Xcel Energy 2015 Annual Report Download - page 39
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• RPS — The RPS rider recovers deferred costs associated with renewable energy programs in New Mexico.
• TCRF — The TCRF rider recovers certain transmission infrastructure improvement costs and changes in wholesale
transmission charges in Texas that are not included in base rates.
Fuel and purchased energy costs are recovered in Texas through a fixed fuel and purchased energy recovery factor, which is part of
SPS’ retail electric tariff. SO2 and NOx allowance revenues and costs are also recovered through the fixed fuel and purchased energy
recovery factor. The regulations allow retail fuel factors to change up to three times per year.
The fixed fuel and purchased energy recovery factor provides for the over- or under-recovery of fuel and purchased energy expenses.
Regulations also require refunding or surcharging over- or under- recovery amounts, including interest, when they exceed four percent
of the utility’s annual fuel and purchased energy costs on a rolling 12-month basis, if this condition is expected to continue.
PUCT regulations require periodic examination of SPS’ fuel and purchased energy costs, the efficient use of fuel and purchased
energy, fuel acquisition and management policies and purchased energy commitments. SPS is required to file an application for the
PUCT to retrospectively review fuel and purchased energy costs at least every three years. SPS will be required to file its next fuel
reconciliation application by December 2016.
Each New Mexico utility operating with a FPPCAC as part of its tariff must file an application for continued use at intervals of no
more than four years from the date the FPPCAC is approved or continued by the NMPRC. In October 2015, the NMPRC granted SPS
authority to continue using its FPPCAC to collect its fuel and purchase power costs. SPS will be required to file a request for
continuation of its FPPCAC by October 2019.
SPS recovers fuel and purchased energy costs from its wholesale customers through a monthly wholesale fuel and purchased
economic energy cost adjustment clause accepted for filing by the FERC.
Capacity and Demand
Uninterrupted system peak demand for SPS for each of the last three years and the forecast for 2016, assuming normal weather
conditions, is as follows:
System Peak Demand (in MW)
2013 2014 2015 2016 Forecast
SPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,056 4,871 4,678 4,886
The peak demand for the SPS system typically occurs in the summer. The 2015 system peak demand for SPS occurred on July 28,
2015. The 2015 peak demand was lower due to wetter and cooler summer weather and a reduction in a partial requirements wholesale
contractual agreement. The 2016 forecast assumes normal peak day weather.
Energy Sources and Related Transmission Initiatives
SPS expects to use existing electric generating stations, power purchases, DSM and new generation options to meet its system
capacity requirements.
Purchased Power — SPS has contracts to purchase power from other utilities and independent power producers. Long-term
purchased power contracts typically require a periodic payment to secure the capacity and a charge for the associated energy actually
purchased. SPS also makes short-term purchases to meet system load and energy requirements, to replace generation from company-
owned units under maintenance or during outages, to meet operating reserve obligations or to obtain energy at a lower cost.
Purchased Transmission Services — SPS has contractual arrangements with SPP and regional transmission service providers,
including PSCo, to deliver power and energy to its native load customers.
High Priority Incremental Load Study Report — In April 2014, the SPP Board of Directors approved the High Priority Incremental
Load Study Report, a reliability assessment that evaluated the anticipated transmission needs of certain parts of the SPP resulting from
expected load growth in the area. As a result of this study, SPS has received NTCs and conditional NTCs for 44 new transmission
projects to be placed into service by 2020, some of which are already in service. SPS is developing plans for the remaining projects
and submitting CCNs to the PUCT and the NMPRC. The estimated cost for these projects is $203 million. These projects are
intended to provide regional reliability benefits as well as the ability to serve the increase in load in southeastern New Mexico.