Xcel Energy rate increase approved by PUC

Xcel Energy rate increase approved by PUC

PIERRE, S.D. – The South Dakota Public Utilities Commission today voted to allow Xcel Energy to raise its electric rates at a rate of less than half of what the company had requested. The average customer in Xcel’s South Dakota territory is expected to experience a 4 percent increase in electric rates beginning July 1, 2015. Xcel’s original request asked for an increase of 8 percent.

The PUC issued its decision at an ad hoc meeting June 15 in Pierre, where it accepted a joint settlement agreement presented by Xcel Energy and PUC staff. The agreement outlined a recommendation that the company be allowed to increase base rates and implement an infrastructure rider to raise approximately $7.795 million in additional annual revenues. In its June 2014 application, the company sought additional revenues of $15.6 million annually.

Xcel representatives have stated that investments to the company’s generation, transmission and distribution facilities and property taxes are among the drivers of the rate increase request.

The commission agreed to allow the company to continue utilizing the infrastructure rider, a mechanism to recover specific costs related to investment in infrastructure. The company must submit a request to the commission for annual review and approval of the rider for rates effective in 2016 and 2017. Xcel Energy also agreed to hold off on any future base rate increase until 2018, which would require commission approval before implementation.

“I have spent a great deal of time contemplating my decision in this case,” said PUC Chairman Chris Nelson. “There are intricacies and complexities that make up this comprehensive request from Xcel Energy such as safety and power upgrades to nuclear facilities, new generation sources, and costs incurred as a result of federal mandates. In the end, I agree that the deal negotiated by PUC staff and the company is fair for both customers and the company,” he concluded.

“The final question that needs to be answered in any rate increase request is, does this increase allow for the production of reliable and safe electricity to the consumer at an affordable rate?” PUC Vice Chairperson Kristie Fiegen said. “After thoroughly studying the case, reading and hearing testimony from PUC staff, consultants and Xcel Energy representatives, I am confident the answer is yes and the decision made today is the right one,” she continued.

“I am appreciative of the negotiations between Xcel and the PUC staff,” Commissioner Gary Hanson stated. “It is clear that the extensive research, discussions and give-and-take involving both entities were conducted professionally and with the goal of keeping the financial impact on consumers as low as possible.”

As allowed by state law, Xcel Energy implemented an interim rate increase on Jan. 1, 2015, reflective of its initial rate increase request. The company will refund to customers the difference between the interim rate and the final approved rate, with interest, during a monthly billing cycle beginning no later than Aug. 1, 2015.

Xcel Energy has approximately 85,000 customers in its South Dakota service territory.

The full Xcel Energy rate increase request docket may be viewed on the PUC’s website at www.puc.sd.gov, Commission Actions, Electric Dockets, 2014 Electric Dockets, EL14-058 – In the Matter of the Application of Northern States Power Company dba Xcel Energy for Authority to Increase its Electric Rates.

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