Xcel Energy 2007 Annual Report Download - page 115

11.0 percent ROE, a projected equity ratio of 51.98 percent and a natural gas rate base of $439 million. Interim rates,
subject to refund, were set at a $15.9 million increase and went into effect on Jan. 8, 2007.
In September 2007, the MPUC issued an order approving a rate increase of approximately $11.9 million, based on an
authorized ROE of 9.71 percent and an equity ratio of 51.98 percent. The MPUC subsequently denied
NSP-Minnesota’s request for rehearing on the ROE. NSP-Minnesota has filed a compliance filing and refund plan,
proposing to implement final rates on Feb. 1, 2008. In January 2008, the MPUC approved the compliance filing.
NSP-Minnesota Electric Rate Case — In November 2005, NSP-Minnesota requested an electric rate increase of
$168 million or 8.05 percent. This increase was based on a requested 11 percent ROE, a projected common equity to
total capitalization ratio of 51.7 percent and a projected electric rate base of $3.2 billion.
In September 2006, the MPUC issued an order approving a rate increase of approximately $131 million for 2006 based
on an authorized ROE of 10.54 percent. This amount was reduced in 2007 to $115 million to reflect the return of
Flint Hills Resources, a large industrial customer, to the NSP-Minnesota system. The MPUC order became effective in
November 2006, and final rates were implemented on Feb. 1, 2007.
In March 2007, a citizen intervenor submitted a brief asking that the Minnesota Court of Appeals remand to the
MPUC on various issues decided by the MPUC. The Court of Appeals issued an Order upholding the MPUC’s
decision.
Electric, Purchased Gas and Resource Adjustment Clauses
TCR — In November 2006, the MPUC approved a TCR rider pursuant to 2005 legislation. The TCR mechanism
allows the recovery of incremental transmission investments between rate cases.
• NSP-Minnesota filed for approval of recovery of $14.7 million in 2007 under the TCR tariff.
• In March 2007, the MPUC approved recovery of $11.5 million in 2007.
• In August 2007, NSP-Minnesota filed for approval of recovery of $19.7 million in Minnesota retail electric rates
in 2008 under the TCR tariff.
• In December 2007, NSP-Minnesota filed tariff sheets proposing to implement TCR rate factors that would
recover only the non-disputed costs effective Jan. 1, 2008, subject to true up. In December 2007, the MDOC
recommended 2008 recovery of approximately $18.5 million, asserting that certain costs did not meet statutory
criteria. After further comment and reply, the parties resolved all disputed issues.
• The filing, as amended, is pending MPUC action.
RES Rider — In June 2007, NSP-Minnesota filed an application for a new rate rider to recover the costs associated
with utility-owned projects implemented in compliance with the RES adopted by the 2007 Minnesota legislature. The
proposed rate adjustment would recover the costs associated with the Grand Meadow wind farm, a 100-MW wind
project proposed by NSP-Minnesota. The rate rider would recover the 2008 revenue requirements associated with the
project of approximately $14.6 million. MPUC action on this request is pending.
Mercury Cost Recovery — In December 2006, NSP-Minnesota requested approval of a Mercury Emissions Reduction
Rider to recover approximately $5.4 million during 2007 from Minnesota electric retail customers for costs associated
with implementing both the mercury and other environmental improvement portions of the Mercury Emissions
Reduction Act. NSP-Minnesota subsequently withdrew the filing and obtained approval to defer costs associated as a
regulatory asset for potential future recovery. NSP-Minnesota has since filed a mercury reduction plan with the MPCA
and MPUC and expects to file for rate rider recovery in the first half of 2008.
Annual Automatic Adjustment Report for 2007 — In September 2007, NSP-Minnesota filed its annual automatic
adjustment report for July 1, 2006 through June 30, 2007, which is the basis for the MPUC review of charges that
flow through the FCA and PGA mechanisms. During that time period, $1.16 billion in fuel and purchased energy
costs, including $384 million of MISO Day 2 energy market charges were recovered from electric customers through
the FCA. In addition, approximately $590 million of purchased natural gas and transportation costs were recovered
through the PGA. The 2007 annual automatic adjustment report is pending comments and MPUC action.
Other
MISO Day 2 Market Cost Recovery — In December 2006, the MPUC issued an order ruling that NSP-Minnesota
may recover all MISO Day 2 costs, except Schedules 16 and 17 administrative charges, through its fuel clause
adjustment (FCA) effective April 1, 2005.
In April 2007, the MOAG filed an appeal of the MPUC order to the Minnesota Court of Appeals challenged the
MPUC’s decision to allow FCA recovery of these MISO charges. NSP-Minnesota and the other affected utilities
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