Item 8.01. Other Events
2022 Minnesota Electric Rate Case
In October 2021, Northern States Power Company, a Minnesota corporation (NSP-Minnesota) and a wholly owned subsidiary of Xcel Energy Inc., filed a three-year electric rate case with the Minnesota Public Utilities Commission (MPUC). The rate case is based on a requested return on equity (ROE) of 10.2%, a 52.5% equity ratio and forward test years.
In December 2021, the MPUC approved interim rates, subject to refund, of $247 million, effective Jan. 1, 2022. In October 2022, several parties filed testimony with various recommendations. In November 2022, NSP-Minnesota revised its rate request to $498 million over three years.
On March 31, 2023, the Administrative Law Judge (ALJ) presiding over the case issued her report. NSP-Minnesota estimates that the ALJ recommendation would result in a rate increase of approximately $384 million over three years from 2022-2024, based on a ROE of 9.87% and an equity ratio of 52.5%. In addition, it also reflects rate reductions associated with certain wind and nuclear generation life extensions and Midcontinent Independent System Operator, Inc. (MISO) capacity revenues and related tracker, as proposed in NSP-Minnesota’s revised rate request.
Proposed modifications to NSP-Minnesota’s request were as follows:
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| (Millions of Dollars) | | 2022 | | 2023 | | 2024 |
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| NSP-Minnesota’s revised revenue request | | $ | 234 | | | $ | 328 | | | $ | 498 | |
| Production tax credit forecast | | (28) | | | (2) | | | (1) | |
| Impact of ROE change | | (27) | | | (29) | | | (30) | |
| Operating & maintenance expenses | | (15) | | | (17) | | | (18) | |
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| Property tax | | — | | | (11) | | | (23) | |
| Sherco 3 and A.S. King remaining life | | — | | | — | | | (35) | |
| Other, net | | (15) | | | (12) | | | (7) | |
| Total adjustments | | (85) | | | (71) | | | (114) | |
| Total proposed revenue change | | $ | 149 | | | $ | 257 | | | $ | 384 | |
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A MPUC order is expected on June 30, 2023.
Xcel Energy reaffirms its 2023 GAAP and ongoing earnings guidance of $3.30 to $3.40 per share, which is based on several key assumptions, including constructive regulatory outcomes.
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, 2022, 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: operational safety, including our nuclear generation facilities and other utility operations; 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; our ability to recover costs; changes in regulation; reductions in our credit ratings and the cost of maintaining certain contractual relationships; general economic conditions, including recessionary conditions, inflation rates, monetary fluctuations, supply chain constraints and their impact on capital expenditures and/or the ability of NSP-Minnesota 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; uncertainty regarding epidemics, the duration and magnitude of business restrictions including shutdowns (domestically and globally), the potential impact on the workforce, including shortages of employees or third-party contractors due to quarantine policies, vaccination requirements or government restrictions, impacts on the transportation of goods and the generalized impact on the economy; 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 events; natural disaster and resource depletion, including compliance with any accompanying legislative and regulatory changes; costs of potential regulatory penalties; regulatory changes and/or limitations related to the use of natural gas as an energy source; challenging labor market conditions and our ability to attract and retain a qualified workforce; and our ability to execute on our strategies or achieve expectations related to environmental, social and governance matters including as a result of evolving legal, regulatory and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs, the availability of requisite financing, and changes in carbon markets.