Xcel Energy Files Form 8-K with Securities and Exchange Commission: Southwestern Public Service Company Seeks Rate Increase

Strategic Insights -

Xcel Energy Inc. has filed a Form 8-K with the Securities and Exchange Commission on May 21, 2021, disclosing its wholly-owned subsidiary, Southwestern Public Service Company (SPS), has filed an electric rate case with the New Mexico Public Regulation Commission (NMPRC) seeking a rate increase of approximately $88 million. This rate case, filed on January 4, 2021, aims to offset fuel cost reductions and production tax credits (PTCs) attributable to the Sagamore wind project. The proposed rate increase, if approved, would result in a $48 million net increase for New Mexico customers, representing a 10% increase as a result of the offsetting fuel cost reductions and PTCs.

Key Takeaways:

  • The rate case seeks a $88 million increase in base rates, of which $48 million is expected to be offset by fuel cost reductions and PTCs.
  • The proposed rate increase is based on a historic test year ended September 30, 2020, with a return on equity (ROE) of 10.35% and an equity ratio of 54.72%.
  • The New Mexico Attorney General (AG), NMPRC Staff (Staff), Occidental Permian Ltd. (OPL), Louisiana Energy Services (LES), New Mexico Large Customer Group (NMLCG), and Walmart have filed comprehensive answer testimony.
  • The recommended base rate adjustments vary among the participants, with AG Staff recommending a reduction of $17 million, while Walmart recommends an ROE no higher than 9.45%.
  • The next steps in the procedural schedule include rebuttal testimony on June 9, 2021, and a public hearing or hearing on stipulation from July 26 to August 6, 2021.

Sources:

  • Form 8-K filed by Xcel Energy Inc. with the Securities and Exchange Commission on May 21, 2021 (Source: UNITED STATES SECURITIES AND EXCHANGE COMMISSION)

Statistics:

  • $88 million: The requested increase in base rates by Southwestern Public Service Company
  • $48 million: The net rate increase expected for New Mexico customers as a result of offsetting fuel cost reductions and PTCs
  • 10%: The proposed rate increase for New Mexico customers
  • 10.35%: The return on equity (ROE) recommended by Southwestern Public Service Company
  • 54.72%: The equity ratio recommended by Southwestern Public Service Company
  • January 4, 2021: The date on which Southwestern Public Service Company filed the electric rate case with the New Mexico Public Regulation Commission
  • May 17, 2021: The date on which the New Mexico Attorney General (AG), NMPRC Staff (Staff), Occidental Permian Ltd. (OPL), Louisiana Energy Services (LES), New Mexico Large Customer Group (NMLCG), and Walmart filed comprehensive answer testimony.