ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
001-03789 |
(Commission File Number) |
SOUTHWESTERN PUBLIC SERVICE COMPANY |
(Exact name of registrant as specified in its charter) |
New Mexico | 75-0575400 |
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification No.) |
Amarillo, | Texas | 79101 | |||||
(Address of | ( | ||||||
(303) | 571-7511 | ||||||
(Registrant’s Telephone Number, Including Area Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||
N/A | N/A | N/A |
PART I | ||
Item 1A — | ||
Item 1B — | ||
Item 2 — | ||
Item 3 — | ||
Item 4 — | ||
PART II | ||
PART III | ||
PART IV | ||
Item 16 — | ||
ITEM l — BUSINESS |
Xcel Energy Inc.’s Subsidiaries and Affiliates (current and former) | |
NSP-Minnesota | Northern States Power Company, a Minnesota corporation |
NSP-Wisconsin | Northern States Power Company, a Wisconsin corporation |
PSCo | Public Service Company of Colorado |
SPS | Southwestern Public Service Company |
Utility subsidiaries | NSP-Minnesota, NSP-Wisconsin, PSCo and SPS |
Xcel Energy | Xcel Energy Inc. and its subsidiaries |
Federal and State Regulatory Agencies | |
D.C. Circuit | United States Court of Appeals for the District of Columbia Circuit |
EPA | United States Environmental Protection Agency |
FERC | Federal Energy Regulatory Commission |
IRS | Internal Revenue Service |
NERC | North American Electric Reliability Corporation |
NMPRC | New Mexico Public Regulation Commission |
NPRM | Notice of Proposed Rulemaking |
PHMSA | Pipeline and Hazardous Materials Safety Administration |
PUCT | Public Utility Commission of Texas |
SEC | Securities and Exchange Commission |
TCEQ | Texas Commission on Environmental Quality |
Electric and Resource Adjustment Clauses | |
DCRF | Distribution cost recovery factor |
DSM | Demand side management |
EE | Energy efficiency |
EECRF | Energy efficiency cost recovery factor |
FPPCAC | Fuel and purchased power cost adjustment clause |
PCRF | Power cost recovery factor |
RPS | Renewable portfolio standards |
TCRF | Transmission cost recovery factor (recovers transmission infrastructure improvement costs and changes in wholesale transmission charges) |
Other | |
ADIT | Accumulated deferred income taxes |
AFUDC | Allowance for funds used during construction |
ALJ | Administrative |
ARO | Asset retirement obligation |
ASC | FASB Accounting Standards Codification |
ASU | FASB Accounting Standards Update |
BART | Best available retrofit technology |
C&I | Commercial and Industrial |
CWIP | Construction work in progress |
ETR | Effective tax rate |
FASB | Financial Accounting Standards Board |
FTR | Financial transmission right |
GAAP | Generally accepted accounting principles |
GHG | Greenhouse gas |
IM | Integrated Marketplace |
IPP | Independent power |
IRP | Integrated Resource Plan |
ITC | Investment tax credit |
Moody’s | Moody’s Investor Services |
NAAQS | National Ambient Air Quality Standard |
Native load | Customer demand of retail and wholesale customers whereby a utility has an obligation to serve under statute or long-term contract. |
NAV | Net asset value |
NOL | Net operating loss |
O&M | Operating and maintenance |
PPA | Purchased power agreement |
PRP | Potentially responsible party |
PTC | Production tax credit |
REC | Renewable energy credit |
ROE | Return on equity |
ROU | Right-of-use |
RTO | Regional Transmission Organization |
SO2 | Sulfur dioxide |
SPP | Southwest Power Pool, Inc. |
Standard & Poor’s | Standard & Poor’s Ratings Services |
TCJA | 2017 federal tax reform enacted as Public Law No: 115-97, commonly referred to as the Tax Cuts and Jobs Act |
VIE | Variable interest entity |
Measurements | |
KV | Kilovolts |
KWh | Kilowatt hours |
MMBtu | Million British thermal units |
MW | Megawatts |
MWh | Megawatt hours |
ppb | Parts per billion |
Forward-Looking Statements |
Where to Find More Information |
Company Overview |
Electric customers | 0.4 million | SPS was incorporated in 1921 under the laws of New Mexico. SPS conducts business in Texas and New Mexico and generates, purchases, transmits, distributes and sells electricity. | |||
Total assets | $7.9 billion | ||||
Rate base | $4.9 billion | ||||
ROE | 9.71% | ||||
Electric generating capacity | 4,804 MW | ||||
Electric transmission lines (conductor miles) | 38,418 miles | ||||
Electric distribution lines (conductor miles) | 21,810 miles | ||||
Electric Operations |
2019 | 2018 | |||||||
KWH sales per retail customer | 53,123 | 52,074 | ||||||
Revenue per retail customer | $3,147 | $3,124 | ||||||
Residential revenue per KWh | 10.04 | ¢ | 9.92 | ¢ | ||||
Large C&I revenue per KWh | 4.01 | ¢ | 4.08 | ¢ | ||||
Small C&I revenue per KWh | 7.17 | ¢ | 7.22 | ¢ | ||||
Total retail revenue per KWh | 5.92 | ¢ | 6.00 | ¢ |
(a) | Includes biomass and hydroelectric. |
2019 | 2018 | |||||
Wind Farms | Capacity | Wind Farms | Capacity | |||
1 | 478 MW | — | — |
2019 | 2018 | |||||
PPAs | Range | PPAs | Range | |||
18 | 0.7 MW - 250.0 MW | 18 | 0.7 MW - 250.0 MW |
2019 | 2018 | |
2,045 MW | 1,565 MW |
2019 | 2018 | |
$25 | $26 |
Project | Capacity | |
Hale | 460 MW |
Project | Capacity | Estimated Completion | ||
Sagamore | 522 MW | 2020 |
Type | Capacity | |
Distributed Generation | 10 MW | |
Utility-Scale | 191 MW |
Coal | |||||||
Cost | Percent | ||||||
2019 | $ | 2.19 | 45 | % | |||
2018 | 2.04 | 56 |
Natural Gas | |||||||
Cost | Percent | ||||||
2019 | $ | 1.14 | 55 | % | |||
2018 | 2.24 | 44 |
(a) | Includes biomass and hydroelectric. |
System Peak Demand (in MW) | |||||||||||
2014 | 2015 | 2016 | 2017 Forecast | ||||||||
SPS | 4,871 | 4,678 | 4,836 | 4,484 |
2019 | 2018 | |||||
Wind Farms | Capacity | Wind Farms | Capacity | |||
1 | 478 MW | — | — |
2019 | 2018 | |||||
PPAs | Range | PPAs | Range | |||
18 | 0.7 MW - 250.0 MW | 18 | 0.7 MW - 250.0 MW |
2019 | 2018 | |
2,045 MW | 1,565 MW |
2019 | 2018 | |
$25 | $26 |
Project | Capacity | |
Hale | 460 MW |
Project | Capacity | Estimated Completion | ||
Sagamore | 522 MW | 2020 |
Type | Capacity | |
Distributed Generation | 10 MW | |
Utility-Scale | 191 MW |
Coal | Natural Gas | Weighted Average Owned Fuel Cost | ||||||||||||||||
SPS Generating Plants | Cost | Percent | Cost | Percent | ||||||||||||||
2016 | $ | 2.12 | 70 | % | $ | 2.81 | 30 | % | $ | 2.32 | ||||||||
2015 | 2.12 | 73 | 3.11 | 27 | 2.39 | |||||||||||||
2014 | 2.07 | 71 | 4.76 | 29 | 2.85 |
Coal | |||||||
Cost | Percent | ||||||
2019 | $ | 2.19 | 45 | % | |||
2018 | 2.04 | 56 |
Natural Gas | |||||||
Cost | Percent | ||||||
2019 | $ | 1.14 | 55 | % | |||
2018 | 2.24 | 44 |
(a) | Includes biomass and hydroelectric. |
2019 | 2018 | |||||
Wind Farms | Capacity | Wind Farms | Capacity | |||
1 | 478 MW | — | — |
2019 | 2018 | |||||
PPAs | Range | PPAs | Range | |||
18 | 0.7 MW - 250.0 MW | 18 | 0.7 MW - 250.0 MW |
2019 | 2018 | |
2,045 MW | 1,565 MW |
2019 | 2018 | |
$25 | $26 |
Project | Capacity | |
Hale | 460 MW |
Project | Capacity | Estimated Completion | ||
Sagamore | 522 MW | 2020 |
Type | Capacity | |
Distributed Generation | 10 MW | |
Utility-Scale | 191 MW |
Coal | |||||||
Cost | Percent | ||||||
2019 | $ | 2.19 | 45 | % | |||
2018 | 2.04 | 56 |
Natural Gas | |||||||
Cost | Percent | ||||||
2019 | $ | 1.14 | 55 | % | |||
2018 | 2.24 | 44 |
System Peak Demand (in MW) | ||||||||
2019 | 2018 | |||||||
4,261 | Aug. 5 | 4,648 | July 19 |
Project | Miles | Size | |||
TUCO-Yoakum-Hobbs | 64 | 345 KV | |||
NEF-Cardinal | 15 | 115 KV | |||
Potash Junction-Livingston Ridge | 15 | 115 KV | |||
Mustang-Shell | 9 | 115 KV | |||
North Loving-South Loving | 3 | 115 KV | |||
Cunningham-Monument Tap | 7 | 115 KV |
Project | Miles | Size | Completion Date | ||||
TUCO-Yoakum-Hobbs | 106 | 345 KV | 2020 | ||||
Eddy-Kiowa | 34 | 345 KV | 2020 |
Public Utility Regulation |
Regulatory Body | Additional Information on Regulatory Authority | |
PUCT | Retail electric operations, rates, services, construction of transmission or generation and other aspects of electric operations. Texas municipalities have original jurisdiction over rates in those communities. The municipalities’ rate setting decisions are subject to PUCT review. | |
NMPRC | Retail electric operations, rates services, construction of transmission or generation and other aspects of electric operations. | |
FERC | 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. | |
SPP RTO and SPP IM Wholesale Market | SPS is a transmission-owning member of the SPP RTO and operates within the SPP RTO and SPP IM wholesale market. SPS is authorized to make wholesale electric sales at market-based prices. |
Mechanism | Additional Information | |
DCRF | Recovers distribution costs not included in rates in Texas. | |
EECRF | Recovers costs for energy efficiency programs in Texas. | |
EE Rider | Recovers costs for energy efficiency programs in New Mexico. | |
FPPCAC | Adjusts monthly to recover fuel and purchased power costs in New Mexico. | |
PCRF | Allows recovery of purchased power costs not included in Texas rates. | |
RPS | Recovers deferred costs for renewable energy programs in New Mexico. | |
TCRF | Recovers transmission infrastructure improvement costs and changes in wholesale transmission charges not included in Texas base rates. | |
Fixed Fuel and Purchased Recovery Factor | Provides for recovery of energy expenses. Regulations require refunding or surcharging over- or under- recovery amounts, including interest, when they exceed 4% of the utility’s annual fuel and purchased energy costs on a rolling 12-month basis, if this condition is expected to continue. | |
Wholesale Fuel and Purchased Energy Cost Adjustment | SPS recovers production, fuel and purchased energy costs from its wholesale customers through a monthly wholesale fuel and purchased energy cost adjustment clause accepted by the FERC. Wholesale customers also pay the jurisdictional allocation of production costs. |
Year Ended Dec. 31 | |||||||||||
2016 | 2015 | 2014 | |||||||||
Electric sales (Millions of KWh) | |||||||||||
Residential | 3,478 | 3,536 | 3,549 | ||||||||
Large C&I | 10,518 | 10,334 | 10,262 | ||||||||
Small C&I | 4,708 | 4,719 | 4,741 | ||||||||
Public authorities and other | 555 | 538 | 556 | ||||||||
Total retail | 19,259 | 19,127 | 19,108 | ||||||||
Sales for resale | 8,689 | 8,694 | 8,563 | ||||||||
Total energy sold | 27,948 | 27,821 | 27,671 | ||||||||
Number of customers at end of period | |||||||||||
Residential | 305,076 | 304,711 | 302,922 | ||||||||
Large C&I | 219 | 221 | 214 | ||||||||
Small C&I | 77,319 | 77,238 | 76,553 | ||||||||
Public authorities and other | 6,377 | 6,354 | 6,323 | ||||||||
Total retail | 388,991 | 388,524 | 386,012 | ||||||||
Wholesale | 8 | 8 | 7 | ||||||||
Total customers | 388,999 | 388,532 | 386,019 | ||||||||
Electric revenues (Thousands of Dollars) | |||||||||||
Residential | $ | 343,475 | $ | 347,966 | $ | 363,841 | |||||
Large C&I | 462,576 | 445,853 | 516,648 | ||||||||
Small C&I | 322,599 | 353,450 | 379,558 | ||||||||
Public authorities and other | 44,892 | 42,963 | 46,916 | ||||||||
Total retail | 1,173,542 | 1,190,232 | 1,306,963 | ||||||||
Wholesale | 414,815 | 409,956 | 493,127 | ||||||||
Other electric revenues | 262,602 | 187,030 | 137,280 | ||||||||
Total electric revenues | $ | 1,850,959 | $ | 1,787,218 | $ | 1,937,370 | |||||
KWh sales per retail customer | 49,510 | 49,230 | 49,501 | ||||||||
Revenue per retail customer | $ | 3,017 | $ | 3,063 | $ | 3,386 | |||||
Residential revenue per KWh | 9.88 | ¢ | 9.84 | ¢ | 10.25 | ¢ | |||||
Large C&I revenue per KWh | 4.40 | 4.31 | 5.03 | ||||||||
Small C&I revenue per KWh | 6.85 | 7.49 | 8.01 | ||||||||
Total retail revenue per KWh | 6.09 | 6.22 | 6.84 | ||||||||
Wholesale revenue per KWh | 4.77 | 4.72 | 5.76 |
Year Ended Dec. 31 | |||||||||||||||||
2016 | 2015 | 2014 | |||||||||||||||
Millions of KWh | Percent of Generation | Millions of KWh | Percent of Generation | Millions of KWh | Percent of Generation | ||||||||||||
Coal | 10,990 | 39 | % | 12,441 | 44 | % | 12,770 | 48 | % | ||||||||
Natural Gas | 10,909 | 38 | 10,514 | 36 | 10,068 | 37 | |||||||||||
Wind (a) | 6,120 | 22 | 5,252 | 19 | 3,762 | 14 | |||||||||||
Other (b) | 347 | 1 | 150 | 1 | 180 | 1 | |||||||||||
Total | 28,366 | 100 | % | 28,357 | 100 | % | 26,780 | 100 | % | ||||||||
Owned generation | 15,015 | 53 | % | 16,480 | 58 | % | 16,956 | 63 | % | ||||||||
Purchased generation | 13,351 | 47 | 11,877 | 42 | 9,824 | 37 | |||||||||||
Total | 28,366 | 100 | % | 28,357 | 100 | % | 26,780 | 100 | % |
Environmental |
Employees |
ITEM 1A — RISK FACTORS |
ITEM 1B — UNRESOLVED STAFF COMMENTS |
ITEM 2 —PROPERTIES |
Electric Utility Generating Stations: | ||||||||
Station, Location and Unit | Fuel | Installed | Summer 2016 Net Dependable Capability (MW) | |||||
Steam: | ||||||||
Cunningham-Hobbs, N.M., 2 Units | Natural Gas | 1957-1965 | 254 | |||||
