Rate Matters

12 Months Ended

Dec. 31, 2012

Rate Matters [Abstract]

Rate Matters

10.      Rate Matters

Pending Regulatory Proceedings — PUCT

Base Rate

SPS - Texas 2012 Electric Rate Case — In November 2012, SPS filed an electric rate case in Texas with the PUCT for an increase in annual revenue of approximately $90.2 million. The rate filing is based on a historic twelve month test year ended June 30, 2012 adjusted for known and measurable changes, a requested ROE of 10.65 percent, an electric rate base of $1.15 billion and an equity ratio of 52 percent.

The procedural schedule is as follows:

• Intervenor Direct Testimony – March 22, 2013

• Staff Direct Testimony – April 2, 2013

• SPS Rebuttal Testimony – April 12, 2013

• Hearing Starts – April 23, 2013

• The procedural order also establishes July 1, 2013 as the latest date rates from this case will become effective.

In an effort to pursue settlement, the parties have asked the ALJ for a four week extension for filing Intervenor Direct Testimony, but that in the event the ultimate decision is delayed beyond July 1, 2013, that SPS could implement a surcharge for any approved increase for the period from July 1 to final rate implementation.

Pending Regulatory Proceedings — NMPRC

SPS - New Mexico 2012 Electric Rate Case — In December 2012, SPS filed an electric rate case in New Mexico with the NMPRC for an increase in annual revenue of approximately $45.9 million. The rate filing is based on a 2014 forecast test year, a requested ROE of 10.65 percent, a jurisdictional electric rate base of $479.8 million and an equity ratio of 53.89 percent. A NMPRC decision is expected in the fourth quarter of 2013 with the implementation of final rates anticipated in the first quarter of 2014.

The procedural schedule is as follows:

• Intervenor and Staff Direct Testimony – May 6, 2013

• Rebuttal Testimony – May 20, 2013

• Hearing Starts – June 3, 2013

Pending Regulatory Proceedings — FERC

Wholesale Rate Complaint — In April 2012, Golden Spread Electric Cooperative, Inc. (Golden Spread) filed a rate complaint with the FERC alleging that SPS' rates for wholesale service were excessive. Golden Spread alleges that the base ROE currently charged to them through the SPS production formula rate, of 10.25 percent, and the SPS transmission base formula rate, ROE of 10.77 percent, is unjust and unreasonable. Golden Spread alleges that the appropriate base ROE is 9.15 percent, or an annual difference of approximately $3.3 million. An additional 50 basis point incentive is added to the base ROE for the transmission formula rate for SPS' participation in the SPP RTO. Golden Spread is not contesting this transmission incentive. The FERC has taken no action on this complaint.