Xcel Energy 2014 Annual Report Download - page 76

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2014 Comparison to 2013 — The increase in O&M expenses for 2014 was largely driven by the following:
• Nuclear cost increases are related to the amortization of prior outages and initiatives designed to improve the operational
efficiencies of the plants; and
• Gain on sale of transmission assets relates to the 2013 gain associated with the sale of certain SPS’ transmission assets to
Sharyland.
(Millions of Dollars) 2013 vs. 2012
Electric and gas distribution expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 44
Nuclear plant operations and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Transmission costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Gain on sale of transmission assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14)
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Total increase in O&M expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 97
2013 Comparison to 2012 — The increase in O&M expenses for 2013 was largely driven by the following:
• Electric and gas distribution expenses were primarily driven by increased maintenance activities due to vegetation
management, storms and outages;
• Nuclear cost increases are related to the amortization of prior outages and initiatives designed to improve the operational
efficiencies of the plants;
• Increased transmission costs were related to higher substation maintenance expenditures and reliability costs;
• Higher employee benefits related primarily to increased pension expense; and
• See Note 12 to the consolidated financial statements for further discussion of the gain on sale of transmission assets.
Conservation and DSM Program Expenses — Conservation and DSM program expenses increased $41.0 million, or 15.7 percent,
for 2014 compared with 2013. The increase was primarily attributable to higher electric recovery rates at NSP-Minnesota.
Conservation and DSM program expenses are generally recovered in our major jurisdictions concurrently through riders and base
rates.
Depreciation and Amortization — Depreciation and amortization increased $41.2 million, or 4.2 percent, for 2014 compared with
2013. The increase was primarily attributable to the PI steam generator replacement placed in service in December 2013 and normal
system expansion, partially offset by additional accelerated amortization of the excess depreciation reserve associated with certain
Minnesota assets. See further discussion within Note 12 to the consolidated financial statements.
Depreciation and amortization increased $51.8 million, or 5.6 percent, for 2013 compared with 2012. The increase is primarily
attributable to normal system expansion, which was partially offset by reductions related to the final rate order received for the 2013
Minnesota electric rate case that reduced depreciation expense by approximately $32 million for 2013.
Taxes (Other Than Income Taxes) — Taxes (other than income taxes) increased $45.3 million, or 10.8 percent, for 2014 compared
with 2013. The increase was primarily due to higher property taxes in Colorado, Minnesota and Texas.
Taxes (other than income taxes) increased $11.6 million, or 2.8 percent, for 2013 compared with 2012. The annual increase is due to
higher property taxes primarily in Colorado and Texas.
AFUDC, Equity and Debt — AFUDC increased $1.3 million for 2014 compared with 2013. The increase was primarily due to
construction related to the CACJA and the expansion of transmission facilities, partially offset by the portion of the Monticello LCM/
EPU placed in service in July 2013 and the PI steam generator replacement placed in service in December 2013.
AFUDC increased $28.7 million for 2013 compared with 2012. The increase is primarily due to construction related to the CACJA
and the expansion of transmission facilities.
Interest Charges — Interest charges decreased $8.6 million, or 1.5 percent, for 2014 compared with 2013. The decrease was
primarily due to refinancings at lower interest rates, partially offset by higher long-term debt levels. In addition, interest charges in
2013 reflected $4 million of interest associated with the customer refund at SPS based on a FERC order, interest on customer refunds
in Minnesota and the write off of $6.3 million of unamortized debt expense related to the junior subordinated notes called in May
2013.