Harrington-Amarillo, Texas, 3 Units | Coal | 1976-1980 | 1,018 | |||||
Jones-Lubbock, Texas, 2 Units | Natural Gas | 1971-1974 | 486 | |||||
Maddox-Hobbs, N.M., 1 Unit | Natural Gas | 1967 | 112 | |||||
Nichols-Amarillo, Texas, 3 Units | Natural Gas | 1960-1968 | 457 | |||||
Plant X-Earth, Texas, 4 Units | Natural Gas | 1952-1964 | 411 | |||||
Tolk-Muleshoe, Texas, 2 Units | Coal | 1982-1985 | 1,067 | |||||
Combustion Turbine: | ||||||||
Carlsbad-Carlsbad, N.M., 1 Unit | Natural Gas | 1968 | — | (a) | ||||
Cunningham-Hobbs, N.M., 2 Units | Natural Gas | 1998 | 212 | |||||
Jones-Lubbock, Texas, 2 Units | Natural Gas | 2011-2013 | 338 | |||||
Maddox-Hobbs, N.M., 1 Unit | Natural Gas | 1963-1976 | 61 | |||||
Total | 4,416 |
Station, Location and Unit | Fuel | Installed | MW (a) | |||||
Steam: | ||||||||
Cunningham-Hobbs, NM, 2 Units | Natural Gas | 1957 - 1965 | 189 | |||||
Harrington-Amarillo, TX, 3 Units | Coal | 1976 - 1980 | 1,018 | |||||
Jones-Lubbock, TX, 2 Units | Natural Gas | 1971 - 1974 | 486 | |||||
Maddox-Hobbs, NM, 1 Unit | Natural Gas | 1967 | 112 | |||||
Nichols-Amarillo, TX, 3 Units | Natural Gas | 1960 - 1968 | 457 | |||||
Plant X-Earth, TX, 4 Units | Natural Gas | 1952 - 1964 | 411 | |||||
Tolk-Muleshoe, TX, 2 Units | Coal | 1982 - 1985 | 1,067 | |||||
Combustion Turbine: | ||||||||
Cunningham-Hobbs, NM, 2 Units | Natural Gas | 1997 | 209 | |||||
Jones-Lubbock, TX, 2 Units | Natural Gas | 2011 - 2013 | 334 | |||||
Maddox-Hobbs, NM, 1 Unit | Natural Gas | 1963 - 1976 | 61 | |||||
Wind: | ||||||||
Hale-Plainview, TX, 239 Units (b) | Wind | 2019 | 460 | |||||
Total | 4,804 |
(a) | Summer 2019 net dependable capacity. |
(b) | Values disclosed are the maximum generation levels for these wind units. Capacity is attainable only when wind conditions are sufficiently available (on-demand net dependable capacity is zero). |
Conductor Miles | ||
345 KV | ||
230 KV | ||
115 KV | ||
Less than 115 KV |
Miles | ||
Transmission | 20 | |
Distribution | — |
ITEM 3 —LEGAL PROCEEDINGS |
ITEM 4 — MINE SAFTEY DISCLOSURES |
ITEM 5 —MARKETFOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS ANDISSUER PURCHASE OF EQUITY SECURITIES |
(Thousands of Dollars) | 2016 | 2015 | ||||||||||||||
(Millions of Dollars) | 2019 | 2018 | ||||||||||||||
First quarter | $ | 25,645 | $ | 25,339 | $ | 57.5 | $ | 33.3 | ||||||||
Second quarter | 19,388 | 23,025 | 83.4 | 30.7 | ||||||||||||
Third quarter | 27,498 | 24,352 | 114.6 | 40.0 | ||||||||||||
Fourth quarter | 30,870 | 12,538 | 78.3 | 45.4 |
ITEM 6 —SELECTED FINANCIAL DATA |
ITEM 7 —MANAGEMENT’S DISCUSSIONAND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Results of Operations |
(Millions of Dollars) | 2019 | 2018 | ||||||
Electric revenues before TCJA impact | $ | 1,825.8 | $ | 1,988.1 | ||||
Electric fuel and purchased power before TCJA impact | (875.4 | ) | (1,050.1 | ) | ||||
Electric margin before TCJA impact | $ | 950.4 | $ | 938.0 | ||||
TCJA impact (offset as a reduction in income tax) | — | (48.3 | ) | |||||
Electric margin | $ | 950.4 | $ | 889.7 |
(Millions of Dollars) | 2016 | 2015 | ||||||
Electric revenues | $ | 1,851 | $ | 1,787 | ||||
Electric fuel and purchased power | (1,035 | ) | (1,001 | ) | ||||
Electric margin | $ | 816 | $ | 786 |
(Millions of Dollars) | 2016 vs. 2015 | |||
Transmission revenue | $ | 38 | ||
Fuel and purchase power cost recovery | 17 | |||
Retail rate increases (a) | 11 | |||
Estimated impact of weather | 2 | |||
Trading | (5 | ) | ||
Other, net | 1 | |||
Total increase in electric revenues | $ | 64 |
(Millions of Dollars) | 2016 vs. 2015 | |||
Retail rate increases (a) | $ | 11 | ||
Transmission revenue, net of costs | 10 | |||
Fuel handling and procurement | 5 | |||
Estimated impact of weather | 2 | |||
Other, net | 2 | |||
Total increase in electric margin | $ | 30 |
(Millions of Dollars) | 2019 vs. 2018 | |||
Purchase capacity costs | $ | 40.7 | ||
Regulatory rate outcomes | 24.7 | |||
Demand revenue | 24.7 | |||
Wholesale transmission revenue | 13.7 | |||
Sales growth | 5.9 | |||
Non-fuel riders | 4.3 | |||
Firm wholesale | (26.2 | ) | ||
PTC sharing | (16.0 | ) | ||
Estimated weather impact | (5.2 | ) | ||
Other (net) | (5.9 | ) | ||
Total increase in electric margin | $ | 60.7 |
Mechanism | Utility Service | Amount Requested (in millions) | Filing Date | Approval | Additional Information | |||||
SPS (NMPRC) | ||||||||||
Rate Case | Electric | $51 | July 2019 | Pending | In July 2019, SPS filed an electric rate case with the NMPRC seeking an increase in retail electric base rates of approximately $51 million. The rate request is based on an ROE of 10.35%, an equity ratio of 54.77%, a rate base of approximately $1.3 billion and a historic test year with rate base additions through Aug. 31, 2019. In December 2019, SPS revised its base rate increase request to approximately $47 million, based on an ROE of 10.10% and updated information. The request also included an increase of $14.6 million for accelerated depreciation including the early retirement of the Tolk Coal Plant in 2032. On Jan. 13, 2020, SPS and various parties filed an uncontested comprehensive stipulation. The stipulation includes a base rate revenue increase of $31 million, based on an ROE of 9.45% and an equity ratio of 54.77%. The stipulation also includes an acceleration of depreciation on the Tolk Coal Plant to reflect early retirement in 2037, which results in a total increase in depreciation expense of $8 million. The Signatories will not oppose the full application of depreciation rates associated with the 2032 retirement date in SPS’ next base rate case. SPS anticipates final rates will go into effect in the second or third quarter of 2020. |
(Millions of Dollars) | Staff | AXM | OPUC | TIEC | DOE | |||||||||||||||
SPS Direct Testimony | $ | 136.5 | $ | 136.5 | $ | 136.5 | $ | 136.5 | $ | 136.5 | ||||||||||
Recommended base rate adjustments: | ||||||||||||||||||||
ROE | (22.1 | ) | (24.2 | ) | (15.2 | ) | (20.5 | ) | (23.8 | ) | ||||||||||
Capital structure | (6.9 | ) | (10.4 | ) | — | (6.9 | ) | (3.1 | ) | |||||||||||
Tolk/Harrington O&M disallowance | — | (6.6 | ) | — | — | — | ||||||||||||||
Distribution and Transmission Capital Disallowances (a) | (6.5 | ) | — | — | — | — | ||||||||||||||
Depreciation expense | (7.5 | ) | (14.5 | ) | (8.3 | ) | (20.4 | ) | — | |||||||||||
Excess ADIT unprotected plant | — | — | (6.9 | ) | — | — | ||||||||||||||
Income Tax Expense Differences | (11.6 | ) | — | — | — | — | ||||||||||||||
Other, net | (6.8 | ) | (6.1 | ) | (0.4 | ) | (0.6 | ) | — | |||||||||||
Total Adjustments | (61.4 | ) | (61.8 | ) | (30.8 | ) | (48.4 | ) | (26.9 | ) | ||||||||||
Total proposed revenue change | $ | 75.1 | $ | 74.7 | $ | 105.7 | $ | 88.1 | $ | 109.6 |
Recommended Position | Staff | AXM | OPUC (b) | TIEC | DOE | ||||||||||
ROE | 9.1 | % | 9.0 | % | — | % | 9.2 | % | 9.0 | % | |||||
Equity Ratio | 51.00 | % | 50.00 | % | — | % | 51.00 | % | 53.00 | % |
(a) | Staff recommends exclusion of approximately $134 million in transmission, distribution, and general plant in service in this rate case resulting in an approximate $7 million decrease to the revenue requirement. |
(b) | OPUC did not provide a recommendation for an ROE or equity ratio. For illustrative purposes an ROE of 9.5% was used. |
ITEM 7A —QUANTITATIVEAND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 8 — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
/s/ BEN FOWKE | /s/ ROBERT C. FRENZEL | |
Ben Fowke | Robert C. Frenzel | |
Chairman, | Executive Vice President, Chief Financial Officer and Director | |
Feb. | Feb. |
/s/ DELOITTE & TOUCHE LLP |
Minneapolis, Minnesota |
February |
We have served as the Company’s auditor since 2002. |
Year Ended Dec. 31 | Year Ended Dec. 31 | ||||||||||||||||||||||
2016 | 2015 | 2014 | 2019 | 2018 | 2017 | ||||||||||||||||||
Operating revenues | $ | 1,850,959 | $ | 1,787,218 | $ | 1,937,370 | $ | 1,825.8 | $ | 1,933.2 | $ | 1,918.0 | |||||||||||
Operating expenses | |||||||||||||||||||||||
Electric fuel and purchased power | 1,034,950 | 1,001,083 | 1,192,176 | 875.4 | 1,043.5 | 1,055.3 | |||||||||||||||||
Operating and maintenance expenses | 269,471 | 289,856 | 277,217 | 285.3 | 282.7 | 285.4 | |||||||||||||||||
Demand side management program expenses | 16,028 | 13,365 | 12,350 | 16.6 | 17.7 | 15.5 | |||||||||||||||||
Depreciation and amortization | 162,429 | 150,913 | 135,632 | 229.9 | 209.6 | 193.9 | |||||||||||||||||
Taxes (other than income taxes) | 60,800 | 57,536 | 53,871 | 71.9 | 68.0 | 67.0 | |||||||||||||||||
Total operating expenses | 1,543,678 | 1,512,753 | 1,671,246 | 1,479.1 | 1,621.5 | 1,617.1 | |||||||||||||||||
Operating income | 307,281 | 274,465 | 266,124 | 346.7 | 311.7 | 300.9 | |||||||||||||||||
Other income (expense), net | 91 | (6 | ) | (59 | ) | 2.2 | (3.0 | ) | (1.8 | ) | |||||||||||||
Allowance for funds used during construction — equity | 9,981 | 7,378 | 12,118 | 26.8 | 19.1 | 9.3 | |||||||||||||||||
Interest charges and financing costs | |||||||||||||||||||||||
Interest charges — includes other financing costs of $3,055, $3,158 and $3,038, respectively | 88,671 | 84,040 | 80,218 | ||||||||||||||||||||
Interest charges — includes other financing costs of $3.4, $2.9 and $2.5, respectively | 99.3 | 84.5 | 86.2 | ||||||||||||||||||||
Allowance for funds used during construction — debt | (5,589 | ) | (4,491 | ) | (7,089 | ) | (12.3 | ) | (8.9 | ) | (5.4 | ) | |||||||||||
Total interest charges and financing costs | 83,082 | 79,549 | 73,129 | 87.0 | 75.6 | 80.8 | |||||||||||||||||
Income before income taxes | 234,271 | 202,288 | 205,054 | 288.7 | 252.2 | 227.6 | |||||||||||||||||
Income taxes | 82,114 | 75,025 | 75,202 | 25.6 | 38.9 | 68.4 | |||||||||||||||||
Net income | $ | 152,157 | $ | 127,263 | $ | 129,852 | $ | 263.1 | $ | 213.3 | $ | 159.2 |
Year Ended Dec. 31 | |||||||||||
2016 | 2015 | 2014 | |||||||||
Net income | $ | 152,157 | $ | 127,263 | $ | 129,852 | |||||
Other comprehensive (loss) income | |||||||||||
Pension and retiree medical benefits: | |||||||||||
Net pension and retiree medical benefits losses arising during the period, net of tax of $(84), $(260), and $0, respectively | (148 | ) | (464 | ) | — | ||||||
Derivative instruments: | |||||||||||
Reclassification of losses to net income, net of tax of $80, $97, and $96, respectively | 139 | 172 | 172 | ||||||||
Other comprehensive (loss) income | (9 | ) | (292 | ) | 172 | ||||||
Comprehensive income | $ | 152,148 | $ | 126,971 | $ | 130,024 |
Year Ended Dec. 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
Net income | $ | 263.1 | $ | 213.3 | $ | 159.2 | |||||
Other comprehensive income | |||||||||||
Defined pension and other postretirement benefits: | |||||||||||
Net pension and retiree medical loss arising during the period, net of tax of $(0.1), $0 and $0, respectively | (0.2 | ) | — | — | |||||||
Reclassification of loss to net income, net of tax of $0 | 0.2 | — | 0.1 | ||||||||
Derivative instruments: | |||||||||||
Reclassification of loss to net income, net of tax of $0 | — | 0.1 | — | ||||||||
Other comprehensive income | — | 0.1 | 0.1 | ||||||||
Comprehensive income | $ | 263.1 | $ | 213.4 | $ | 159.3 |
Year Ended Dec. 31 | Year Ended Dec. 31 | |||||||||||||||||||||
2016 | 2015 | 2014 | 2019 | 2018 | 2017 | |||||||||||||||||
Operating activities | ||||||||||||||||||||||
Net income | $ | 152,157 | $ | 127,263 | $ | 129,852 | $ | 263.1 | $ | 213.3 | $ | 159.2 | ||||||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||||||||||||
Depreciation and amortization | 162,957 | 153,241 | 137,947 | 232.2 | 210.0 | 193.9 | ||||||||||||||||
Demand side management program amortization | 1,673 | 1,673 | 1,673 | — | 1.7 | 1.7 | ||||||||||||||||
Deferred income taxes | 122,983 | 62,836 | 123,517 | 29.0 | 22.1 | 126.5 | ||||||||||||||||
Amortization of investment tax credits | (213 | ) | (213 | ) | (341 | ) | ||||||||||||||||
Allowance for equity funds used during construction | (9,981 | ) | (7,378 | ) | (12,118 | ) | (26.8 | ) | (19.1 | ) | (9.3 | ) | ||||||||||
Provision for bad debts | 6,066 | 4,655 | 4,137 | 5.7 | 4.9 | 5.1 | ||||||||||||||||
Net derivative losses | 217 | 268 | 268 | — | 0.1 | 0.1 | ||||||||||||||||
Other | 122 | (3,827 | ) | — | ||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||
Accounts receivable | (8,868 | ) | (3,291 | ) | 9,045 | (9.0 | ) | (19.5 | ) | (10.4 | ) | |||||||||||
Accrued unbilled revenues | (15,637 | ) | 25,506 | (20,080 | ) | (0.6 | ) | 15.3 | (10.4 | ) | ||||||||||||
Inventories | (959 | ) | 5,686 | (6,093 | ) | (20.5 | ) | (16.0 | ) | (1.9 | ) | |||||||||||
Prepayments and other | 22,651 | (24,712 | ) | (11,905 | ) | 2.8 | 0.5 | 4.3 | ||||||||||||||
Accounts payable | 13,776 | (24,570 | ) | 11,428 | (8.5 | ) | (6.6 | ) | 11.8 | |||||||||||||
Net regulatory assets and liabilities | (55,689 | ) | 26,452 | (973 | ) | 13.8 | 38.2 | 38.1 | ||||||||||||||
