Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
£ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
£ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
£ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
£
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, $2.50 par value
per share
XEL
Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company £
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. £
Item 8.01. Other Events
On July 1, 2019, Southwestern Public Service Company (SPS), a New Mexico corporation, and a wholly owned subsidiary of Xcel Energy Inc., filed an electric
rate case with the New Mexico Public Regulation Commission (NMPRC) seeking an increase in retail electric base rates of approximately $51 million.
The filing intends to recover additional capital investment and operating costs since SPS’ previous rate case in 2017, including New Mexico's allocated portion of the 478 megawatt Hale Wind Project, and incorporates approximately $1.4 billion in new and upgraded electric facilities and equipment (total company).
The request is based on a historic test year ended March 31, 2019, a return on equity of 10.35%, an equity ratio of 54.77% (based on actual capital structure) and a total company rate base of approximately $4.7 billion, including expected rate base additions through Aug.
31, 2019.
This rate case also takes into account the decline in contracted sales of 349 megawatts in 2019 from certain wholesale customers and seeks to adjust the depreciation rates on SPS' generation assets. The change in depreciation rates includes an adjustment to the service life of SPS’ Tolk power plant (Unit 1 from 2042 to 2032 and Unit 2 from 2045 to 2032).
The following table summarizes SPS’ base rate increase request:
Revenue Request (Millions of Dollars)
Hale
Wind Farm
$
28
Other plant investment
22
Wholesale sales reduction
17
Allocator changes
due to load growth
15
Depreciation rate change (including Tolk)
15
Base rate sales growth
(41
)
Other, net
(5
)
New
revenue request
$
51
SPS' net revenue increase to New Mexico consumers is expected to be approximately $26 million, or 5.7%, due to fuel cost reductions and production tax credits attributable to wind energy provided by the Hale Wind Project. Production tax credits are being credited to customers through the fuel clause.
SPS is requesting new rates effective July 31, 2019 (30 days), however the NMPRC is expected to follow its standard practice of suspending
the rates for nine months, pending review. A NMPRC decision and implementation of final rates is anticipated in the second or third quarter of 2020.
Certain information discussed in this Current Report on Form 8-K is forward-looking information that involves risks, uncertainties and assumptions. Such forward-looking information includes, among other information, the expected impact of SPS’ electric rate case and other statements identified by words such as "anticipate,"“believe,”“could,”“estimate,”“expect,”"intend,""may,""objective,""outlook,""plan,""project,""possible,"“potential,”"should,""will,""would," and similar expressions. Actual results may vary materially. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update any forward-looking information. The following factors, in addition to those discussed in Xcel Energy's and SPS' Annual Report on Form 10-K for the year ended Dec. 31, 2018, and subsequent securities filings, that could cause actual results to differ materially from management expectations as suggested by such forward-looking information: changes in environmental laws and regulations; climate change and other weather, natural disaster and resource depletion, including compliance with any accompanying legislative and regulatory changes; ability
to recover costs from customers; reductions in our credit ratings and the costs of maintaining certain contractual relationships; actions of credit rating agencies; general economic conditions, including inflation rates, monetary fluctuations and their impact on capital expenditures and the ability of SPS to obtain financing on favorable terms; availability or cost of capital; our customers’ and counterparties’ ability to pay their debts to us; assumptions and costs relating to funding our employee benefit plans and health care benefits; tax laws; operational safety; successful long-term operational planning; commodity risks associated with energy markets and production; rising energy prices; costs of potential regulatory penalties; effects of geopolitical events, including war and acts of terrorism; cyber security threats and data security breaches; fuel costs; and employee work force and third party contractor factors.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
