UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 20, 2020
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| Commission File Number | | Exact Name of Registrant as Specified in its Charter; State of Incorporation; Address of Principal Executive Offices; and Telephone Number | | IRS Employer Identification Number |
| 001-3034 | | XCEL ENERGY INC. | | 41-0448030 |
| | | (a Minnesota corporation) | | |
| | | 414 Nicollet Mall | | |
| | | Minneapolis | Minnesota | 55401 | | |
| | | (612) | 330-5500 | | |
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| 001-03789 | | SOUTHWESTERN PUBLIC SERVICE COMPANY | | 75-0575400 |
| | | (a New Mexico corporation) | | |
| | | 790 South Buchanan Street | | |
| | | Amarillo | Texas | 79101 | | |
| | | (303) | 571-7511 | | |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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| Title of each class | | Trading Symbol | | Name of each exchange on which registered |
| Common Stock, $2.50 par value | | XEL | | Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. £
Item 8.01. Other Events
Texas 2019 Electric Rate Case
In August 2019, Southwestern Public Service Company (SPS), a wholly owned subsidiary of Xcel Energy Inc., filed an electric rate case with the Public Utility Commission of Texas (PUCT) seeking an increase in retail electric base rates of approximately $141 million. The filing requests a return on equity (ROE) of 10.35%, a 54.65% equity ratio, rate base of approximately $2.6 billion and utilizes a historic 12 month period ended June 30, 2019. SPS' request was subsequently revised in March 2020 to approximately $130 million, based on a requested ROE of 10.1%, a 54.62% equity ratio, rate base of approximately $2.6 billion and historic test year ended June 30, 2019.
On May 20, 2020, SPS, the PUCT Staff and various intervenors reached an uncontested settlement, which includes:
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| • | Increase in retail electric base rates of $88 million and a reset of the Transmission Cost Recovery Factor to zero; |
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| • | Allowance for funds used during construction will apply a 9.45% ROE and a 54.62% equity ratio; |
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| ◦ | Tolk - 2037 end-of-life date; |
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| ◦ | Hale - 25-year end-of-life date; |
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| ◦ | All other generating units - end-of-life dates as proposed by SPS; and |
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| ◦ | Transmission - 35% of the incremental change between existing depreciation rates and rates proposed by SPS. |
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| • | Ring-fencing measures like those in other recent PUCT settlements, including: |
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| ◦ | Credit agreements and indentures (e.g., no cross-default provisions); |
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| ◦ | Restrictions on pledging of assets and securing debt; |
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| ◦ | Maintaining stand-alone credit facility and ratings; and |
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| ◦ | Affiliate and non-affiliate limitations. |
The PUCT is expected to take up the settlement in the third quarter of 2020. Final rates are anticipated to be retroactively applied as of Sept. 12, 2019.
New Mexico 2019 Electric Rate Case
In July 2019, SPS, filed an electric rate case with the New Mexico Public Regulation Commission (NMPRC).
On Jan. 13, 2020, SPS and various parties filed an uncontested comprehensive stipulation, which includes the following terms:
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| • | A base rate revenue increase of $31 million; |
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| • | Equity ratio of 54.77%; and |
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| • | Acceleration of depreciation on the Tolk Coal Plant to reflect early retirement in 2037. The Signatories will not oppose the full application of depreciation rates associated with the 2032 retirement date in SPS’s next base rate case. The change to total depreciation expense is an increase of $8 million, which includes the acceleration of depreciation of the Tolk Coal Plant. |
On May 11, 2020, the Hearing Examiner issued a Certification of Stipulation recommending approval of the uncontested comprehensive stipulation without modification. On May 20,2020, the NMPRC approved the stipulation without modification. New rates and tariffs will be effective beginning May 28, 2020.
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, 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. Factors, in addition to those discussed in Xcel Energy's and SPS' Annual Report on Form 10-K for the year ended Dec. 31, 2019, and subsequent securities filings, that could cause actual results to differ materially from management expectations as suggested by such forward-looking information: uncertainty around the impacts and duration of the COVID-19 pandemic; operational safety, including our nuclear generation facilities; 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; ability to recover costs, changes in regulation and subsidiaries’ ability to recover costs from customers; reductions in our credit ratings and the cost of maintaining certain contractual relationships; general economic conditions, including inflation rates, monetary fluctuations and their impact on capital expenditures and the ability of Xcel Energy Inc. and its subsidiaries 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; our subsidiaries’ ability to make dividend payments; tax laws; 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; natural disaster and resource depletion, including compliance with any accompanying legislative and regulatory changes; and costs of potential regulatory penalties.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| May 20, 2020 | Xcel Energy Inc. (a Minnesota corporation) |
| | Southwestern Public Service Company (a New Mexico corporation) |
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| | /s/ BRIAN J. VAN ABEL |
| | Brian J. Van Abel |
| | Executive Vice President, Chief Financial Officer and Director |