Other current liabilities | 5,156 | (30,762 | ) | 12,665 | 5.8 | 11.6 | 3.4 | |||||||||||||||
Pension and other employee benefit obligations | (15,276 | ) | (9,405 | ) | (2,246 | ) | (17.7 | ) | (16.0 | ) | (21.7 | ) | ||||||||||
Change in other noncurrent assets | (200 | ) | 2,352 | 2,836 | ||||||||||||||||||
Change in other noncurrent liabilities | 6,748 | 8,974 | 7,166 | |||||||||||||||||||
Other, net | 3.5 | 5.8 | (19.9 | ) | ||||||||||||||||||
Net cash provided by operating activities | 387,683 | 314,748 | 386,778 | 472.8 | 446.3 | 470.5 | ||||||||||||||||
Investing activities | ||||||||||||||||||||||
Utility capital/construction expenditures | (512,522 | ) | (599,511 | ) | (554,936 | ) | (844.4 | ) | (1,020.9 | ) | (550.6 | ) | ||||||||||
Allowance for equity funds used during construction | 9,981 | 7,378 | 12,118 | |||||||||||||||||||
Proceeds from insurance recoveries | 3,901 | — | — | |||||||||||||||||||
Investments in utility money pool arrangement | (75,000 | ) | (92,000 | ) | (105,000 | ) | (133.0 | ) | (285.0 | ) | (142.0 | ) | ||||||||||
Receipts from utility money pool arrangement | 75,000 | 92,000 | 105,000 | 133.0 | 350.0 | 77.0 | ||||||||||||||||
Other | (1,174 | ) | 3,136 | — | — | — | (0.5 | ) | ||||||||||||||
Net cash used in investing activities | (499,814 | ) | (588,997 | ) | (542,818 | ) | (844.4 | ) | (955.9 | ) | (616.1 | ) | ||||||||||
Financing activities | ||||||||||||||||||||||
Proceeds from (repayment of) short-term borrowings, net | 35,000 | (22,000 | ) | (47,000 | ) | |||||||||||||||||
(Repayments of) proceeds from short-term borrowings, net | (42.0 | ) | 42.0 | (50.0 | ) | |||||||||||||||||
Proceeds from issuance of long-term debt | 295,985 | 198,496 | 148,123 | 292.2 | 295.0 | 442.3 | ||||||||||||||||
Repayment of long-term debt | (200,000 | ) | — | — | ||||||||||||||||||
Repayment of long-term debt, including reacquisition premiums | — | — | (271.6 | ) | ||||||||||||||||||
Borrowings under utility money pool arrangement | 636,500 | 579,700 | 458,000 | 296.0 | 595.0 | 335.0 | ||||||||||||||||
Repayments under utility money pool arrangement | (636,500 | ) | (595,700 | ) | (480,000 | ) | (296.0 | ) | (595.0 | ) | (335.0 | ) | ||||||||||
Capital contributions from parent | 66,225 | 214,535 | 160,000 | 426.3 | 336.8 | 143.7 | ||||||||||||||||
Dividends paid to parent | (85,069 | ) | (100,544 | ) | (83,498 | ) | (332.7 | ) | (131.0 | ) | (108.8 | ) | ||||||||||
Net cash provided by financing activities | 112,141 | 274,487 | 155,625 | 343.8 | 542.8 | 155.6 | ||||||||||||||||
Net change in cash and cash equivalents | 10 | 238 | (415 | ) | ||||||||||||||||||
Cash and cash equivalents at beginning of year | 834 | 596 | 1,011 | |||||||||||||||||||
Cash and cash equivalents at end of year | $ | 844 | $ | 834 | $ | 596 | ||||||||||||||||
Net change in cash, cash equivalents and restricted cash | (27.8 | ) | 33.2 | 10.0 | ||||||||||||||||||
Cash, cash equivalents and restricted cash at beginning of year | 44.0 | 10.8 | 0.8 | |||||||||||||||||||
Cash, cash equivalents and restricted cash at end of year | $ | 16.2 | $ | 44.0 | $ | 10.8 | ||||||||||||||||
Supplemental disclosure of cash flow information: | ||||||||||||||||||||||
Cash paid for interest (net of amounts capitalized) | $ | (78,236 | ) | $ | (76,474 | ) | $ | (70,748 | ) | $ | (83.6 | ) | $ | (71.2 | ) | $ | (76.0 | ) | ||||
Cash received (paid) for income taxes, net | 61,813 | (23,987 | ) | 42,679 | 11.9 | (10.6 | ) | 41.5 | ||||||||||||||
Supplemental disclosure of non-cash investing transactions: | ||||||||||||||||||||||
Property, plant and equipment additions in accounts payable | $ | 43,074 | $ | 44,335 | $ | 33,164 | $ | 94.5 | $ | 71.5 | $ | 85.1 | ||||||||||
Inventory transfer additions in property, plant and equipment | 23.3 | 22.5 | 13.7 | |||||||||||||||||||
Operating lease right-of-use assets | 548.3 | — | — | |||||||||||||||||||
Allowance for equity funds used during construction | 26.8 | 19.1 | 9.3 |
Dec. 31 | Dec. 31 | |||||||||||||||
2016 | 2015 | 2019 | 2018 | |||||||||||||
Assets | ||||||||||||||||
Current assets | ||||||||||||||||
Cash and cash equivalents | $ | 844 | $ | 834 | $ | 16.2 | $ | 44.0 | ||||||||
Accounts receivable, net | 74,190 | 71,166 | 92.7 | 90.7 | ||||||||||||
Accounts receivable from affiliates | 949 | 1,079 | 4.2 | 10.5 | ||||||||||||
Investments in money pool arrangements | — | — | ||||||||||||||
Accrued unbilled revenues | 119,418 | 103,781 | 115.1 | 114.5 | ||||||||||||
Inventories | 38,505 | 37,546 | 31.0 | 33.9 | ||||||||||||
Regulatory assets | 38,721 | 31,541 | 20.0 | 26.0 | ||||||||||||
Derivative instruments | 5,114 | 12,952 | 15.0 | 17.8 | ||||||||||||
Prepaid taxes | 21,779 | 35,666 | 0.8 | 14.2 | ||||||||||||
Prepayments and other | 7,855 | 20,520 | 21.4 | 10.7 | ||||||||||||
Total current assets | 307,375 | 315,085 | 316.4 | 362.3 | ||||||||||||
Property, plant and equipment, net | 4,695,819 | 4,348,823 | 6,631.6 | 5,946.4 | ||||||||||||
Other assets | ||||||||||||||||
Regulatory assets | 346,683 | 301,814 | 364.0 | 366.2 | ||||||||||||
Derivative instruments | 22,113 | 25,272 | 12.6 | 15.8 | ||||||||||||
Operating lease right-of-use assets | 522.4 | — | ||||||||||||||
Other | 7,477 | 3,449 | 3.9 | 5.1 | ||||||||||||
Total other assets | 376,273 | 330,535 | 902.9 | 387.1 | ||||||||||||
Total assets | $ | 5,379,467 | $ | 4,994,443 | $ | 7,850.9 | $ | 6,695.8 | ||||||||
Liabilities and Equity | ||||||||||||||||
Current liabilities | ||||||||||||||||
Current portion of long-term debt | $ | — | $ | 200,000 | ||||||||||||
Short-term debt | 50,000 | 15,000 | $ | — | $ | 42.0 | ||||||||||
Accounts payable | 176,157 | 146,794 | 168.1 | 191.8 | ||||||||||||
Accounts payable to affiliates | 14,414 | 29,135 | 20.4 | 19.9 | ||||||||||||
Regulatory liabilities | 41,577 | 98,305 | 118.1 | 85.8 | ||||||||||||
Taxes accrued | 39,742 | 33,374 | 40.4 | 41.6 | ||||||||||||
Accrued interest | 19,162 | 17,781 | 26.2 | 25.8 | ||||||||||||
Dividends payable | 30,870 | 12,538 | 46.3 | 45.2 | ||||||||||||
Derivative instruments | 3,565 | 3,565 | 3.7 | 3.6 | ||||||||||||
Operating lease liabilities | 26.9 | — | ||||||||||||||
Other | 29,703 | 35,654 | 30.7 | 28.3 | ||||||||||||
Total current liabilities | 405,190 | 592,146 | 480.8 | 484.0 | ||||||||||||
Deferred credits and other liabilities | ||||||||||||||||
Deferred income taxes | 989,137 | 860,744 | 671.8 | 619.1 | ||||||||||||
Regulatory liabilities | 233,454 | 229,584 | 732.3 | 780.9 | ||||||||||||
Asset retirement obligations | 28,663 | 27,233 | 77.3 | 32.4 | ||||||||||||
Derivative instruments | 23,513 | 27,078 | 12.8 | 16.4 | ||||||||||||
Pension and employee benefit obligations | 107,872 | 93,346 | 67.0 | 92.4 | ||||||||||||
Operating lease liabilities | 495.3 | — | ||||||||||||||
Other | 24,084 | 17,841 | 9.4 | 7.9 | ||||||||||||
Total deferred credits and other liabilities | 1,406,723 | 1,255,826 | 2,065.9 | 1,549.1 | ||||||||||||
Commitments and contingencies | ||||||||||||||||
Capitalization | ||||||||||||||||
Long-term debt | 1,635,858 | 1,338,522 | 2,419.7 | 2,126.1 | ||||||||||||
Common stock — 200 shares authorized of $1.00 par value; 100 shares outstanding at Dec. 31, 2016 and 2015, respectively | — | — | ||||||||||||||
Common stock — 200 shares authorized of $1.00 par value; 100 shares outstanding at Dec. 31, 2019 and 2018, respectively | — | — | ||||||||||||||
Additional paid in capital | 1,446,223 | 1,371,223 | 2,350.9 | 1,932.3 | ||||||||||||
Retained earnings | 486,763 | 438,007 | 535.0 | 605.7 | ||||||||||||
Accumulated other comprehensive loss | (1,290 | ) | (1,281 | ) | (1.4 | ) | (1.4 | ) | ||||||||
Total common stockholder’s equity | 1,931,696 | 1,807,949 | 2,884.5 | 2,536.6 | ||||||||||||
Total liabilities and equity | $ | 5,379,467 | $ | 4,994,443 | $ | 7,850.9 | $ | 6,695.8 |
Common Stock Issued | Accumulated Other Comprehensive Income (Loss) | Total Common Stockholder’s Equity | Common Stock Issued | Accumulated Other Comprehensive Income (Loss) | Total Common Stockholder’s Equity | |||||||||||||||||||||||||||||||||||||||
Shares | Par Value | Additional Paid In Capital | Retained Earnings | Shares | Par Value | Additional Paid In Capital | Retained Earnings | |||||||||||||||||||||||||||||||||||||
Balance at Dec. 31, 2013 | 100 | $ | — | $ | 1,005,463 | $ | 359,389 | $ | (1,161 | ) | $ | 1,363,691 | ||||||||||||||||||||||||||||||||
Balance at Dec. 31, 2016 | 100 | $ | — | $ | 1,446.2 | $ | 486.7 | $ | (1.3 | ) | $ | 1,931.6 | ||||||||||||||||||||||||||||||||
Net income | 159.2 | 159.2 | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | 0.1 | 0.1 | ||||||||||||||||||||||||||||||||||||||||||
Common dividends declared to parent | (104.6 | ) | (104.6 | ) | ||||||||||||||||||||||||||||||||||||||||
Contribution of capital by parent | 144.0 | 144.0 | ||||||||||||||||||||||||||||||||||||||||||
Adoption of ASU No. 2018-02 | 0.3 | (0.3 | ) | — | ||||||||||||||||||||||||||||||||||||||||
Balance at Dec. 31, 2017 | 100 | $ | — | $ | 1,590.2 | $ | 541.6 | $ | (1.5 | ) | $ | 2,130.3 | ||||||||||||||||||||||||||||||||
Net income | 213.3 | 213.3 | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | 0.1 | 0.1 | ||||||||||||||||||||||||||||||||||||||||||
Common dividends declared to parent | (149.2 | ) | (149.2 | ) | ||||||||||||||||||||||||||||||||||||||||
Contribution of capital by parent | 342.1 | 342.1 | ||||||||||||||||||||||||||||||||||||||||||
Balance at Dec. 31, 2018 | 100 | $ | — | $ | 1,932.3 | $ | 605.7 | $ | (1.4 | ) | $ | 2,536.6 | ||||||||||||||||||||||||||||||||
Net income | 129,852 | 129,852 | 263.1 | 263.1 | ||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | 172 | 172 | — | — | ||||||||||||||||||||||||||||||||||||||||
Common dividends declared to parent | (93,243 | ) | (93,243 | ) | (333.8 | ) | (333.8 | ) | ||||||||||||||||||||||||||||||||||||
Contribution of capital by parent | 160,000 | 160,000 | 418.6 | 418.6 | ||||||||||||||||||||||||||||||||||||||||
Balance at Dec. 31, 2014 | 100 | $ | — | $ | 1,165,463 | $ | 395,998 | $ | (989 | ) | $ | 1,560,472 | ||||||||||||||||||||||||||||||||
Net income | 127,263 | 127,263 | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | (292 | ) | (292 | ) | ||||||||||||||||||||||||||||||||||||||||
Common dividends declared to parent | (85,254 | ) | (85,254 | ) | ||||||||||||||||||||||||||||||||||||||||
Contribution of capital by parent | 205,760 | 205,760 | ||||||||||||||||||||||||||||||||||||||||||
Balance at Dec. 31, 2015 | 100 | $ | — | $ | 1,371,223 | $ | 438,007 | $ | (1,281 | ) | $ | 1,807,949 | ||||||||||||||||||||||||||||||||
Net income | 152,157 | 152,157 | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | (9 | ) | (9 | ) | ||||||||||||||||||||||||||||||||||||||||
Common dividends declared to parent | (103,401 | ) | (103,401 | ) | ||||||||||||||||||||||||||||||||||||||||
Contribution of capital by parent | 75,000 | 75,000 | ||||||||||||||||||||||||||||||||||||||||||
Balance at Dec. 31, 2016 | 100 | $ | — | $ | 1,446,223 | $ | 486,763 | $ | (1,290 | ) | $ | 1,931,696 | ||||||||||||||||||||||||||||||||
Balance at Dec. 31, 2019 | 100 | $ | — | $ | 2,350.9 | $ | 535.0 | $ | (1.4 | ) | $ | 2,884.5 |
Dec. 31 | |||||||
2016 | 2015 | ||||||
Long-Term Debt | |||||||
First Mortgage Bonds, Series due: | |||||||
June 15, 2024, 3.3% | $ | 350,000 | $ | 350,000 | |||
Aug. 15, 2041, 4.5% | 400,000 | 400,000 | |||||
Aug. 15, 2046, 3.4% | 300,000 | — | |||||
Unsecured Senior E Notes, due Oct. 1, 2016, 5.6% | — | 200,000 | |||||
Unsecured Senior G Notes, due Dec. 1, 2018, 8.75% | 250,000 | 250,000 | |||||
Unsecured Senior C and D Notes, due Oct. 1, 2033, 6% | 100,000 | 100,000 | |||||
Unsecured Senior F Notes, due Oct. 1, 2036, 6% | 250,000 | 250,000 | |||||
Unamortized premium | 365 | 605 | |||||
Unamortized debt expense | (14,507 | ) | (12,083 | ) | |||
Total | 1,635,858 | 1,538,522 | |||||
Less current maturities | — | 200,000 | |||||
Total long-term debt | $ | 1,635,858 | $ | 1,338,522 | |||
Common Stockholder’s Equity | |||||||
Common stock — 200 shares authorized of $1.00 par value, 100 shares outstanding at Dec. 31, 2016 and 2015, respectively | $ | — | $ | — | |||
Additional paid in capital | 1,446,223 | 1,371,223 | |||||
Retained earnings | 486,763 | 438,007 | |||||
Accumulated other comprehensive loss | (1,290 | ) | (1,281 | ) | |||
Total common stockholder’s equity | $ | 1,931,696 | $ | 1,807,949 |
1. | Summary of Significant Accounting Policies |
(Millions of Dollars) | Dec. 31, 2019 | Dec. 31, 2018 | ||||||
Inventories | ||||||||
Materials and supplies | $ | 24.7 | $ | 25.7 | ||||
Fuel | 6.3 | 8.2 | ||||||
Total inventories | $ | 31.0 | $ | 33.9 |
2. | Accounting Pronouncements |
3. Property, Plant and Equipment |
(Millions of Dollars) | Dec. 31, 2019 | Dec. 31, 2018 | ||||||
Property, plant and equipment | ||||||||
