Xcel Energy Faces Challenges to New Mexico Rate Increase

An announcement from Xcel Energy ( (XEL) ) is now available.

In November 2025, Southwestern Public Service Company filed an electric rate case with the New Mexico Public Regulation Commission seeking a $168 million, or 16%, revenue increase, updated in March 2026, based on a future test year ending Nov. 30, 2027, a 10.5% return on equity, a 56% equity ratio and a $3.9 billion retail rate base. On May 1, 2026, intervenors including commission staff, the New Mexico Department of Justice, the New Mexico Large Customer Group and Louisiana Energy Services & Federal Executive Agencies submitted testimony proposing substantial reductions to SPS’s requested increase, recommending lower returns on equity and different capital structures that would cut the revenue change to between $28 million and $113 million, ahead of rebuttal testimony on May 29, a July 7 hearing, and a final rate decision expected by late 2026, outcomes that will shape SPS’s future earnings, customer bills and regulatory environment.

The intervenors’ recommendations would significantly narrow SPS’s ability to recover costs, with suggested ROEs between 8.10% and 9.75% and, in some cases, materially lower equity ratios, highlighting tension between the utility’s investment plans and consumer and large-customer cost concerns. The case schedule, including the end of the rate suspension on Nov. 30, 2026, positions the fourth quarter of 2026 as a key inflection point for Xcel Energy’s regional financial profile and could influence future regulatory strategies and capital allocation across its New Mexico operations.

The most recent analyst rating on (XEL) stock is a Buy with a $96.00 price target. To see the full list of analyst forecasts on Xcel Energy stock, see the XEL Stock Forecast page.

Spark’s Take on XEL Stock

According to Spark, TipRanks’ AI Analyst, XEL is a Neutral.

The score is driven primarily by stable regulated-utility profitability but held back by rising leverage and uneven/weak latest operating cash flow. Technicals are supportive with price strength above major moving averages. Valuation looks reasonable rather than cheap given the ~19.4 P/E and ~2.8% yield, while the earnings call adds support via reaffirmed guidance and a large capex/data-center growth runway, partially offset by regulatory and wildfire-related risks and higher financing cost headwinds.

To see Spark’s full report on XEL stock, click here.

More about Xcel Energy

Xcel Energy Inc., through its wholly owned subsidiary Southwestern Public Service Company, operates as a regulated electric utility serving customers in New Mexico. The company generates and delivers electricity under state-regulated rates, with its earnings and cash flow heavily influenced by outcomes of rate cases and oversight by utility commissions such as the New Mexico Public Regulation Commission.

Average Trading Volume: 4,649,751

Technical Sentiment Signal: Buy

Current Market Cap: $50.67B

See more insights into XEL stock on TipRanks’ Stock Analysis page.