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At Dec. 31, 2005, NSP-Minnesota had recorded and recovered in rates cumulative decommissioning accruals of $816 million. The following
table summarizes the funded status of NSP-Minnesota’s decommissioning obligation based on approved regulatory recovery parameters.
These amounts are not those recorded in the financial statements for the asset retirement obligation in accordance with SFAS No. 143.
(Thousands of dollars) 2005 2004
Estimated decommissioning cost obligation from most recently approved study (2002 dollars) $1,716,618 $1,716,618
Effect of escalating costs to 2005 and 2004 dollars (at 4.19 percent per year), respectively 224,946 146,866
Estimated decommissioning cost obligation in current dollars 1,941,564 1,863,484
Effect of escalating costs to payment date (at 4.19 percent per year) 1,851,801 1,929,881
Estimated future decommissioning costs (undiscounted) 3,793,365 3,793,365
Effect of discounting obligation (using risk-free interest rate) (2,026,003) (2,139,561)
Discounted decommissioning cost obligation 1,767,362 1,653,804
Assets held in external decommissioning trust 1,047,592 918,442
Discounted decommissioning obligation in excess of assets currently held in external trust $ 719,770 $ 735,362
Decommissioning expenses recognized include the following components:
(Thousands of dollars) 2005 2004 2003
Annual decommissioning cost accrual reported as depreciation expense:
Externally funded $80,582 $80,582 $80,582
Internally funded (including interest costs) (57,561) (53,307) (35,906)
Interest cost on externally funded decommissioning obligation (24,516) (19,026) (14,952)
Earnings from external trust funds 24,516 19,026 14,952
Net decommissioning accruals recorded $23,021 $ 27,275 $44,676
Decommissioning and interest accruals are included with Regulatory Liabilities on the Consolidated Balance Sheets. Interest costs and trust
earnings associated with externally funded obligations are reported in Other Nonoperating Income on the Consolidated Statements of Operations.
Negative accruals for internally funded portions in 2003, 2004 and 2005 reflect the impact of the 2002 decommissioning study, which
approved an assumption of 100-percent external funding of future costs. The 2005 nuclear decommissioning filing has not been used for
the regulatory presentation because it is effective for 2006. However, the filing and all the updated parameters were used for a new ARO
layer for SFAS No. 143 recognition.
XCEL ENERGY 2005 ANNUAL REPORT 79
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS