Xcel Energy 2009 Annual Report Download - page 150

amount of removal costs accumulated through historic depreciation expense based on current factors used in the
existing depreciation rates.
Accordingly, the recorded amounts of estimated future removal costs are considered regulatory liabilities. Removal costs
by entity are as follows at Dec. 31:
2009 2008
(Millions of Dollars)
NSP-Minnesota ............................................ $372 $354
NSP-Wisconsin ............................................ 102 96
PSCo ................................................... 375 379
SPS.................................................... 93 96
Total Xcel Energy ......................................... $942 $925
Nuclear Insurance
NSP-Minnesota’s public liability for claims resulting from any nuclear incident is limited to $12.5 billion under the
Price-Anderson amendment to the Atomic Energy Act of 1954, as amended. NSP-Minnesota has secured $300 million
of coverage for its public liability exposure with a pool of insurance companies. The remaining $12.2 billion of
exposure is funded by the Secondary Financial Protection Program, available from assessments by the federal
government in case of a nuclear accident. NSP-Minnesota is subject to assessments of up to $117.5 million per reactor
per accident for each of its three licensed reactors, to be applied for public liability arising from a nuclear incident at
any licensed nuclear facility in the United States. The maximum funding requirement is $17.5 million per reactor
during any one year. These maximum assessment amounts are both subject to inflation adjustment by the NRC and
state premium taxes. The NRC’s last adjustment was effective Oct. 29, 2008. The next adjustment is due on or before
Oct. 29, 2013.
NSP-Minnesota purchases insurance for property damage and site decontamination cleanup costs from Nuclear Electric
Insurance Ltd. (NEIL). The coverage limits are $2.3 billion for each of NSP-Minnesota’s two nuclear plant sites. NEIL
also provides business interruption insurance coverage, including the cost of replacement power obtained during certain
prolonged accidental outages of nuclear generating units. Premiums are expensed over the policy term. All companies
insured with NEIL are subject to retroactive premium adjustments if losses exceed accumulated reserve funds. Capital
has been accumulated in the reserve funds of NEIL to the extent that NSP-Minnesota would have no exposure for
retroactive premium assessments in case of a single incident under the business interruption and the property damage
insurance coverage. However, in each calendar year, NSP-Minnesota could be subject to maximum assessments of
approximately $15.2 million for business interruption insurance and $30.9 million for property damage insurance if
losses exceed accumulated reserve funds.
Legal Contingencies
Lawsuits and claims arise in the normal course of business. Management, after consultation with legal counsel, has
recorded an estimate of the probable cost of settlement or other disposition of them. The ultimate outcome of these
matters cannot presently be determined. Accordingly, the ultimate resolution of these matters could have a material
adverse effect on Xcel Energy’s financial position and results of operations.
Gas Trading Litigation
e prime is a wholly owned subsidiary of Xcel Energy. Among other things, e prime was in the business of natural gas
trading and marketing. e prime has not engaged in natural gas trading or marketing activities since 2003. Thirteen
lawsuits have been commenced against e prime and Xcel Energy (and NSP-Wisconsin, in one instance); alleging fraud
and anticompetitive activities in conspiring to restrain the trade of natural gas and manipulate natural gas prices. Xcel
Energy, e prime, and NSP-Wisconsin deny these allegations and will vigorously defend against these lawsuits, including
seeking dismissal and summary judgment.
The initial gas-trading lawsuit, a purported class action brought by wholesale natural gas purchasers, was filed in
November 2003 in the United States District Court in the Eastern District of California. e prime is one of several
defendants named in the complaint. This case is captioned Texas-Ohio Energy vs. CenterPoint Energy et al. The other
twelve cases arising out of the same or similar set of facts are captioned Fairhaven Power Company vs. EnCana
Corporation et al.; Ableman Art Glass vs. EnCana Corporation et al.; Utility Savings and Refund Services LLP vs. Reliant
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