Xcel Energy 2014 Annual Report Download - page 145

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The Staff and OCC’s recommendations, PSCo’s rebuttal testimony and the terms of the settlement agreement are summarized as
follows:
2015 Rate Request (Millions of Dollars) Staff OCC PSCo Rebuttal Settlement
Agreement
PSCo’s filed rate request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 136.0 $ 136.0 $ 136.0 $ 136.0
Transfer from TCA rider to base rates . . . . . . . . . . . . . . . . . . . . . . . . . . 19.9 19.9 19.9 19.9
PSCo’s filed revenue requirement deficiency. . . . . . . . . . . . . . . . . . . 155.9 155.9 155.9 155.9
Lower ROE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (69.1)(66.5)(6.2) (27.9)
Capital structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20.9)(23.7) — —
Rate base adjustments (largely the removal of prepaid pension asset). . (20.8) 2.3 — —
Adjustment to an HTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (82.5)(82.5) — (23.9)
Adjustment to use 13-month average rate base. . . . . . . . . . . . . . . . . . . . (26.1)(22.0) — —
Rate base adjustments for known and measurable plant through
September 2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.9 — — —
O&M expense adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.2)(16.6) — —
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (3.8) — —
Property taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (12.1)(5.3) (5.3)
Remove CACJA from base rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (62.4) — (98.7) (98.7)
Updated sales forecast. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (15.2) (15.2)
Prepaid pension amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 9.5
Non-specified settlement adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . — — — (31.7)
Other, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1 0.1 (2.1) (2.1)
Total base rate (decrease) increase . . . . . . . . . . . . . . . . . . . . . . . . . . . (111.1)(68.9) 28.4 (39.4)
CACJA rider mechanism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.2 — 98.7 97.0
TCA rider mechanism — 2015 forecast test year. . . . . . . . . . . . . . . . . . — — — 15.6
Transfer from TCA rider to base rates . . . . . . . . . . . . . . . . . . . . . . . . . . (19.9)(19.9)(19.9) (19.9)
Total revenue impact. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (76.8) $ (88.8) $ 107.2 $ 53.3
In addition to the revenue reflected in the table above, PSCo estimates that it will defer approximately $3.1 million of additional
expenses in 2015 as a result of the settlement.
In its original rate case request, PSCo proposed to shorten the depreciable lives for certain assets, which would have resulted in a
material increase in depreciation expense. As a result of the settlement, PSCo will not implement the depreciation changes, but will
instead file a standalone case to address depreciation, amortization and decommissioning in early 2016. The results of the
depreciation case will become effective as part of the 2018 electric rate case.
Settlement rates became effective Feb. 13, 2015 on an interim basis, subject to refund, and the CPUC is expected to issue a final
decision regarding the settlement in the first quarter of 2015.
PSCo – Manufacturer’s Sales Tax Refund — PSCo has deferred 2012-2014 annual property taxes in excess of $76.7 million as part
of its multi-year rate plan with the CPUC. To the extent that PSCo was successful in the manufacturer’s sales tax refund lawsuit
against the Colorado Department of Revenue, PSCo was to credit such refunds first against certain legal fees, and then against the
unamortized deferred property tax balance at the end of 2014.
On June 30, 2014, the Colorado Supreme Court ruled against PSCo’s claim that it was due refunds for the payment of sales taxes on
purchases of certain equipment from December 1998 to December 2001. As a result of the adverse ruling, PSCo was required to
reduce its 2014 property tax deferral by $10 million, as this amount will not be recovered in electric rates.
PSCo – Annual Electric Earnings Test — As part of an annual earnings test, PSCo must share with customers a portion of any annual
earnings that exceed PSCo’s authorized ROE threshold of 10 percent for 2012-2014. In April 2014, PSCo filed its 2013 earnings test
with the CPUC proposing a refund obligation of $45.7 million to electric customers. This tariff was approved by the CPUC in July
2014. As of Dec. 31, 2014, PSCo has also recognized management’s best estimate of the expected customer refund obligation for the
2014 earnings test of $74.0 million. PSCo will file its 2014 earnings test with the CPUC in April 2015. The final sharing obligation
will be based on the CPUC-approved tariff and could vary from the current estimate.