Xcel Energy 2006 Annual Report Download - page 24

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Minnesota plans to submit the certificate of need for the Monticello uprate in the second quarter of 2007 and the certificate of need for
the Prairie Island uprate in the third quarter of 2007.
NMC — As of Dec. 31, 2006, all members of the NMC, other than Xcel Energy, have chosen to sell their units and exit the NMC.
Regarding the remaining members of the NMC, the sales transaction of the CMS Energy Corp. Palisades Nuclear Power Plant is
targeted to close in the first quarter of 2007. In December 2006, Wisconsin Electric Power Co., announced its intent to sell its Point
Beach Nuclear Plant to FPL Energy, with the sale expected to close in the third or fourth quarter of 2007.
Following consummation of these sale transactions, NSP-Minnesota will be the sole remaining member of the NMC. NSP-Minnesota
is evaluating the situation and is considering various alternatives, including transitioning the NMC to a wholly owned subsidiary of
Xcel Energy. To facilitate implementation of this option, Xcel Energy plans are progressing to restructure the NMC to support a two-
site organization, as well as reabsorb the administrative functions within Xcel Energy by the end of 2007.
For further discussion of nuclear obligations, see Note 15 to the Consolidated Financial Statements.
Fuel Supply and Costs
The following table shows the delivered cost per MMBtu of each significant category of fuel consumed for electric generation, the
percentage of total fuel requirements represented by each category of fuel and the total weighted average cost of all fuels.
NSP System Coal* Nuclear Natural Gas Average Fuel
Generating Plants Cost Percent Cost Percent Cost Percent Cost
2006......... $ 1.12 59% $ 0.46 38% $ 7.28 3% $ 1.08
2005......... $ 1.04 60% $ 0.46 36% $ 8.32 3% $ 1.11
2004......... $ 0.99 61% $ 0.44 37% $ 6.48 2% $ 0.92
* Includes refuse-derived fuel and wood
See additional discussion of fuel supply and costs under Factors Affecting Results of Continuing Operations in Management’s
Discussion and Analysis under Item 7.
Fuel Sources — Coal inventory levels may vary widely among plants. However, the NSP System normally maintains approximately
30 days of coal inventory at each plant site. Coal supply inventories at Dec. 31, 2006 were approximately 30 days usage, based on the
maximum burn rate for all of NSP-Minnesota’s coal-fired plants. Estimated coal requirements at NSP-Minnesota and NSP-
Wisconsin’s major coal-fired generating plants are approximately 12.4 million tons per year.
NSP-Minnesota and NSP-Wisconsin have a number of coal transportation contracts that provide for delivery of approximately 99
percent of 2007 coal requirements, 99 percent of 2008 coal requirements and 99 percent of 2009 coal requirements. Coal delivery may
be subject to short-term interruptions or reductions due to transportation problems, weather, and availability of equipment.
To operate NSP-Minnesota’s nuclear generating plants, NSP-Minnesota secures contracts for uranium concentrates, uranium
conversion, uranium enrichment and fuel fabrication. The contract strategy involves a portfolio of spot purchases and medium- and
long-term contracts for uranium, conversion and enrichment with multiple producers and countries to alleviate the current
supply/demand imbalance. Due to less availability in the world supply market for uranium, conversion and enrichment, NSP-
Minnesota is working toward maintaining a strategic inventory level to decrease its exposure to supply limitations.
• Current nuclear fuel supply contracts cover 100 percent of uranium concentrates requirements through 2008, approximately 90
percent of the requirements for 2009 and approximately 32 percent of the requirements for 2010 through 2012 with no
coverage of requirements for 2013 and beyond. Contracts with additional uranium concentrate suppliers are currently in
various stages of negotiations that are expected to provide a portion of the requirements through 2016.
• Current contracts for conversion services cover 100 percent of the requirements through 2009 and approximately 67 percent of
the requirements from 2010 through 2012, with no coverage for 2013 and beyond.
• Current enrichment services contracts cover 100 percent of 2007 and 2008, and approximately 96 percent of the 2009
requirements. Approximately 50 percent of the 2010 through 2013 enrichment services requirements are currently covered
with no coverage of requirements for 2014 and beyond. These current contracts expire at varying times between 2009 and
2013. Contracts with additional enrichment services suppliers are being investigated for coverage from 2010 and beyond.
• Fuel fabrication for Monticello is covered through 2010. Under a new contract executed in 2006 for fuel fabrication services,
Prairie Island’s fuel fabrication is 100 percent committed for six reloads with an option to extend for three additional reloads.
The six reloads provide for fabrication services through at least 2013, while adding the optional reloads would provide for
fabrication services to at least 2015.