MINNEAPOLIS - Citing changed circumstances since its November 2012 application, Xcel Energy proposed a reduction to the electricity rate increase request currently under review before the Minnesota Public Utilities Commission. The company provided the revised request in testimony filed today.
"This case is needed to support investments that will serve our customers well over the long term," said Judy Poferl, president and CEO of Northern States Power Co.-Minnesota, an Xcel Energy company. "Our revised request allows us to facilitate these investments while reducing the size of our requested increase for customers."
The proposals reduce Xcel Energy's requested rate increase to approximately $220 million, down from $285 million. The modified request represents an overall rate increase of approximately 8.2 percent, down from 10.7 percent originally.
"Our proposal takes a balanced approach, mitigating customer impacts now while also meeting the company's need to recover investments already made," Poferl said. "We offer these proposals in an effort to reach a constructive outcome in this case."
Key reductions proposed by the company include:
$35 million for Sherburne County (Sherco) Generating Station Unit 3 by lowering and deferring some 2012 and 2013 costs for later recovery, to better match the cost of the unit with its return to service later this year. The unit is currently unavailable as it undergoes extensive repairs since a catastrophic event in late 2011.
About $8 million for Monticello Nuclear Generating Plant by deferring some 2013 costs for later recovery, subject to a review by the commission.
Approximately $9 million by smoothing the impacts of the 2008 recession on pension expenses.
"We hope to work with the participants to further narrow the issues in this case," Poferl said. "Rate requests are subject to extensive review prior to approval, and customers can have confidence that the rate increases granted are necessary for providing high-quality energy service."
"While our prices are below the national average, we understand that any rate increase has an impact on our customers," Poferl continued. "We urge our customers to take advantage of our extensive suite of energy efficiency programs to help manage and reduce their energy bills."
More information can be found at www.xcelenergy.com. Copies of the rate case filing and all other documents filed in the case are available on the commission's website at www.puc.state.mn.us.
Xcel Energy (NYSE: XEL) is a major U.S. electricity and natural gas company with regulated operations in eight Western and Midwestern states. Xcel Energy provides a comprehensive portfolio of energy-related products and services to 3.4 million electricity customers and 1.9 million natural gas customers through its regulated operating companies. Company headquarters are located in Minneapolis.
Xcel Energy Electricity Rate Case Fact Sheet
• $220 million, an 8.2 percent increase in overall rates. If final rates are higher than interim rates, customers will receive refunds with interest.
• A typical residential customer's monthly bill would increase by approximately 10 percent ($8).
• 10.6 percent rate of return on equity (same as original)
• Nov. 2, 2012: Original filing
• Jan. 1, 2013: Interim rates take effect
• March 4-22, 2013: Seven public hearings
• April 18, 2013: Evidentiary hearings convene
• September 2013: Minnesota Public Utilities Commission consideration and final action expected
• First Quarter 2014: New rates take effect
• Extending the lives of the Prairie Island and Monticello nuclear plants and expanding output at Monticello were previously approved by the Minnesota commission and provide a low-cost, carbon-free resource for the future. Investments are required now in order to extend the lives of these plants for another 20 years.
• Costs of the Monticello projects are similar to the experience of other nuclear plant owners. The nuclear industry has changed tremendously over the last few years. Even before the 2011 accident at Fukushima Daiichi in Japan, the Nuclear Regulatory
Commission was increasing requirements for both life extension and capacity expansion projects.
• Restoration of Sherco 3 is the largest such project Xcel Energy has ever performed, and there are no equivalent restoration projects industry-wide. During the repair process, damage that was not evident until repairs were under way was discovered, which has delayed start-up from the first quarter of 2013 to September 2013.