Xcel Energy 2008 Annual Report Download - page 149

A reconciliation of the beginning and ending aggregate carrying amounts of Xcel Energy’s AROs is shown in the table
below for the 12 months ended Dec. 31, 2008 and Dec. 31, 2007, respectively:
Beginning Revisions Ending
Balance Liabilities Liabilities to Prior Balance
Jan. 1, 2008 Recognized Settled Accretion Estimates Dec. 31, 2008
(Thousands of Dollars)
Electric Utility Plant:
Steam production asbestos ......... $ 35,807 $21,721 $(500) $ 2,165 $ 33,948 $ 93,141
Steam production ash containment . . . 22,539 — — 1,275 (5,171) 18,643
Steam production radiation sources . . . — 335 — 2 — 337
Nuclear production decommissioning . . 1,209,746 — — 71,370 (267,774) 1,013,342
Wind production .............. — 7,408 39 7,447
Electric transmission and distribution . . 270——1627313
Gas Utility Plant:
Gas transmission and distribution .... 45,505 — — 1,127 (45,752) 880
Common Utility and Other Property:
Common general plant asbestos ..... 1,277 — — 70 (268) 1,079
Total liability ............... $1,315,144 $29,464 $(500) $76,064 $(284,990) $1,135,182
The fair value of NSP-Minnesota assets legally restricted, for purposes of settling the nuclear ARO is $1.1 billion as of
Dec. 31, 2008, including external nuclear decommissioning investment funds and internally funded amounts.
A new decommissioning study filed with the MPUC in 2008 proposed extension of the final removal date of the
Monticello and Prairie Island nuclear plants by 14 and 26 years, respectively, effective Jan. 1, 2009. As a result of the
studies for the Monticello and Prairie Island nuclear plants, the nuclear production decommissioning ARO and related
regulatory asset decreased by $128.5 million and $139.3 million, respectively, in the fourth quarter of 2008.
Revisions to prior estimates were made for asbestos, ash ponds, gas distribution and electric transmission and
distribution asset retirement obligations due to revised estimates and end of life dates.
Beginning Revisions Ending
Balance Liabilities Liabilities to Prior Balance
Jan. 1, 2007 Recognized Settled Accretion Estimates Dec. 31, 2007
(Thousands of Dollars)
Electric Utility Plant:
Steam production asbestos ......... $ 35,515 $— $— $ 2,049 $ (1,757) $ 35,807
Steam production ash containment . . . 21,416 — — 1,212 (89) 22,539
Nuclear production decommissioning . . 1,256,763 — — 73,914 (120,931) 1,209,746
Electric transmission and distribution . . 1,994 — — 43 (1,767) 270
Gas Utility Plant:
Gas transmission and distribution .... 44,405 — — 1,100 — 45,505
Common Utility and Other Property:
Common general plant asbestos ..... 1,858 — — 100 (681) 1,277
Total liability ............... $1,361,951 $— $— $78,418 $(125,225) $1,315,144
On Sept. 21, 2007, the MPUC approved NSP-Minnesota’s remaining lives depreciation filing lengthening the life of
the Monticello nuclear plant by 20 years, effective Jan. 1, 2007, which decreased the related ARO and related
regulatory asset by $120.9 million in the third quarter of 2007.
Indeterminate AROs — PSCo has underground natural gas storage facilities that have special closure requirements for
which the final removal date cannot be determined, therefore an ARO has not been recorded.
Removal Costs — Xcel Energy accrues an obligation for plant removal costs for other generation, transmission and
distribution facilities of its utility subsidiaries. Generally, the accrual of future non-ARO removal obligations is not
required. However, long-standing ratemaking practices approved by applicable state and federal regulatory commissions
have allowed provisions for such costs in historical depreciation rates. These removal costs have accumulated over a
number of years based on varying rates as authorized by the appropriate regulatory entities. Given the long periods over
which the amounts were accrued and the changing of rates through time, the utility subsidiaries have estimated the
amount of removal costs accumulated through historic depreciation expense based on current factors used in the
existing depreciation rates.
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