Xcel Energy 2008 Annual Report Download - page 140

customers have protested the calculations. Once the final refund amounts are approved by the FERC, interest will be
added to the refund due the full requirements customers. As of Dec. 31, 2008, SPS has accrued an amount sufficient
to cover the estimated refund obligation.
Wholesale 2005 Power Base Rate Application — In December 2005, SPS filed for a $2.5 million increase in wholesale
power rates to certain electric cooperatives. In January 2006, the FERC conditionally accepted the proposed rates for
filing and the $2.5 million power rate increase became effective on July 1, 2006, subject to refund. In September 2006,
offers of settlement with respect to the five full-requirements customers and with respect to PNM were filed for
approval. In September 2007, the FERC accepted the settlement with the full-requirements customers. In September
2008, the FERC issued an order accepting the contested partial settlement with PNM.
SPS Formula Transmission Rate Case — In December 2007, Xcel Energy submitted an application to implement a
transmission formula rate for the SPS zone of the Xcel Energy OATT. The changed rates will affect all wholesale
transmission service customers using the SPS transmission network under either the SPP Regional OATT or the Xcel
Energy OATT.
The proposed rates would be updated annually each July 1 based on SPS’ prior year actual costs and loads plus the
revenue requirements associated with projected current year transmission plant additions. The proposed ROE is
12.7 percent, including a 50 basis point adder for SPS’ participation in the SPP RTO. The proposed rates would
provide first year incremental annual transmission revenue for SPS of approximately $5.5 million.
In February 2008, the FERC accepted the proposed rates, suspending the effective date to July 6, 2008, and setting the
rate filing for hearings and settlement procedures. The FERC granted a 50 basis point adder to the ROE that it will
determine in this proceeding as a result of SPS’ participation in the SPP RTO. The filed rates, updated for 2007 actual
costs and projected 2008 transmission plant additions, were placed into effect on July 6, 2008, subject to refund. The
SPS and SPP rate filings are now in settlement procedures. The ultimate outcome of the rate filings is not known at
this time.
SPS 2008 Wholesale Rate Case — On March 31, 2008, SPS filed a wholesale rate case seeking an annual revenue
increase of $14.9 million or an overall 5.14 percent increase, based on 12.20 percent requested ROE. On April 21,
2008, a motion for dismissal and protest was filed by the four eastern New Mexico cooperatives.
In SPS’ answer to the motions to intervene and protest, SPS renewed its request for a nominal suspension of 60 days
and asked the FERC to consider such a nominal suspension in exchange for SPS’ acceptance of two conditions. The
first condition was that SPS would agree to a ROE of no more than 10.25 percent and second, SPS would agree to use
a 12 CP demand allocator for the period the rates will be in effect. The SPS answer would result in an annual revenue
increase of $9.9 million or an overall 3.4 percent increase.
On May 30, 2008, the FERC conditionally accepted and suspended the rates and established hearing and settlement
procedures. The FERC granted a one-day suspension of rates instead of 180 days. The LPP plant achieved commercial
operations in September 2008 and the proposed base rates, based on a 10.25 percent ROE and a 12-CP demand
allocator, became effective, subject to refund. A pre-hearing conference was held Jan. 29, 2009, where a procedural
schedule for the hearing was established and a preliminary joint list of issues was discussed.
17. Commitments and Contingent Liabilities
Commitments
Capital Commitments — As of Dec. 31, 2008, the estimated cost of capital requirements of Xcel Energy and its
subsidiaries and the capital expenditure programs is approximately $1.8 billion in 2009, $2.3 billion in 2010 and
$2.4 billion in 2011. Xcel Energy’s capital forecast includes the following major projects:
Nuclear Capacity Increases and Life Extension — In August 2004, NSP-Minnesota announced plans to pursue 20-year
license renewals for the Monticello and Prairie Island nuclear plants. A renewed operating license was approved and
issued for Monticello by the NRC in November 2006 licensing the plant to operate until 2030, and the MPUC order
approving the spent fuel storage capacity needed to support plant operations until 2030 went into effect in June 2007.
The application to renew Prairie Island’s operating licenses was submitted to the NRC in April 2008 and the
application for a certificate of need for additional spent fuel storage capacity to support 20 additional years of plant
operation was submitted to the MPUC in May 2008. Final state and federal approvals are expected in 2010.
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