(KNSI) – The Minnesota Public Utilities Commission agreed Tuesday to an Xcel Energy request to end its application for a second consecutive interim rate increase.
The company had initially sought $122.1 million before shrinking the request to $68.3 million on November 28th. The company said it would extend the term of its depreciation period for several facilities, including the Monticello Nuclear Plant. The State Attorney General’s office argued in a response filing that the change proved the entire request was unnecessary.
Depreciation is an accounting practice that seeks to match revenues with expenses in real time. If a utility has a power plant that is in use for 30 years, depreciation will spread out the cost to build the facility over its entire lifetime. If the plant cost $30 million, that would mean an expense of $1 million per year. If the depreciation schedule is extended to 60 years, the annual charge is only $500,000 instead. Depreciation is a non-cash expense but it affects how accountants measure profitability.
The company was granted an 8.13% increase this year, totaling $247.1 million. The 2022 hike was already above what the Minnesota Department of Commerce recommends for this year and next on a combined basis.
The Office of the Attorney General, Citizens Utility Board of Minnesota, and Just Solar Coalition also filed comments with the commission against Xcel’s plan.
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