Insights

— 1 min read

Xcel Energy's subsidiary, Southwestern Public Service Company, has filed an electric rate case with the Public Utility Commission of Texas (PUCT), seeking an increase in base rate revenue of $158 million, or a 14% impact to customer bills. The request is based on a return on equity (ROE) of 10.65%, an equity ratio of 54.6%, retail rate base of $3.6 billion, and the acceleration of the Tolk coal plant depreciation life from 2034 to 2028.

Key Takeaways:

  • Southwestern Public Service Company is seeking a rate increase of $158 million, or 14% of customer bills, in Texas.
  • The requested increase is based on a return on equity (ROE) of 10.65% and an equity ratio of 54.6%.
  • The proposed rate increase includes surcharges from July 13, 2023, through the effective date of new base rates.
  • The Public Utility Commission of Texas (PUCT) Staff, Alliance of Xcel Municipalities (AXM), Office of Public Utility Counsel (OPUC), and Texas Industrial Energy Consumers (TIEC) have submitted comprehensive testimony, proposing modifications to the original request.
  • Proposed modifications include adjusting the ROE and capital structure, depreciation expense, jurisdictional allocators, operating and maintenance expense, and other net items.
  • Opponents have suggested alternative ROE and equity ratio adjustments, with some proposing a rejection of the accelerated Tolk depreciable life.
  • Hearings are scheduled for September 12-21, 2023, with proposed findings expected on October 25, 2023.
  • Xcel Energy reaffirms its 2023 GAAP earnings guidance of $3.30 to $3.40 per share.

Statistics:

  • Rate increase Request: $158 million, or 14% impact to customer bills
  • Return on Equity (ROE): 10.65%
  • Equity Ratio: 54.6%
  • Retail Rate Base: $3.6 billion
  • Surcharge Duration: July 13, 2023, through the effective date of new base rates
  • Proposed Rebuttal Testimony Date: August 25, 2023
  • Hearings Schedule: September 12-21, 2023
  • Proposed Findings Date: October 25, 2023
  • Expected PUCT Decision: First quarter of 2024
  • Xcel Energy's 2023 GAAP Earnings Guidance: $3.30 to $3.40 per share

Sources:

  • SEC Form 8-K, filed by Southwestern Public Service Company on August 15, 2023, as a Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
  • Public Utility Commission of Texas (PUCT) Staff, Alliance of Xcel Municipalities (AXM), Office of Public Utility Counsel (OPUC), and Texas Industrial Energy Consumers (TIEC) testimony.
  • Xcel Energy's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and subsequent filings with the Securities and Exchange Commission.

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