Xcel Energy Seeks Rate Increase in Texas with Proposed Changes to SPS' Filing

Xcel Energy's subsidiary, Southwestern Public Service Company (SPS), filed an electric rate case with the Public Utility Commission of Texas (PUCT) in February 2023, seeking a base rate revenue increase of $149 million, which would result in a 13% impact on customer bills. In March 2023, SPS updated the filing, increasing the request to $158 million, representing a 14% impact on customer bills. The proposed changes include an accelerated depreciation life for the Tolk coal plant from 2034 to 2028 and a return on equity (ROE) of 10.65%. Several parties, including the PUCT Staff, Alliance of Xcel Municipalities (AXM), Office of Public Utility Counsel (OPUC), and Texas Industrial Energy Consumers (TIEC), have filed comprehensive testimony, recommending modifications to SPS' request.

Key Takeaways:

• SPS is seeking a base rate revenue increase of $158 million, which would impact customer bills by 14%.
• The proposed changes include an accelerated depreciation life for the Tolk coal plant from 2034 to 2022 and a return on equity (ROE) of 10.65%.
• The PUCT Staff, AXM, OPUC, and TIEC have filed comprehensive testimony, recommending modifications to SPS' request, including recommended base rate adjustments.
• Proposed modifications to SPS' request include changes to ROE and capital structure, depreciation expense, jurisdictional allocators, operating and maintenance expense, and other net adjustments.
• The total proposed base rate revenue change ranges from $66 million to $130 million, depending on the party's recommendations.
• The PUCT is expected to make a decision on the rate case in the first quarter of 2024.

Statistics:

• $.149 billion (13% impact) - initial request for base rate revenue increase
• $158 million (14% impact) - updated request for base rate revenue increase
• 10.65% - return on equity (ROE) requested by SPS
• $3.6 billion - retail rate base for SPS
• 2028 - proposed accelerated depreciation life for the Tolk coal plant
• 2034 - original depreciation life for the Tolk coal plant
• 9.05%-9.95% - recommended range of ROE by TIEC
• 48%-50% - recommended equity ratio by TIEC
• September 12-21, 2023 - dates of PUCT hearings
• October 25, 2023 - proposed date for PUCT's proposed findings

Sources:

• Xcel Energy Inc. (2023, August 15). Form 8-K (Current Report). UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
• Xcel Energy Inc. (2022). Annual Report on Form 10-K for the fiscal year ended December 31, 2022.