Xcel Energy 2010 Annual Report Download - page 22

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NSP-Minnesota also makes short-term purchases to comply with minimum availability requirements, to obtain energy at a lower
cost and for various other operating requirements.
Purchased Transmission Services — In addition to using their integrated transmission system, NSP-Minnesota and NSP-
Wisconsin have contracts with MISO and regional transmission service providers to deliver power and energy to the NSP System.
2010 NSP System Resource Decisions and Plan — In May 2010, NSP-Minnesota signed new power purchase and exchange
agreements with Manitoba Hydro that will extend purchases through 2025. The existing agreements provided for the purchase of
850 MW, which would have started to expire in April 2015. NSP-Minnesota filed for approval with the MPUC in June 2010.
NSP-Minnesota filed its 2011-2025 resource plan in August 2010. In addition to the extension of contracts with Manitoba Hydro
and previously approved life extensions and capacity increases at NSP-Minnesota’s nuclear generating plants, the near term
actions in the plan include continued expansion of demand side management programs up to 1.5 percent of sales annually, the
acquisition of up to 250 MW of additional wind power to be in service by 2012 if priced competitively, and the replacement of
the remaining 270 MW of coal fired generation at the Black Dog generating plant with 680 MW combined-cycle unit by January
2016.
Through the Interchange Agreement, the Minnesota resource plan and decisions have a direct impact on the costs that are shared
by NSP-Wisconsin.
Wind Generation — NSP-Minnesota invested approximately $500 million in wind generation through 2010 and expects to invest
an additional $400 million in 2011. The 201 MW Nobles Wind Project in southwestern Minnesota began commercial operations
in 2010 and the 150 MW Merricourt Wind Project in southeastern North Dakota is expected to reach commercial operation in
2011. The portion of the costs for the Nobles and Merricourt Wind Projects assigned to Minnesota electric retail customers are
currently being collected through the RES rider. NSP-Minnesota has included the costs for the Nobles Wind Project in its current
pending rate case in Minnesota and if approved, the costs will be recovered in base rates when final rates are implemented. The
NDPSC granted advanced determinations of prudence for the Nobles and Merricourt Wind Projects and a CPCN for the
Merricourt Wind Project. This process provides greater assurance that NSP-Minnesota can recover the North Dakota portion of
prudently incurred expenses for these projects.
NSP-Minnesota Transmission CONs — In May 2009, the MPUC granted a CON to construct three 345 KV electric transmission
lines as part of the CapX2020 project. The project to build the three lines includes construction of approximately 700 miles of
new facilities at a cost of approximately $1.9 billion. The portion of the project cost to be constructed by NSP-Minnesota and
NSP-Wisconsin is estimated to be approximately $1.0 billion. The remainder of the costs will be born by other utilities in the
upper Midwest. These cost estimates will be revised after the regulatory process is completed. The MPUC also included a
condition assuring a portion of the capacity of the Brookings, S.D. to Hampton, Minn. line is used for renewable energy. In May
2010, NSP-Minnesota and other CapX2020 utilities notified the MPUC that the in-service date for the Brookings, S.D. to
Hampton, Minn. project is expected to be delayed to the second quarter of 2015, more than one year after the date provided in the
MPUC CON decision. The MPUC ordered NSP-Minnesota to provide a report in January 2011 to update the status of the project.
NSP-Minnesota filed the report, which described the numerous activities in progress to allow the project to be placed in service
by second quarter 2015.
As part of the regulatory process for the CapX2020 345 KV projects, NSP-Minnesota and Great River Energy filed four route
permit applications with the MPUC in addition to a facility permit application with the SDPUC, a certificate of corridor
compatibility application with the NDPSC and a CPCN application with the PSCW. Two filed route permit applications have
completed the evidentiary hearing processes, and the MPUC issued route permits for the Monticello, Minn. to St. Cloud, Minn.
project and five of the six segments of the Brookings, S.D. to Hampton, Minn. project. One segment of the Brookings, S.D. to
Hampton, Minn. line was referred back to the ALJ to develop more information concerning the appropriate location to cross the
Minnesota River. That process has been completed and the ALJ issued recommendations in December 2010. In February 2011,
the MPUC approved an aerial crossing of the Minnesota River. The other two CapX2020 route applications are expected to be
sent to an evidentiary hearing in 2011.
Bemidji to Grand Rapids
In July 2009, the MPUC approved the CON application for a 230 KV CapX2020 transmission line between Bemidji, Minn. and
Grand Rapids, Minn. Route permit hearings were concluded in May 2010, and a route permit was approved by the MPUC in
November 2010. This line is expected to entail construction of approximately 68 miles of new facilities at a cost of $100 million.
Construction related activities began in January 2011 and are expected to be completed in 2012. The estimated project cost to
NSP-Minnesota is approximately $26 million.