Xcel Energy 2008 Annual Report Download - page 130

approved the rider request but required that the issue of whether these costs should be moved to base rates in the
currently pending electric rate case or left in the rider, as NSP-Minnesota has proposed, to be addressed through
supplemental testimony in the rate case.
MERP Rider — On Oct. 1, 2008, NSP-Minnesota filed a proposed MERP rider for 2009 designed to recover costs
related to MERP environmental improvement projects. Under this rider, NSP-Minnesota proposes to recover
$114 million in 2009, an increase of approximately $23 million over 2008. New rates went into effect automatically on
Jan. 1, 2009 as stipulated. MPUC approval is still pending.
Annual Automatic Adjustment Report for 2007 — In September 2007, NSP-Minnesota filed its annual automatic
adjustment reports for July 1, 2006 through June 30, 2007, which is the basis for the MPUC review of charges that
flow through the FCA and PGA mechanisms. During that time period, $1.2 billion in fuel and purchased energy costs,
including $384 million of MISO charges were recovered from electric customers through the FCA. In addition,
approximately $590 million of purchased natural gas and transportation costs were recovered through the PGA. In
October 2008, the MPUC voted to accept the 2007 gas annual automatic adjustment report. The 2007 annual electric
automatic adjustment report is pending further MPUC action.
Annual Automatic Adjustment Report for 2008 — In September 2008, NSP-Minnesota filed its annual automatic
adjustment reports for July 1, 2007 through June 30, 2008. During that time period, $848.5 million in fuel and
purchased energy costs, including $258.8 million of MISO charges, were recovered from Minnesota electric customers
through the FCA. In addition, approximately $680 million of purchased natural gas and transportation costs were
recovered through the PGA. The 2008 annual automatic adjustment reports are pending initial comments and MPUC
action.
MISO ASM Cost Recovery — On May 9, 2008, NSP-Minnesota and several other Minnesota electric utilities filed
jointly for MPUC regulatory approval to recover ASM costs through the Minnesota FCA cost recovery mechanism. The
filing is pending MPUC action after an initial hearing on Dec. 18, 2008. The MPUC voted to approve FCA recovery
of these charges, subject to refund, and required NSP-Minnesota to make a filing that demonstrates that there were
benefits of the ASM market after one year of operation.
Gas Meter Module Failures — Approximately 8,700 customers in the St. Cloud and East Grand Forks areas of
Minnesota and about 4,000 customers in the Fargo, N.D. area were under billed for a period of time during the
2007-2008 heating season due to the failure of the automated meter reading (AMR) module installed on their natural
gas meters. While the modules failed to register usage, the meters continued to function. In the May to July 2008
timeframe, NSP-Minnesota rebilled approximately 5,000 of these customers for their estimated consumption during the
period the modules registered no consumption and then ceased rebilling as both the MPUC and NDPSC opened
investigations into this matter.
On July 2, 2008, NSP-Minnesota received a letter from the NDPSC requesting further information on the module
failure. Subsequent meetings between NSP-Minnesota and NDPSC staff were held in September and October 2008 to
discuss NSP-Minnesota’s progress in addressing various NDPSC concerns about NSP-Minnesota’s response.
On Aug. 1, 2008, the MPUC opened a docket and issued a notice directing NSP-Minnesota to file information about
the AMR module failure. NSP-Minnesota responded to the MPUC on Aug. 21, 2008, proposing to rebill affected
customers for the unrecorded natural gas usage during the months that no consumption or intermittent usage was
recorded. NSP-Minnesota proposed to employ the process provided by NSP-Minnesota’s natural gas tariff and the
MPUC’s rules to estimate usage, which would be consistent with the process used whenever any other type of meter or
module failure affecting the measurement of customer consumption occurs. The MOAG and the OES subsequently
submitted comments on NSP-Minnesota’s filing. The OES comments indicated support for the rebilling plan with
certain conditions. The MOAG raised concerns about the timing of the remediation efforts, and questions whether
customers should be responsible for the entire cost of the unbilled natural gas.
On Nov. 6, 2008, the MPUC reviewed the matter and directed NSP-Minnesota to provide additional information prior
to making a final decision on the rebilling plan.
On Dec. 3, 2008, NSP-Minnesota made a filing with the NDPSC regarding its commitments and proposed remedies
for rebilling affected customers. The filing outlined the proposed rebilling plan in detail, which committed to a 10-day,
go-forward field response to customer inquiries regarding meter accuracy, offered an adjustment to the natural gas
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