Xcel Energy 2006 Annual Report Download - page 119

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Missouri Public Service Commission vs. e prime, inc. and Xcel Energy Inc. — On Oct. 24, 2006, the Missouri Public Utilities
Commission filed a complaint in State Court for Jackson County of Missouri alleging that e prime, Xcel Energy and 21 other
defendants falsely reported natural gas trades to market trade publications in an effort to artificially raise natural gas prices. The
complaint further alleges that such conduct constitutes a violation of the Missouri Antitrust Law, fraud and unjust enrichment. This
matter has been removed to U.S. District Court, and plaintiffs have indicated they intend to file a motion to remand to state court. Xcel
Energy and e prime deny plaintiffs’ allegations and intend to vigorously defend themselves in this action.
Payne et al. vs. PSCo et al. — In late October 2003, there was a wildfire in Boulder County, Colorado. There was no loss of life, but
there was property damage associated with this fire. On Oct. 28, 2005, an action against PSCo relating to this fire was filed in Boulder
County District Court. There are 22 plaintiffs, including individuals, the City of Jamestown and two companies, and three co-
defendants, including PSCo. Plaintiffs have asserted that a tree falling into PSCo distribution lines may have caused the fire.
Discovery is nearly complete, and the case is set to go to trial commencing July 30, 2007. A motion for partial summary judgment has
been filed by PSCo and its co-defendants. PSCo is continuing to vigorously defend itself against the claims asserted in this lawsuit.
This lawsuit is not expected to have a material financial impact on Xcel Energy and PSCo believes that its insurance coverage will
cover any liability in this matter.
Comanche 3 Permit Litigation — On Aug. 4, 2005, Citizens for Clean Air and Water in Pueblo and Southern Colorado and Clean
Energy Action filed a complaint against the Colorado Air Pollution Control Division alleging that the Division improperly granted
permits to PSCo under Colorado’s Prevention of Significant Deterioration program for the construction and operation of Comanche 3.
PSCo intervened in the case. On June 20, 2006, the court ruled in PSCo’s favor and held that the Comanche 3 permits had been
properly granted and plaintiffs’ claims to the contrary were without merit. Plaintiffs have appealed this decision. On Nov. 22, 2006,
plaintiffs filed their opening briefs. PSCo’s response was filed Dec. 22, 2006. The Colorado Court of Appeals is expected to rule on
the appeal in 2007.
Fru-Con Construction Corporation vs. Utility Engineering et al. — On March 28, 2005, Fru-Con Construction Corporation (Fru-
Con) commenced a lawsuit in U.S. District Court for the Eastern District of California against UE and the Sacramento Municipal
Utility District (SMUD) for damages allegedly suffered during the construction of a natural gas-fired, combined-cycle power plant in
Sacramento County. Fru-Con’s complaint alleges that it entered into a contract with SMUD to construct the power plant and further
alleges that UE was negligent with regard to the design services it furnished to SMUD. UE denies this claim and intends to vigorously
defend itself. Because this lawsuit was commenced prior to the April 8, 2005, closing of the sale of UE to Zachry, Xcel Energy is
obligated to indemnify Zachry for damages related to this case up to $17.5 million. Pursuant to the terms of its professional liability
policy, UE is insured up to $35 million. On June 1, 2005, UE filed a motion to dismiss Fru-Con’s complaint. A hearing concerning
this motion was held on July 18, 2005, with the court taking the matter under advisement. On Aug. 4, 2005, the court granted UE’s
motion to dismiss. Because SMUD remains a defendant in this action, the court has not entered a final judgment subject to an appeal
with respect to its order to dismiss UE from the lawsuit.
Metropolitan Airports Commission vs. Northern States Power Company — On Dec. 30, 2004, the Metropolitan Airports
Commission (MAC) filed a complaint in Minnesota State District Court in Hennepin County asserting that NSP-Minnesota is required
to relocate facilities on MAC property at the expense of NSP-Minnesota. MAC claims that approximately $7.1 million charged by
NSP-Minnesota over the past five years for relocation costs should be repaid. Both parties asserted cross motions for partial summary
judgment on a separate and less significant claim concerning legal obligations associated with rent payments allegedly due and owing
by NSP-Minnesota to MAC for the use of its property for a substation that serves MAC. A hearing regarding these cross motions was
held in January 2006. In February 2006, the court granted MAC’s motion on this issue, finding that there was a valid lease and that the
past course of action between the parties required NSP-Minnesota to continue making rent payments. NSP-Minnesota had made rent
payments for 45 years. Depositions of key witnesses took place in February, March and April of 2006. The parties entered into
meaningful settlement negotiations in May 2006, and in August 2006 reached an oral settlement of the dispute. The parties are
negotiating over the final form of the settlement documents and it is expected that the action will be formally dismissed in the near
future.
Siewert vs. Xcel Energy — Plaintiffs, the owners and operators of a Minnesota dairy farm, brought an action against NSP-Minnesota
alleging negligence in the handling, supplying, distributing and selling of electrical power systems; negligence in the construction and
maintenance of distribution systems; and failure to warn or adequately test such systems. Plaintiffs allege decreased milk production,
injury, and damage to a dairy herd as a result of stray voltage resulting from NSP-Minnesota’s distribution system. Plaintiffs’ expert
report on the economic damage to their dairy farm states that the total present value of plaintiffs’ loss is $6.8 million. Trial is
scheduled to commence in January 2008. NSP-Minnesota denies these allegations and will vigorously defend itself in this matter.
Hoffman vs. Northern States Power Company — On March 15, 2006, a purported class action complaint was filed in Minnesota
State District Court in Hennepin County, on behalf of NSP-Minnesota’s residential customers in Minnesota, North Dakota and South
Dakota for alleged breach of a contractual obligation to maintain and inspect the points of connection between NSP-Minnesota’s wires
and customers’ homes within the meter box. Plaintiffs claim NSP-Minnesota’s alleged breach results in an increased risk of fire and is
in violation of tariffs on file with the MPUC. Plaintiffs seek injunctive relief and damages in an amount equal to the value of
inspections plaintiffs claim NSP-Minnesota was required to perform over the past six years. NSP-Minnesota filed a motion for