Brian J. Van Abel
Executive Vice President and Chief Financial Officer at Xcel Energy
Thanks, Bob, and good morning, everyone. We had a solid third quarter, recording $1.13 per share compared with $1.14 per share last year. On a year-to-date basis, our earnings are $0.13 per share ahead of last year. The most significant earnings drivers for the quarter include the following: Higher electric and natural gas margins increased earnings by $0.04 per share primarily driven by riders and regulatory outcomes to recover our capital investments. Lower O&M expenses increased earnings by $0.02 per share. And in addition, the lower effective tax rate increased earnings by $0.01 per share.
As a reminder, production tax credits lowered the ETR. However, PTCs are flowed back to customers through lower electric margin and are largely earnings neutral. Offsetting these positive drivers were increased depreciation expense, which reduced earnings by $0.03 per share reflecting our capital investment program. Lower AFUDC decreased earnings by $0.02 per share, largely due to placing several large wind farms into service last year. And other items combined to reduce earnings by $0.03 per share.
Turning to sales. Weather-adjusted electric sales increased by 2.4% in the third quarter, while our year-to-date electric sales increased 1.9%. Given our year-to-date results and the continued economic rebound in our states, we're updating our full year weather-adjusted electric sales growth to approximately 1.5% to 2%. Shifting to expenses. O&M expenses declined 1.9% for the quarter and increased 2.6% on a year-to-date basis. Quarterly O&M expense comparisons are noisy with the COVID impacts from last year, but overall, we expect our O&M expenses to increase approximately 1% for the year.
Turning to regulatory. We reached a comprehensive settlement in Colorado, and are making strong progress on potential Texas rate case settlement. As a reminder, last quarter we reached constructive settlements in our Wisconsin, New Mexico and North Dakota rate cases. In October, we reached a comprehensive settlement with the Colorado staff in the Colorado Energy office that proposes to resolve several regulatory proceedings. Key terms include: we will fully recover all Winter Storm Uri deferred fuel costs over 24 months for electric and over 30 months from the natural gas LDC customers, with no carrying charges through a rider. Please note, the Uri Storm cost estimate for Colorado was revised to $550 million.
We will refund to electric customers approximately $41 million of previously deferred revenue associated with the 2020 decoupling program. We'll forgo recovery of approximately $14 million of replacement power costs incurred due to an extended Comanche three outage during 2020. And we will not seek recovery of approximately $11 million of deferred COVID-19 bad debt expense. We are pleased that we were able to reach this comprehensive settlement, which represents compromises from all the parties and take steps to mitigate the customer impact of the Uri cost recovery. We expect a commission decision in the first half of 2022.
In terms of pending rate cases, we are making progress in settlement discussions in our Texas case. As a result, the hearing schedule has been abated, and we are hopeful that we'll ultimately be able to reach a settlement agreement. We expect a decision on our Colorado electric case in March of next year with new rates effective in April. As a reminder, we're seeking a net rate increase of approximately $343 million based on an ROE of 10% and equity ratio of 55.6% in the 2022 forecast test year. The case is largely driven by capital investment. In October, we filed the Minnesota electric rate case seeking a net increase of $677 million over three years.
The filing is based on a requested ROE of 10.2% and equity ratio of 52.5% in forecast test years. We requested interim rates of $288 million to be implemented in January 2022. Finally, we plan to file a Minnesota gas rate case in early November with interim rates going into effect in January of 2022. We also plan to file a stay-out option as we look to help mitigate bill impacts of Uri cost recovery for our customers. As Bob mentioned, we have issued a robust $26 billion five-year capital forecast, which is detailed in our earnings release. Our base capital plan results in rate base growth of approximately 6.5% using 2021 as a base.
The base forecast reflects significant grid investment in our Colorado power pathway proposal and other transmission system investments to maintain asset health and reliability and enable renewable generation. The plan reflects a modest level of renewables including our proposed Sherco solar facility. It also includes two natural gas peaking plants to ensure reliability as we retire coal plants, along with investments to improve the customer experience. Beyond our base capital forecast, we anticipate potential incremental capital investment for renewables associated with the Minnesota and Colorado resource plans.
Our proposed resource plans include approximately 2,000 megawatts of renewable additions from 2024 to 2026, which would result in incremental capital investment of $1.0 billion to $1.5 billion, assuming 50% ownership. In addition, we anticipate the need for incremental $500 million to $1 billion of related transmission for the Colorado IRP. Combined, we could see a potential incremental investment to support the clean energy transition of $1.5 billion to $2.5 billion in the latter part of this five-year forecast. We've also updated our financing plan, which reflects a combination of internal cash generation and debt issuances to fund the majority of our capital expenditures.
We expect to issue $800 million of equity and $450 million of DRIP and benefits equity over the next five years. The financing plan maintains our current credit metrics and strong balance sheet, which is important for maintaining a low cost of capital for our customers. We expect the equity would likely be issued through an ATM over the five years. We anticipate that any incremental capital would be financed with approximately 50% equity and 50% debt. This incremental equity will allow us to fund accretive capital investments, which will benefit our customers while maintaining our solid credit ratings and favorable access to the capital markets.
However, our equity needs could be significantly reduced if the reconciliation package is passed with the current framework. Shifting to earnings. We are initiating our 2022 earnings guidance range of $3.10 to $3.20 per share, which is consistent with our long-term EPS growth objective of 5% to 7%. Key assumptions are detailed in our earnings release. In addition, we've updated the base of our growth rate to $2.96 per share, which represents the midpoint of our revised 2021 guidance range. This represents 6.5% growth in the base between 2020 and 2021.
With that, I'll wrap up with a quick summary. We reached a comprehensive settlement in Colorado that resolved several regulatory proceedings. We are making progress towards the settlement of our Texas rate case. We narrowed our 2021 guidance range to $2.94 to $2.98 per share. We announced a robust updated capital investment program that provides strong, transparent rate base growth and customer value. We initiated 2022 earnings guidance consistent with our long-term growth objective. And finally, we remain confident we can deliver long-term earnings and dividend growth within the upper half of our 5% to 7% objective range as we continue leading the clean energy transition and keeping bills low for our customers.
This concludes our prepared remarks. Operator, we will now take questions.
