Xcel Energy Subsidiary Seeks $88 Million Rate Increase in New Mexico

Strategic Insights -

Southwestern Public Service Company (SPS), a subsidiary of Xcel Energy, has filed an electric rate case with the New Mexico Public Regulation Commission (NMPRC) seeking a base rate increase of approximately $88 million. This proposed increase is expected to result in a net rate increase of around $48 million, or 10%, for New Mexico customers. The request is based on a historic test year ended September 30, 2020, and includes expected capital additions through February 28, 2021.

Key Takeaways:

  • The proposed rate increase of $88 million is expected to result in a net rate increase of around $48 million, or 10%, for New Mexico customers.
  • The rate increase is based on a historic test year ended September 30, 2020, and includes expected capital additions through February 28, 2021.
  • The New Mexico Attorney General, NMPRC Staff, Occidental Permian Ltd., Louisiana Energy Services, New Mexico Large Customer Group, and Walmart have filed comprehensive answer testimony in the case.
  • The proposed recommended base rate adjustments vary among the parties involved, with the New Mexico Attorney General recommending a reduction of around $30 million.
  • The parties also proposed different return on equity (ROE) rates, with the New Mexico Attorney General recommending a rate of 9.10% and Walmart recommending a rate of 9.45%.
  • The next steps in the procedural schedule include rebuttal testimony, a deadline to file stipulation, and a public hearing, with a NMPRC decision and implementation anticipated in the fourth quarter of 2021.

Statistics:

  • Proposed rate increase: $88 million
  • Net rate increase: $48 million (10% for New Mexico customers)
  • ROE rates recommended by the parties: 9.10% by the New Mexico Attorney General, 9.45% by Walmart, and 9.22% by Occidental Permian Ltd.
  • Equity ratio recommended by the New Mexico Attorney General: 54.72%
  • Total company rate base: approximately $6.0 billion
  • Retail rate base: approximately $1.9 billion

Sources:

  • Xcel Energy Inc. and SPS
  • New Mexico Public Regulation Commission (NMPRC)
  • Securities and Exchange Commission (SEC)
  • EDGAR database (SEC)