Xcel Energy 2010 Annual Report Download - page 25

15
Fuel Supply and Costs
The following table shows the delivered cost per MMBtu of each significant category of fuel consumed for electric generation,
the percentage of total fuel requirements represented by each category of fuel and the total weighted average cost of all fuels.
Weighted
Average
Fuel Cost
Coal* Nuclear Natural Gas
NSP System Generating Plants Cost Percent Cost Percent Cost Percent
2010 ....................................... $ 1.89 51% $ 0.83 42% $ 6.29 7% $ 1.73
2009 ....................................... 1.78 57 0.70 39 7.36 4 1.61
2008 ....................................... 1.73 58 0.56 39 10.09 3 1.55
* Includes refuse-derived fuel and wood.
See Items 1A and 7 for further discussion of fuel supply and costs.
Fuel Sources
Coal — The NSP System normally maintains approximately 40 days of coal inventory at each plant site. Coal supply inventories
at Dec. 31, 2010 and 2009 were approximately 39 and 43 days usage, respectively. NSP-Minnesota’s generation stations use low-
sulfur western coal purchased primarily under long-term contracts with suppliers operating in Wyoming and Montana. Estimated
coal requirements at NSP-Minnesota’s and NSP-Wisconsin’s major coal-fired generating plants were approximately 9.9 and 10.2
million tons per year at Dec. 31, 2010 and 2009, respectively.
NSP-Minnesota and NSP-Wisconsin have contracted for coal supplies to provide 85 percent of their coal requirements in 2011,
75 percent of their coal requirements in 2012 and 31 percent of their coal requirements in 2013. Any remaining requirements will
be filled through a RFP process or through over-the-counter transactions.
NSP-Minnesota and NSP-Wisconsin have a number of coal transportation contracts that provide for delivery of 100 percent of
their coal requirements through 2013. Coal delivery may be subject to short-term interruptions or reductions due to operation of
the mines, transportation problems, weather and availability of equipment.
Nuclear — To operate NSP-Minnesota’s nuclear generating plants, NSP-Minnesota secures contracts for uranium concentrates,
uranium conversion, uranium enrichment and fuel fabrication. The contract strategy involves a portfolio of spot purchases and
medium and long-term contracts for uranium, conversion and enrichment with multiple producers and with a focus on
diversification to minimize potential impacts caused by supply interruptions due to geographical and world political issues.
● Current nuclear fuel supply contracts cover 100 percent of uranium concentrates requirements through 2012,
approximately 66 percent of the requirements for 2013 through 2017, and approximately 38 percent of the requirements
for 2018 through 2025. Contracts for additional uranium concentrate supplies are currently being negotiated that are
expected to provide a portion of the remaining open requirements through 2025.
● Current contracts for conversion services cover 100 percent of the requirements through 2011, approximately 78 percent
of the requirements from 2012 through 2016, and approximately 30 percent of the requirements for 2017 through 2025.
Contracts for additional conversion services are being negotiated to provide a portion of remaining open requirements for
2012 and beyond.
● Current enrichment services contracts cover 100 percent of 2011 through 2016 requirements, and approximately 54
percent of the requirements for 2017 through 2025. Contracts for additional enrichment services are being negotiated to
provide a portion of the remaining open requirements for 2017 and beyond.
Fabrication services for Monticello are covered through 2014. A contract for fuel fabrication services for Monticello for 2015 and
beyond is currently being negotiated. Prairie Island’s fuel fabrication is 100 percent committed to 2015.
NSP-Minnesota expects sufficient uranium, conversion and enrichment to be available for the total fuel requirements of its
nuclear generating plants. Some exposure to spot market price volatility will remain, due to index-based pricing structures
contained in some of the supply contracts.