FERC Approves Incentive Transmission Rates in Upper Midwest

December 24, 2007

The Federal Energy Regulatory Commission (FERC) has approved a request by Xcel Energy for incentive transmission rates for six transmission upgrades in the upper Midwest. The utility is completing the upgrades to help Minnesota, North Dakota, South Dakota, Wisconsin, and Michigan meet their renewable energy generation standards and help serve increased regional demand.

Xcel Energy's subsidiaries, Northern States Power Companies (NSP Companies), which operate in the upper Midwest, are members of the Midwest Independent Transmission System Operator (MISO). The NSP Companies are planning to spend about $1 billion to upgrade the regional infrastructure in six expansion projects, which will accommodate 300 to 700 megawatts (MW) of wind power.

The new rates reduce the risk to Xcel Energy investors to complete this major infrastructure development. NSP proposed two kinds of incentive rate treatments for the upgrades: recovery on 100 percent of construction work in progress and recovery of costs for facilities that are canceled for reasons beyond the companies' control.

FERC Chairman Joseph T. Kelliher said, "Xcel's proposal not only will help improve reliability and strengthen the nation's grid system, but provide the necessary links to the expanding renewable market in the region."

For more information, see the FERC December 20 press release.