State utility regulators recently voted to approve about one-quarter of the total electric rate hike proposed by Xcel Energy Inc. unit Public Service Co. of Colorado in the Centennial State, pending a final order expected to be published around mid-January.
The Colorado Public Utilities Commission approved an approximately $41.5 million net increase in electric rates, according to a commission spokesman, or about 75% less than the $158.3 million net rate increase initially sought by the company in May 2019. The requested increase would have reflected a 5.7% electric base rate increase with a 10.35% return on equity. Residential ratepayers are expected to see their monthly bills rise by $1.03, while small commercial customers will see their own monthly bills go up by $1.95.
The proposed 10.35% ROE would have been above the 9.6% average equity return granted electric utilities nationwide in cases decided during 2018, according to Regulatory Research Associates, a group within S&P Global Market Intelligence.
Commissioner Frances Koncilja said during the commission's Dec. 17, 2019, meeting that she would write a dissent in regard to the approved 9.3% return on equity, calling it a "draconian result" that "sends the wrong message to the capital markets."
"It puts this commission out there as an outlier with lower ROEs than anybody historically in the past two years has been getting," said Koncilja. Other members of the commission argued that the ROE was appropriate, noting the company is in good fiscal shape.
In an emailed statement, Xcel Energy spokeswoman Michelle Aguayo called the company a carbon-free energy future "leader." Minneapolis-based Xcel intends to completely decarbonize its power supply portfolio by midcentury, the company announced in December 2018.
"To continue on this path, we need to invest in our Colorado infrastructure to ensure clean, safe and reliable energy at the lowest cost possible," wrote Aguayo. She added that the electric utility, which serves customers in eight Western and Midwestern states, is awaiting the commissions' written order to determine its next steps.
The rate case was the subsidiary's first since 2014. (Colorado PUC docket 19AL-0268E)