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iFALSEi06/1/2023iXCEL
ENERGY INCi0000072903iMNiNORTHERN
STATES POWER COi0001123852iMN00000729032023-06-012023-06-010000072903xel:NorthernStatesPowerCoMNMember2023-06-012023-06-01
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM i8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 1, 2023
Commission
File Number
Exact Name of Registrant as Specified in its Charter; State of Incorporation; Address of Principal Executive Offices; and Telephone Number
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:
i☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
i☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
i☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
i☐
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
iCommon
Stock, $2.50 par value per share
iXEL
iNasdaq 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 i☐
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
2022 Minnesota Electric Rate Case
In October 2021, Northern States Power Company, a Minnesota corporation (NSP-Minnesota) and a wholly owned subsidiary of Xcel Energy Inc., filed a three-year electric rate case with the Minnesota Public Utilities Commission (MPUC). The rate case is based on a requested return on equity (ROE) of 10.2%, a 52.5% equity ratio and forward test years.
In December 2021, the MPUC approved interim rates, subject to refund, of $247 million, effective Jan. 1, 2022. In October 2022, several parties filed testimony with various recommendations. In November 2022, NSP-Minnesota revised its rate request to $498 million over three years.
In March 2023, the ALJ’s report was issued, which included an estimated rate increase of approximately $386 million over three years from 2022-2024, based on a ROE of 9.87% and an equity ratio of 52.5%. In addition, it also reflects rate reductions associated with certain wind and nuclear generation life extensions and MISO capacity revenues and related tracker, as proposed in NSP-Minnesota’s revised rate request.
On June 1, 2023, the MPUC issued a verbal order. NSP-Minnesota estimates that the MPUC final order would result in a rate increase of approximately $311 million over three years from 2022-2024, based on a ROE of 9.25% and an equity ratio of 52.5%.
Modifications to NSP-Minnesota’s request were as follows:
(Millions
of Dollars)
2022
2023
2024
NSP-Minnesota’s revised revenue request
$
233
$
328
$
498
Sherco 3 and A.S. King moved to new docket
—
—
(35)
New
property tax forecast with tracker
—
(11)
(23)
NSP-Minnesota’s revised revenue request at Oral Arguments
233
317
440
Impact of ROE change
(77)
(82)
(85)
Operating
& maintenance expenses
(27)
(29)
(32)
Production tax credit forecast update with tracker
(28)
(1)
(1)
Prepaid and accrued pension
(9)
(10)
(11)
Other,
net
9
(5)
—
Total proposed revenue change
$
101
$
190
$
311
Annual
incremental revenue change
$
101
$
89
$
121
Annual percentage increase
3.1
%
2.7
%
3.7
%
A
final written MPUC order is expected on June 30, 2023.
Xcel Energy reaffirms its 2023 GAAP and ongoing earnings guidance of $3.30 to $3.40 per share, which will require the company to evaluate programs, staffing levels, operating expenses and other management actions to offset the Minnesota electric rate decision that reflected a lower ROE and the disallowance of certain expenses.
Certain information discussed in this Current Report on Form 8-K is forward-looking information that involves risks, uncertainties and assumptions. Such forward-looking statements, including our expectations and intentions regarding the regulatory proceedings and 2023 earnings
guidance, as well as assumptions and other statements are intended to be identified in this document by the words"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 NSP-Minnesota’s Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2022, and subsequent filings with the Securities and Exchange Commission, could cause actual results to differ materially from
management expectations as suggested by such forward-looking information: operational safety, including our nuclear generation facilities and other utility operations; successful long-term operational planning; commodity risks associated with energy markets and production; rising energy prices and fuel costs; qualified employee work force and third-party contractor factors; violations of our Codes of Conduct; our ability to recover costs; changes in regulation; reductions in our credit ratings and the cost of maintaining certain contractual relationships; general economic conditions, including recessionary conditions, inflation rates, monetary fluctuations, supply chain constraints and their impact on capital expenditures and/or the ability of NSP-Minnesota 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; uncertainty regarding epidemics, the duration and magnitude of business restrictions including shutdowns (domestically and globally), the potential impact on the workforce, including shortages of employees or third-party contractors due to quarantine policies, vaccination requirements or government restrictions, impacts on the transportation of goods and the generalized impact on the economy; effects of geopolitical events, including war and acts of terrorism; cyber security threats and data security breaches; seasonal weather patterns; changes in environmental laws and regulations; climate change and other weather events; natural disaster and resource depletion, including compliance with any accompanying legislative and regulatory changes; costs of potential regulatory penalties; regulatory changes and/or limitations related to the use of natural gas as an energy source; challenging labor market conditions and our ability
to attract and retain a qualified workforce; and our ability to execute on our strategies or achieve expectations related to environmental, social and governance matters including as a result of evolving legal, regulatory and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs, the availability of requisite financing, and changes in carbon markets.
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.
