Item 8.01. Other Events
2022 Minnesota Natural Gas Rate Case
In November 2021, Northern States Power Company, a Minnesota corporation
(NSP-Minnesota), and a wholly owned subsidiary of Xcel Energy Inc. filed a
request with the Minnesota Public Utilities Commission (MPUC) for an annual
natural gas rate increase of $36 million, or 6.6%. The filing is based on a 2022
forecast test year and includes a requested return on equity (ROE) of 10.5%, an
equity ratio of 52.5% and a rate base of $934 million.
In December 2021, the MPUC approved interim rates of $25 million, subject to
refund, effective Jan. 1, 2022.
On August 30, 2022, four parties filed testimony. The Minnesota Department of
Commerce (DOC) and Office of Attorney General (OAG) were the only two parties to
quantify recommended adjustments. The OAG provided limited comments,
recommending $3 million of adjustments, but did not comment on ROE or capital
structure.
Proposed DOC modifications to NSP-Minnesota's request were as follows, which
reflect a 9.15% proposed ROE and 52.5% equity ratio:
(Millions of Dollars)
NSP-Minnesota's filed base revenue request $ 36
Recommended adjustments:
ROE (9)
Sales forecast (2)
Property tax (2)
Depreciation expense (1)
Damage prevention (1)
Other, net (4)
Total adjustments $ (19)
Total proposed revenue change $ 17
Next steps in the procedural schedule are expected to be as follows:
•Rebuttal testimony: Oct. 4, 2022.
•Hearing: Nov. 1-4, 2022.
•ALJ report: Feb. 6, 2023.
•MPUC order: April 26, 2023.
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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 regarding the
regulatory proceedings, 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, 2021, 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: uncertainty around the impacts and duration of the
COVID-19 pandemic, including potential workforce impacts resulting from
vaccination requirements, quarantine policies or government restrictions, and
sales volatility; operational safety; 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; ability to recover costs; changes
in regulation; reductions in our credit ratings and the cost of maintaining
certain contractual relationships; general economic conditions, including
inflation rates, monetary fluctuations, supply chain constraints and their
impact on capital expenditures and/or the ability of NSP-Minnesota and its
subsidiaries 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; 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; natural disaster and resource depletion, including compliance
with any accompanying legislative and regulatory changes; costs of potential
regulatory penalties; and regulatory changes and/or limitations related to the
use of natural gas as an energy source.
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