Xcel Energy 2006 Annual Report Download - page 35

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25
firm peak day sales obligations are primarily purchased at PSCo’s city gate meter stations and a small amount is received directly
from wellhead sources.
PSCo has closed the Leyden Storage Field and is in the monitoring phase of the abandonment process, which is expected to continue
until December 2007. See further discussion under Item 1, Environmental Matters.
PSCo is required by CPUC regulations to file a natural gas purchase plan by June of each year projecting and describing the quantities
of natural gas supplies, upstream services and the costs of those supplies and services for the period beginning July 1 through June 30
of the following year. PSCo is also required to file a natural gas purchase report by October of each year reporting actual quantities
and costs incurred for natural gas supplies and upstream services for the 12-month period ending the previous June 30.
Natural Gas Supply and Costs
PSCo actively seeks natural gas supply, transportation and storage alternatives to yield a diversified portfolio that provides increased
flexibility, decreased interruption and financial risk, and economical rates. In addition, PSCo conducts natural gas price hedging
activities that have been approved by the CPUC. This diversification involves numerous supply sources with varied contract lengths.
The following table summarizes the average delivered cost per MMBtu of natural gas purchased for resale by PSCo’s regulated retail
natural gas distribution business:
2006 ....................................................................... $7.0
9
2005 ....................................................................... $8.0
1
2004 ....................................................................... $6.3
0
PSCo has certain natural gas supply, transportation and storage agreements that include obligations for the purchase and/or delivery of
specified volumes of natural gas or to make payments in lieu of delivery. At Dec. 31, 2006, PSCo was committed to approximately
$1.2 billion in such obligations under these contracts, which expire in various years from 2007 through 2025.
PSCo purchases natural gas by optimizing a balance of long-term and short-term natural gas purchases, firm transportation and natural
gas storage contracts. During 2006, PSCo purchased natural gas from approximately 37 suppliers.
See additional discussion of natural gas costs under Factors Affecting Results of Continuing Operations in Management’s Discussion
and Analysis under Item 7.