Electric plant | $ | 8,453.0 | $ | 7,227.7 | ||||
CWIP | 485.4 | 847.3 | ||||||
Total property, plant and equipment | 8,938.4 | 8,075.0 | ||||||
Less accumulated depreciation | (2,306.8 | ) | (2,128.6 | ) | ||||
Property, plant and equipment, net | $ | 6,631.6 | $ | 5,946.4 |
4. Regulatory Assets and Liabilities |
(Millions of Dollars) | See Note(s) | Remaining Amortization Period | Dec. 31, 2019 | Dec. 31, 2018 | ||||||||||||||||
Regulatory Assets | Current | Noncurrent | Current | Noncurrent | ||||||||||||||||
Pension and retiree medical obligations | 9 | Various | $ | 11.1 | $ | 203.5 | $ | 12.6 | $ | 222.1 | ||||||||||
Excess deferred taxes — TCJA | 7 | Various | 1.7 | 52.0 | — | 55.9 | ||||||||||||||
Recoverable deferred taxes on AFUDC recorded in plant | Plant lives | — | 34.1 | — | 27.9 | |||||||||||||||
Net AROs (a) | 1, 10 | Plant lives | — | 26.9 | — | 25.7 | ||||||||||||||
Losses on reacquired debt | Term of related debt | 0.8 | 21.0 | 0.8 | 21.9 | |||||||||||||||
Conservation programs (b) | 1 | One to two years | 0.6 | 1.1 | 0.7 | 0.6 | ||||||||||||||
Other | Various | 5.8 | 25.4 | 11.9 | 12.1 | |||||||||||||||
Total regulatory assets | $ | 20.0 | $ | 364.0 | $ | 26.0 | $ | 366.2 |
(a) |
(b) | Includes costs for conservation programs, as well as incentives allowed in certain jurisdictions. |
(Thousands of Dollars) | Dec. 31, 2016 | Dec. 31, 2015 | ||||||
Accounts receivable, net | ||||||||
Accounts receivable | $ | 80,569 | $ | 77,054 | ||||
Less allowance for bad debts | (6,379 | ) | (5,888 | ) | ||||
$ | 74,190 | $ | 71,166 |
(Thousands of Dollars) | Dec. 31, 2016 | Dec. 31, 2015 | ||||||
Inventories | ||||||||
Materials and supplies | $ | 25,453 | $ | 24,888 | ||||
Fuel | 13,052 | 12,658 | ||||||
$ | 38,505 | $ | 37,546 |
(Thousands of Dollars) | Dec. 31, 2016 | Dec. 31, 2015 | ||||||
Property, plant and equipment, net | ||||||||
Electric plant | $ | 6,362,189 | $ | 5,933,764 | ||||
Construction work in progress | 260,327 | 236,697 | ||||||
Total property, plant and equipment | 6,622,516 | 6,170,461 | ||||||
Less accumulated depreciation | (1,926,697 | ) | (1,821,638 | ) | ||||
$ | 4,695,819 | $ | 4,348,823 |
(Millions of Dollars) | See Note(s) | Remaining Amortization Period | Dec. 31, 2019 | Dec. 31, 2018 | |||||||||||||||||
Regulatory Liabilities | Current | Noncurrent | Current | Noncurrent | |||||||||||||||||
Deferred income tax adjustments and TCJA refunds (a) | 7 | Various | $ | 6.9 | $ | 534.9 | $ | 2.2 | $ | 569.8 | |||||||||||
Plant removal costs | 1, 10 | Plant lives | — | 174.5 | — | 187.7 | |||||||||||||||
Revenue subject to refund | One to two years | 14.6 | 1.1 | 11.3 | 8.1 | ||||||||||||||||
Gain from asset sales | Various | — | 2.4 | — | 2.4 | ||||||||||||||||
Deferred electric energy costs | Less than one year | 81.6 | — | 56.5 | — | ||||||||||||||||
Contract valuation adjustments (b) | 1, 8 | Less than one year | 11.7 | — | 14.7 | — | |||||||||||||||
Other | Various | 3.3 | 19.4 | 1.1 | 12.9 | ||||||||||||||||
Total regulatory liabilities (c) | $ | 118.1 | $ | 732.3 | $ | 85.8 | $ | 780.9 |
(a) | Includes the revaluation of recoverable/regulated plant ADIT and revaluation impact of non-plant ADIT due to the TCJA. |
(b) | Includes the fair value of certain long-term PPAs used to meet energy capacity requirements. |
(c) | Revenue subject to refund of $3.9 million for 2019 and none for 2018 is included in other current liabilities. |
5. Borrowings and Other Financing Instruments |
(Millions of Dollars, Except Interest Rates) | Three Months Ended Dec. 31, 2019 | Year Ended Dec. 31 | ||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||
Borrowing limit | $ | 100 | $ | 100 | $ | 100 | $ | 100 | ||||||||
Amount outstanding at period end | — | — | — | — | ||||||||||||
Average amount outstanding | 1 | 8 | 29 | 13 | ||||||||||||
Maximum amount outstanding | 12 | 100 | 100 | 100 | ||||||||||||
Weighted average interest rate, computed on a daily basis | 1.63 | % | 2.42 | % | 1.96 | % | 1.12 | % | ||||||||
Weighted average interest rate at end of period | N/A | N/A | N/A | N/A |
(Amounts in Millions, Except Interest Rates) | Three Months Ended Dec. 31, 2016 | |||
Borrowing limit | $ | 100 | ||
Amount outstanding at period end | — | |||
Average amount outstanding | 20 | |||
Maximum amount outstanding | 64 | |||
Weighted average interest rate, computed on a daily basis | 0.83 | % | ||
Weighted average interest rate at period end | N/A |
(Amounts in Millions, Except Interest Rates) | Twelve Months Ended Dec. 31, 2016 | Twelve Months Ended Dec. 31, 2015 | Twelve Months Ended Dec. 31, 2014 | |||||||||
Borrowing limit | $ | 100 | $ | 100 | $ | 100 | ||||||
Amount outstanding at period end | — | — | 16 | |||||||||
Average amount outstanding | 28 | 21 | 9 | |||||||||
Maximum amount outstanding | 100 | 100 | 100 | |||||||||
Weighted average interest rate, computed on a daily basis | 0.67 | % | 0.40 | % | 0.22 | % | ||||||
Weighted average interest rate at end of period | N/A | N/A | 0.45 |
(Millions of Dollars, Except Interest Rates) | Three Months Ended Dec. 31, 2019 | Year Ended Dec. 31 | ||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||
Borrowing limit | $ | 500 | $ | 500 | $ | 400 | $ | 400 | ||||||||
Amount outstanding at period end | — | — | 42 | — | ||||||||||||
Average amount outstanding | — | 72 | 30 | 69 | ||||||||||||
Maximum amount outstanding | — | 316 | 144 | 176 | ||||||||||||
Weighted average interest rate, computed on a daily basis | N/A | 2.68 | % | 2.27 | % | 1.13 | % | |||||||||
Weighted average interest rate at end of period | N/A | N/A | 2.80 | NA |
(Amounts in Millions, Except Interest Rates) | Three Months Ended Dec. 31, 2016 | |||
Borrowing limit | $ | 400 | ||
Amount outstanding at period end | 50 | |||
Average amount outstanding | 19 | |||
Maximum amount outstanding | 75 | |||
Weighted average interest rate, computed on a daily basis | 0.74 | % | ||
Weighted average interest rate at period end | 0.95 |
(Amounts in Millions, Except Interest Rates) | Twelve Months Ended Dec. 31, 2016 | Twelve Months Ended Dec. 31, 2015 | Twelve Months Ended Dec. 31, 2014 | |||||||||
Borrowing limit | $ | 400 | $ | 400 | $ | 400 | ||||||
Amount outstanding at period end | 50 | 15 | 37 | |||||||||
Average amount outstanding | 43 | 100 | 83 | |||||||||
Maximum amount outstanding | 140 | 246 | 241 | |||||||||
Weighted average interest rate, computed on a daily basis | 0.67 | % | 0.46 | % | 0.26 | % | ||||||
Weighted average interest rate at end of period | 0.95 | 0.60 | 0.47 |
Debt-to-Total Capitalization Ratio(a) | Amount Facility May Be Increased (millions) | Additional Periods for Which a One-Year Extension May Be Requested (b) | ||||
2019 | 2018 | |||||
46% | 46% | $50 | 2 |
(a) | The SPS credit facility has a financial covenant requiring that the debt-to-total capitalization ratio be less than or equal to 65%. |
(b) | All extension requests are subject to majority bank group approval. |
Credit Facility (a) | Credit Facility (a) | Drawn (b) | Available | Drawn (b) | Available | |||||||||
$ | 400 | $ | 55.0 | $ | 345.0 | |||||||||
$500 | $2 | $498 |
(a) | This credit facility matures in June |
(b) | Includes letters of credit and outstanding commercial |
Financing Instrument | Interest Rate | Maturity Date | 2019 | 2018 | |||||||||
First mortgage bonds | 3.30 | % | June 15, 2024 | $ | 150 | $ | 150 | ||||||
First mortgage bonds | 3.30 | June 15, 2024 | 200 | 200 | |||||||||
Unsecured senior notes | 6.00 | Oct. 1, 2033 | 100 | 100 | |||||||||
Unsecured senior notes | 6.00 | Oct. 1, 2036 | 250 | 250 | |||||||||
First mortgage bonds | 4.50 | Aug. 15, 2041 | 200 | 200 | |||||||||
First mortgage bonds | 4.50 | Aug. 15, 2041 | 100 | 100 | |||||||||
First mortgage bonds | 4.50 | Aug. 15, 2041 | 100 | 100 | |||||||||
First mortgage bonds | 3.40 | Aug. 15, 2046 | 300 | 300 | |||||||||
First mortgage bonds | 3.70 | Aug. 15, 2047 | 450 | 450 | |||||||||
First mortgage bonds (b) | 4.40 | Nov. 15, 2048 | 300 | 300 | |||||||||
First mortgage bonds (a) | 3.75 | June 15, 2049 | 300 | — | |||||||||
Unamortized discount | (7 | ) | (4 | ) | |||||||||
Unamortized debt issuance cost | (23 | ) | (20 | ) | |||||||||
Total long-term debt | $ | 2,420 | $ | 2,126 |
(a) | 2019 financing |
(b) | 2018 financing |
(Millions of Dollars) | ||||
2020 | $ | — | ||
2021 | — | |||
2022 | — | |||
2023 | — | |||
2024 | 350 |
Preferred Stock Authorized (Shares) | Par Value of Preferred Stock | Preferred Stock Outstanding (Shares) 2019 and 2018 | |||||
10,000,000 | 1.00 | — |
Equity to Total Capitalization Ratio - Required Range | Equity to Total Capitalization Ratio - Actual (a) | ||||||
Low | High | 2019 | |||||
45.0 | % | 55.0 | % | 54.4 | % |
(a) | Excludes short-term debt. |
Unrestricted Retained Earnings | Total Capitalization | Limit on Total Capitalization (a) | ||||||
$ | 535.0 | million | $ | 5.3 | billion | N/A |
Preferred Shares Authorized | Par Value | Preferred Shares Outstanding | ||||||
10,000,000 | $ | 1.00 | None |
6. Revenues |
(Millions of Dollars) | Year Ended Dec. 31, 2019 | |||
Major product lines | ||||
Revenue from contracts with customers: | ||||
Residential | $ | 351.9 | ||
C&I | 800.3 | |||
Other | 41.1 | |||
Total retail | 1,193.3 | |||
Wholesale | 361.0 | |||
Transmission | 239.6 | |||
Other | 3.3 | |||
Total revenue from contracts with customers | 1,797.2 | |||
Alternative revenue and other | 28.6 | |||
Total revenues | $ | 1,825.8 |
(Millions of Dollars) | Year Ended Dec. 31, 2018 | |||
Major product lines | ||||
Revenue from contracts with customers: | ||||
Residential | $ | 363.7 | ||
C&I | 828.3 | |||
Other | 44.7 | |||
Total retail | 1,236.7 | |||
Wholesale | 426.0 | |||
Transmission | 231.1 | |||
Other | 12.8 | |||
Total revenue from contracts with customers | 1,906.6 | |||
Alternative revenue and other | 26.6 | |||
Total revenues | $ | 1,933.2 |
7. Income Taxes |
Tax Year(s) | Expiration | |
2009 - 2013 | June 2020 | |
2014 - 2016 | September 2020 |
(Millions of Dollars) | Dec. 31, 2019 | Dec. 31, 2018 | ||||||
Unrecognized tax benefit — Permanent tax positions | $ | 3.7 | $ | 3.0 | ||||
Unrecognized tax benefit — Temporary tax positions | 1.5 | 1.5 | ||||||
Total unrecognized tax benefit | $ | 5.2 | $ | 4.5 |
(Millions of Dollars) | 2019 | 2018 | 2017 | |||||||||
Balance at Jan. 1 | $ | 4.5 | $ | 4.3 | $ | 28.7 | ||||||
Additions based on tax positions related to the current year | 0.7 | 0.6 | 0.9 | |||||||||
Reductions based on tax positions related to the current year | (0.1 | ) | (0.1 | ) | (0.6 | ) | ||||||
Additions for tax positions of prior years | 0.2 | 0.1 | 1.3 | |||||||||
Reductions for tax positions of prior years | (0.1 | ) | (0.3 | ) | (19.9 | ) | ||||||
Settlements with taxing authorities | — | (0.1 | ) | (6.1 | ) | |||||||
Balance at Dec. 31 | $ | 5.2 | $ | 4.5 | $ | 4.3 |
(Millions of Dollars) | Dec. 31, 2016 | Dec. 31, 2015 | ||||||
Unrecognized tax benefit — Permanent tax positions | $ | 4.5 | $ | 2.6 | ||||
Unrecognized tax benefit — Temporary tax positions | 24.2 | 22.1 | ||||||
Total unrecognized tax benefit | $ | 28.7 | $ | 24.7 |
(Millions of Dollars) | 2016 | 2015 | 2014 | |||||||||
Balance at Jan. 1 | $ | 24.7 | $ | 13.2 | $ | 4.1 | ||||||
Additions based on tax positions related to the current year | 1.4 | 4.2 | 8.6 | |||||||||
Reductions based on tax positions related to the current year | — | (0.6 | ) | — | ||||||||
Additions for tax positions of prior years | 3.9 | 9.0 | 2.3 | |||||||||
Reductions for tax positions of prior years | (1.3 | ) | (1.1 | ) | (0.3 | ) | ||||||
Settlements with taxing authorities | — | — | (0.2 | ) | ||||||||
Lapse of applicable statutes of limitations | — | — | (1.3 | ) | ||||||||
Balance at Dec. 31 | $ | 28.7 | $ | 24.7 | $ | 13.2 |
(Millions of Dollars) | Dec. 31, 2019 | Dec. 31, 2018 | ||||||
NOL and tax credit carryforwards | $ | (4.4 | ) | $ | (3.8 | ) |
(Millions of Dollars) | Dec. 31, 2016 | Dec. 31, 2015 | ||||||
NOL and tax credit carryforwards | $ | (5.9 | ) | $ | (5.0 | ) |
(Millions of Dollars) | 2019 | 2018 | 2017 | |||||||||
Receivable (payable) for interest related to unrecognized tax benefits at Jan. 1 | $ | 0.7 | $ | 0.5 | $ | (0.9 | ) | |||||
Interest income related to unrecognized tax benefits | — | 0.2 | 1.4 | |||||||||
Receivable for interest related to unrecognized tax benefits at Dec. 31 | $ | 0.7 | $ | 0.7 | $ | 0.5 |
(Millions of Dollars) | 2016 | 2015 | 2014 | |||||||||
Payable for interest related to unrecognized tax benefits at Jan. 1 | $ | — | $ | (0.1 | ) | $ | — | |||||
Interest (expense) income related to unrecognized tax benefits | (0.9 | ) | 0.1 | (0.1 | ) | |||||||
Payable for interest related to unrecognized tax benefits at Dec. 31 | $ | (0.9 | ) | $ | — | $ | (0.1 | ) |
(Millions of Dollars) | 2019 | 2018 | ||||||
Federal tax credit carryforwards | $ | 29.5 | $ | 5.7 | ||||
