Xcel Energy 2007 Annual Report Download - page 135

Saemrow Dairy Partnership vs. Xcel Energy — In December 2006, plaintiffs, the owners and operators of a Minnesota
dairy farm, brought an action in Minnesota state court against NSP-Minnesota alleging negligence in the handling,
supplying, distributing and selling of electrical power systems and in the construction and maintenance of distribution
systems. They also alleged failure to warn or adequately test such systems. Plaintiffs allege decreased milk production,
injury, and damage to a dairy herd as a result of stray voltage resulting from NSP-Minnesota’s distribution system.
Plaintiffs claim losses approximately $9 million. NSP-Minnesota denies all allegations. Mediation has been set for
March 2008; and in the event the matter is not resolved, trial is set for October 2008.
Qwest vs. Xcel Energy Inc. — In June 2004, an employee of PSCo was seriously injured when a pole owned by Qwest
malfunctioned. In September 2005, the employee commenced an action against Qwest in Denver state court. In April
2006, Qwest filed a third party complaint against PSCo based on terms in a joint pole use agreement between Qwest
and PSCo. Pursuant to this agreement, Qwest asserted PSCo had an affirmative duty to properly train and instruct its
employees on pole safety, including testing the pole for soundness before climbing. In May 2006, PSCo filed a
counterclaim against Qwest asserting Qwest had a duty to PSCo and an obligation under the contract to maintain its
poles in a safe and serviceable condition. In May 2007, the matter was tried and the jury found Qwest solely liable for
the accident and this determination resulted in an award of damages in the amount of approximately $90 million. In
January 2008, Qwest filed a notice of appeal.
Hoffman vs. Northern States Power Company — In March 2006, a purported class action complaint was filed in
Minnesota state court, on behalf of NSP-Minnesota’s residential customers in Minnesota, North Dakota and South
Dakota for alleged breach of a contractual obligation to maintain and inspect the points of connection between
NSP-Minnesota’s wires and customers’ homes within the meter box. Plaintiffs claim NSP-Minnesota’s alleged breach
results in an increased risk of fire and is in violation of tariffs on file with the MPUC. Plaintiffs seek injunctive relief
and damages in an amount equal to the value of inspections plaintiffs claim NSP-Minnesota was required to perform
over the past six years. In August 2006, NSP-Minnesota filed a motion for dismissal on the pleadings. In November
2006, the court issued an order denying NSP-Minnesota’s motion, but later, pursuant to a motion by NSP-Minnesota,
certified the issues raised in NSP-Minnesota’s original motion for appeal as important and doubtful, and
NSP-Minnesota filed an appeal with the Minnesota Court of Appeals. On Jan. 22, 2008, the Minnesota Court of
Appeals determined the plaintiffs’ claims are barred by the filed rate doctrine and remanded the case to the district
court for dismissal.
MGP Insurance Coverage Litigation — In October 2003, NSP-Wisconsin initiated discussions with its insurers
regarding the availability of insurance coverage for costs associated with the remediation of four former MGP sites
located in Ashland, Chippewa Falls, Eau Claire, and LaCrosse, Wis. In lieu of participating in discussions, in October
2003, two of NSP-Wisconsin’s insurers, St. Paul Fire & Marine Insurance Co. and St. Paul Mercury Insurance Co.,
commenced litigation against NSP-Wisconsin in Minnesota state district court. In November 2003, NSP-Wisconsin
commenced suit in Wisconsin state circuit court against St. Paul Fire & Marine Insurance Co. and its other insurers.
Subsequently, the Minnesota court enjoined NSP-Wisconsin from pursuing the Wisconsin litigation. The Wisconsin
action remains in abeyance.
NSP-Wisconsin has reached settlements with 22 insurers, and these insurers have been dismissed from both the
Minnesota and Wisconsin actions.
In July 2007, the Minnesota state court issued a decision on allocation, reaffirming its prior rulings that Minnesota law
on allocation should apply and ordering the dismissal, without prejudice, of eleven insurers whose coverage would not
be triggered under such an allocation method. In September 2007, NSP-Wisconsin commenced an appeal in the Court
of Appeals for Minnesota challenging the dismissal of these carriers. In November 2007, Ranger Insurance Company
(Ranger) and TIG Insurance Company (TIG) filed a motion to dismiss NSP-Wisconsin’s appeal, asserting that
NSP-Wisconsin’s failure to serve Continental Insurance Company, as successor in interest to certain policies issued by
Harbor Insurance Company (Harbor), requires dismissal of NSP-Wisconsin’s appeal. In February 2008, the Court of
Appeals issued an order deferring a decision on the procedural motion filed by Harbor and TIG and referring the
motion to the panel assigned to consider the merits of the appeal. The PSCW has established a deferral process
whereby clean-up costs associated with the remediation of former MGP sites are deferred and, if approved by the
PSCW, recovered from ratepayers. Carrying charges associated with these clean-up costs are not subject to the deferral
process and are not recoverable from ratepayers. Any insurance proceeds received by NSP-Wisconsin will operate as a
credit to ratepayers. None of the aforementioned lawsuit settlements are expected to have a material effect on Xcel
Energy’s consolidated financial statements.
Nuclear Waste Disposal Litigation — In 1998, NSP-Minnesota filed a complaint in the U.S. Court of Federal Claims
against the United States requesting breach of contract damages for the U.S. DOE’s failure to begin accepting spent
nuclear fuel by Jan. 31, 1998, as required by the contract between the DOE and NSP-Minnesota. At trial,
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