Xcel Energy 2008 Annual Report Download - page 30

ISOC Program — In November 2007, PSCo submitted a request to the CPUC for permission to expand its ISOC
program to make it available to customers without demand history, drop the threshold for participation to 300 KW,
allow customers to control load through their energy management system, increase credits and allow customers to limit
the number of interruptions in a day. PSCo also sought approval for current recovery of those credits through the DSM
adjustment clause. Lastly, PSCo sought authority to recover an incentive in addition to receiving reimbursement of the
credits paid to customers to reward it for successful implementation of a program that reduces overall costs to its retail
customers. In June 2008, the ALJ assigned to the case approved expansion of the program and removed current
recovery and incentives from the current case. The CPUC upheld the ALJ’s recommendation through an initial
decision. Three parties filed a request for rehearing, reargument or reconsideration on limited issues. The CPUC
granted the request and held deliberations on Oct. 15, 2008. In its final order, the CPUC approved expansion of the
program, higher credits and concurrent recovery effective Jan. 1, 2009.
RESA — In December 2008, PSCo filed a request with the CPUC to increase the RESA to a full 2 percent in order to
increase renewables to levels that comply with the 20 percent renewable energy requirement. The CPUC approved the
request, and the increase became effective on Jan. 1, 2009.
Fuel Supply and Costs
The following table shows the delivered cost per MMBtu of each significant category of fuel consumed for electric
generation, the percentage of total fuel requirements represented by each category of fuel and the total weighted average
cost of all fuels.
Weighted
Coal Natural Gas Average Fuel
Cost Percent Cost Percent Cost
2008 ...................................... $1.42 84% $7.03 16% $2.31
2007 ...................................... 1.26 84 4.34 16 1.76
2006 ...................................... 1.24 85 6.52 15 2.01
See additional discussion of fuel supply and costs under Item 7 — Factors Affecting Results of Continuing Operations
in Management’s Discussion and Analysis and under Item 1A — Risks Associated with Our Business.
Fuel Sources
Coal — Coal inventory levels may vary widely among plants. However, PSCo normally maintains approximately
35 days of coal inventory at each plant site. Coal supply inventories at Dec. 31, 2008 and 2007, were approximately 32
and 41 days usage, based on the maximum burn rate for all of PSCo’s coal-fired plants. PSCo’s generation stations use
low-sulfur western coal purchased primarily under contracts with suppliers operating in Colorado and Wyoming.
During 2008 and 2007, PSCo’s coal requirements for existing plants were approximately 11 million and 10 million
tons, respectively.
PSCo has contracted for coal suppliers to supply 100 percent of its coal requirements in 2009, 49 percent of its coal
requirements in 2010 and 34 percent of its coal requirements in 2011. Any remaining requirements will be filled
through an RFP process.
PSCo has coal transportation contracts that provide for delivery of 100 percent of its coal requirements in 2009,
93 percent of its coal requirements in 2010 and 93 percent of its coal requirements in 2011. Coal delivery may be
subject to short-term interruptions or reductions due to operation of the mines, transportation problems, weather, and
availability of equipment.
Natural gas — PSCo uses both firm and interruptible natural gas and standby oil in combustion turbines and certain
boilers. Natural gas supplies for PSCo’s power plants are procured under contracts to provide an adequate supply of
fuel. The supply contracts expire in 2009 and 2010. The transportation and storage contracts expire in various years
from 2009 to 2040. Certain natural gas supply and transportation agreements 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, 2008, PSCo’s
commitments related to supply contracts were approximately $137 million and transportation and storage contracts
were approximately $1 billion.
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