Xcel Energy 2011 Annual Report Download - page 40

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30
The following table summarizes the average delivered cost per MMBtu of natural gas purchased for resale by NSP-Wisconsin’s
regulated retail natural gas distribution business:
2011................................................................
...................
$
5.18
2010................................................................
...................
5.46
2009................................................................
...................
5.85
The cost of natural gas supply, transportation service and storage service is recovered through various cost-recovery adjustment
mechanisms. NSP-Wisconsin has firm natural gas transportation contracts with several pipelines, which expire in various years
from 2012 through 2029.
NSP-Wisconsin has certain natural gas supply, transportation and storage agreements that include obligations for the purchase
and/or delivery of specified volumes of natural gas or to make payments in lieu of delivery. At Dec. 31, 2011, NSP-Wisconsin
was committed to approximately $94 million in such obligations under these contracts.
NSP-Wisconsin purchased firm natural gas supply utilizing long-term and short-term agreements from approximately 14
domestic and Canadian suppliers. This diversity of suppliers and contract lengths allows NSP-Wisconsin to maintain competition
from suppliers and minimize supply costs.
See Items 1A and 7 for further discussion of natural gas supply and costs.
PSCo
Public Utility Regulation
Summary of Regulatory Agencies and Areas of Jurisdiction — PSCo is regulated by the CPUC with respect to its facilities,
rates, accounts, services and issuance of securities. PSCo holds a FERC certificate that allows it to transport natural gas in
interstate commerce without PSCo becoming subject to full FERC jurisdiction under the Federal Natural Gas Act. PSCo is also
subject to the jurisdiction of the FERC with respect to certain natural gas transactions in interstate commerce. PSCo is subject to
the DOT and the CPUC with regards to pipeline safety compliance.
Purchased Gas and Conservation Cost-Recovery Mechanisms — PSCo has retail adjustment clauses that recover purchased gas
and other resource costs:
• GCA — The GCA recovers the actual costs of purchased gas and transportation to meet the requirements of its
customers and is revised quarterly to allow for changes in gas rates. Effective September 2011, the GCA recovers the
return on gas in underground storage.
• DSMCA — PSCo has a low-income energy assistance program. The costs of this energy conservation and weatherization
program are recovered through the gas DSMCA.
• PSIA — Effective Jan. 1, 2012, the PSIA began to recover costs associated with transmission and distribution pipeline
integrity management programs and two projects to replace large transmission pipelines.
QSP Requirements — The CPUC established a natural gas QSP. This regulatory plan includes a natural gas QSP that provides
for bill credits to customers if PSCo does not achieve certain performance targets relating to natural gas leak repair time and
customer service through 2012. The CPUC conducts proceedings to review and approve the rate adjustment annually.
Capability and Demand
PSCo projects peak day natural gas supply requirements for firm sales and backup transportation, which include transportation
customers contracting for firm supply backup, to be 1,926,635 MMBtu. In addition, firm transportation customers hold 565,008
MMBtu of capacity for PSCo without supply backup. Total firm delivery obligation for PSCo is 2,491,643 MMBtu per day. The
maximum daily deliveries for PSCo for firm and interruptible services were 2,155,547 MMBtu on Feb. 1, 2011 and 1,820,806 on
Jan. 7, 2010.