Press release: Xcel Energy files for increase in Texas base rates

AMARILLO – Xcel Energy’s Texas-based operating company, Southwestern Public Service Company (SPS), is seeking a 7 percent overall retail rate increase in Texas that will recover recent investments in the power lines, substations and workforce necessary to maintain and sustain regional economic and industrial growth.

Riley Hill, president and CEO of Southwestern Public Service Company, an Xcel Energy company, said the increase in rates is needed because the regional economy is changing and growing, and requires greater investment in the power grid. He emphasized that the growth of the power grid must keep pace as businesses grow and new businesses come into the region.

Current base rates are based on 2007 costs. Since that time, the company has absorbed higher costs for materials to build and maintain its system of transmission and distribution facilities, as well as more cost to make its generating fleet cleaner and more efficient. Additionally, pension and healthcare costs continue to rise, and in order to maintain a top-notch workforce, the company must invest more dollars in these employee benefits, Hill said.

“In order to prepare for and sustain growth in our communities, and integrate more renewable energy, we must be able to recover the costs of these investments,” Hill said. “But even with the increase, we will remain among the lowest cost providers in Texas – a critical economic drawing card for businesses seeking to expand in this region.”

In a proposal filed today at the Public Utility Commission of Texas, and with each of the 80 municipalities Xcel Energy serves in Texas, the company seeks a residential base rate increase of 21 percent. But because a monthly bill is made up of both base rate charges and fuel charges, the net effect on the overall bill would be a 10.7 percent increase, or $8.89, for a customer using 1,000 kilowatts per month. Texas commercial customer bills would increase by 1.9 percent, industrial customer bills would rise by 4.8 percent, and municipal customer bills would rise by 11.6 percent.

This filing reflects an overall increase in revenues of $62 million. However, nearly $8.5 million of this total represents existing line-item charges that will be moved from separate charge into the base rates. The effective, non-fuel net increase will be $53.5 million, or 7 percent across all customer classes.

The average residential bill in Texas is 11.6 cents per kilowatt-hour, and under the new rate structure, Xcel Energy’s residential customers in Texas would be paying 9.2 cents per kilowatt hour – still well below both state and national averages.

Xcel Energy’s 80 municipalities will consider the proposal first, but the issue likely will be appealed to the PUCT as in the case with past base rate changes. It could take six to nine months before a final ruling is given.

Xcel Energy’s Texas and New Mexico service area covers more than 50,000 square miles, including most of the Texas Panhandle, the Texas South Plains region, and eastern and southeastern New Mexico. Peak electricity demand in this region is currently about 5,000 megawatts.

Xcel Energy (NYSE: XEL) is a major U.S. electricity and natural gas company with regulated operations in eight Western and Midwestern states. Xcel Energy provides a comprehensive portfolio of energy-related products and services to 3.4 million electricity customers and 1.9 million natural gas customers through its regulated operating companies. Xcel Energy’s headquarters are located in Minneapolis. More information is available at