State NOL carryforwards | 1.2 | 2.9 |
(Millions of Dollars) | 2016 | 2015 | ||||||
Federal NOL carryforward | $ | 275 | $ | 306 | ||||
Federal tax credit carryforwards | 4 | 3 | ||||||
State NOL carryforwards | 60 | 79 | ||||||
Valuation allowances for state NOL carryforwards | — | (11 | ) |
2019 | 2018 (a) | 2017 (a) | ||||||
Federal statutory rate | 21.0 | % | 21.0 | % | 35.0 | % | ||
State income tax on pretax income, net of federal tax effect | 2.2 | % | 2.3 | % | 2.0 | % | ||
Increases (decreases) in tax from: | ||||||||
Wind PTCs | (7.9 | ) | — | — | ||||
Plant regulatory differences (b) | (5.0 | ) | (4.8 | ) | (0.9 | ) | ||
Amortization of excess nonplant deferred taxes | (0.9 | ) | (1.2 | ) | — | |||
Other tax credits, net of NOL & tax credit allowances | (0.6 | ) | (0.7 | ) | (0.6 | ) | ||
Adjustments attributable to tax returns | (0.1 | ) | (1.5 | ) | (0.4 | ) | ||
Change in unrecognized tax benefits | 0.2 | 0.1 | (1.0 | ) | ||||
Tax reform | — | — | (3.5 | ) | ||||
Other, net | — | 0.2 | (0.5 | ) | ||||
Effective income tax rate | 8.9 | % | 15.4 | % | 30.1 | % |
(a) | Prior periods have been reclassified to conform to current year presentation. |
(b) | Regulatory differences for income tax primarily relate to the credit of excess deferred taxes to customers through the average rate assumption method. Income tax benefits associated with the credit of excess deferred credits are offset by corresponding revenue reductions. |
2016 | 2015 | 2014 | |||||||
Federal statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | |||
Increases (decreases) in tax from: | |||||||||
State income taxes, net of federal income tax benefit | 1.5 | 2.6 | 3.4 | ||||||
Change in unrecognized tax benefits | 0.8 | 0.5 | 0.2 | ||||||
Regulatory differences — utility plant items | (1.0 | ) | (0.8 | ) | (1.6 | ) | |||
Tax credits recognized, net of federal income tax expense | (0.5 | ) | (0.3 | ) | (0.4 | ) | |||
Other, net | (0.7 | ) | 0.1 | 0.1 | |||||
Effective income tax rate | 35.1 | % | 37.1 | % | 36.7 | % |
(Millions of Dollars) | 2019 | 2018 | 2017 | |||||||||
Current federal tax (benefit) expense | $ | (3.9 | ) | $ | 12.3 | $ | (20.9 | ) | ||||
Current state tax expense (benefit) | 0.6 | 2.3 | (12.8 | ) | ||||||||
Current change in unrecognized tax expense (benefit) | — | 2.3 | (24.3 | ) | ||||||||
Deferred federal tax expense | 22.3 | 20.5 | 89.9 | |||||||||
Deferred state tax expense | 6.0 | 3.6 | 14.5 | |||||||||
Deferred change in unrecognized tax expense (benefit) | 0.7 | (2.0 | ) | 22.1 | ||||||||
Deferred ITCs | (0.1 | ) | (0.1 | ) | (0.1 | ) | ||||||
Total income tax expense | $ | 25.6 | $ | 38.9 | $ | 68.4 |
(Thousands of Dollars) | 2016 | 2015 | 2014 | |||||||||
Current federal tax benefit | $ | (40,853 | ) | $ | (1,327 | ) | $ | (57,201 | ) | |||
Current state tax (benefit) expense | (2,929 | ) | 2,448 | 2,512 | ||||||||
Current change in unrecognized tax expense | 3,126 | 11,281 | 6,715 | |||||||||
Deferred federal tax expense | 116,404 | 67,640 | 121,882 | |||||||||
Deferred state tax expense | 7,757 | 5,399 | 8,025 | |||||||||
Deferred change in unrecognized tax benefit | (1,178 | ) | (10,203 | ) | (6,390 | ) | ||||||
Deferred investment tax credits | (213 | ) | (213 | ) | (341 | ) | ||||||
Total income tax expense | $ | 82,114 | $ | 75,025 | $ | 75,202 |
(Millions of Dollars) | 2019 | 2018 | 2017 | |||||||||
Deferred tax expense (benefit) excluding items below | $ | 52.7 | $ | 44.2 | $ | (414.2 | ) | |||||
Amortization and adjustments to deferred income taxes on income tax regulatory assets and liabilities | (23.8 | ) | (22.0 | ) | 540.7 | |||||||
Tax benefit (expense) allocated to other comprehensive income, net of adoption of ASU No. 2018-02, and other | 0.1 | (0.1 | ) | — | ||||||||
Deferred tax expense | $ | 29.0 | $ | 22.1 | $ | 126.5 |
(Thousands of Dollars) | 2016 | 2015 | 2014 | |||||||||
Deferred tax expense excluding items below | $ | 128,393 | $ | 63,453 | $ | 124,875 | ||||||
Amortization and adjustments to deferred income taxes on income tax regulatory assets and liabilities | (5,416 | ) | (780 | ) | (1,262 | ) | ||||||
Tax benefit (expense) allocated to other comprehensive income and other | 6 | 163 | (96 | ) | ||||||||
Deferred tax expense | $ | 122,983 | $ | 62,836 | $ | 123,517 |
(Thousands of Dollars) | 2016 | 2015 | ||||||||||||||
(Millions of Dollars) | 2019 | 2018 (a) | ||||||||||||||
Deferred tax liabilities: | ||||||||||||||||
Differences between book and tax bases of property | $ | 1,034,675 | $ | 945,142 | $ | 758.7 | $ | 680.6 | ||||||||
Employee benefits | 42,239 | 50,097 | ||||||||||||||
Other | 35,975 | 18,260 | ||||||||||||||
Operating lease assets | 115.8 | — | ||||||||||||||
Regulatory assets | 49.7 | 49.2 | ||||||||||||||
Pension expense | 33.1 | 32.3 | ||||||||||||||
Total deferred tax liabilities | �� | $ | 1,112,889 | $ | 1,013,499 | $ | 957.3 | $ | 762.1 | |||||||
Deferred tax assets: | ||||||||||||||||
Regulatory liabilities | $ | 111.2 | $ | 116.8 | ||||||||||||
Operating lease liabilities | 115.8 | — | ||||||||||||||
Tax credit carryforward | 29.5 | 5.7 | ||||||||||||||
Deferred fuel costs | 18.3 | 12.7 | ||||||||||||||
Other employee benefits | 5.8 | 5.6 | ||||||||||||||
NOL carryforward | $ | 100,179 | $ | 112,060 | 0.1 | 0.2 | ||||||||||
Deferred fuel costs | 10,226 | 23,127 | ||||||||||||||
Regulatory liabilities | 3,380 | 10,480 | ||||||||||||||
Other | 9,967 | 7,088 | 4.8 | 2.0 | ||||||||||||
Total deferred tax assets | $ | 123,752 | $ | 152,755 | 285.5 | 143.0 | ||||||||||
Net deferred tax liability | $ | 989,137 | $ | 860,744 | $ | 671.8 | $ | 619.1 |
(Amounts in Millions) (a) | Dec. 31, 2019 | Dec. 31, 2018 | ||||
MWh of electricity | 6.4 | 5.5 |
(a) | Amounts are not reflective of net positions in the underlying commodities. |
(Millions of Dollars) | 2019 | 2018 | 2017 | |||||||||
Accumulated other comprehensive loss related to cash flow hedges at Jan. 1 | $ | (0.7 | ) | $ | (0.8 | ) | $ | (0.7 | ) | |||
After-tax net realized losses on derivative transactions reclassified into earnings | — | 0.1 | — | |||||||||
Adoption of ASU. 2018-02 (a) | — | — | (0.1 | ) | ||||||||
Accumulated other comprehensive loss related to cash flow hedges at Dec. 31 | $ | (0.7 | ) | $ | (0.7 | ) | $ | (0.8 | ) |
(a) | In 2017, SPS implemented ASU No. 2018-02 related to TCJA, which resulted in reclassification of certain credit balances within net accumulated other comprehensive loss to retained earnings. |
Dec. 31, 2019 | Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value | |||||||||||||||||||||||||||||||||||||||||||||||
(Millions of Dollars) | Level 1 | Level 2 | Level 3 | Fair Value Total | Netting (a) | Total | Level 1 | Level 2 | Level 3 | Fair Value Total | Netting (a) | Total | ||||||||||||||||||||||||||||||||||||
Current derivative assets | ||||||||||||||||||||||||||||||||||||||||||||||||
Other derivative instruments: | ||||||||||||||||||||||||||||||||||||||||||||||||
Electric commodity | $ | — | $ | — | $ | 11.8 | $ | 11.8 | $ | — | $ | 11.8 | $ | — | $ | — | $ | 14.9 | $ | 14.9 | $ | (0.2 | ) | $ | 14.7 | |||||||||||||||||||||||
Total current derivative assets | $ | — | $ | — | $ | 11.8 | $ | 11.8 | $ | — | 11.8 | $ | — | $ | — | $ | 14.9 | $ | 14.9 | $ | (0.2 | ) | 14.7 | |||||||||||||||||||||||||
PPAs (b) | 3.2 | 3.1 | ||||||||||||||||||||||||||||||||||||||||||||||
Current derivative instruments | $ | 15.0 | $ | 17.8 | ||||||||||||||||||||||||||||||||||||||||||||
Noncurrent derivative assets | ||||||||||||||||||||||||||||||||||||||||||||||||
PPAs (b) | 12.6 | 15.8 | ||||||||||||||||||||||||||||||||||||||||||||||
Noncurrent derivative instruments | $ | 12.6 | $ | 15.8 | ||||||||||||||||||||||||||||||||||||||||||||
Current derivative liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||
Other derivative instruments: | ||||||||||||||||||||||||||||||||||||||||||||||||
Electric commodity | $ | — | $ | — | $ | 0.1 | $ | 0.1 | $ | — | $ | 0.1 | $ | — | $ | — | $ | 0.2 | $ | 0.2 | $ | (0.2 | ) | $ | — | |||||||||||||||||||||||
Total current derivative liabilities | $ | — | $ | — | $ | 0.1 | $ | 0.1 | $ | — | 0.1 | $ | — | $ | — | $ | 0.2 | $ | 0.2 | $ | (0.2 | ) | — | |||||||||||||||||||||||||
PPAs (b) | 3.6 | 3.6 | ||||||||||||||||||||||||||||||||||||||||||||||
Current derivative instruments | $ | 3.7 | $ | 3.6 | ||||||||||||||||||||||||||||||||||||||||||||
Noncurrent derivative liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||
PPAs (b) | 12.8 | 16.4 | ||||||||||||||||||||||||||||||||||||||||||||||
Noncurrent derivative instruments | $ | 12.8 | $ | 16.4 |
(a) | SPS nets derivative instruments and related collateral in its balance sheet when supported by a legally enforceable master netting agreement, and all derivative instruments and related collateral amounts were subject to master netting agreements at Dec. 31, 2019 and 2018. At both Dec. 31, 2019 and 2018, derivative assets and liabilities include 0 obligations to return cash collateral or rights to reclaim cash collateral. The counterparty netting excludes settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements. |
(b) | During 2006, SPS qualified these contracts under the normal purchase exception. Based on this qualification, the contracts are no longer adjusted to fair value and the previous carrying value of these contracts will be amortized over the remaining contract lives along with the offsetting regulatory assets and liabilities. |
Year Ended Dec. 31 | ||||||||||||
(Millions of Dollars) | 2019 | 2018 | 2017 | |||||||||
Balance at Jan. 1 | $ | 14.7 | $ | 12.7 | $ | 2.0 | ||||||
Purchases | 26.7 | 32.3 | 41.2 | |||||||||
Settlements | (34.2 | ) | (41.6 | ) | (55.8 | ) | ||||||
Net transactions recorded during the period: | ||||||||||||
Net gains recognized as regulatory assets | 4.5 | 11.3 | 25.3 | |||||||||
Balance at Dec. 31 | $ | 11.7 | $ | 14.7 | $ | 12.7 |
2019 | 2018 | |||||||||||||||
(Millions of Dollars) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Long-term debt, including current portion | $ | 2,419.7 | $ | 2,706.1 | $ | 2,126.1 | $ | 2,139.8 |
9. Benefit Plans and Other Postretirement Benefits |
2016 | 2015 | |||||
Domestic and international equity securities | 36 | % | 36 | % | ||
Long-duration fixed income and interest rate swap securities | 31 | 31 | ||||
Short-to-intermediate fixed income securities | 15 | 12 | ||||
Alternative investments | 16 | 19 | ||||
Cash | 2 | 2 | ||||
Total | 100 | % | 100 | % |
Dec. 31, 2019 (a) | Dec. 31, 2018 (a) | |||||||||||||||||||||||||||||||||||||||
(Millions of Dollars) | Level 1 | Level 2 | Level 3 | Measured at NAV | Total | Level 1 | Level 2 | Level 3 | Measured at NAV | Total | ||||||||||||||||||||||||||||||
Cash equivalents | $ | 18.9 | $ | — | $ | — | $ | — | $ | 18.9 | $ | 21.6 | $ | — | $ | — | $ | — | $ | 21.6 | ||||||||||||||||||||
Commingled funds | 202.5 | — | — | 144.8 | 347.3 | 128.6 | — | — | 132.5 | 261.1 | ||||||||||||||||||||||||||||||
Debt securities | — | 98.2 | 0.6 | — | 98.8 | — | 98.1 | — | — | 98.1 | ||||||||||||||||||||||||||||||
Equity securities | 12.1 | — | — | — | 12.1 | 14.4 | — | — | — | 14.4 | ||||||||||||||||||||||||||||||
Other | (16.8 | ) | 0.7 | — | (2.8 | ) | (18.9 | ) | 0.2 | 0.8 | — | (4.0 | ) | (3.0 | ) | |||||||||||||||||||||||||
Total | $ | 216.7 | $ | 98.9 | $ | 0.6 | $ | 142.0 | $ | 458.2 | $ | 164.8 | $ | 98.9 | $ | — | $ | 128.5 | $ | 392.2 |
Dec. 31, 2016 | ||||||||||||||||||||
(Thousands of Dollars) | Level 1 | Level 2 | Level 3 | Investments Measured at NAV (a) | Total | |||||||||||||||
Cash equivalents | $ | 29,237 | $ | — | $ | — | $ | — | $ | 29,237 | ||||||||||
Commingled funds: | ||||||||||||||||||||
U.S. equity funds | — | — | — | 62,899 | 62,899 | |||||||||||||||
Non U.S. equity funds | — | — | — | 46,403 | 46,403 | |||||||||||||||
U.S. corporate bond funds | — | — | — | 41,226 | 41,226 | |||||||||||||||
Emerging market equity funds | — | — | — | 24,637 | 24,637 | |||||||||||||||
Emerging market debt funds | — | — | — | 20,399 | 20,399 | |||||||||||||||
Commodity funds | — | — | — | 2,876 | 2,876 | |||||||||||||||
Private equity investments | — | — | — | 12,098 | 12,098 | |||||||||||||||
Real estate | — | — | — | 23,232 | 23,232 | |||||||||||||||
Other commingled funds | — | — | — | 28,247 | 28,247 | |||||||||||||||
Debt securities: | ||||||||||||||||||||
Government securities | — | 38,105 | — | — | 38,105 | |||||||||||||||
U.S. corporate bonds | — | 36,293 | — | — | 36,293 | |||||||||||||||
Non U.S. corporate bonds | — | 5,818 | — | — | 5,818 | |||||||||||||||
Mortgage-backed securities | — | 821 | — | — | 821 | |||||||||||||||
Asset-backed securities | — | 389 | — | — | 389 | |||||||||||||||
Equity securities: | ||||||||||||||||||||
U.S. equities | 10,477 | — | — | — | 10,477 | |||||||||||||||
Other | — | (2,762 | ) | — | — | (2,762 | ) | |||||||||||||
