Xcel Energy 2014 Annual Report Download - page 32

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Energy Sources and Related Transmission Initiatives
NSP-Wisconsin operates an integrated system with NSP-Minnesota. See NSP-Minnesota Energy Sources and Related Transmission
Initiatives.
NSP-Wisconsin CapX2020 CPCN — The PSCW issued a CPCN for the Wisconsin portion of the Hampton, Minn. to La Crosse, Wis.
project in May 2012. The Wisconsin route is approximately 50 miles of new transmission line with an estimated cost of $211 million.
The line is expected to go into service in the fall of 2015.
NSP-Wisconsin / American Transmission Company, LLC (ATC) - La Crosse, Wis. to Madison, Wis. Transmission Line — In
October 2013, NSP-Wisconsin and ATC jointly filed an application with the PSCW for a CPCN for a new 345 KV transmission line
that would extend from La Crosse, Wis. to Madison, Wis. The proposed line, known as the Badger Coulee line, would run between
154 and 187 miles based on the permitted route, which includes an estimated project cost, including AFUDC, of between $540 and
$580 million. NSP-Wisconsin’s half of the project is shared with two partners, Dairyland Power Cooperative and WPPI Energy.
NSP-Wisconsin’s portion of the investment is estimated to be between $190 and $207 million. In 2011, MISO determined the line to
be a MVP project, and as such, eligible for cost sharing under MISO’s MVP tariff. The PSCW held hearings on the application in
January 2015, and a decision is expected by April 2015. If approved, NSP-Wisconsin and ATC anticipate beginning construction on
the line in late 2016, with completion by late 2018.
Fuel Supply and Costs
NSP-Wisconsin operates an integrated system with NSP-Minnesota. See NSP-Minnesota Fuel 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 is regulated by the FERC with respect to its wholesale electric operations,
accounting practices, hydroelectric licensing, wholesale sales for resale, the transmission of electricity in interstate commerce,
compliance with the NERC electric reliability standards, asset transactions and mergers and natural gas transactions in interstate
commerce.
Fuel, Purchased Energy and Conservation Cost-Recovery Mechanisms — PSCo has several retail adjustment clauses that recover
fuel, purchased energy and other resource costs:
• ECA — The ECA recovers fuel and purchased energy costs. Short-term sales margins are shared with retail customers through
the ECA. The ECA is revised quarterly.
• PCCA — The PCCA recovers purchased capacity payments.
• SCA — The SCA recovers the difference between PSCo’s actual cost of fuel and the amount of these costs recovered under its
base steam service rates. The SCA rate is revised annually in January, as well as on an interim basis.
• DSMCA — The DSMCA recovers DSM, interruptible service option credit costs and performance initiatives for achieving
various energy savings goals.
• RESA — The RESA recovers the incremental costs of compliance with the RES with a maximum of two percent of the
customer’s total bill.
• Wind Energy Service — Wind Energy Service is a premium service for customers who voluntarily choose to pay an additional
charge for renewable resources.
• TCA — The TCA recovers costs associated with transmission investment outside of rate cases.
• CACJA — As part of its pending electric rate case, PSCo proposed to establish a CACJA rider, retroactive to Jan. 1, 2015, to
recover costs associated with implementing its compliance plan under the CACJA.
PSCo recovers fuel and purchased energy costs from its wholesale electric customers through a fuel cost adjustment clause approved
by the FERC. PSCo’s wholesale customers have agreed to pay the full cost of certain renewable energy purchase and generation costs
through a fuel clause and in exchange receive RECs associated with those resources. The wholesale customers pay their jurisdictional
allocation of production costs through a fully forecasted formula rate with true-up.