Xcel Energy 2011 Annual Report Download - page 30

20
NMPRC regulations require SPS to periodically request authority to continue using its FPPCAC. The NMPRC reviews SPS’ use
of its FPPCAC since the filing of its previous fuel clause continuation filing. As a follow-up to an SPS rate case, the NMPRC
conducted an audit of SPS’ fuel and purchased power costs for a 12-month period from July 2009 through July 2010 and the
tracking mechanism to capture costs and revenues associated with SPS’ RECs from assorted wind projects for that period. In
December 2011, the NMPRC authorized SPS to continue its use of its FPPCAC and approved the prudency of the use of the
FPPCAC for the period through Dec. 31, 2010.
SPS recovers fuel and purchased energy costs from its wholesale customers through a monthly wholesale fuel and purchased
economic energy cost adjustment clause accepted for filing by the FERC.
Capacity and Demand
Uninterrupted system peak demand for SPS for each of the last three years and the forecast for 2012, assuming normal weather, is
listed below.
System Peak Demand (in MW)
2009 2010 2011 2012 Forecast
SPS ................................
....................
5,038 4,985 5,210 5,155
The peak demand for the SPS system typically occurs in the summer. The 2011 uninterrupted system peak demand for SPS
occurred on Aug. 2, 2011.
Energy Sources and Related Transmission Initiatives
SPS expects to use existing electric generating stations, power purchases and DSM options to meet its net dependable system
capacity requirements.
Purchased Power — SPS has contracts to purchase power from other utilities and independent power producers. Long-term
purchased power contracts typically require a periodic payment to secure the capacity and a charge for the associated energy
actually purchased. SPS also makes short-term purchases to meet system load and energy requirements, to replace generation
from company-owned units under maintenance or during outages, to meet operating reserve obligations or to obtain energy at a
lower cost.
Purchased Transmission Services — SPS has contractual arrangements with SPP and regional transmission service providers,
including PSCo, to deliver power and energy to its native load customers, which are retail and wholesale load obligations with
terms of more than one year.
SPS Transmission NTC — In 2010, SPP approved the first of a series of new transmission lines in several states, including
Texas, New Mexico and Oklahoma, to help improve electric reliability, strengthen the existing transmission grid and provide
outlets for additional renewable wind generation. As a member of SPP, SPS accepts NTCs for SPP identified lines. SPS has
accepted NTCs for approximately 119 miles of transmission lines at an estimated cost of $126 million. Under its jurisdiction, the
PUCT has thus far approved the construction of two 115 KV and one 230 KV electric transmission line as part of the project at an
estimated cost of $29.1 million. These approved transmission lines are expected to be completed in the first half of 2013.
TUCO to Woodward District Extra High Voltage Interchange — In June 2009, SPP directed SPS to construct a 178 mile 345
KV transmission line between Lubbock, Texas and Woodward, Okla. The estimated investment in the new line is $184 million
and will be recovered from SPP members, including SPS, in accordance with the SPP OATT and the retail ratemaking process. In
March 2011, SPS filed a CCN to build the line with the PUCT. A decision is expected in the first quarter of 2012.
Jones CCN — In August 2011, the PUCT approved SPS’ request for a CCN to build a gas-fired combustion turbine generating
unit at SPS’ existing Jones Station in Lubbock, Texas (Jones Unit 4). This generating unit will add 168 MW of capacity to the
SPS service territory. In February 2012, the NMPRC approved the CCN.