Xcel Energy 2008 Annual Report Download - page 136

In an order issued in August 2007, the Court of Appeals remanded the proceeding back to the FERC. The Court of
Appeals also indicated that the FERC should consider other rulings addressing overcharges in the California organized
markets. The FERC has yet to act on this order on remand.
PSCo Wholesale Rate Case — In February 2008, PSCo requested a $12.5 million, or 5.88 percent, increase in
wholesale rates, based on an 11.5 percent requested ROE. The $12.5 million total increase was composed of
$8.8 million of traditional base rate recovery and $3.7 million of construction work in progress recovery for the
Comanche 3 and Fort St. Vrain projects. The increase would be applicable to all wholesale firm service customers with
the exception of Intermountain Rural Electric Cooperative, which would be under a rate moratorium until January
2009.
In March 2008, PSCo reached an agreement with Rural Electric Association (REA) customers Holy Cross, Yampa
Valley and Grand Valley, which resolved all issues based on a ‘‘black box’’ settlement with an implied ROE of
10.4 percent. Parties filed the settlement with the FERC on April 17, 2008, with rates effective May 1, 2008. PSCo
has reached an agreement with the cities of Burlington and Center, as well as Aquila under the same substantive terms
and conditions as the REA settlement. This settlement was filed with the FERC on April 25, 2008. The settlements
provide for:
• A traditional annual rate base rate increase of $6.6 million with AFDC continuing for Comanche Station and
Fort St. Vrain.
• Implementation of new rates several months earlier than is typical in a disputed filing.
• The ability to implement rates in PSCo’s next general rate case that will involve Comanche 3 costs upon a
nominal suspension.
The FERC approved the settlement agreements on June 19, 2008.
Additionally, PSCo reached a settlement with Intermountain Rural Electric Association on similar terms. The FERC
approved the settlement on Dec. 29, 2008. Rates took effect on Jan. 1, 2009. This agreement will increase base rates
for Intermountain by $1.7 million in 2009.
SPS
Pending and Recently Concluded Regulatory Proceedings — PUCT
Base Rate
Texas Retail Base Rate Case — On June 12, 2008, SPS filed a rate case with the PUCT seeking an annual rate increase
of approximately $61.3 million, or approximately 5.9 percent. Base revenues are proposed to increase by $94.4 million,
while fuel and purchased power revenue would decline by $33.1 million, primarily due to fuel savings from the LPP
purchase power agreement.
The rate filing is based on a 2007 test-year adjusted for known and measurable changes, a requested ROE of
11.25 percent, an electric rate base of $989.4 million and an equity ratio of 51.0 percent. Interim rates of $18 million
for costs associated with the LPP power purchase agreement went into effect in September 2008.
On Jan. 30, 2009, SPS filed an agreed upon motion to begin collecting interim rates of $57.4 million effective Feb. 1,
2009 for consumption occurring on or after that date. The ALJs issued an order authorizing this interim rate increase,
which supersedes the $18 million interim rate increase that became effective in September 2008. On Feb. 20, 2009, the
parties filed a unanimous settlement with the ALJs. The settlement:
• Provides for a base rate increase of $57.4 million;
• Approves depreciation rates that reduced depreciation expense by $5.6 million from currently authorized rates;
• Includes a mechanism for tracking and deferral of $2.6 million in renewable energy credit expenses until its next
rate case;
• Provides that $3.2 million of annual energy efficiency expenses that SPS had requested through a rider be
recovered through base rates (the parties agreed to litigate whether there should be a mechanism to address
recovery of actual energy efficiency expenses to the extent that they are different than the amount included in
the settlement rates);
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