Xcel Energy Inc. said Monday it will write off about $125 million in expected profits from the upgrade of its Monticello nuclear power plant after a regulatory ruling last week.

The hit will erase about half the $280 million profit analysts surveyed by Bloomberg expect Xcel to produce in the January-to-March quarter.

The figure came from the Minneapolis-based energy company's preliminary interpretation of a ruling by the Minnesota Public Utilities Commission on Friday over whether Xcel's customers or shareholders would pay for cost overruns in the plant improvements at Monticello.

The commission gave the company a green light to collect all of the $748 million it spent on the project, which increased the plant's longevity and boosted output by about 12 percent.

But it said Xcel could not collect from customers its usual, regulated profit on the portion of the costs that were considered an overrun, or greater than originally expected. "We are saying you can recover those costs. You just can't get a profit on them," Commissioner Dan Lipschultz said Friday.

The improvements were done chiefly during maintenance shutdowns in 2009, 2011 and 2013. One constraint Xcel encountered came in trying to install bigger, newer components in spaces that were designed 40 years ago for smaller gear.

Commissioners said they thought experts should have noticed the ballooning costs earlier and Xcel must take some blame. But they also acknowledged that the upgrade would benefit consumers.

During the commission's review, Xcel officials said, despite the higher-than-expected costs, the improvements at the Monticello plant represented a good investment in carbon-free electricity.

Two state agencies took differing views on the matter before the commission. The state attorney general's office argued Xcel and its investors should absorb more of the overrun expense than ratepayers. The Commerce Department recommended that ratepayers pay much of the expense.

In a filing with securities regulators Monday, Xcel said that if other regulators in other states go along with the Minnesota PUC, the effect is to disallow $155 million in profits to the firm.

Xcel previously took a $30 million depreciation expense to the profit-related portion of the overrun. To account for the remaining $125 million, Xcel said it will record a charge in the current quarter.

Aside from the charge, Xcel told investors it was on track with previously announced earnings guidance for 2015.

Xcel shares rose about 1.3 percent Monday.

Tyler Gieseke is a University of Minnesota student on assignment for the Star Tribune.