NSP Cases
Xcel Energy (aka Northern States Power-Wisconsin)
Gasifier at Bayfront Power Plant
Docket 4220-CE-169
On February 23, 2009, Xcel filed an application to add a biomass gasifier at its Bayfront facility near Ashland so that it can burn biogas instead of coal.
CUB intervened to make sure the cost of the project was reasonable. During the proceeding, CUB discovered a study written by a consultant hired by Xcel that concluded that the proposed project may not work at the size and scope envisioned. CUB brought these concerns to light in legal briefs submitted to the PSC.
The PSC issued an approval for the project on December 22, 2009. Although the PSC determined that the project was technically feasible, the PSC agreed with CUB to limit the cost-overrun collar to 10 percent, rather than 20 percent sought by Xcel.
In addition, the PSC agreed with CUB and did not provide Xcel with a guarantee of cost recovery should cost overruns exceed 20 percent and the PSC orders Xcel to cease construction. These actions will help protect ratepayers from paying millions of dollars for possible cost overruns, or for a project that may not work.
Northern States Power-Wisconsin (dba Xcel Energy)
Rate Case for 2008 Rates
Docket 4220-UR-115
On June 1, 2007, Northern States Power (also know as Xcel Energy) applied to the PSC for permission to raise 2008 electric rates by $67 million, or 14.3 percent and increase 2008 natural gas rates by $5.3 million, or 3.3 percent.
According to Xcel, the utility asked for the rate increase because of higher prices for fossil fuels used to generate electricity, higher costs for transmitting electricity, and investments in its existing nuclear plants in Minnesota and new wind power plants.
CUB intervened in this case at the PSC, and urged Xcel to develop new rates for utility customers so that they can take steps to reduce their electric bills. CUB also asked the PSC to make sure costs are being fairly split between residential, commercial, and industrial customers.
Given the magnitude of the rate increase proposed by Xcel it is especially important to develop alternative rate options that allow residential customers to better control their electric energy costs while also reducing the cost drivers for the utility. CUB proposed residential rate designs ranging from inverted rates with a critical peak pricing element to prescriptive rate designs. CUB also investigated how residential customers should receive the value of the Company's proposed use of automated meter reading within a reasonable timeframe. Automated meter reading, if used for the benefits of customers, could allow ratepayers to receive accurate price signals regarding their electric energy consumption and change their usage accordingly to lower their utility bills.
CUB submitted testimony from its experts to the PSC in October 2007, and filed legal briefs.
Direct Testimony of George Edgar and Wayne DeForest
Rebuttal Testimony of George Edgar and Wayne DeForest
CUB's Initial Brief
CUB's Reply Brief
On January 8, 2008, the PSC issued its written order and allowed Xcel to increase its 2008 electric rates by $39.4 million (8.1%) and natural gas rates by $5.3 million (3.3%). The PSC ordered Xcel to work with CUB on rate designs.
Northern States Power Company
NSPW 2006 Test Year Rate Case, Order Issued January 5, 2006
PSC Docket 4220-UR-114
On June 1st, 2005 NSP-Wisconsin filed an electric and natural gas rate case for the 2006 test year. The Company requested an increase of $41 million, or 10.3% on average, in electric rates, and $7 million, or 4.4% on average, in natural gas rates. Commission staff’s audit revised the company’s request to an estimated $45.4 million, or 11.4% on average increase in electric rates, and $5.8 million, or 3.52% increase on average in natural gas rates. This is the first base rate change requested by NSPW since 1998 for both electric and natural gas rates. The Company has received modest fuel cost increases in fuel rule proceedings since 1998. NSPW has 231,000 retail electric customers and 92,000 natural gas customers.
The electric rate increase drivers include an increase in decommissioning costs for nuclear plants in Minnesota, production and transmission cost increases, pension and benefit cost increases, and various increases in O&M costs.
The Commission decided the case at its December 22, 2005 open meeting. Based on the discussion the Commission authorized:
• 11% increase in electric rates.
• 2.5% increase in gas rates.
• 11% ROE.
Below is a brief summary of the issues CUB addressed in the case and the Commission’s decision regarding those issues.
• Return on Equity
CUB Position: Reduce NSPW’s requested ROE of 11.9% to 10.25%. This would lower the company’s revenue requirement by $9.6 million for electric and $1.3 million for gas.
Commission Decision: Authorized ROE of 11%
• Capital Structure
CUB Position: Reduce NSPW’s equity levels from 56% to 51% for the test year. Reducing the equity level reduces customer rates because common equity is three times more expensive than debt. At a ROE of 10.5% reducing the equity level to 51% would reduce customer costs by $3.5 million.
Commission Decision: Authorized a capital structure range for common equity of 50% to 55%.
• Load Management Goals
CUB Position: Require NSPW to work with Commission staff to develop goals for the company’s load management programs.
Commission Decision: NSPW to work with Commission staff to develop goals for the company’s load management programs.
• Residential Rates
CUB Position: Reject customer class revenue allocations in which residential customers would receive a 14.2% rate increase in favor of cost of service studies that would limit the residential increase to between 8% to 10.6%.
Commission Decision: Residential class to get higher than average increase in rates than other classes. The Commission supported its staff’s recommendation for rate increases of approximately 14.8% for residential; 9.9% for commercial; and 9.4% for industrial. The average residential customer will see a monthly increase of approximately $8.50 for electric service and $2.25 for gas service.
CUB's Initial Brief filed November 17, 2005
CUB's Reply Brief filed November 29, 2005
The PSC's final decision January 6, 2006
