UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) Oct. 12, 2015
Commission File Number | Exact Name of Registrant as Specified in its Charter; State of Incorporation; Address of Principal Executive Offices; and Telephone Number | IRS Employer Identification Number | ||
001-3034 | XCEL ENERGY INC. | 41-0448030 | ||
(a Minnesota corporation) | ||||
414 Nicollet Mall | ||||
Minneapolis, Minnesota 55401 | ||||
(612) 330-5500 | ||||
001-03789 | SOUTHWESTERN PUBLIC SERVICE COMPANY | 75-0575400 | ||
(a New Mexico corporation) | ||||
Tyler at Sixth | ||||
Amarillo, Texas 79101 | ||||
(303) 571-7511 | ||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
£ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
£ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
£ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
£ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01. Other Events
In December 2014, Southwestern Public Service Company (SPS), a New Mexico corporation, and a wholly owned subsidiary of Xcel Energy Inc., filed a retail electric rate case in Texas seeking an overall increase in annual revenue of approximately $64.8 million, or 6.7 percent. The filing was based on a historic test year ending June 2014, adjusted for known and measurable changes, a return on equity (ROE) of 10.25 percent, an electric rate base of approximately $1.6 billion and an equity ratio of 53.97 percent. In March 2015, SPS revised its requested increase to $58.9 million based on updated information.
SPS is seeking a waiver of the Public Utility Commission of Texas (PUCT) post-test year adjustment rule which would allow for inclusion of $392 million (SPS total company) additional capital investment for the period July 1, 2014 through Dec. 31, 2014.
In June 2015, SPS filed rebuttal testimony supporting a revised rate increase of approximately $42.1 million, or 4.4 percent.
On Oct. 12, 2015, the administrative law judges (ALJs) issued their Proposal for Decision (PFD) and recommended a rate increase of approximately $1.2 million, based on a ROE of 9.70 percent and an equity ratio of 53.97 percent.
The following table reflects the current positions of Alliance of Xcel Municipalities (AXM), the Office of Public Utility Counsel (OPUC), the PUCT Staff (Staff), SPS as well as the estimated recommendation of the ALJs:
SPS Rebuttal Testimony | ALJs’ PFD (a) | |||||||||||||||||||
(Millions of Dollars) | AXM | OPUC | Staff | |||||||||||||||||
SPS’ revised rate request | $ | 58.9 | $ | 58.9 | $ | 58.9 | $ | 58.9 | $ | 42.1 | ||||||||||
Investment for capital expenditures — post-test year adjustments | (11.3 | ) | (23.8 | ) | (23.8 | ) | — | (16.7 | ) | |||||||||||
Lower ROE | (10.9 | ) | (13.5 | ) | (12.1 | ) | — | (6.3 | ) | |||||||||||
Rate base adjustments (largely the removal of the prepaid pension asset) | (6.2 | ) | (6.8 | ) | — | — | — | |||||||||||||
O&M expense adjustments | (13.7 | ) | (11.0 | ) | (7.9 | ) | (1.6 | ) | (5.3 | ) | ||||||||||
Depreciation expense | (13.3 | ) | — | — | — | (3.9 | ) | |||||||||||||
Property taxes | — | (1.2 | ) | (4.4 | ) | (1.8 | ) | (3.7 | ) | |||||||||||
Revenue adjustments | (2.2 | ) | (0.2 | ) | — | — | — | |||||||||||||
Wholesale load reductions | (13.2 | ) | — | (11.1 | ) | — | — | |||||||||||||
Southwest Power Pool transmission expansion plan | — | — | — | (7.3 | ) | (4.2 | ) | |||||||||||||
Other, net | (1.7 | ) | (0.6 | ) | (2.2 | ) | (1.8 | ) | (0.6 | ) | ||||||||||
Total recommendation | $ | (13.6 | ) | $ | 1.8 | $ | (2.6 | ) | $ | 46.4 | $ | 1.4 | ||||||||
Adjustment to move rate case expenses to a separate docket | — | — | — | (4.3 | ) | (0.2 | ) | |||||||||||||
Recommendation, excluding rate case expenses | $ | (13.6 | ) | $ | 1.8 | $ | (2.6 | ) | $ | 42.1 | $ | 1.2 | ||||||||
(a) The ALJs’ recommendation reflects proposed adjustments to SPS’ rebuttal testimony which supports a $42.1 million rate increase.
SPS believes the ALJs’ recommended decision contains discrepancies and a revised calculation will result in a higher recommended rate increase. On Oct. 21, 2015, SPS filed a letter notifying the PUCT of its concerns regarding the calculation.
New rates will be made effective retroactive to June 11, 2015 as established by the PUCT. A PUCT decision is expected in December 2015.
Except for the historical statements contained in this 8-K, the matters discussed herein, including the expected impact of rate cases, are forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements are intended to be identified in this document by the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “objective,” “outlook,” “plan,” “project,” “possible,” “potential,” “should” and similar expressions. Actual results may vary materially. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update any forward-looking information. The following factors, in addition to those discussed in Xcel Energy’s and SPS’ Annual Report on Form 10-K for the year ended Dec. 31, 2014, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: general economic conditions, including inflation rates, monetary fluctuations and their impact on capital expenditures and the ability of Xcel Energy Inc. and its subsidiaries (collectively, Xcel Energy) to obtain financing on favorable terms; business conditions in the energy industry; including the risk of a slow down in the U.S. economy or delay in growth recovery; trade, fiscal, taxation and environmental policies in areas where Xcel Energy and SPS have a financial interest; customer business conditions; actions of credit rating agencies; competitive factors including the extent and timing of the entry of additional competition in the markets served by Xcel Energy and its subsidiaries; unusual weather; effects of geopolitical events, including war and acts of terrorism; cyber security threats and data security breaches; state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an impact on rates or have an impact on asset operation or ownership; or impose environmental compliance conditions; structures that affect the speed and degree to which competition enters the electric and natural gas markets; costs and other effects of legal and administrative proceedings, settlements, investigations and claims; financial or regulatory accounting policies imposed by regulatory bodies; outcomes of regulatory proceedings; availability of cost of capital; and employee work force factors.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Oct. 22, 2015 | Xcel Energy Inc. (a Minnesota corporation) |
Southwestern Public Service Company (a New Mexico corporation) | |
/s/ TERESA S. MADDEN | |
Teresa S. Madden | |
Executive Vice President, Chief Financial Officer | |