Xcel Energy 2010 Annual Report Download - page 144

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In August 2008, Xcel Energy entered into a contract with Accenture for information technology services, which began on Feb. 1,
2009 and extends through 2016. The contract is cancelable at Xcel Energy’s option, although Xcel Energy would be obligated to
pay 50 percent of the contract value for early termination. In 2010, Xcel Energy paid Accenture $22.7 million under the contract
and $8.4 million for other project business. 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 2011 through 2016.
Committed minimum payments under these obligations are as follows:
(Millions of Dollars) IBM Agreement Accenture Agreement
2011 .................................................................................... $ 19.0 $ 9.7
2012 .................................................................................... 17.9 8.7
2013 .................................................................................... 17.6 8.4
2014 .................................................................................... 17.2 8.2
2015 and thereafter ....................................................................... 11.9 16.3
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 — The Comprehensive Environmental Response, Compensation and Liability Act of 1980 and comparable
state laws impose liability, without regarding the legality of the original conduct, on certain classes of persons responsible for the
release of hazardous substances to the environment. 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 various situations, including sites of former MGPs operated by Xcel Energy subsidiaries, predecessors, or other
entities; and third-party sites, such as landfills, for which Xcel Energy is alleged to be a PRP that sent hazardous materials and
wastes. At Dec. 31, 2010 and Dec. 31, 2009, the liability for the cost of remediating these sites was estimated to be $104.0 million
and $102.1 million, respectively, of which $5.7 million and $6.3 million, respectively, was considered to be a current liability.
MGP Sites
Ashland MGP Site — NSP-Wisconsin has been named a PRP for creosote and coal tar contamination at a site in Ashland, Wis.
The Ashland/Northern States Power Lakefront Superfund Site (Ashland site) includes property owned by NSP-Wisconsin, which
was previously an MGP facility and two other properties: an adjacent city lakeshore park area, on which an unaffiliated third
party previously operated a sawmill; and an area of Lake Superior’s Chequamegon Bay adjoining the park.
In 2002, the Ashland site was placed on the National Priorities List. In 2009, the EPA issued its proposed remedial action plan
(PRAP). The EPA issued its Record of Decision (ROD) in September 2010, which documents the remedy that the EPA has
selected for the cleanup of the site. The EPA has estimated the cost for its selected cleanup is between $83 million and $97
million. The EPA’s cost estimate is expected to be within plus 50 percent to minus 30 percent of the actual project costs. It is
anticipated that the EPA will issue special notice letters to several PRPs, including NSP-Wisconsin in 2011, and in those letters,
the EPA will invite the PRPs to participate in negotiations with the EPA to conduct or pay for all, or a portion, of the future
cleanup work at the site.
NSP-Wisconsin’s potential liability, the actual cost of remediating the Ashland site and the time frame over which the amounts
may be paid out are not determinable until after the EPA issues special notice letters and engages in negotiations with the PRPs at
the site. NSP-Wisconsin also continues to work to identify and access state and federal funds to apply to the ultimate remediation
cost of the entire site. NSP-Wisconsin has recorded a liability of $97.5 million based upon potential remediation and design costs
together with estimated outside legal and consultant costs.