Xcel Energy 2009 Annual Report Download - page 137

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NSP-Wisconsin to apply $6.4 million of the estimated 2009 fuel refund obligation to offset the rate increase. Lastly, the
PSCW approved NSP-Wisconsin’s request for a limited rate case reopener in 2011 to update certain costs that are billed
to NSP-Wisconsin through the interchange agreement with NSP-Minnesota.
The base non-fuel adjustments made by the PSCW include: (1) adjustments to the ROE and equity ratio as discussed
above; (2) reduced interchange agreement fixed charge billings; and (3) a disallowance of certain employee
compensation expenses. In addition, the PSCW adjustments include a $9.1 million reduction for Prairie Island nuclear
plant decommissioning and depreciation expense as a result of the 10-year life extension approved by the MPUC earlier
this year. The PSCW approved NSP-Wisconsin’s request to discontinue the practice of reducing rate base and common
equity to account for appropriated retained earnings associated with certain hydro licenses.
A summary of the PSCW’s adjustments is listed below:
PSCW
Request Approved
Millions of Dollars
Base non-fuel .......................................................... $45.1 $ 35.8
Fuel................................................................ (14.7) (20.3)
Prairie Island decommissioning ............................................... — (9.1)
Rate increase ......................................................... $30.4 $ 6.4
Other
2009 Electric Fuel Cost Recovery — NSP-Wisconsin’s actual fuel and purchased power costs for 2009 were less than the
amount authorized in rates, primarily due to lower load and lower market prices for fuel and purchased power. In April
2009, the PSCW determined fuel costs were outside the established variance ranges and set NSP-Wisconsin’s electric
rates subject to refund with interest, pending a full review of 2009 fuel costs.
The PSCW has not yet completed its review of NSP-Wisconsin’s 2009 fuel costs. However, based on actual 2009 fuel
costs, NSP-Wisconsin has established a liability of $18.5 million to reflect its expected 2009 fuel refund obligation. As
noted above, the PSCW ordered NSP-Wisconsin to apply $6.4 million of the 2009 fuel refund obligation to offset the
2010 electric rate increase. NSP-Wisconsin filed an application with the PSCW in February 2010, requesting
authorization to immediately refund the remainder of its 2009 fuel refund obligation to customers before the PSCW
completes its review of actual 2009 fuel costs. If the PSCW review determines an additional refund is owed, the
balance would be deferred and returned to customers in NSP-Wisconsin’s next rate filing.
PSCo
Pending and Recently Concluded Regulatory Proceedings — CPUC
Base Rate
PSCo 2009 Electric Rate Case — In November 2008, PSCo filed a request with the CPUC to increase Colorado
electric rates by $174.7 million annually, or approximately 7.4 percent. The rate filing was based on a 2009 forecast test
year, an electric rate base of $4.2 billion, a requested ROE of 11.0 percent and an equity ratio of 58.08 percent. PSCo’s
request included a return of approximately $40 million for CWIP associated with incremental expenditures on the
Comanche Unit 3 since Jan. 1, 2007. PSCo does not record AFUDC income for the months this return is actually
received from customers.
In March 2009, PSCo filed rebuttal testimony and revised its rate increase request to $159.3 million to reflect updated
data.
In May 2009, the CPUC approved a blackbox settlement agreement which provided for an overall $112.2 million
increase in base rates. The settlement provides that incremental CWIP not included in existing rates for the Comanche
Unit 3 be removed from rate base and that PSCo would be allowed to continue to record AFUDC income on this
balance until the Comanche Unit 3 is placed into service. New rates went into effect on July 1, 2009.
PSCo 2010 Electric Rate Case — In May 2009, PSCo filed with the CPUC a request to increase Colorado electric
rates by $180.2 million, or 6.8 percent, effective in 2010. The request was based on a 2010 forecast test year, an
11.25 percent ROE, a rate base of $4.4 billion and an equity ratio of 58.05 percent, In October 2009, PSCo filed
rebuttal testimony and revised the requested rate increase to $177.4 million.
127