Public Service settlement would roll about $161 million of rider costs into base rates; rate‑base method drives $50–80M swing

A negotiated settlement in Public Utilities Commission case 25‑0494E would move roughly $161 million of rider revenue requirement (TCA and TCAD) from interim riders into Public Service Company of Colorado’s base electric rates, company witnesses said at a May hearing.

The company’s finance witness, Arthur Freighus, told commissioners that the $161 million figure reflects capital placed into service through Dec. 31, 2025 and calculated under current rider tariffs. "That is the amount of capital that is rolling out of the riders using the methodology established for the riders," he said.

Why it matters: rolling rider revenue into base rates changes which line on customers’ bills collects recovery for capital; it does not change the underlying capital that was built or the fact that customers already receive service from those assets, Freighus said. He added that riders’ roll‑in amounts are computed under tariff rules and therefore are largely independent of the settlement negotiation.

But parties sharply debated how to compute the test‑year rate base. The company and settling parties used a year‑end rate base calculated with actual 2025 data; several intervenors urged a 13‑month average that would smooth the effect of assets that went into service late in the year.

Freighus quantified the effect: updating the filing to full‑year 2025 actuals reduced the company’s revenue deficiency by about $22.7 million; moving from a year‑end rate base to a 13‑month average (and removing a depreciation annualization adjustment) would lower the deficiency by roughly $60.6 million. "That difference is the impact of 13‑month average and removing the depreciation expense adjustment," he said. Combined, the two adjustments reduce the company’s requested revenue by roughly $82 million compared with its original filing; the settlement’s lower authorized returns and other terms reduce that gap somewhat.

What officials and intervenors said: Commissioners and counsel pressed company witnesses on the customer‑side effect of these methodological choices. Commissioner questions emphasized that customers already receive service from assets placed in 2025; using a 13‑month average, intervenors say, delays cost recovery for assets that are already in service and serving customers.

Freighus responded that the settlement is a package: "the assets placed into service through the end of 2025 are currently serving customers," he said, and the settlement’s year‑end ratemaking is one component of an overall package that also includes concessions on returns and other adjustments.

Next steps: The commission and parties confirmed they will exchange corrected exhibits and additional reconciliations early next week, including a corrected revenue‑requirement table to remove PTC transfer bookkeeping items mistakenly included in base‑rate lines and a short comparison of company sales forecasts and actuals for 2025. The hearing will resume with additional company witnesses on Monday.