SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) JUNE 24, 1999
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NORTHERN STATES POWER COMPANY
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(Exact name of registrant as specified in its charter)
MINNESOTA
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(State or other jurisdiction of incorporation)
1-3034 41-0448030
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(Commission File Number) (IRS Employer Identification No.)
414 NICOLLET MALL, MPLS, MN 55401
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 612-330-5500
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
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On June 24, 1999, the Minnesota Public Utilities Commission (MPUC) voted to
deny rate recovery of certain electric conservation program incentives,
retroactive to January 1, 1998.
Background
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In late 1998, the MPUC approved continued recovery of lost margins and load
management discounts related to conservation programs for NSP and other
Minnesota public utilities. However, the MPUC put Minnesota utilities on notice
that there may be significant changes, including elimination of lost margin and
load management discount recovery, pending the outcome of a 1999 study on the
issue. In 1998, NSP recorded pretax income of approximately $33.8 million
(representing 13 cents per share), primarily in electric revenue, from the
conservation incentives under review by the MPUC, consistent with the recovery
approved for such items since 1995. This accrued conservation recovery is being
collected from customers in rates over the period July 1998 to June 1999.
In April 1999, NSP filed a revised conservation incentive plan which, if
approved, would result in recovery of approximately $27 million (representing 10
cents per share) for 1999. The April filing was in lieu of the previously
planned work group study and report to the MPUC scheduled for May 1999. Through
May 31, 1999, NSP has recorded conservation incentives at expected recovery
levels, consistent with the filing.
June 1999 Action
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On June 24, 1999, the MPUC voted 3-2 to deny NSP's recovery of lost
margins, load management discounts and incentives associated with 1998
state-mandated programs for electric energy conservation. NSP plans to request
reconsideration of the MPUC decision, and if necessary seek court review.
The MPUC's decision appears to contradict previous orders and reduce NSP's 1998
rates retroactively.
The MPUC decision did not address 1999 conservation incentive recovery.
1999 Earnings Impact
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Although NSP intends to contest the MPUC decision, at this time the
ultimate outcome and impact on NSP's financial results is not known. Should the
MPUC decision stand, NSP would need to reverse the 1998 income recorded for
conservation incentives and refund any amounts collected in rates for such
incentives. In addition, NSP would need to consider whether conservation
incentives recorded in 1999 should be adjusted as well.
The need for accounting adjustments related to this matter for the quarter
ended June 30, 1999 cannot be fully assessed until NSP has the opportunity to
review the MPUC's order describing the basis for its decision. Such order is
anticipated by mid-July 1999.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Northern States Power Company
(a Minnesota Corporation)
By /s/
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Edward J. McIntyre
Vice President and Chief
Financial Officer
Dated: June 24, 1999
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