Xcel Energy 2014 Annual Report Download - page 142

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On Feb. 12, 2015, NSP-Minnesota, Xcel Large Industrials and the OAG filed exceptions to the ALJ’s Report, advocating their initial
positions. On Feb. 17, 2015, reply comments were filed by various parties, including NSP-Minnesota. Oral arguments are scheduled
to be held on March 3, 2015.
NSP-Minnesota does not expect a delay to the scheduled proceedings and a final MPUC order is anticipated in the second quarter of
2015. The MPUC decision for the Monticello prudence review is expected to be reflected in the final results of NSP-Minnesota’s
pending Minnesota 2014 Multi-Year electric rate case.
NSP-Minnesota – 2015 Transmission Cost Recovery Rate Filing — In October 2014, the 2015 NSP-Minnesota TCR filing was filed
with the MPUC, requesting recovery of $65.8 million of 2015 transmission investment costs not previously included in electric base
rates. An MPUC decision is anticipated in the second quarter of 2015, with implementation of new rates soon after approval.
PI Nuclear Plant EPU — In 2009, the MPUC granted NSP-Minnesota a CON for an EPU project at the PI nuclear generating plant.
The total estimated cost of the EPU was $294 million, of which approximately $78.9 million had been incurred through 2012,
including AFUDC of approximately $12.8 million. Subsequently, NSP-Minnesota made a change of circumstances filing notifying
the MPUC that there were changes in the size, timing and cost estimates for this project, revisions to economic and project design
analysis and changes due to the estimated impact of revised scheduled outages. The information indicated reductions to the estimated
benefit of the uprate project. As a result, NSP-Minnesota concluded that further investment in this project would not benefit
customers. In February 2013, the MPUC issued an order terminating the CON for the PI EPU project.
NSP-Minnesota plans to address recovery of incurred costs in rate cases for each of the NSP-Minnesota jurisdictions. As noted, NSP-
Minnesota is seeking recovery in Minnesota in its pending Minnesota 2014 Multi-Year electric rate case. In December 2014, NSP-
Minnesota filed a request with the FERC for approval to recover a portion of the costs from NSP-Wisconsin through the Interchange
Agreement commencing Jan. 1, 2016. The request is pending FERC action. NSP-Wisconsin plans to seek cost recovery in future rate
cases. Based on the outcome of the December 2012 MPUC decision, EPU costs incurred to date were compared to the discounted
value of the estimated future rate recovery based on past jurisdictional precedent, resulting in a $10.1 million pretax charge in
December 2012 which is included in O&M expense for that year. The remaining PI EPU costs were deferred for future amortization
corresponding with rate recovery in various NSP jurisdictions.
Pending Regulatory Proceedings — SDPUC
NSP-Minnesota – South Dakota 2015 Electric Rate Case — In June 2014, NSP-Minnesota filed a request with the SDPUC to
increase South Dakota electric rates by $15.6 million annually, or 8.0 percent, effective Jan. 1, 2015. The request is based on a 2013
HTY adjusted for certain known and measurable changes for 2014 and 2015, a requested ROE of 10.25 percent, an average rate base
of $433.2 million and an equity ratio of 53.86 percent. This request reflects NSP-Minnesota’s proposal to move recovery of
approximately $9.0 million for certain TCR rider and Infrastructure rider projects to base rates.
Interim rates of $15.6 million, subject to refund, went into effect in January 2015. At this time, the case is in the discovery phase and
further procedure scheduling may be established, as necessary during the first quarter of 2015. Final rates are anticipated to be
effective mid-2015.
Electric, Purchased Gas and Resource Adjustment Clauses
CIP and CIP Rider — In December 2012, the MPUC approved reductions to the CIP financial incentive mechanisms effective for the
2013 through 2015 program years. Based on the approved savings goals, the estimated average annual electric and natural gas
incentives are $30.6 million and $3.6 million, respectively.
CIP expenses are recovered through base rates and a rider that is adjusted annually.
• In December 2014, the MPUC approved NSP-Minnesota’s 2013 CIP electric and natural gas financial incentives totaling
$42.7 million and $5.4 million, respectively.
• In addition, the MPUC approved NSP-Minnesota’s proposed 2014 to 2015 electric and natural gas CIP riders. NSP-
Minnesota estimates 2015 recovery of $15.5 million of electric CIP expenses and $6.0 million of natural gas CIP expenses.
• This proposed recovery through the riders is in addition to an estimated $86.9 million and $3.7 million through electric and
gas base rates, respectively.