Xcel Energy 2012 Annual Report Download - page 139

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129
Included in electric fuel and purchased power expenses for PPAs accounted for as executory contracts were payments for capacity
of $261.9 million, $325.3 million and $426.7 million in 2012, 2011 and 2010, respectively. At Dec. 31, 2012, the estimated future
payments for capacity and energy that the utility subsidiaries of Xcel Energy are obligated to purchase pursuant to these executory
contracts, subject to availability, are as follows:
(Millions of Dollars)
Capacity
Energy (a)
2013................................
................................
$
230.3
$
114.2
2014................................
................................
242.1
110.4
2015................................
................................
241.5
116.4
2016................................
................................
202.0
98.5
2017................................
................................
173.3
90.3
Thereafter................................
...........................
628.6
959.9
Total ................................
.............................
$
1,717.8
$
1,489.7
(a) Excludes contingent energy payments for renewable PPAs.
Additional energy payments under these PPAs and PPAs accounted for as operating leases will be required to meet expected
future electric demand.
Leases — Xcel Energy leases a variety of equipment and facilities used in the normal course of business. Three of these leases
qualify as capital leases and are accounted for accordingly. The assets and liabilities at the inception of a capital lease are recorded
at the lower of fair market value or the present value of future lease payments and are amortized over the term of the contract.
WYCO was formed as a joint venture with CIG to develop and lease natural gas pipeline, storage, and compression facilities.
Xcel Energy Inc. has a 50 percent ownership interest in WYCO. WYCO leases the facilities to CIG, and CIG operates the
facilities, providing natural gas storage services to PSCo under a service arrangement.
PSCo accounts for its Totem natural gas storage service arrangement with CIG as a capital lease. As a result, PSCo had $148.7
million and $152.7 million of capital lease obligations recorded for the arrangement as of Dec. 31, 2012 and 2011, respectively.
Xcel Energy Inc. eliminates 50 percent of the capital lease obligation related to WYCO in the consolidated balance sheet along
with an equal amount of Xcel Energy Inc.’s equity investment in WYCO.
PSCo records amortization for its capital leases as cost of natural gas sold and transported on the consolidated statements of
income. Total amortization expenses under capital lease assets were approximately $5.7 million, $3.2 million, and $5.3 million
for 2012, 2011 and 2010, respectively. Following is a summary of property held under capital leases:
(Millions of Dollars)
2012
2011
Storage, leaseholds and rights................................
.........
$
200.5
$
200.5
Gas pipeline................................
.........................
20.7
20.7
Property held under capital lease ................................
......
221.2
221.2
Accumulated depreciation ................................
............
(35.5)
(29.8
)
Total property held under capital leases, net
............................
$
185.7
$
191.4
The remainder of the leases, primarily for certain PPAs, office space, railcars, generating facilities, trucks, aircraft, cars and
power-operated equipment, are accounted for as operating leases. Total expenses under operating lease obligations for Xcel
Energy were approximately $217.8 million, $204.8 million, and $197.4 million for 2012, 2011 and 2010, respectively. These
expenses included capacity payments for PPAs accounted for as operating leases of $174.4 million, $160.5 million, and $163.7
million in 2012, 2011 and 2010, respectively, recorded to electric fuel and purchased power expenses.
Included in the future commitments under operating leases are estimated future capacity payments under PPAs that have been
accounted for as operating leases in accordance with the applicable accounting guidance.