Xcel Energy 2009 Annual Report Download - page 136

the commencement of the MISO’s ASMs in January 2009. In February 2009, MISO submitted a filing to implement
the new RSG rate design; however, the FERC has not yet rendered a final decision to implement the new rate design.
In August 2009, the FERC issued an order in which it invalidated numerous exemptions to the RSG that had
previously been utilized by MISO through its business practice manuals. Several parties have sought rehearing of the
order and a final FERC decision is still pending.
Xcel Energy is a party to each of the relevant RSG-related proceedings. Each of the relevant RSG-related orders has
been the subject of requests for rehearing at the FERC and petitions for review filed at the United States Court of
Appeals for the District of Columbia Circuit (D.C. Circuit). The separate RSG proceedings have proceeded in parallel
at the FERC, and the most recent orders are subject to pending requests for rehearing. The D.C. Circuit proceedings
are being held in abeyance pending final action in the FERC proceedings.
FERC Section 5 Rate Cases for Interstate Gas Pipelines — In November 2009, the FERC approved orders initiating
rate investigations under Section 5 of the Natural Gas Act (NGA) against Northern Natural Gas Company (NNG) and
Great Lakes Gas Transmission Company (GLGT). NSP-Minnesota and NSP-Wisconsin are together the largest
customer on NNG, holding $41 million per year of maximum rate storage and transportation contracts.
According to the FERC orders, FERC staff concluded, based on a review of the financial information filed with the
FERC by the pipelines, that each of the pipelines are substantially over-recovering their cost of service and earning
excessive ROEs. The orders require the pipelines to file full cost and revenue studies, and the matters were set for
hearing before an ALJ on an expedited basis. If the FERC orders the pipelines to reduce their transportation and
storage rates, the rate reductions and any associated refunds would be reflected in the purchased gas and electric fuel
cost adjustment mechanisms of the Xcel Energy utility subsidiaries.
Xcel Energy has filed an intervention as part of a group of similarly-situated GLGT shippers in the GLGT Section 5
case, and filed to intervene individually in the NNG Section 5 rate case. The FERC ALJ conducted a pre-hearing
conference on Jan. 12, 2010 and established the procedural schedule for the proceedings. If fully litigated, the Section 5
rate cases can be expected to go to hearings before the ALJ beginning Aug. 2, 2010. An initial decision must be issued
by Nov. 11, 2010.
NSP-Wisconsin
Pending and Recently Concluded Regulatory Proceedings — PSCW
Base Rate
2008 Electric Rate Case — Nuclear Decommissioning Expenses — In January 2008, the PSCW issued the final order in
NSP-Wisconsin’s 2008 test year rate case. The PSCW’s final order included recovery of $8.7 million of annual nuclear
decommissioning expenses, subject to refund, in anticipation of potential decreases in NSP-Minnesota’s
decommissioning expenses.
In June 2009, the MPUC issued the final order in its review of NSP-Minnesota’s 2009 nuclear plant decommissioning
accrual, and as a result of that order, the Wisconsin retail jurisdiction’s share of annual nuclear decommissioning
expenses decreased to approximately $1.4 million, effective January 2009. The PSCW reviewed NSP-Wisconsin’s nuclear
decommissioning expenses in the context of the company’s 2010 electric rate case, and reduced the NSP-Wisconsin’s
2010 revenue requirements pursuant to the refund provision in the 2008 rate case order.
The June 2009 MPUC order also directed NSP-Minnesota to return to customers their contributions made to the
external escrow decommissioning fund for the Monticello nuclear plant. In NSP-Wisconsin’s 2010 electric rate case the
PSCW decided that NSP-Wisconsin should return the Wisconsin retail jurisdiction’s share of these funds, with interest
to customers in the next rate case. NSP-Wisconsin’s share of these funds is approximately $5.9 million as of Dec. 31,
2009.
2010 Electric and Natural Gas Rate Case — In June 2009, NSP-Wisconsin filed an electric and gas rate case in
Wisconsin seeking an increase in retail electric rates of $30.4 million, or 5.7 percent, and proposed no change in
natural gas rates. The request was based on an ROE of 10.75 percent, an equity ratio of 53.12 percent, an electric rate
base of $644 million, a gas rate base of $81 million and a 2010 forecasted test year. The request was comprised of a
base rate increase of $45.1 million offset by projected fuel decreases of $14.7 million.
In December 2009, the PSCW approved an electric rate increase of approximately $6.4 million or 1.2 percent and no
change in gas rates, based on a 10.4 percent ROE and a 52.30 percent equity ratio. The PSCW ordered
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