Item 8.01. Other Events
OnJan. 4, 2021 ,Southwestern Public Service Company (SPS), aNew Mexico corporation, and a wholly owned subsidiary ofXcel Energy Inc. , filed an electric rate case with theNew Mexico Public Regulation Commission (NMPRC) seeking an increase in base rates of approximately$88 million . SPS' net rate increase toNew Mexico customers is expected to be approximately$48 million , or 10%, as a result of offsetting fuel cost reductions and production tax credits (PTCs) attributable to wind energy provided by the Sagamore wind project. PTCs are being credited to customers through the fuel clause. The request is primarily driven by additional capital investment in new and upgraded electric facilities and equipment since SPS' previous rate case in 2019, includingNew Mexico's allocated portion of the 522 megawatt Sagamore wind project, which began commercial operations on time inDecember 2020 . The request is based on a historic test year endedSept. 30, 2020 , including expected capital additions throughFeb. 28, 2021 , a return on equity of 10.35%, an equity ratio of 54.72% (based on actual capital structure) and retail rate base of approximately$1.9 billion (total company rate base of approximately$6.0 billion ). Additionally, the request includes the effect of approximately 400 megawatts of reduced peak load in 2021 from a wholesale transmission customer and changes to depreciation rates to reflect a reduction to the service lives of SPS' Tolk power plant (from 2037 to 2032) and the coal handling assets at the Harrington facility (to 2024). SPS' base rate request: Rate Request (Millions of Dollars) Sagamore wind project investment$ 38 Other plant investment 40 Allocator changes due to load growth 9 Depreciation rate change (including Tolk) 3 Other, net (2) Total rate request 88 Fuel cost reductions and PTCs (40) Net rate increase$ 48
SPS requested new rates to be effective on
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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 net rate
increases to consumers and 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
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