Xcel Energy has reached a settlement with Texas customer groups to increase annual revenues to support close to $1 billion in capital improvements and recognize the impact of reductions in wholesale sales in 2015.

Xcel Energy, the Public Utility Commission of Texas Staff, industry groups and an alliance of the 80 towns Xcel Energy serves in Texas, have agreed to a $35 million, or 6.9 percent, annual revenue increase. Under the settlement rates filed today, the typical 1,000 kilowatt-hour residential bill will rise on Dec. 10 by approximately 4 percent, or $3.97 per month.

The agreement also provides for the assured recovery of $12.6 million of annual power factor revenues, including $11 million of additional power factor revenues, to protect Xcel Energy against the risk of revenue loss from potential unrealized power factor billings for a two-year period after new rates become effective. Power factor billings are only applicable to business classes with a demand charge and are a means of compensation for the supplying of extra electrical current for customers who have low power factors, or are inefficient users of electrical power.

“Our customer groups understand that the service Xcel Energy provides and the investments we’re making are critical to the economic success of both Xcel Energy and the region, and we value their input throughout this process,” said David Hudson, president – Xcel Energy Texas.

The increase is needed to support close to $1 billion of investments Xcel Energy made through December 2015 to maintain and improve reliability and to import lower-cost power. Notable examples of these investments are the two 345-kilovolt transmission lines to Woodward, Okla. These lines cost $270 million, but delivered about $60 million in energy savings within their first year of operation by allowing the company to tap a wider market where more affordable power is available.

New rates also account for the reduction in wholesale power sold to rural cooperatives and municipal utilities in the region. Xcel Energy’s contracts with wholesale customers include planned reductions in sales, with most contracts ending in 2019. As these sales decrease and eventually go away, retail customers benefit long term because existing generating resources are freed up to serve retail customer needs as their power demand increases. The change in costs reflects Xcel Energy’s investment in the energy future of the Panhandle and South Plains region.

“The energy future that Xcel Energy creates for the residents, businesses, and communities in the Panhandle and South Plains of Texas is realized through our company’s focus on ensuring affordable and reliable service while appropriately capturing changes in our costs to serve, as well as making smart investments that will support economic growth for decades to come,” Hudson said.

The new rates will be implemented on an interim basis until a final order is issued by the Public Utility Commission of Texas. Xcel Energy is also permitted to seek collection of the new rates retroactively to July 20. Xcel Energy will file a surcharge in the spring of 2017 that will recover the difference between the old and new rates for the period of July 20 through Dec. 9.

About Xcel Energy
Xcel Energy (NYSE: XEL) provides the energy that powers millions of homes and businesses across eight Western and Midwestern states. Headquartered in Minneapolis, the company is an industry leader in responsibly reducing carbon emissions and producing and delivering clean energy solutions from a variety of renewable sources at competitive prices. For more information, visit xcelenergy.com or follow us on Twitter and Facebook.

(News release from Xcel Energy)