Xcel Energy 2007 Annual Report Download - page 29

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PSCo’s electric customers. Currently, the RESA recovers the incremental costs of compliance with the RES and is
set at a level of 0.6 percent of the net costs.
•Wind Energy Service Adjustment (WESA) — The WESA provides for the recovery of certain costs associated with
the provision of wind energy resources from those customers subscribed as WindSource renewable energy
customers.
•Transmission Cost Adjustment (TCA) — Effective January 2008, the TCA provides for the recovery outside of rate
cases of transmission plant revenue requirements and allows for a return on construction work in progress for
investments for grid reliability or for new or upgraded transmission facilities.
PSCo recovers fuel and purchased energy costs from its wholesale electric customers through a fuel cost adjustment
clause accepted for filing by the FERC.
Performance-Based Regulation and Quality of Service Requirements — PSCo currently operates under an electric and
natural gas PBRP. The major components of this regulatory plan include:
• an electric QSP that provides for bill credits to customers if PSCo does not achieve certain performance targets
relating to electric reliability and customer service through 2010; and
• a natural gas QSP that provides for bill credits to customers if PSCo does not achieve certain performance
targets relating to natural gas leak repair time and customer service through 2010.
PSCo regularly monitors and records as necessary an estimated customer refund obligation under the PBRP. In April of
each year following the measurement period, PSCo files its proposed rate adjustment under the PBRP. The CPUC
conducts proceedings to review and approve these rate adjustments annually.
Capacity and Demand
Uninterrupted system peak demand for PSCo’s electric utility for each of the last three years and the forecast for 2008,
assuming normal weather, are listed below.
System Peak Demand (in MW)
2005 2006 2007 2008 Forecast
PSCo .............................................. 6,975 6,757 6,950 6,877
The peak demand for PSCo’s system typically occurs in the summer. The 2007 system peak demand for PSCo occurred
on July 24, 2007.
Energy Sources and Related Transmission Initiatives
PSCo expects to meet its system capacity requirements through existing electric generating stations, power purchases,
new generation facilities, DSM options and phased expansion of existing generation at select power plants.
Purchased Transmission Services — In addition to using its own transmission system, PSCo has contractual
arrangements with regional transmission service providers to deliver power and energy to PSCo’s native load customers,
which are retail and wholesale load obligations with terms of more than one year.
Purchased Power — PSCo has contractual arrangements to purchase power from other utilities and independent power
producers. Capacity is the measure of the rate at which a particular generating source produces electricity. Energy is a
measure of the amount of electricity produced from a particular generating source over a period of time. Long-term
purchase power contracts typically require a periodic payment to secure the capacity from a particular generating source
and a charge for the associated energy actually purchased from such generating source.
PSCo also makes short-term purchases to replace generation from company-owned units that are unavailable due to
maintenance and unplanned outages, to comply with minimum availability requirements, to obtain energy at a lower
cost than that which could be produced by other resource options, including company-owned generation and/or
long-term purchase power contracts, and for various other operating requirements.
PSCo Resource Plan — PSCo estimates it will purchase approximately 40 percent of its total electric system energy
needs for 2008 and generate the remainder with PSCo-owned resources. Additional capacity has been secured under
contract making additional energy available for purchase, if required. PSCo currently has under contract or through
owned generation, the resources necessary to meet its anticipated 2008 load obligation. In November 2007, PSCo filed
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