Total | $ | 39,714 | $ | 78,664 | $ | — | $ | 262,017 | $ | 380,395 |
(a) |
Dec. 31, 2015 | ||||||||||||||||||||
(Thousands of Dollars) | Level 1 | Level 2 | Level 3 | Investments Measured at NAV (a) | Total | |||||||||||||||
Cash equivalents | $ | 22,999 | $ | — | $ | — | $ | — | $ | 22,999 | ||||||||||
Derivatives | — | 553 | — | — | 553 | |||||||||||||||
Commingled funds: | ||||||||||||||||||||
U.S. equity funds | — | — | — | 55,533 | 55,533 | |||||||||||||||
Non U.S. equity funds | — | — | — | 53,449 | 53,449 | |||||||||||||||
U.S. corporate bond funds | — | — | — | 32,020 | 32,020 | |||||||||||||||
Emerging market equity funds | — | — | — | 23,891 | 23,891 | |||||||||||||||
Emerging market debt funds | — | — | — | 23,169 | 23,169 | |||||||||||||||
Commodity funds | — | — | — | 7,884 | 7,884 | |||||||||||||||
Private equity investments | — | — | — | 19,114 | 19,114 | |||||||||||||||
Real estate | — | — | — | 27,690 | 27,690 | |||||||||||||||
Other commingled funds | — | — | — | 29,793 | 29,793 | |||||||||||||||
Debt securities: | ||||||||||||||||||||
Government securities | — | 37,495 | — | — | 37,495 | |||||||||||||||
U.S. corporate bonds | — | 28,826 | — | — | 28,826 | |||||||||||||||
Non U.S. corporate bonds | — | 4,626 | — | — | 4,626 | |||||||||||||||
Asset-backed securities | — | 323 | — | — | 323 | |||||||||||||||
Equity securities: | ||||||||||||||||||||
U.S. equities | 13,492 | — | — | — | 13,492 | |||||||||||||||
Other | — | (1,944 | ) | — | — | (1,944 | ) | |||||||||||||
Total | $ | 36,491 | $ | 69,879 | $ | — | $ | 272,543 | $ | 378,913 |
Dec. 31, 2019 (a) | Dec. 31, 2018 (a) | |||||||||||||||||||||||||||||||||||||||
(Millions of Dollars) | Level 1 | Level 2 | Level 3 | Measured at NAV | Total | Level 1 | Level 2 | Level 3 | Measured at NAV | Total | ||||||||||||||||||||||||||||||
Cash equivalents | $ | 2.2 | $ | — | $ | — | $ | — | $ | 2.2 | $ | 1.8 | $ | — | $ | — | $ | — | $ | 1.8 | ||||||||||||||||||||
Insurance contracts | — | 4.9 | — | — | 4.9 | — | 4.3 | — | — | 4.3 | ||||||||||||||||||||||||||||||
Commingled funds: | 6.7 | — | — | 7.4 | 14.1 | 12.8 | — | — | 3.8 | 16.6 | ||||||||||||||||||||||||||||||
Debt securities: | — | 22.1 | 0.1 | — | 22.2 | — | 17.2 | — | — | 17.2 | ||||||||||||||||||||||||||||||
Equity securities: | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Other | — | 0.2 | — | — | 0.2 | — | 0.1 | — | — | 0.1 | ||||||||||||||||||||||||||||||
Total | $ | 8.9 | $ | 27.2 | $ | 0.1 | $ | 7.4 | $ | 43.6 | $ | 14.6 | $ | 21.6 | $ | — | $ | 3.8 | $ | 40.0 |
(a) |
(Thousands of Dollars) | 2016 | 2015 | ||||||
Accumulated Benefit Obligation at Dec. 31 | $ | 453,317 | $ | 429,726 | ||||
Change in Projected Benefit Obligation: | ||||||||
Obligation at Jan. 1 | $ | 467,394 | $ | 500,690 | ||||
Service cost | 9,761 | 11,006 | ||||||
Interest cost | 21,259 | 20,184 | ||||||
Actuarial loss (gain) | 25,053 | (35,154 | ) | |||||
Transfer to other plan | (3,305 | ) | (2,843 | ) | ||||
Benefit payments | (36,561 | ) | (26,489 | ) | ||||
Obligation at Dec. 31 | $ | 483,601 | $ | 467,394 |
(Thousands of Dollars) | 2016 | 2015 | ||||||
Change in Fair Value of Plan Assets: | ||||||||
Fair value of plan assets at Jan. 1 | $ | 378,913 | $ | 402,269 | ||||
Actual return (loss) on plan assets | 23,306 | (6,013 | ) | |||||
Employer contributions | 18,088 | 11,651 | ||||||
Transfer to other plan | (3,351 | ) | (2,505 | ) | ||||
Benefit payments | (36,561 | ) | (26,489 | ) | ||||
Fair value of plan assets at Dec. 31 | $ | 380,395 | $ | 378,913 |
(Thousands of Dollars) | 2016 | 2015 | ||||||
Funded Status of Plans at Dec. 31: | ||||||||
Funded status (a) | $ | (103,206 | ) | $ | (88,481 | ) |
Pension Benefits | Postretirement Benefits | |||||||||||||||
(Millions of Dollars) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Change in Benefit Obligation: | ||||||||||||||||
Obligation at Jan. 1 | $ | 477.8 | $ | 515.9 | $ | 41.8 | $ | 47.0 | ||||||||
Service cost | 8.8 | 9.7 | 0.9 | 1.1 | ||||||||||||
Interest cost | 20.1 | 18.4 | 1.7 | 1.6 | ||||||||||||
Plan amendments | — | — | — | — | ||||||||||||
Actuarial loss (gain) | 44.2 | (34.8 | ) | 0.4 | (5.1 | ) | ||||||||||
Plan participants’ contributions | — | — | 0.6 | 0.6 | ||||||||||||
Benefit payments (a) | (32.1 | ) | (31.4 | ) | (2.2 | ) | (3.4 | ) | ||||||||
Obligation at Dec. 31 | $ | 518.8 | $ | 477.8 | $ | 43.2 | $ | 41.8 | ||||||||
Change in Fair Value of Plan Assets: | ||||||||||||||||
Fair value of plan assets at Jan. 1 | $ | 392.2 | $ | 433.2 | $ | 40.0 | $ | 44.1 | ||||||||
Actual return on plan assets | 80.2 | (17.6 | ) | 5.1 | (1.3 | ) | ||||||||||
Employer contributions | 17.9 | 8.0 | 0.1 | — | ||||||||||||
Plan participants’ contributions | — | — | 0.6 | 0.6 | ||||||||||||
Benefit payments | (32.1 | ) | (31.4 | ) | (2.2 | ) | (3.4 | ) | ||||||||
Fair value of plan assets at Dec. 31 | $ | 458.2 | $ | 392.2 | $ | 43.6 | $ | 40.0 | ||||||||
Funded status of plans at Dec. 31 | $ | (60.6 | ) | $ | (85.6 | ) | $ | 0.4 | $ | (1.8 | ) | |||||
Amounts recognized in the Balance Sheet at Dec. 31: | ||||||||||||||||
Noncurrent assets | — | — | 0.4 | — | ||||||||||||
Noncurrent liabilities | (60.6 | ) | (85.6 | ) | — | (1.8 | ) | |||||||||
Net amounts recognized | $ | (60.6 | ) | $ | (85.6 | ) | $ | 0.4 | $ | (1.8 | ) | |||||
Significant Assumptions Used to Measure Benefit Obligations: | ||||||||||||||||
Discount rate for year-end valuation | 3.49 | % | 4.31 | % | 3.47 | % | 4.32 | % | ||||||||
Expected average long-term increase in compensation level | 3.75 | 3.75 | N/A | N/A | ||||||||||||
Mortality table | Pri-2012 | RP-2014 | Pri-2012 | RP-2014 | ||||||||||||
Health care costs trend rate — initial: Pre-65 | N/A | N/A | 6.00 | % | 6.50 | % | ||||||||||
Health care costs trend rate — initial: Post-65 | N/A | N/A | 5.10 | % | 5.30 | % | ||||||||||
Ultimate trend assumption — initial: Pre-65 | N/A | N/A | 4.50 | % | 4.50 | % | ||||||||||
Ultimate trend assumption — initial: Post-65 | N/A | N/A | 4.50 | % | 4.50 | % | ||||||||||
Years until ultimate trend is reached | N/A | N/A | 3 | 4 |
(a) |
(Thousands of Dollars) | 2016 | 2015 | ||||||
Amounts Not Yet Recognized as Components of Net Periodic Benefit Cost: | ||||||||
Net loss | $ | 247,381 | $ | 236,107 |
Pension Benefits | Postretirement Benefits | |||||||||||||||||||||||
(Millions of Dollars) | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||
Service cost | $ | 8.8 | $ | 9.7 | $ | 9.8 | $ | 0.9 | $ | 1.1 | $ | 0.9 | ||||||||||||
Interest cost | 20.1 | 18.4 | 19.7 | 1.7 | 1.6 | 1.7 | ||||||||||||||||||
Expected return on plan assets | (28.6 | ) | (28.3 | ) | (27.9 | ) | (2.0 | ) | (2.5 | ) | (2.4 | ) | ||||||||||||
Amortization of prior service credit | (0.1 | ) | (0.1 | ) | — | (0.5 | ) | (0.4 | ) | (0.4 | ) | |||||||||||||
Amortization of net loss | 11.3 | 14.1 | 13.0 | (0.4 | ) | (0.4 | ) | (0.6 | ) | |||||||||||||||
Settlement charge (a) | 2.4 | 3.2 | — | — | — | — | ||||||||||||||||||
Net periodic pension cost (credit) | 13.9 | 17.0 | 14.6 | (0.3 | ) | (0.6 | ) | (0.8 | ) | |||||||||||||||
Costs not recognized due to effects of regulation | 0.9 | (2.2 | ) | 0.3 | — | — | — | |||||||||||||||||
Net benefit cost (credit) recognized for financial reporting | $ | 14.8 | $ | 14.8 | $ | 14.9 | $ | (0.3 | ) | $ | (0.6 | ) | $ | (0.8 | ) | |||||||||
Significant Assumptions Used to Measure Costs: | ||||||||||||||||||||||||
Discount rate | 4.31 | % | 3.63 | % | 4.13 | % | 4.32 | % | 3.62 | % | 4.13 | % | ||||||||||||
Expected average long-term increase in compensation level | 3.75 | 3.75 | 3.75 | — | — | — | ||||||||||||||||||
Expected average long-term rate of return on assets | 6.78 | 6.78 | 6.78 | 5.30 | 5.80 | 5.80 |
(a) | A settlement charge is required when the amount of all lump-sum distributions during the year is greater than the sum of the service and interest cost components of the annual net periodic pension cost. In 2019 and 2018, as a result of lump-sum distributions during the 2019 and 2018 plan years, SPS recorded a total pension settlement charge of $2.4 million and $3.2 million in 2019 and 2018, respectively. A total of $0.6 million and $0.7 million of that amount was recorded in the income statement in 2019 and 2018, respectively. |
(Thousands of Dollars) | 2016 | 2015 | ||||||||||||||||||||||
Pension Benefits | Postretirement Benefits | |||||||||||||||||||||||
(Millions of Dollars) | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
Amounts Not Yet Recognized as Components of Net Periodic Benefit Cost: | ||||||||||||||||||||||||
Net loss | $ | 209.7 | $ | 230.9 | $ | (11.9 | ) | $ | (9.6 | ) | ||||||||||||||
Prior service credit | (1.1 | ) | (1.2 | ) | (1.4 | ) | (1.8 | ) | ||||||||||||||||
Total | $ | 208.6 | $ | 229.7 | $ | (13.3 | ) | $ | (11.4 | ) | ||||||||||||||
Amounts Not Yet Recognized as Components of Net Periodic Benefit Cost Have Been Recorded as Follows Based Upon Expected Recovery in Rates: | ||||||||||||||||||||||||
Current regulatory assets | $ | 13,524 | $ | 13,690 | $ | 11.0 | $ | 12.9 | $ | — | $ | — | ||||||||||||
Noncurrent regulatory assets | 233,857 | 222,417 | 197.6 | 216.8 | — | — | ||||||||||||||||||
Current regulatory liabilities | — | — | (0.8 | ) | (0.9 | ) | ||||||||||||||||||
Noncurrent regulatory liabilities | — | — | (12.5 | ) | (10.5 | ) | ||||||||||||||||||
Total | $ | 247,381 | $ | 236,107 | $ | 208.6 | $ | 229.7 | $ | (13.3 | ) | $ | (11.4 | ) |
Measurement date | Dec. 31, | Dec. 31, | Dec. 31, 2019 | Dec. 31, 2018 |
2016 | 2015 | |||||
Significant Assumptions Used to Measure Benefit Obligations: | ||||||
Discount rate for year-end valuation | 4.13 | % | 4.66 | % | ||
Expected average long-term increase in compensation level | 3.75 | 4.00 | ||||
Mortality table | RP-2014 | RP-2014 |
Pension Benefits | Postretirement Benefits | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Domestic and international equity securities | 37 | % | 35 | % | 15 | % | 18 | % | ||||
Long-duration fixed income securities | 30 | 32 | — | — | ||||||||
Short-to-intermediate fixed income securities | 14 | 16 | 72 | 70 | ||||||||
Alternative investments | 17 | 15 | 9 | 8 | ||||||||
Cash | 2 | 2 | 4 | 4 | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
(Millions of Dollars) | Projected Pension Benefit Payments | Gross Projected Postretirement Health Care Benefit Payments | Expected Medicare Part D Subsidies | Net Projected Postretirement Health Care Benefit Payments | ||||||||||||
2020 | $ | 30.7 | $ | 2.9 | $ | — | $ | 2.9 | ||||||||
2021 | 29.4 | 2.9 | — | 2.9 | ||||||||||||
2022 | 30.3 | 2.9 | — | 2.9 | ||||||||||||
2023 | 30.4 | 2.9 | — | 2.9 | ||||||||||||
2024 | 30.4 | 2.8 | — | 2.8 | ||||||||||||
2025-2029 | 153.5 | 13.2 | 0.1 | 13.1 |
(Thousands of Dollars) | 2016 | 2015 | 2014 | |||||||||
Service cost | $ | 9,761 | $ | 11,006 | $ | 9,184 | ||||||
Interest cost | 21,259 | 20,184 | 20,444 | |||||||||
Expected return on plan assets | (27,602 | ) | (28,610 | ) | (26,179 | ) | ||||||
Amortization of prior service cost | — | 39 | 54 | |||||||||
Amortization of net loss | 11,986 | 15,087 | 13,326 | |||||||||
Net periodic pension cost | 15,404 | 17,706 | 16,829 | |||||||||
Credits not recognized due to effects of regulation | 2,042 | 2,597 | 3,170 | |||||||||
Net benefit cost recognized for financial reporting | $ | 17,446 | $ | 20,303 | $ | 19,999 |
2016 | 2015 | 2014 | |||||||
Significant Assumptions Used to Measure Costs: | |||||||||
Discount rate | 4.66 | % | 4.11 | % | 4.75 | % | |||
Expected average long-term increase in compensation level | 4.00 | 3.75 | 3.75 | ||||||
Expected average long-term rate of return on assets | 6.78 | 7.22 | 6.90 |
2016 | 2015 | |||||
Domestic and international equity securities | 25 | % | 25 | % | ||
Short-to-intermediate fixed income securities | 57 | 57 | ||||
Alternative investments | 13 | 13 | ||||
Cash | 5 | 5 | ||||
Total | 100 | % | 100 | % |
Dec. 31, 2016 | ||||||||||||||||||||
(Thousands of Dollars) | Level 1 | Level 2 | Level 3 | Investments Measured at NAV (a) | Total | |||||||||||||||
Cash equivalents | $ | 1,966 | $ | — | $ | — | $ | — | $ | 1,966 | ||||||||||
Insurance contracts | — | 4,519 | — | — | 4,519 | |||||||||||||||
Commingled funds: | ||||||||||||||||||||
U.S. equity funds | — | — | — | 5,208 | 5,208 | |||||||||||||||
U.S fixed income funds | — | — | — | 2,593 | 2,593 | |||||||||||||||
Emerging market debt funds | — | — | — | 2,911 | 2,911 | |||||||||||||||
Other commingled funds | — | — | — | 5,258 | 5,258 | |||||||||||||||
Debt securities: | ||||||||||||||||||||
Government securities | — | 3,611 | — | — | 3,611 | |||||||||||||||
U.S. corporate bonds | — | 5,962 | — | — | 5,962 | |||||||||||||||
Non U.S. corporate bonds | — | 1,653 | — | — | 1,653 | |||||||||||||||
Asset-backed securities | — | 1,810 | — | — | 1,810 | |||||||||||||||
