Xcel Energy 2007 Annual Report Download - page 119

In November 2007, PSCo updated its estimate of costs to be recovered through the TCA commencing Jan. 1, 2008,
reducing its requested recovery during 2008 to $8.7 million.
In December 2007, the CPUC issued its initial decision approving PSCo’s application to implement the TCA. The
CPUC limited the scope of the costs that could be recovered through the rider during 2008 to only those costs
associated with transmission investment made after the new legislation authorizing the rider became effective on
March 26, 2007. The CPUC also will require PSCo to base its revenue requirement calculation on a thirteen month
average net transmission plant balance. As a result of the CPUC’s decision, PSCo will implement a rider on Jan. 1,
2008 to recover approximately $4.5 million in 2008. PSCo sought reconsideration of that aspect of the decision
requiring it to base the rider on a thirteen-month average net transmission plant balance. In February, the CPUC voted
to deny rehearing.
Enhanced DSM Program — In October 2007, PSCo filed an application with the CPUC for approval to implement
an expanded DSM program and to revise its DSM cost adjustment mechanism (DSMCA) to include current cost
recovery and incentives designed to reward PSCo for successfully implementing cost-effective DSM programs and
measures. Under the DSM program currently in place, PSCo is committed to using its best efforts to acquire, on
average, 40 MW of demand reduction and 100 GWh of energy savings per year from cost-effective DSM programs
over the period beginning Jan. 1, 2006 and ending Dec. 31, 2013, so that by Jan. 1, 2014 PSCo will have achieved a
cumulative level of 320 MW of total demand reduction and 800 GWh of annual energy savings. With this application,
PSCo proposes to expand and extend its commitment to acquire a cumulative level of 694 MW of peak demand
reduction and 2,351 GWh of energy savings, including achievements associated with its existing DSM programs over
the period Jan. 1, 2009 through Dec. 31 2009. Under the proposed revision to the DSMCA, PSCo would recover
100 percent of its forecasted expenses associated with the DSM program during the year in which the rider is in effect
as well as an incentive based upon the net economic benefits achieved during the prior year up to 20 percent of the net
present vales of the benefits achieved.
Interruptible Service Option Credit Program — In November 2007, PSCo requested to expand its interruptible service
option credit program (ISOC) to make it available to customers with interruptible demands of 300 KW and above.
PSCo also seeks to change the basis upon which it pays credits to customers who participate in the program and to
obtain approval for current recovery of those credits through the DSM Adjustment Clause. Lastly, PSCo seeks authority
to recover an incentive in addition to receiving reimbursement of the credits paid to customers to reward it for
successful implementation of a program that reduces overall costs to its retail customers. PSCo’s petition is pending
before the CPUC.
Pending and Recently Concluded Regulatory Proceedings — FERC
Pacific Northwest FERC Refund Proceeding — In July 2001, the FERC ordered a preliminary hearing to determine
whether there may have been unjust and unreasonable charges for spot market bilateral sales in the Pacific Northwest
for the period Dec. 25, 2000 through June 20, 2001. PSCo supplied energy to the Pacific Northwest markets during
this period and has been an active participant in the hearings. In September 2001, the presiding ALJ concluded that
prices in the Pacific Northwest during the referenced period were the result of a number of factors, including the
shortage of supply, excess demand, drought and increased natural gas prices. Under these circumstances, the ALJ
concluded that the prices in the Pacific Northwest markets were not unreasonable or unjust and no refunds should be
ordered. Subsequent to the ruling, the FERC has allowed the parties to request additional evidence regarding the use of
certain strategies and how they may have impacted the markets in the Pacific Northwest markets. For the referenced
period, parties have claimed that the total amount of transactions with PSCo subject to refund are $34 million. In June
2003, the FERC issued an order terminating the proceeding without ordering further proceedings. Certain purchasers
filed appeals of the FERC’s orders in this proceeding with the United States Court of Appeals for the Ninth Circuit.
In an order issued on Aug. 24, 2007, the Ninth Circuit issued an order remanding the proceeding back to the FERC.
The court of appeals preliminarily determined that it had jurisdiction to review the FERC’s decision not to order
refunds and remanded the case back to the FERC, directing that the FERC consider evidence that had been presented
regarding intentional market manipulation in the California markets and its potential ties to transactions in the Pacific
Northwest. The court of appeals also indicated that the FERC should consider other rulings addressing overcharges in
the California organized markets.
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