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Prairie Island Nuclear Plant EPU — In 2009, the MPUC granted NSP-Minnesota a CON for an EPU project at the Prairie
Island nuclear generating plant. The total estimated cost of the EPU was $294 million, of which approximately $77.6 million has
been incurred, including AFUDC of approximately $13.3 million. Subsequently, NSP-Minnesota filed a resource plan update and
a change of circumstances filing notifying the MPUC that there were changes in the size, timing and cost estimates for this
project, revisions to economic and project design analysis and changes due to the estimated impact of revised scheduled outages.
The information indicated reductions to the estimated benefit of the uprate project. As a result, NSP-Minnesota concluded that
further investment in this project would not benefit customers. In December 2012, the MPUC voted unanimously that no party
had shown cause to prevent termination of the EPU CON. The MPUC is expected to issue an order terminating the EPU CON in
the first half of 2013.
NSP-Minnesota plans to address recovery of incurred costs in the next rate case for each of the NSP-Minnesota jurisdictions and
to file a request with the FERC for approval to recover a portion of the costs from NSP-Wisconsin through the Interchange
Agreement. NSP-Wisconsin plans to seek cost recovery in a future rate case. Based on the outcome of the MPUC decision, EPU
costs incurred to date were compared to the discounted value of the estimated future rate recovery based on past jurisdictional
precedent, resulting in a $10.1 million pretax charge in December 2012 which is included in O&M expense.
Pending and Recently Concluded Regulatory Proceedings — NDPSC
NSP-Minnesota – North Dakota 2012 Electric Rate Case — In December 2012, NSP-Minnesota filed a request with the NDPSC
for an increase in annual retail electric revenues of approximately $16.9 million, or 9.25 percent. The rate filing is based on a
2013 forecast test year, a requested ROE of 10.6 percent, an electric rate base of approximately $377.6 million and an equity ratio
of 52.56 percent.
In January 2013, the NDPSC approved an interim electric increase of $14.7 million, effective Feb. 16, 2013, subject to refund. A
final NDPSC decision on the case is expected in the third quarter of 2013.
NSP-Minnesota – North Dakota 2010 Electric Rate Case — In December 2010, NSP-Minnesota filed a request with the NDPSC
to increase 2011 electric rates in North Dakota by approximately $19.8 million, or 12 percent, and a step increase of $4.2 million,
or 2.6 percent, in 2012. The rate filing was based on a 2011 forecast test year and included a requested ROE of 11.25 percent, an
electric rate base of approximately $328 million and an equity ratio of 52.56 percent. The NDPSC approved an interim rate
increase of approximately $17.4 million, subject to refund, effective Feb. 18, 2011.
In May 2011, NSP-Minnesota revised its rate request to approximately $18.0 million, or an increase of 11 percent, for 2011 and
$2.4 million, or 1.4 percent, for the additional step increase in 2012. In February 2012, the NDPSC approved the settlement
agreement, which provided for a rate increase of $13.7 million in 2011 and an additional step increase of $2.0 million in 2012,
based on a 10.4 percent ROE and black box settlement for all other issues. To address the unknown timing of economic recovery
and the effect on sales, the settlement includes a true-up to 2012 non-fuel revenues plus the settlement rate increase. NSP-
Minnesota implemented final rates in May 2012 and issued refunds in June 2012.
Pending and Recently Concluded Regulatory Proceedings — SDPUC
NSP-Minnesota – South Dakota 2012 Electric Rate Case — In June 2012, NSP-Minnesota filed a request with the SDPUC to
increase electric rates by $19.4 million annually. The request was based on a 2011 historic test year adjusted for known and
measurable changes for 2012 and 2013, a requested ROE of 10.65 percent, an average rate base of $367.5 million and an equity
ratio of 52.89 percent.
In December 2012, the procedural schedule was suspended to allow time to construct a potential settlement agreement between
NSP-Minnesota and the SDPUC Staff. Interim rates of $19.4 million went into effect on Jan. 1, 2013, subject to refund. A
SDPUC decision is expected in the first half of 2013.
NSP-Minnesota – South Dakota 2011 Electric Rate Case — In June 2011, NSP-Minnesota filed a request with the SDPUC to
increase electric rates by $14.6 million annually, effective in 2012. The request was based on a 2010 historic test year adjusted for
known and measurable changes, a requested ROE of 11 percent, a rate base of $323.4 million and an equity ratio of 52.48 percent.
On Jan. 2, 2012, interim rates of $12.7 million were implemented. In June 2012, the SDPUC authorized a rate increase of
approximately $8.0 million, based on an ROE of 9.25 percent, and an equity ratio of 53 percent. Final rates became effective Aug.
1, 2012. Interim rate refunds of $2.9 million were completed in September 2012.