Xcel Energy Inc. (XEL) reached a settlement in Colorado that will gradually phase in rate increases through 2014, potentially offering the multistate utility company more certainty about its future revenue.
In a settlement tied to its 2011 electric rate case, Xcel agreed to a plan that would raise base rates by $114 million over a three-year period. At the same time, the company said low natural gas prices and other reductions will likely keep overall electric rates below or very near what customers were charged in 2010 and 2011.
Incremental increases to base rates would still yield a cumulative impact of about 5.5% on the average customer's bill over the three-year period, Xcel said, before periodic adjustments for fuel costs or purchased power.
The settlement, negotiated with the staff of the Colorado Public Utilities Commission and other parties, still requires approval from the CPUC's three-member board.
Xcel, which provides service to customers in eight Western and Midwestern states, has reported mostly improving results from its regulated electricity markets have as rates increase.
The company still projected 2012 earnings at the low end of its previously forecast guidance after the CPUC denied its request for higher interim rates.
Colorado consumer counsel Bill Levis said the deal will smooth rate payers' bills over time while helping support Xcel's investments under the state's 2010 Clean Air Clean Jobs Act, which requires the utility to scale back much of its coal-fired generation capacity.
Xcel shares were recently off 3 cents at $26.55 after hours. The stock has climbed 10% over the past year.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com