Mortgage-backed securities | — | 2,748 | — | — | 2,748 | |||||||||||||||
Equity securities: | ||||||||||||||||||||
Non U.S. equities | 3,919 | — | — | — | 3,919 | |||||||||||||||
Other | — | 139 | — | — | 139 | |||||||||||||||
Total | $ | 5,885 | $ | 20,442 | $ | — | $ | 15,970 | $ | 42,297 |
Dec. 31, 2015 | ||||||||||||||||||||
(Thousands of Dollars) | Level 1 | Level 2 | Level 3 | Investments Measured at NAV (a) | Total | |||||||||||||||
Cash equivalents | $ | 1,873 | $ | — | $ | — | $ | — | $ | 1,873 | ||||||||||
Insurance contracts | — | 4,501 | — | — | 4,501 | |||||||||||||||
Commingled funds: | ||||||||||||||||||||
U.S. equity funds | — | — | — | 3,643 | 3,643 | |||||||||||||||
Non U.S. equity funds | — | — | — | 3,204 | 3,204 | |||||||||||||||
U.S fixed income funds | — | — | — | 2,311 | 2,311 | |||||||||||||||
Emerging market equity funds | — | — | — | 1,058 | 1,058 | |||||||||||||||
Emerging market debt funds | — | — | — | 3,401 | 3,401 | |||||||||||||||
Other commingled funds | — | — | — | 5,910 | 5,910 | |||||||||||||||
Debt securities: | ||||||||||||||||||||
Government securities | — | 3,742 | — | — | 3,742 | |||||||||||||||
U.S. corporate bonds | — | 5,710 | — | — | 5,710 | |||||||||||||||
Non U.S. corporate bonds | — | 1,239 | — | — | 1,239 | |||||||||||||||
Asset-backed securities | — | 2,736 | — | — | 2,736 | |||||||||||||||
Mortgage-backed securities | — | 3,396 | — | — | 3,396 | |||||||||||||||
Other | — | (40 | ) | — | — | (40 | ) | |||||||||||||
Total | $ | 1,873 | $ | 21,284 | $ | — | $ | 19,527 | $ | 42,684 |
(Thousands of Dollars) | 2016 | 2015 | ||||||
Change in Projected Benefit Obligation: | ||||||||
Obligation at Jan. 1 | $ | 40,864 | $ | 44,342 | ||||
Service cost | 775 | 954 | ||||||
Interest cost | 1,821 | 1,745 | ||||||
Medicare subsidy reimbursements | 31 | 45 | ||||||
Plan participants’ contributions | 653 | 687 | ||||||
Actuarial loss (gain) | 1,293 | (3,793 | ) | |||||
Benefit payments | (3,577 | ) | (3,116 | ) | ||||
Obligation at Dec. 31 | $ | 41,860 | $ | 40,864 |
(Thousands of Dollars) | 2016 | 2015 | ||||||
Change in Fair Value of Plan Assets: | ||||||||
Fair value of plan assets at Jan. 1 | $ | 42,684 | $ | 45,356 | ||||
Actual return (loss) on plan assets | 1,978 | (421 | ) | |||||
Plan participants’ contributions | 653 | 687 | ||||||
Employer contributions | 559 | 178 | ||||||
Benefit payments | (3,577 | ) | (3,116 | ) | ||||
Fair value of plan assets at Dec. 31 | $ | 42,297 | $ | 42,684 |
(Thousands of Dollars) | 2016 | 2015 | ||||||
Funded Status of Plans at Dec. 31: | ||||||||
Funded status (a) | $ | 437 | $ | 1,820 |
(Thousands of Dollars) | 2016 | 2015 | ||||||
Amounts Not Yet Recognized as Components of Net Periodic Benefit Credit: | ||||||||
Net gain | $ | (12,595 | ) | $ | (14,870 | ) | ||
Prior service credit | (2,630 | ) | (3,031 | ) | ||||
Total | $ | (15,225 | ) | $ | (17,901 | ) |
(Thousands of Dollars) | 2016 | 2015 | ||||||
Amounts Not Yet Recognized as Components of Net Periodic Benefit Credit Have Been Recorded as Follows Based Upon Expected Recovery in Rates: | ||||||||
Current regulatory liabilities | $ | (1,004 | ) | $ | (985 | ) | ||
Noncurrent regulatory liabilities | (14,221 | ) | (16,916 | ) | ||||
Total | $ | (15,225 | ) | $ | (17,901 | ) |
2016 | 2015 | |||||
Significant Assumptions Used to Measure Benefit Obligations: | ||||||
Discount rate for year-end valuation | 4.13 | % | 4.65 | % | ||
Mortality table | RP 2014 | RP 2014 | ||||
Health care costs trend rate — initial | 5.50 | % | 6.00 | % |
One-Percentage Point | ||||||||
(Thousands of Dollars) | Increase | Decrease | ||||||
APBO | $ | 3,979 | $ | (3,389 | ) | |||
Service and interest components | 273 | (231 | ) |
(Thousands of Dollars) | 2016 | 2015 | 2014 | |||||||||
Service cost | $ | 775 | $ | 954 | $ | 1,246 | ||||||
Interest cost | 1,821 | 1,745 | 2,572 | |||||||||
Expected return on plan assets | (2,377 | ) | (2,540 | ) | (3,247 | ) | ||||||
Amortization of prior service credit | (401 | ) | (401 | ) | (401 | ) | ||||||
Amortization of net gain | (583 | ) | (639 | ) | (321 | ) | ||||||
Net periodic postretirement benefit credit | $ | (765 | ) | $ | (881 | ) | $ | (151 | ) |
2016 | 2015 | 2014 | |||||||
Significant Assumptions Used to Measure Costs: | |||||||||
Discount rate | 4.65 | % | 4.08 | % | 4.82 | % | |||
Expected average long-term rate of return on assets | 5.80 | 5.80 | 7.20 |
(Thousands of Dollars) | Projected Pension Benefit Payments | Gross Projected Postretirement Health Care Benefit Payments | Expected Medicare Part D Subsidies | Net Projected Postretirement Health Care Benefit Payments | ||||||||||||
2017 | $ | 28,596 | $ | 3,420 | $ | 24 | $ | 3,396 | ||||||||
2018 | 28,086 | 3,203 | 26 | 3,177 | ||||||||||||
2019 | 28,545 | 3,008 | 24 | 2,984 | ||||||||||||
2020 | 29,567 | 3,015 | 25 | 2,990 | ||||||||||||
2021 | 29,716 | 3,096 | 26 | 3,070 | ||||||||||||
2022-2026 | 156,673 | 14,135 | 148 | 13,987 |
(Thousands of Dollars) | 2016 | 2015 | 2014 | |||||||||
Interest income | $ | 129 | $ | 129 | $ | 246 | ||||||
Other nonoperating income | 5 | 11 | 183 | |||||||||
Insurance policy expense | (43 | ) | (40 | ) | (488 | ) | ||||||
Other nonoperating expense | — | (106 | ) | — | ||||||||
Other income (expense), net | $ | 91 | $ | (6 | ) | $ | (59 | ) |
(Amounts in Thousands) (a) | Dec. 31, 2016 | Dec. 31, 2015 | ||||
MWh of electricity | 2,685 | 6,192 |
(Thousands of Dollars) | 2016 | 2015 | 2014 | |||||||||
Accumulated other comprehensive loss related to cash flow hedges at Jan. 1 | $ | (817 | ) | $ | (989 | ) | $ | (1,161 | ) | |||
After-tax net realized losses on derivative transactions reclassified into earnings | 139 | 172 | 172 | |||||||||
Accumulated other comprehensive loss related to cash flow hedges at Dec. 31 | $ | (678 | ) | $ | (817 | ) | $ | (989 | ) |
Dec. 31, 2016 | ||||||||||||||||||||||||
Fair Value | Fair Value Total | Counterparty Netting (b) | ||||||||||||||||||||||
(Thousands of Dollars) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Current derivative assets | ||||||||||||||||||||||||
Other derivative instruments: | ||||||||||||||||||||||||
Electric commodity | $ | — | $ | — | $ | 3,254 | $ | 3,254 | $ | (1,299 | ) | $ | 1,955 | |||||||||||
Total current derivative assets | $ | — | $ | — | $ | 3,254 | $ | 3,254 | $ | (1,299 | ) | 1,955 | ||||||||||||
PPAs (a) | 3,159 | |||||||||||||||||||||||
Current derivative instruments | $ | 5,114 | ||||||||||||||||||||||
Noncurrent derivative assets | �� | |||||||||||||||||||||||
PPAs (a) | $ | 22,113 | ||||||||||||||||||||||
Noncurrent derivative instruments | $ | 22,113 | ||||||||||||||||||||||
Current derivative liabilities | ||||||||||||||||||||||||
Other derivative instruments: | ||||||||||||||||||||||||
Electric commodity | $ | — | $ | — | $ | 1,299 | $ | 1,299 | $ | (1,299 | ) | $ | — | |||||||||||
Total current derivative liabilities | $ | — | $ | — | $ | 1,299 | $ | 1,299 | $ | (1,299 | ) | — | ||||||||||||
PPAs (a) | 3,565 | |||||||||||||||||||||||
Current derivative instruments | $ | 3,565 | ||||||||||||||||||||||
Noncurrent derivative liabilities | ||||||||||||||||||||||||
PPAs (a) | $ | 23,513 | ||||||||||||||||||||||
Noncurrent derivative instruments | $ | 23,513 |
Dec. 31, 2015 | ||||||||||||||||||||||||
Fair Value | Fair Value Total | Counterparty Netting (b) | ||||||||||||||||||||||
(Thousands of Dollars) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Current derivative assets | ||||||||||||||||||||||||
Other derivative instruments: | ||||||||||||||||||||||||
Electric commodity | $ | — | $ | — | $ | 8,980 | $ | 8,980 | $ | (3,920 | ) | $ | 5,060 | |||||||||||
Total current derivative assets | $ | — | $ | — | $ | 8,980 | $ | 8,980 | $ | (3,920 | ) | 5,060 | ||||||||||||
PPAs (a) | 7,892 | |||||||||||||||||||||||
Current derivative instruments | $ | 12,952 | ||||||||||||||||||||||
Noncurrent derivative assets | ||||||||||||||||||||||||
PPAs (a) | $ | 25,272 | ||||||||||||||||||||||
Noncurrent derivative instruments | $ | 25,272 | ||||||||||||||||||||||
Current derivative liabilities | ||||||||||||||||||||||||
Other derivative instruments: | ||||||||||||||||||||||||
Electric commodity | $ | — | $ | — | $ | 3,920 | $ | 3,920 | $ | (3,920 | ) | $ | — | |||||||||||
Total current derivative liabilities | $ | — | $ | — | $ | 3,920 | $ | 3,920 | $ | (3,920 | ) | — | ||||||||||||
PPAs (a) | 3,565 | |||||||||||||||||||||||
Current derivative instruments | $ | 3,565 | ||||||||||||||||||||||
Noncurrent derivative liabilities | ||||||||||||||||||||||||
PPAs (a) | $ | 27,078 | ||||||||||||||||||||||
Noncurrent derivative instruments | $ | 27,078 |
Year Ended Dec. 31 | ||||||||||||
(Thousands of Dollars) | 2016 | 2015 | 2014 | |||||||||
Balance at Jan. 1 | $ | 5,060 | $ | 15,884 | $ | 9,933 | ||||||
Purchases | 7,616 | 23,425 | 50,244 | |||||||||
Settlements | (41,923 | ) | (31,703 | ) | (44,283 | ) | ||||||
Net transactions recorded during the period: | ||||||||||||
Gains (losses) recognized as regulatory assets | 31,202 | (2,546 | ) | (10 | ) | |||||||
Balance at Dec. 31 | $ | 1,955 | $ | 5,060 | $ | 15,884 |
2016 | 2015 | |||||||||||||||
(Thousands of Dollars) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Long-term debt, including current portion (a) | $ | 1,635,858 | $ | 1,741,502 | $ | 1,538,522 | $ | 1,678,673 |
10. |
(Millions of Dollars) | Settlement | |||
Base rate increase, retroactive to July 20, 2016 | $ | 35.2 | ||
Power factor revenues (a) | 12.6 | |||
Rate case expenses to be addressed in a separate proceeding | 4.0 | |||
Total estimated impact | $ | 51.8 |
(Millions of Dollars) | Request | |||
Capital expenditures | $ | 20.1 | ||
Allocator changes, including wholesale load reductions | 11.5 | |||
Transmission expense, net of revenue, including charges paid to SPP for construction of regionally shared transmission projects | 4.7 | |||
Depreciation, including adjustment of service life for the Tolk generating station | 3.6 | |||
Rate case expenses | 1.1 | |||
Other, net | 0.4 | |||
Requested rate increase | $ | 41.4 |
Commitments and Contingencies |
(Millions of Dollars) | Coal | Natural gas supply | Natural gas storage and transportation | |||||||||
2017 | $ | 195.2 | $ | 16.7 | $ | 22.8 | ||||||
2018 | — | — | 20.8 | |||||||||
2019 | — | — | 21.4 | |||||||||
2020 | — | — | 21.4 | |||||||||
2021 | — | — | 16.3 | |||||||||
Thereafter | — | — | 58.2 | |||||||||
Total | $ | 195.2 | $ | 16.7 | $ | 160.9 |
(Millions of Dollars) | Capacity | |||
2017 | $ | 58.0 | ||
2018 | 57.0 | |||
2019 | 19.4 | |||
2020 | 11.6 | |||
2021 | 11.9 | |||
Thereafter | 29.7 | |||
Total | $ | 187.6 |
(Millions of Dollars) | Operating Leases | PPA (a) (b) Operating Leases | Total Operating Leases | |||||||||
2017 | $ | 5.0 | $ | 51.5 | $ | 56.5 | ||||||
2018 | 5.7 | 50.7 | 56.4 | |||||||||
2019 | 5.7 | 50.7 | 56.4 | |||||||||
2020 | 5.6 | 50.7 | 56.3 | |||||||||
2021 | 5.4 | 50.7 | 56.1 | |||||||||
Thereafter | 67.9 | 593.6 | 661.5 |
(Thousands of Dollars) | Beginning Balance Jan. 1, 2016 | Accretion | Cash Flow Revisions | Ending Balance Dec. 31, 2016 (a) | ||||||||||||
Electric plant | ||||||||||||||||
Steam production asbestos | $ | 17,981 | $ | 1,089 | $ | — | $ | 19,070 | ||||||||
Steam production ash containment | 1,513 | 80 | — | 1,593 | ||||||||||||
Electric distribution | 6,559 | 240 | — | 6,799 | ||||||||||||
Other | 1,180 | 42 | (21 | ) | 1,201 | |||||||||||
Total liability | $ | 27,233 | $ | 1,451 | $ | (21 | ) | $ | 28,663 |
(Thousands of Dollars) | Beginning Balance Jan. 1, 2015 | Accretion | Cash Flow Revisions | Ending Balance Dec. 31, 2015 (a) | ||||||||||||
Electric plant | ||||||||||||||||
Steam production asbestos | $ | 16,957 | $ | 1,024 | $ | — | $ | 17,981 | ||||||||
Steam production ash containment | 1,609 | 85 | (181 | ) | 1,513 | |||||||||||
Electric distribution | 6,327 | 232 | — | 6,559 | ||||||||||||
Other | 1,138 | 42 | — | 1,180 | ||||||||||||
Total liability | $ | 26,031 | $ | 1,383 | $ | (181 | ) | $ | 27,233 |
(Thousands of Dollars) | See Note(s) | Remaining Amortization Period | Dec. 31, 2016 | Dec. 31, 2015 | |||||||||||||||||
Regulatory Assets | Current | Noncurrent | Current | Noncurrent | |||||||||||||||||
Pension and retiree medical obligations (a) | 7 | Various | $ | 13,986 | $ | 234,171 | $ | 15,632 | $ | 223,122 | |||||||||||
Recoverable deferred taxes on AFUDC recorded in plant | 1 | Plant lives | — | 44,258 | — | 39,368 | |||||||||||||||
Net AROs (b) | 11 | Plant lives | — | 24,352 | — | 23,014 | |||||||||||||||
Renewable resources and environmental initiatives | 11 | One to four years | 3,580 | 2,900 | 3,740 | 2,019 | |||||||||||||||
Conservation programs (c) | 1 | One to three years | 3,754 | 2,431 | 5,137 | 3,859 | |||||||||||||||
Losses on reacquired debt | 4 | Term of related debt | 127 | 1,617 | 850 | 1,743 | |||||||||||||||
