REGULATORY ENVIRONMENT

6 Months Ended

Jun. 30, 2024

Regulated Operations [Abstract]

REGULATORY ENVIRONMENT

REGULATORY ENVIRONMENT

2025 and 2026 Rate Case

On April 12, 2024, we filed a request with the PSCW to increase our retail electric and natural gas rates, effective January 1, 2025 and January 1, 2026. The request reflected the following:

Proposed 2025 rate increase
Electric	$	110.1	million	/	8.5%
Gas	$	26.8	million	/	6.8%
Proposed 2026 rate increase (1)
Electric	$	64.3	million	/	4.5%
Gas	$	16.1	million	/	3.7%
Proposed ROE	10.0%
Proposed common equity component average on a financial basis	53.5%

(1)    The proposed 2026 rate increases are incremental to the currently authorized revenue plus the requested rate increases for 2025.

The primary drivers of the requested increases in electric rates are continued capital investments to transition our generation fleet from coal to renewables and natural gas-fueled generation, increased costs driven by higher inflation and interest rates, and the recovery of regulatory assets previously approved by the PSCW.

The requested increases in natural gas rates are driven by our ongoing capital investments in reliability and safety projects, as well as the impacts from higher inflation and increased interest rates.

We also proposed retaining our current earnings sharing mechanism. Under the current earnings sharing mechanism, if we earn above our authorized ROE: (i) we retain 100.0% of earnings for the first 15 basis points above the authorized ROE; (ii) 50.0% of the next 60 basis points is required to be refunded to ratepayers; and (iii) 100.0% of any remaining excess earnings is required to be refunded to ratepayers.

A decision is expected in the fourth quarter of 2024, with any rate adjustments expected to be effective January 1, 2025 and 2026.