Xcel Energy 2007 Annual Report Download - page 24

In January 2008, the MPUC voted to grant NSP-Minnesota a certificate of need for the Chisago County, Minnesota
project, which would replace an existing 69 KV line with 115 and 161 KV facilities and add a new substation at an
estimated cost of $64 million and a route permit for the majority of the proposed line. The MPUC set the issue of the
disputed route for a half-mile segment of the line for further discussions between the parties. The project would be
placed in service in 2010. The PSCW has already approved construction by NSP-Wisconsin and Dairyland Power
Cooperative of related 161 KV facilities in Wisconsin.
As part of CapX 2020, NSP-Minnesota and Great River Energy (on behalf of nine other regional transmission
providers) filed a certificate of need application in August 2007, for three 345 KV transmission lines serving Minnesota
and parts of surrounding states. The current schedule targets an MPUC order by the end of 2008 or early 2009. The
three lines would include construction of approximately 700 miles of new facilities at a cost of $1.4 to $1.7 billion,
with construction to be completed in phases between 2011 and 2015. The application put forth a potential ownership
percentage of 36 to 72 percent for each of the three 345 KV projects for NSP System. Updated NSP-Minnesota and
NSP-Wisconsin cost estimates are expected following the negotiation of project agreements outlining the terms and
conditions related to construction management, ownership, operations and maintenance of these facilities.
FCA Investigation — In 2003, the MPUC opened an investigation to consider the continuing usefulness of the FCAs
for electric utilities in Minnesota. There was no further activity until the MPUC issued a notice for comments on
April 5, 2007, as to whether to continue the statewide investigation.
Pursuant to the notice, utilities in Minnesota, the MDOC and the Minnesota Office of Attorney General (MOAG)
filed initial and reply comments on April 30, 2007 and June 1, 2007, respectively. The utilities generally argued the
2003 investigation could be closed, with remaining issues addressed in the separate investigation initiated by the
Dec. 20, 2006 order in the MISO Day 2 cost recovery docket. The MDOC filed comments seeking to continue the
investigations. In response, the utilities filed additional comments on Sept. 28, 2007, that indicated a willingness to
continue with the investigation and provide more information to both regulators and customers regarding fuel and
purchased power costs, plant outages and other factors affecting fuel clause levels. Continued discussions among
utilities, the MDOC, MOAG and business customers regarding appropriate FCA reporting detail and provision of
additional information to customers is on going.
Grand Meadow Wind Farm — In June 2007, NSP-Minnesota filed an application for a certificate of need for the
Grand Meadows wind farm, a 100-MW development to be located in southeast Minnesota. The Grand Meadows
project would be implemented under a build-own-transfer agreement between NSP-Minnesota and enXco, a wind
project developer. Total project costs are estimated to be approximately $213 million. The MPUC approved this
certificate of need and issued a site permit. Construction is expected to start in early 2008.
Capital Structure Petition — In December 2007, the MPUC approved NSP-Minnesota’s regular annual capital
structure petition for ongoing security issuance and increased capitalization.
Mercury Reduction and Emissions Reduction Filings — Pursuant to Minnesota law, in December 2007, NSP-Minnesota
filed a plan with the MPCA and MPUC for reducing mercury emissions by up to 90 percent at the Sherco unit 3 and
King plants. Estimated project costs amount to approximately $9.1 million. At the same time, NSP-Minnesota
submitted a revised filing to the MPUC for a major emissions reduction project at Sherco Units 1and 2 to reduce
emissions and expand capacity. The revised filing has estimated project costs of approximately $1.1 billion. The filing
also contains alternatives for the MPUC to consider additional capacity and to achieve lower emissions. If selected,
these alternatives could range from $90.8 million to $330.8 million in addition to the $1.1 billion proposal.
NSP-Minnesota’s investments are subject to the MPUC approval of a cost recovery mechanism.
Nuclear Power Operations and Waste Disposal — NSP-Minnesota owns two nuclear generating plants: the Monticello
plant and the Prairie Island plant. See additional discussion regarding the nuclear generating plants at Note 16 to the
consolidated financial statements.
Nuclear power plant operation produces gaseous, liquid and solid radioactive wastes. The discharge and handling of
such wastes are controlled by federal regulation. High-level radioactive wastes primarily include used nuclear fuel.
Low-level radioactive waste consists primarily of demineralizer resins, paper, protective clothing, rags, tools and
equipment that have become contaminated through use in the plant.
Low-Level Radioactive Waste Disposal — Federal law places responsibility on each state for disposal of low-level
radioactive waste (LLW) generated within its borders. LLW from NSP-Minnesota’s Monticello and Prairie Island nuclear
plants is currently disposed at the Barnwell facility located in South Carolina (all classes of LLW) and at the Clive
facility located in Utah (class A LLW only). NSP-Minnesota has an annual contract with Barnwell that is scheduled to
expire on June 30, 2008, but is also able to utilize the Clive facility through various LLW processors. NSP-Minnesota
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