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September 13, 2019

PUCT identifies issues in SPS rate case

by Kelso King, Grid Monitor

Posted 09/12/2019

In August, Southwestern Public Service Company filed an application to increase its base rate by $141.2 million, an increase of 25.5%. A draft Preliminary Order identified 72 issues to be addressed, including issues associated with:

·         Invested Capital — Rate Base and Return;

·         Expenses;

·         Deferred Costs;

·         Rate Design and Tariffs;

·         Baselines for Cost-Recovery Factors; and

·         Additional Issues.

The proposed issues were approved without discussion.

Background

On August 8, 2019, Southwestern Public Service Company (SPS) filed an application for authority to change its rates and obtain other approvals. SPS seeks to increase its retail base rate revenue requirement to $695,083,931 and increase its base rate by $141,284,640, an increase of 25.5% increase in overall rates based upon updated-test-year revenues. The requested base rate increase includes a rate of return of 7.62%, which is composed of an equity ratio of 54.65%, a rate of return on common equity of 10.35%, and a cost of debt of 4.33%.

SPS is also requesting that the Commission establish baselines for the purpose of setting any future transmission-cost-recovery factors, distribution-cost-recovery factors, or purchased-power-cost recovery factors.

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