Xcel Energy 2015 Annual Report Download - page 38
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• Wind energy comprised 19.4 percent and 18.9 percent of the total energy for 2015 and 2014, respectively; and
• Hydroelectric, biomass and solar power comprised approximately 2.6 percent and 2.5 percent of the total energy for 2015 and
2014.
PSCo also offers customer-focused renewable energy initiatives. Windsource allows customers to purchase a portion or all of their
electricity from renewable sources. In 2015, the number of customers utilizing Windsource increased to approximately 45,000 from
41,000 in 2014.
Additionally, to encourage the growth of solar energy on the system, customers are offered incentives to install solar panels on their
homes and businesses under the Solar*Rewards program. Over 29,500 PV systems with approximately 258 MW of aggregate
capacity and over 24,000 PV systems with approximately 221 MW of aggregate capacity have been installed in Colorado under this
program as of Dec. 31, 2015 and 2014, respectively. Additionally, 24 community solar gardens with 16.6 MW of capacity and 14
gardens with 9.6 MW of capacity have been completed in Colorado as of Dec. 31, 2015 and 2014, respectively.
Wind — PSCo acquires the majority of its wind energy from PPAs with wind farm owners, primarily located in Colorado. Currently,
PSCo has 19 of these agreements in place, with facilities ranging in size from two MW to over 300 MW.
• PSCo had approximately 2,560 MW and 2,340 MW of wind energy on its system at the end of 2015 and 2014, respectively.
In addition to receiving purchased wind energy under these agreements, PSCo also typically receives wind RECs which are
used to meet state renewable resource requirements.
• The average cost per MWh of wind energy under these contracts was approximately $42 and $45 in 2015 and 2014,
respectively. The cost per MWh of wind energy varies by contract and may be influenced by a number of factors including
regulation, state-specific renewable resource requirements, and the year of contract execution. Generally, contracts executed
in 2015 continued to benefit from improvements in wind technology, excess capacity among manufacturers, and motivation
to commence new construction prior to the anticipated expiration of the Federal PTCs. In December 2015, the Federal PTCs
were extended through 2019 with a phase down beginning in 2017.
Wholesale and Commodity Marketing Operations
PSCo conducts various wholesale marketing operations, including the purchase and sale of electric capacity, energy, ancillary services
and energy related products. PSCo uses physical and financial instruments to minimize commodity price and credit risk and hedge
sales and purchases. See Item 7 for further discussion.
SPS
Public Utility Regulation
Summary of Regulatory Agencies and Areas of Jurisdiction — The PUCT and NMPRC regulate SPS’ retail electric operations and
have jurisdiction over its retail rates and services and the construction of transmission or generation in their respective states. The
municipalities in which SPS operates in Texas have original jurisdiction over SPS’ rates in those communities. Each municipality can
deny SPS’ rate increases. SPS can then appeal municipal rate decisions to the PUCT, which hears all municipal rate denials in one
hearing. The NMPRC also has jurisdiction over the issuance of securities. SPS is regulated by the FERC with respect to its wholesale
electric operations, accounting practices, wholesale sales for resale, the transmission of electricity in interstate commerce, compliance
with NERC electric reliability standards, asset transactions and mergers, and natural gas transactions in interstate commerce. As
approved by the FERC, SPS operates within the SPP RTO and SPP IM wholesale market. SPS is authorized to make wholesale
electric sales at market-based prices.
Fuel, Purchased Energy and Conservation Cost-Recovery Mechanisms — SPS has several retail adjustment clauses that recover
fuel, purchased energy and other resource costs:
• DCRF — The DCRF rider recovers certain distribution costs in Texas that are not included in base rates.
• EECRF — The EECRF rider recovers costs associated with providing energy efficiency programs in Texas.
• EE rider — The EE rider recovers costs associated with providing energy efficiency programs in New Mexico.
• FPPCAC — The FPPCAC adjusts monthly to recover the difference between the actual fuel and purchased power costs and the
amount included in base rates of SPS’ New Mexico retail jurisdiction.
• PCRF — The PCRF rider allows recovery of certain purchased power costs in Texas that are not included in base rates.