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55
Electric Revenues and Margin
Electric revenues and fuel and purchased power expenses are largely impacted by the fluctuation in the price of natural gas, coal
and uranium used in the generation of electricity, but as a result of the design of fuel recovery mechanisms to recover current
expenses, these price fluctuations have little impact on electric margin. The following table details the electric revenues and
margin:
(Millions of Dollars) 2011 2010 2009
Electric revenues .............................................................. $
8,767 $
8,452 $
7,705
Electric fuel and purchased power............................................... (3,992) (4,011) (3,672
)
Electric margin .............................................................. $
4,775 $
4,441 $
4,033
The following tables summarize the components of the changes in electric revenues and electric margin for the years ended Dec. 31:
Electric Revenues
(Millions of Dollars) 2011 vs. 2010
Revenue requirements for PSCo gas generation acquisition (a) ............................................. $ 124
Retail rate increases (net of revenue subject to refund) (b) .................................................. 102
Transmission revenue.................................................................................. 45
Conservation and DSM revenue (offset by expenses) ..................................................... 31
Fuel and purchased power cost recovery ................................................................. 19
Estimated impact of weather............................................................................ 18
Conservation and DSM incentive ....................................................................... 14
Trading, including PSCo renewable energy credit sales ................................................... (19)
Other, net ............................................................................................. (19)
Total increase in electric revenue ..................................................................... $ 315
(a) The increase in revenue requirements for PSCo generation reflects the acquisition of the Rocky Mountain and Blue Spruce natural gas facilities in late 2010.
These revenue requirements are partially offset by higher O&M expense, depreciation expense, property taxes and financing costs.
(b) The retail rate increases include final rates in Wisconsin and Texas and interim rates, subject to refund, in Minnesota and North Dakota. The rate increases
are net of a provision for refund of approximately $67 million for Minnesota and $2.3 million for North Dakota, based on settlements reached with various
parties in both cases. In addition, NSP-Minnesota reduced depreciation expense and revenues by approximately $30 million in the fourth quarter of 2011 to
reflect the proposed settlement in the Minnesota electric rate case. These settlements are pending commission decisions in both Minnesota and North
Dakota.
2011 Comparison with 2010 — Electric revenues increased primarily due to the cost recovery of the acquisition of the Rocky
Mountain and Blue Spruce natural gas facilities at PSCo and retail rate increases in Minnesota, Wisconsin, Texas, North Dakota
and Michigan.
Electric Margin
(Millions of Dollars) 2011 vs. 2010
Revenue requirements for PSCo gas generation acquisition (a) ................................
...............
$
124
Retail rate increases (net of revenue subject to refund) (b) ................................
....................
102
Conservation and DSM revenue (offset by expenses) ................................
.......................
31
Transmission revenue, net of costs ................................................................
........
20
Estimated impact of weather................................................................
..............
18
Conservation and DSM incentive ................................................................
.........
14
Non-fuel riders ................................................................
..........................
(5)
Other, net (including firm wholesale and deferred fuel adjustments)................................
..........
30
Total increase in electric margin ................................................................
........
$
334
(a) The increase in revenue requirements for PSCo generation reflects the acquisition of the Rocky Mountain and Blue Spruce natural gas facilities in late 2010.
These revenue requirements are partially offset by higher O&M expense, depreciation expense, property taxes and financing costs.
(b) The retail rate increases include final rates in Wisconsin and Texas and interim rates, subject to refund, in Minnesota and North Dakota. The rate increases
are net of a provision for refund of approximately $67 million for Minnesota and $2.3 million for North Dakota, based on settlements reached with various
parties in both cases. In addition, NSP-Minnesota reduced depreciation expense and revenues by approximately $30 million in the fourth quarter of 2011 to
reflect the proposed settlement in the Minnesota electric rate case. These settlements are pending commission decisions in both Minnesota and North
Dakota.