Xcel Energy waiting on Minnesota ruling on Monticello

Xcel Energy (NYSE:XEL) said Jan. 29 that it expects to receive an Administrative Law Judge (ALJ) recommendation on prudence costs for its Monticello nuclear plant in February.

During a quarterly earnings call, Xcel Energy Chairman, President and CEO Ben Fowke touched upon the Monticello review, regulatory cases that Xcel Energy utilities have in various states and the company’s plans to slash greenhouse gas emissions by 2030.

The ALJ action has been delayed because of a heavy caseload. If the document is issued in February, Xcel Energy would expect the Minnesota Public Utilities Commission to take up the issue in March, company officials said.

The commission is looking at financial issues surrounding an extended power uprate and lifecycle management program proposed by Xcel’s Northern States Power-Minnesota utility.

The original estimate was $320m and final cost was $665m, according to Xcel earnings call materials. The company believes that a rebuilt Monticello nuclear plant is important to both customer value and carbon reduction through 2030.

In July 2014, the Minnesota Department of Commerce recommended a disallowance of $72m for Minnesota – the equivalent of $94m for all jurisdictions, according to the company’s slide presentation. In August the Minnesota Office of Attorney General recommended a disallowance of $321m, Xcel Energy officials said.

Continued nuclear power plant operation is important to Xcel Energy plans to slash its carbon dioxide (CO2) emissions in the Upper Midwest 40% by 2020. The utility also plans to increase use of renewable energy and gradually reduce usage of coal-fired units at the Sherburne County or ‘Sherco’ station.

The Xcel Energy CEO wants “longer-term regulatory compacts” and a disciplined approach to carbon reduction. In Minnesota, Xcel Energy thinks it can achieve its carbon reduction goals at a “very modest” price, Fowke said.

A lot of Xcel Energy’s wind and solar additions will come in the 2020 to 2030 timeframe, Fowke said. “Increasingly, customers want a different energy mix” and greener producers, he said. Xcel will be working to develop products and services to help customers meet that goal.

Xcel Energy utilities are looking at pending rate cases in Minnesota, South Dakota, Texas and Colorado, the company said.

Xcel Energy regions have a combined jobless rate of only 3.6%. That significantly better than the national average. Xcel Energy also saw better-than-expected weather-adjusted electric sales growth of 1.3%

Xcel Energy reported 2014 GAAP earnings of $1.02bn, or $2.03 per share, compared with 2013 GAAP earnings of $948m, or $1.91 per share.

Ongoing earnings, which exclude adjustments for certain items, were $2.03 per share for 2014 compared with $1.95 per share in 2013. Ongoing earnings increased as a result of higher electric and natural gas margins due to rate increases in various jurisdictions, weather-normalized sales growth and lower interest charges. These positive factors were partially offset by the unfavorable impact of milder weather, as well as higher expected operating and maintenance expenses, property taxes and depreciation.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.