Xcel Energy 2007 Annual Report Download - page 117

effective Feb. 1, 2008. Other entities sought to regionalize some of these costs. The impact of the regionalization of
future facilities would depend on the specific facilities placed in service. In January 2008, the FERC issued an order
accepting the MISO filing to continue use of license plate rates for existing facilities and RECB (limited regionalization)
pricing for certain new facilities. The FERC rejected proposals to regionalize a larger share of the cost of existing or
new transmission facilities.
Revenue Sufficiency Guarantee Charges — In April 2006, the FERC issued an order determining that MISO had
incorrectly applied its TEMT regarding the application of the revenue sufficiency guarantee (RSG) charge to certain
transactions. The FERC ordered MISO to resettle all affected transactions retroactive to April 2005. The RSG charges
are collected from MISO customers and paid to generators. In October 2006, the FERC issued an order granting
rehearing in part and reversed the prior ruling requiring MISO to issue retroactive refunds and ordered MISO to
submit a compliance filing to implement prospective changes.
In March 2007, the FERC issued orders separately denying rehearing of the FERC order. Several parties have filed
separate appeals to the D.C. Circuit Court seeking judicial review of the FERC’s determinations of the allocation of
RSG costs among MISO market participants. Xcel Energy has intervened in each of these proceedings. In August 2007,
Ameren Services Company (Ameren) and the Northern Indiana Public Service Company (NIPSCO) filed a joint
complaint against MISO at the FERC, challenging the MISO’s current FERC-approved methodology for the recovery
of RSG costs. Subsequently, eight other entities filed complaints at the FERC effectively adopting the substantive
arguments raised by Ameren and NIPSCO. In November 2007, the FERC issued an order that instituted a proceeding
in these dockets to review evidence and to establish a RSG cost allocation methodology for market participants under
the Midwest ISO Tariff. The refund-effective date established is Aug. 10, 2007. FERC action is pending.
NSP-Wisconsin
Pending and Recently Concluded Regulatory Proceedings — PSCW
Base Rate
Electric and Gas Rate Case — In June 2007, NSP-Wisconsin filed with the PSCW a request to increase retail electric
rates by $67.4 million and retail natural gas rates by $5.3 million, representing overall increases of 14.3 percent and
3.3 percent, respectively. The request assumes a common equity ratio of 53.86 percent, a return on equity of
11.00 percent and a combined electric and natural gas rate base of approximately $640 million.
In January 2008, the PSCW issued the final written order, approving an electric rate increase of approximately
$39.4 million, or 8.1 percent, and a natural gas rate increase of $5.3 million, or 3.3 percent. New rates went into effect
Jan. 9, 2008. The PSCW approved or allowed for:
• A 10.75 percent return on equity.
• Reducing the PSCW staff’s recommended common equity ratio from 53.58 percent to 52.5 percent.
• Recovery of NSP-Wisconsin’s deferred nuclear decommissioning costs and the remaining deferred MISO Day 2
costs.
• A limited reopener for NSP-Wisconsin to propose recovery of production and transmission plant investment and
associated operations and maintenance expenses as well as fuel costs for the year 2009.
A significant portion of PSCW staff adjustments were based on new or revised data since the filing was made, and will
not have an earnings impact on NSP-Wisconsin. These adjustments, which total approximately $15 million, include:
• Increased revenues due to a higher than projected sales forecast ($6 million);
• Higher revenues associated with the interim fuel surcharge approved in October 2007 ($6 million);
• A lower forecast of fuel and purchased power costs than included in the original filing ($2 million); and
• A shift of DSM recovery from electric to gas operations ($1 million).
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