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NSP-Minnesota NOV — In 2011, NSP-Minnesota received an NOV from the EPA alleging violations of the NSR requirements of the
CAA at the Sherco plant and Black Dog plant in Minnesota. The NOV alleges that various maintenance, repair and replacement
projects at the plants in the mid 2000s should have required a permit under the NSR process. NSP-Minnesota believes it has acted in
full compliance with the CAA and NSR process. NSP-Minnesota also believes that the projects identified in the NOV fit within the
routine maintenance, repair and replacement exemption contained within the NSR regulations or are otherwise not subject to the NSR
requirements. NSP-Minnesota disagrees with the assertions contained in the NOV and intends to vigorously defend its position. It is
not known whether any costs would be incurred as a result of this NOV.
Asset Retirement Obligations
Recorded AROs — AROs have been recorded for property related to the following: electric production (nuclear, steam, wind, other
and hydro), electric distribution and transmission, natural gas production, natural gas transmission and distribution, and general
property. The electric production obligations include asbestos, ash-containment facilities, radiation sources, storage tanks, control
panels and decommissioning. The asbestos recognition associated with the steam production includes certain plants at NSP-
Minnesota, NSP-Wisconsin, PSCo and SPS. NSP-Minnesota also recorded asbestos recognition for its general office building. This
asbestos abatement removal obligation originated in 1973 with the CAA, which applied to the demolition of buildings or removal of
equipment containing asbestos that can become airborne on removal. AROs also have been recorded for NSP-Minnesota, PSCo and
SPS steam production related to ash-containment facilities such as bottom ash ponds, evaporation ponds and solid waste landfills. The
origination dates on the ARO recognition for ash-containment facilities at steam plants was the in-service dates of the various
facilities. NSP-Minnesota and PSCo have also recorded AROs for the retirement and removal of assets at certain wind production
facilities for which the land is leased and removal is required by contract, with the origination dates being the in-service date of the
various facilities.
Xcel Energy has recognized an ARO for the retirement costs of natural gas mains at NSP-Minnesota, NSP-Wisconsin and PSCo and
an ARO for the retirement of above ground gas storage facilities at PSCo. In addition, an ARO was recognized for the removal of
electric transmission and distribution equipment at NSP-Minnesota, NSP-Wisconsin, PSCo and SPS, which consists of many small
potential obligations associated with PCBs, mineral oil, storage tanks, treated poles, lithium batteries, mercury and street lighting
lamps. The electric and common general AROs include small obligations related to storage tanks, radiation sources and office
buildings. These assets have numerous in-service dates for which it is difficult to assign the obligation to a particular year. Therefore,
the obligation was measured using an average service life.
For the nuclear assets, the ARO associated with the decommissioning of the NSP-Minnesota nuclear generating plants, Monticello and
Prairie Island, originated with the in-service date of the facility. See Note 14 for further discussion of nuclear obligations.
A reconciliation of Xcel Energy’s AROs is shown in the tables below for the years ended Dec. 31, 2013 and 2012:
(Thousands of Dollars)
Beginning
Balance
Jan. 1, 2013 Liabilities Recognized Liabilities Settled Accretion
Revisions
to Prior
Estimates
Ending
Balance
Dec. 31, 2013
Electric plant
Nuclear production decommissioning . . . . . . . . . $1,546,358 $ — $ — $ 81,940 $ — $1,628,298
Steam and other production ash containment . . . . 61,735 — — 2,105 15,513 79,353
Steam and other production asbestos . . . . . . . . . . 45,461 — (1,059) 2,551 3,874 50,827
Wind production . . . . . . . . . . . . . . . . . . . . . . . . . . 35,864 — — 1,600 — 37,464
Electric distribution. . . . . . . . . . . . . . . . . . . . . . . . 24,150 — — 708 (12,672) 12,186
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,152 — — 240 159 3,551
Natural gas plant
Gas transmission and distribution. . . . . . . . . . . . . 1,258 — — 81 (141) 1,198
Gas gathering . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 575 — — — 575
Common and other property
Common general plant asbestos . . . . . . . . . . . . . . 1,197 — — 66 (783) 480
Common miscellaneous . . . . . . . . . . . . . . . . . . . . 621 — — 59 778 1,458
Total liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,719,796 $ 575 $ (1,059) $ 89,350 $ 6,728 $1,815,390
The aggregate fair value of NSP-Minnesota’s legally restricted assets, for purposes of funding future nuclear decommissioning, was
$1.6 billion as of Dec. 31, 2013, consisting of external investment funds.