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127
In June 2012, several wholesale customers filed a complaint with the FERC seeking to have the transmission formula rate ROE
reduced from 10.25 to 9.15 percent effective July 1, 2012. If implemented, the ROE reduction would reduce PSCo transmission and
ancillary rate revenues by approximately $1.8 million annually. In October 2012, the FERC issued an order accepting the complaint,
consolidating the complaint with the April 2012 formula rate change filing, establishing a refund effective date of July 1, 2012, and
setting the complaint for settlement judge and hearing procedures.
In October 2013, PSCo and the wholesale customers filed a partial settlement that would resolve all issues related to the April 2012
transmission rate filing and June 2012 complaint other than ROE. The settlement is not expected to materially increase 2013
transmission revenues. In December 2013, the FERC approved the partial settlement. The ROE issue is now in an evidentiary
hearing process. Initial testimony was filed in December 2013. PSCo filed testimony supporting the current ROE of 10.25 percent,
while customers filed testimony recommending an ROE of 9.07 percent for the period July 2012 to November 2012, and an ROE of
8.92 percent thereafter. The case is scheduled for a hearing before an ALJ in May 2014, with the ALJ recommended decision by
September 2014.
SPS
Pending and Recently Concluded Regulatory Proceedings — PUCT
SPS – Texas 2014 Electric Rate Case — On Jan. 7, 2014, SPS filed a retail electric rate case in Texas with each of its Texas
municipalities and the PUCT for a net increase in annual revenue of approximately $52.7 million, or 5.8 percent. The net increase
reflects a base rate increase, revenue credits transferred from base rates to rate riders or the fuel clause, and resetting the TCRF to zero
when the final base rates become effective, as shown in the following table:
(Millions of Dollars) SPS Request
Base rate increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 81.5
Resetting TCRF. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12.9)
Credit to customers for gain on sale to Lubbock moved to a rider . . . . . . . (4.9)
Net increase in base revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63.7
Fuel clause offsets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11.0)
Retail customer net bill impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 52.7
The rate filing is based on a HTY ending June 2013, a requested ROE of 10.40 percent, an electric rate base of approximately $1.27
billion and an equity ratio of 53.89 percent. The requested rate increase reflects an increase in depreciation expense of approximately
$16 million.
The PUCT has suspended SPS' proposed rates through Oct. 31, 2014. If the PUCT has not issued a final order by July 11, 2014, then
SPS' current rates will not change, but the final rates will be made effective retroactive to July 12, 2014.
Next steps in the procedural schedule are as follows:
• Intervenor testimony — May 22, 2014;
• PUCT Staff testimony — May 29, 2014;
• Cross-rebuttal testimony — June 12, 2014;
• Rebuttal testimony — June 16, 2014;
• Evidentiary hearing — June 25, 2014; and
• A PUCT decision and implementation of final rates are anticipated in the third quarter of 2014.
SPS – Texas 2012 Electric Rate Case — In November 2012, SPS filed an electric rate case in Texas with the PUCT for an increase in
annual revenue of approximately $90.2 million. The rate filing is based on a historic 12 month test year ended June 30, 2012 (adjusted
for known and measurable changes), a requested ROE of 10.65 percent, an electric rate base of $1.15 billion and an equity ratio of 52
percent. In June 2013, the PUCT approved a settlement agreement in which SPS’ base rate increased by $37 million, effective May 1,
2013 and by an additional $13.8 million on Sept. 1, 2013.
Electric, Purchased Gas and Resource Adjustment Clauses
TCRF Rider — In November 2013, SPS filed with the PUCT to implement the TCRF for Texas retail customers. The requested
increase in revenues is $13 million. The PUCT issued an order allowing the TCRF to go into effect on an interim basis effective Jan.
1, 2014.