Xcel Energy 2014 Annual Report Download - page 150

132
The estimated minimum purchases for Xcel Energy under these contracts as of Dec. 31, 2014 are as follows:
(Millions of Dollars) Coal Nuclear fuel Natural gas supply
Natural gas
storage and
transportation
2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 900.7 $ 90.3 $ 374.2 $ 280.0
2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 659.8 121.8 158.8 221.4
2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359.6 121.0 161.9 171.7
2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.3 65.6 212.3 122.7
2019. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.0 128.5 221.7 114.5
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 387.3 641.4 732.7 1,152.5
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,424.7 $ 1,168.6 $ 1,861.6 $ 2,062.8
Additional expenditures for fuel and natural gas storage and transportation will be required to meet expected future electric generation
and natural gas needs. Xcel Energy’s risk of loss, in the form of increased costs from market price changes in fuel, is mitigated
through the use of natural gas and energy cost-rate adjustment mechanisms, which provide for pass-through of most fuel, storage and
transportation costs to customers.
PPAs — NSP Minnesota, PSCo and SPS have entered into PPAs with other utilities and energy suppliers with expiration dates through
2033 for purchased power to meet system load and energy requirements and meet operating reserve obligations. In general, these
agreements provide for energy payments, based on actual energy delivered and capacity payments. Certain PPAs accounted for as
executory contracts also contain minimum energy purchase commitments. Capacity and energy payments are typically contingent on
the independent power producing entity meeting certain contract obligations, including plant availability requirements. Certain
contractual payments are adjusted based on market indices. The effects of price adjustments on our financial results are mitigated
through purchased energy cost recovery mechanisms.
Included in electric fuel and purchased power expenses for PPAs accounted for as executory contracts were payments for capacity of
$229.8 million, $217.0 million and $261.9 million in 2014, 2013 and 2012, respectively. At Dec. 31, 2014, 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)
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 245.3 $ 132.9
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206.5 104.1
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178.0 91.3
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140.1 93.2
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92.1 98.7
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433.7 767.9
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,295.7 $ 1,288.1
(a) Excludes contingent energy payments for renewable energy 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 $138.9
million and $144.2 million of capital lease obligations recorded for the arrangement as of Dec. 31, 2014 and 2013, 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.