Xcel Energy 2009 Annual Report Download - page 125

2009 2008
(Thousands of Dollars)
Amounts Related to the Funded Status of the Plans Have Been Recorded as Follows Based Upon
Expected Recovery in Rates:
Regulatory assets ...................................................... $190,172 $ 343,662
Deferred income taxes ................................................... 3,943 4,659
Net-of-tax accumulated other comprehensive income ................................ 5,777 6,797
Total ............................................................. $199,892 $ 355,118
Measurement date ..................................................... Dec. 31, 2009 Dec. 31, 2008
Significant Assumptions Used to Measure Benefit Obligations:
Discount rate for year-end valuation .......................................... 6.00% 6.75%
Mortality table ....................................................... RP 2000 RP 2000
Effective Dec. 31, 2009, Xcel Energy reduced its initial medical trend assumption from 7.4 percent to 6.8 percent. The
ultimate trend assumption remained unchanged at 5.0 percent. The period until the ultimate rate is reached is three
years. Xcel Energy bases its medical trend assumption on the long-term cost inflation expected in the health care
market, considering the levels projected and recommended by industry experts, as well as recent actual medical cost
increases experienced by Xcel Energy’s retiree medical plan.
A 1-percent change in the assumed health care cost trend rate would have the following effects:
(Thousands of Dollars)
1-percent increase in APBO components of Dec. 31, 2009 ........................ $68,659
1-percent decrease in APBO components of Dec. 31, 2009 ........................ (58,133)
1-percent increase in service and interest components of the net periodic cost ............ 6,673
1-percent decrease in service and interest components of the net periodic cost ............ (5,542)
Cash Flows — The postretirement health care plans have no funding requirements under income tax and other
retirement-related regulations other than fulfilling benefit payment obligations, when claims are presented and approved
under the plans. Additional cash funding requirements are prescribed by certain state and federal rate regulatory
authorities, as discussed previously. Xcel Energy contributed $62.2 million during 2009 and $55.6 million during 2008
and expects to contribute approximately $45.4 million during 2010.
Plan Amendments — The decrease of the projected benefit obligation for the plan amendment is due to a change in
the medical experience rate resulting from negotiations with the PSCo Bargaining Postretirement Health Care Plan.
Benefit Costs — The components of net periodic postretirement benefit costs are:
2009 2008 2007
(Thousands of Dollars)
Service cost ................................................. $ 4,665 $ 5,350 $ 5,813
Interest cost ................................................. 50,412 51,047 50,475
Expected return on plan assets ..................................... (22,775) (31,851) (30,401)
Amortization of transition obligation ................................. 14,444 14,577 14,577
Amortization of prior service cost ................................... (2,726) (2,175) (2,178)
Amortization of net loss ......................................... 19,329 11,498 14,198
Net periodic postretirement benefit cost .............................. 63,349 48,446 52,484
Additional cost recognized due to effects of regulation ....................... 3,891 3,891 3,891
Net benefit cost recognized for financial reporting ........................ $67,240 $ 52,337 $ 56,375
Significant Assumptions Used to Measure Costs:
Discount rate for year-end valuation .................................. 6.75% 6.25% 6.00%
Expected average long-term rate of return on assets (before tax) ................. 7.50 7.50 7.50
Projected Benefit Payments
The following table lists Xcel Energy’s projected benefit payments for the pension and postretirement benefit plans:
Gross Projected Net Projected
Postretirement Expected Postretirement
Projected Health Care Medicare Health Care
Pension Benefit Benefit Part D Benefit
Payments Payments Subsidies Payments
(Thousands of Dollars)
2010 ........................................... $ 238,929 $ 58,738 $ 4,901 $ 53,837
2011 ........................................... 230,833 60,202 5,184 55,018
2012 ........................................... 234,256 60,665 5,529 55,136
2013 ........................................... 237,817 60,785 5,841 54,944
2014 ........................................... 244,160 61,260 6,075 55,185
2015-2019 ....................................... 1,256,824 313,040 33,598 279,442
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