Xcel Energy 2009 Annual Report Download - page 144

Xcel Energy and its subsidiaries was approximately $209.5, $176.9, and $105.2 million for 2009, 2008, and 2007,
respectively. Included in total rental expense were purchase power agreement payments of $171.3 million,
$130.3 million, and $55.7 million in 2009, 2008 and 2007, respectively.
Included in the future commitments under operating leases are estimated future payments under purchase power
agreements that have been accounted for as operating leases in accordance with ASC 840 Leases. Future commitments
under operating and capital leases for continuing operations are:
Purchase Power
Other Agreement Total
Operating Operating Operating
Leases Leases(a)(b) Leases Capital Leases
(Millions of Dollars)
2010 ........................................... $24.1 $ 151.7 $ 175.8 $ 17.2
2011 ........................................... 27.2 148.7 175.9 18.5
2012 ........................................... 23.7 158.9 182.6 17.6
2013 ........................................... 22.3 173.5 195.8 17.4
2014 ........................................... 22.2 180.6 202.8 17.3
Thereafter ....................................... 124.5 2,264.6 2,389.1 346.3
Total minimum obligation ............................ 434.3
Interest component of obligation ......................... (321.8)
Present value of minimum obligation ................... $112.5
(a) Amounts do not include purchase power agreements accounted for as executory contracts.
(b) Purchase power agreement operating leases contractually expire through 2033.
Technology Agreements — Xcel Energy has a contract that extends through 2015 with International Business Machines
Corp. (IBM) for information technology services. The contract is cancelable at Xcel Energy’s option, although there are
financial penalties for early termination. In 2009, Xcel Energy paid IBM $96.6 million under the contract and
$1.2 million for other project business. The contract also has a committed minimum payment each year from 2010
through September 2015.
In August 2008, Xcel Energy entered into a contract with Accenture for information technology services, which began
on Feb. 1, 2009 and extends through 2014. The contract is cancelable at Xcel Energy’s option, although there are
financial penalties for early termination. In 2009, Xcel Energy paid Accenture $11.3 million under the contract and
$1.6 million for other project business. The contract also has a committed minimum payment each year from 2010
through 2014.
Payments under these obligations are as follows:
IBM Accenture
Agreement Agreement
(Millions of Dollars)
2010 ................................................... $19.8 $11.0
2011 ................................................... 19.5 10.7
2012 ................................................... 19.2 10.5
2013 ................................................... 18.9 10.3
2014 and thereafter .......................................... 31.3 10.2
Environmental Contingencies
Xcel Energy and its subsidiaries have been, or are currently, involved with the cleanup of contamination from certain
hazardous substances at several sites. In many situations, the subsidiary involved believes it will recover some portion of
these costs through insurance claims. Additionally, where applicable, the subsidiary involved is pursuing, or intends to
pursue, recovery from other PRPs and through the rate regulatory process. New and changing federal and state
environmental mandates can also create added financial liabilities for Xcel Energy and its subsidiaries, which are
normally recovered through the rate regulatory process. To the extent any costs are not recovered through the options
listed above, Xcel Energy would be required to recognize an expense.
Site Remediation — Xcel Energy must pay all or a portion of the cost to remediate sites where past activities of its
subsidiaries or other parties have caused environmental contamination. Environmental contingencies could arise from
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