Other | Various | 17,274 | 36,954 | 6,182 | 8,689 | ||||||||||||||||
Total regulatory assets | $ | 38,721 | $ | 346,683 | $ | 31,541 | $ | 301,814 |
2019 | ||||||||||||||||||||||||
(Millions of Dollars) | Jan. 1, 2019 | Amounts Incurred (a) | Amounts Settled (b) | Accretion | Cash Flow Revisions (c) | Dec. 31, 2019 | ||||||||||||||||||
Electric | ||||||||||||||||||||||||
Steam and other production | $ | 22.0 | $ | — | $ | (1.6 | ) | $ | 1.4 | $ | 29.5 | $ | 51.3 | |||||||||||
Wind | — | 16.0 | — | 0.4 | — | 16.4 | ||||||||||||||||||
Distribution | 9.1 | — | — | 0.4 | — | 9.5 | ||||||||||||||||||
Miscellaneous | 1.3 | — | — | — | (1.2 | ) | 0.1 | |||||||||||||||||
Total liability | $ | 32.4 | $ | 16.0 | $ | (1.6 | ) | $ | 2.2 | $ | 28.3 | $ | 77.3 |
(a) |
(b) |
(c) |
(Thousands of Dollars) | See Note(s) | Remaining Amortization Period | Dec. 31, 2016 | Dec. 31, 2015 | |||||||||||||||||
Regulatory Liabilities | Current | Noncurrent | Current | Noncurrent | |||||||||||||||||
Plant removal costs | 11 | Plant lives | $ | — | $ | 208,638 | $ | — | $ | 203,954 | |||||||||||
Revenue subject to refund | 10 | One to two years | 5,093 | 3,602 | 20,647 | 1,080 | |||||||||||||||
Gain from asset sales | 10 | Various | — | 2,530 | 2,640 | 2,584 | |||||||||||||||
Deferred electric energy costs | 1 | Less than one year | 32,451 | — | 61,041 | — | |||||||||||||||
Contract valuation adjustments (a) | 1, 9 | Term of related contract | 1,955 | — | 9,387 | — | |||||||||||||||
Renewable resources and environmental initiatives | 11 | One to two years | 1,075 | — | 2,960 | 880 | |||||||||||||||
Other | Various | 1,003 | 18,684 | 1,630 | 21,086 | ||||||||||||||||
Total regulatory liabilities (b) | $ | 41,577 | $ | 233,454 | $ | 98,305 | $ | 229,584 |
2018 | ||||||||||||||||
(Millions of Dollars) | Jan. 1, 2018 | Accretion | Cash Flow Revisions (a) | Dec. 31, 2018 (b) | ||||||||||||
Electric | ||||||||||||||||
Steam and other production | $ | 20.3 | $ | 1.2 | $ | 0.5 | $ | 22.0 | ||||||||
Distribution | 7.0 | 0.3 | 1.8 | 9.1 | ||||||||||||
Miscellaneous | 1.2 | 0.1 | — | 1.3 | ||||||||||||
Total liability | $ | 28.5 | $ | 1.6 | $ | 2.3 | $ | 32.4 |
(a) |
(b) | There were no ARO amounts incurred or settled in 2018. |
(Millions of Dollars) | Dec. 31, 2019 | |||
PPAs | $ | 500.3 | ||
Other | 48.0 | |||
Gross operating lease ROU assets | 548.3 | |||
Accumulated amortization | (25.9 | ) | ||
Net operating lease ROU assets | $ | 522.4 |
(Millions of Dollars) | 2019 | 2018 | 2017 | |||||||||
Operating leases | ||||||||||||
PPA capacity payments | $ | 48.1 | $ | 51.1 | $ | 51.4 | ||||||
Other operating leases (a) | 4.9 | 7.9 | 6.4 | |||||||||
Total operating lease expense (b) | $ | 53.0 | $ | 59.0 | $ | 57.8 |
(a) | Includes short-term lease expense of $1.5 million, $1.1 million and $1.2 million for 2019, 2018 and 2017, respectively. |
(b) | PPA capacity payments are included in electric fuel and purchased power on the statements of income. Expense for other operating leases is included in O&M expense. |
(Millions of Dollars) | PPA (a) (b) Operating Leases | Other Operating Leases | Total Operating Leases | |||||||||
2020 | $ | 46.2 | $ | 3.4 | $ | 49.6 | ||||||
2021 | 46.2 | 3.3 | 49.5 | |||||||||
2022 | 46.2 | 3.4 | 49.6 | |||||||||
2023 | 46.2 | 3.4 | 49.6 | |||||||||
2024 | 46.2 | 3.5 | 49.7 | |||||||||
Thereafter | 404.5 | 51.3 | 455.8 | |||||||||
Total minimum obligation | 635.5 | 68.3 | 703.8 | |||||||||
Interest component of obligation | (160.0 | ) | (21.6 | ) | (181.6 | ) | ||||||
Present value of minimum obligation | 475.5 | 46.7 | 522.2 | |||||||||
Less current portion | (26.9 | ) | ||||||||||
Noncurrent operating lease liabilities | $ | 495.3 | ||||||||||
Weighted-average remaining lease term in years | 14.1 |
(a) | Amounts do not include PPAs accounted for as executory contracts and/or contingent payments, such as energy payments on renewable PPAs. |
(b) | PPA operating leases contractually expire at various dates through 2033. |
(Millions of Dollars) | PPA (a) (b) Operating Leases | Other Operating Leases | Total Operating Leases | |||||||||
2019 | $ | 46.7 | $ | 5.2 | $ | 51.9 | ||||||
2020 | 46.2 | 5.2 | 51.4 | |||||||||
2021 | 46.2 | 5.1 | 51.3 | |||||||||
2022 | 46.2 | 5.1 | 51.3 | |||||||||
2023 | 46.2 | 5.1 | 51.3 | |||||||||
Thereafter | 450.8 | 56.3 | 507.1 |
(a) | Amounts do not include PPAs accounted for as executory contracts and/or contingent payments, such as energy payments on renewable PPAs. |
(b) | PPA operating leases contractually expire at various dates through 2033. |
(Millions of Dollars) | Capacity | |||
2020 | $ | 12.3 | ||
2021 | 12.5 | |||
2022 | 12.7 | |||
2023 | 13.0 | |||
2024 | 5.9 | |||
Thereafter | — | |||
Total | $ | 56.4 |
(Millions of Dollars) | Coal | Natural gas supply | Natural gas storage and transportation | |||||||||
2020 | $ | 96.7 | $ | 12.3 | $ | 28.9 | ||||||
2021 | 67.7 | — | 23.3 | |||||||||
2022 | 38.8 | — | 17.4 | |||||||||
2023 | — | — | 12.7 | |||||||||
2024 | — | — | 6.7 | |||||||||
Thereafter | — | — | 26.3 | |||||||||
Total | $ | 203.2 | $ | 12.3 | $ | 115.3 |
11. Other Comprehensive Income |
2019 | ||||||||||||
(Millions of Dollars) | Gains and Losses on Cash Flow Hedges | Defined Benefit Pension and Postretirement Items | Total | |||||||||
Accumulated other comprehensive loss at Jan. 1 | $ | (0.7 | ) | $ | (0.7 | ) | $ | (1.4 | ) | |||
Other comprehensive loss before reclassifications (net of taxes of $0 and $(0.1), respectfully | — | (0.2 | ) | (0.2 | ) | |||||||
Losses reclassified from net accumulated other comprehensive loss: | ||||||||||||
Amortization of net actuarial loss (net of taxes of $0) | — | 0.2 | (a) | 0.2 | ||||||||
Net current period other comprehensive income (loss) | — | — | — | |||||||||
Accumulated other comprehensive loss at Dec. 31 | $ | (0.7 | ) | $ | (0.7 | ) | $ | (1.4 | ) |
Year Ended Dec. 31, 2016 | ||||||||||||
(Thousands of Dollars) | Gains and Losses on Cash Flow Hedges | Defined Benefit Pension and Postretirement Items | Total | |||||||||
Accumulated other comprehensive loss at Jan. 1 | $ | (817 | ) | $ | (464 | ) | $ | (1,281 | ) | |||
Other comprehensive loss before reclassifications | — | (148 | ) | (148 | ) | |||||||
Losses reclassified from net accumulated other comprehensive loss | 139 | — | 139 | |||||||||
Net current period other comprehensive income (loss) | 139 | (148 | ) | (9 | ) | |||||||
Accumulated other comprehensive loss at Dec. 31 | $ | (678 | ) | $ | (612 | ) | $ | (1,290 | ) |
Year Ended Dec. 31, 2015 | ||||||||||||
(Thousands of Dollars) | Gains and Losses on Cash Flow Hedges | Defined Benefit Pension and Postretirement Items | Total | |||||||||
Accumulated other comprehensive loss at Jan. 1 | $ | (989 | ) | $ | — | $ | (989 | ) | ||||
Other comprehensive loss before reclassifications | — | (464 | ) | (464 | ) | |||||||
Losses reclassified from net accumulated other comprehensive loss | 172 | — | 172 | |||||||||
Net current period other comprehensive income (loss) | 172 | (464 | ) | (292 | ) | |||||||
Accumulated other comprehensive loss at Dec. 31 | $ | (817 | ) | $ | (464 | ) | $ | (1,281 | ) |
Amounts Reclassified from Accumulated Other Comprehensive Loss | |||||||||
(Thousands of Dollars) | Year Ended Dec. 31, 2016 | Year Ended Dec. 31, 2015 | |||||||
Losses on cash flow hedges: | |||||||||
Interest rate derivatives | $ | 219 | (a) | $ | 269 | (a) | |||
Total, pre-tax | 219 | 269 | |||||||
Tax benefit | (80 | ) | (97 | ) | |||||
Total amounts reclassified, net of tax | $ | 139 | $ | 172 |
(a) | Included in the computation of net periodic pension and postretirement benefit costs. See Note 9 for further information. |
2018 | ||||||||||||
(Millions of Dollars) | Gains and Losses on Cash Flow Hedges | Defined Benefit Pension and Postretirement Items | Total | |||||||||
Accumulated other comprehensive loss at Jan. 1 | $ | (0.8 | ) | $ | (0.7 | ) | $ | (1.5 | ) | |||
Losses reclassified from net accumulated other comprehensive loss: | ||||||||||||
Interest rate derivatives (net of taxes of $0) | 0.1 | (a) | — | 0.1 | ||||||||
Net current period other comprehensive income | 0.1 | — | 0.1 | |||||||||
Accumulated other comprehensive loss at Dec. 31 | $ | (0.7 | ) | $ | (0.7 | ) | $ | (1.4 | ) |
(a) | Included in interest charges. |
12. Related Party Transactions |
(Millions of Dollars) | 2019 | 2018 | 2017 | |||||||||
Operating expenses: | ||||||||||||
Purchased power | $ | — | $ | — | $ | 1.4 | ||||||
Other operating expenses — paid to Xcel Energy Services Inc. | 192.0 | 195.1 | 196.6 | |||||||||
Interest expense | 0.2 | 0.6 | — |
(Thousands of Dollars) | 2016 | 2015 | 2014 | |||||||||
Operating revenues: | ||||||||||||
Electric | $ | 56 | $ | — | $ | 23 | ||||||
Operating expenses: | ||||||||||||
Purchased power | 8,809 | 8,632 | 9,614 | |||||||||
Other operating expenses — paid to Xcel Energy Services Inc. | 188,175 | 197,134 | 145,917 | |||||||||
Interest expense | 189 | 156 | 73 | |||||||||
Interest income | — | 6 | 3 |
2019 | 2018 | |||||||||||||||
(Millions of Dollars) | Accounts Receivable | Accounts Payable | Accounts Receivable | Accounts Payable | ||||||||||||
NSP-Minnesota | $ | 4.2 | $ | — | $ | 4.7 | $ | — | ||||||||
PSCo | — | 0.4 | — | 0.7 | ||||||||||||
Other subsidiaries of Xcel Energy Inc. | — | 20.0 | 5.8 | 19.2 | ||||||||||||
$ | 4.2 | $ | 20.4 | $ | 10.5 | $ | 19.9 |
2016 | 2015 | |||||||||||||||
(Thousands of Dollars) | Accounts Receivable | Accounts Payable | Accounts Receivable | Accounts Payable | ||||||||||||
NSP-Minnesota | $ | 935 | $ | — | $ | 1,066 | $ | — | ||||||||
NSP-Wisconsin | — | 333 | — | 71 | ||||||||||||
PSCo | — | 745 | — | 414 | ||||||||||||
Other subsidiaries of Xcel Energy Inc. | 14 | 13,336 | 13 | 28,650 | ||||||||||||
$ | 949 | $ | 14,414 | $ | 1,079 | $ | 29,135 |
13. Summarized Quarterly Financial Data (Unaudited) |
Quarter Ended | ||||||||||||||||
(Millions of Dollars) | March 31, 2019 | June 30, 2019 | Sept. 30, 2019 | Dec. 31, 2019 | ||||||||||||
Operating revenues | $ | 454.1 | $ | 410.5 | $ | 533.1 | $ | 428.1 | ||||||||
Operating income | 74.5 | 81.9 | 135.4 | 54.9 | ||||||||||||
Net income | 54.1 | 58.8 | 105.1 | 45.1 |
Quarter Ended | ||||||||||||||||
(Thousands of Dollars) | March 31, 2016 | June 30, 2016 | Sept. 30, 2016 | Dec. 31, 2016 | ||||||||||||
Operating revenues | $ | 390,839 | $ | 440,445 | $ | 554,926 | $ | 464,749 | ||||||||
Operating income | 53,569 | 68,386 | 122,362 | 62,964 | ||||||||||||
Net income | 22,523 | 32,211 | 68,346 | 29,077 |
Quarter Ended | ||||||||||||||||
(Millions of Dollars) | March 31, 2018 | June 30, 2018 | Sept. 30, 2018 | Dec. 31, 2018 | ||||||||||||
Operating revenues | $ | 447.2 | $ | 481.3 | $ | 540.1 | $ | 464.6 | ||||||||
Operating income (a) | 57.1 | 87.6 | 111.0 | 56.0 | ||||||||||||
Net income | 33.1 | 58.5 | 81.5 | 40.2 |
(a) | In 2018, SPS implemented ASU No. 2017-07 related to net periodic benefit cost, which resulted in retrospective reclassification of pension costs from O&M expense to other income. |
Quarter Ended | ||||||||||||||||
(Thousands of Dollars) | March 31, 2015 | June 30, 2015 | Sept. 30, 2015 | Dec. 31, 2015 | ||||||||||||
Operating revenues | $ | 423,829 | $ | 422,985 | $ | 530,752 | $ | 409,652 | ||||||||
Operating income | 49,759 | 53,132 | 117,076 | 54,498 | ||||||||||||
Net income | 20,247 | 22,576 | 61,815 | 22,625 |
ITEM 9 — CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A — CONTROLS AND PROCEDURES |
ITEM 9B — OTHER INFORMATION |
ITEM 10 — DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
ITEM 11 — EXECUTIVE COMPENSATION |
ITEM 12 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
ITEM 13 — CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
ITEM 14 — PRINCIPAL ACCOUNTANT FEES AND SERVICES |
ITEM 15 — EXHIBITS, FINANCIAL STATEMENT SCHEDULES |
Financial Statements | |
Management Report on Internal Controls Over Financial Reporting — For the year ended Dec. 31, | |
Report of Independent Registered Public Accounting Firm — Financial Statements | |
Statements of Income — For the three years ended Dec. 31, | |
Statements of Comprehensive Income — For the three years ended Dec. 31, | |
Statements of Cash Flows — For the three years ended Dec. 31, | |
Balance Sheets — As of Dec. 31, | |
Statements of Common Stockholder’s Equity — For the three years ended Dec. 31, | |
Schedule II — Valuation and Qualifying Accounts and Reserves for the years ended Dec. 31, | |
Exhibits |
* | Indicates incorporation by reference | |
+ | Executive Compensation |
Description | Report or Registration Statement | SEC File or Registration Number | Exhibit Reference | |
3.01* | SPS Form | 001-03789 | 3.01 | |
3.02* | SPS Form | 001-03789 | 3.02 | |
4.01* | SPS Form 8-K | 001-03789 | 99.2 | |
4.02* | Xcel Energy Inc. Form 10-Q | 001-03034 | 4.04 | |
4.03* | ||||
SPS Form 8-K | 001-03789 | 4.01 | ||
4.04* | SPS Form 8-K dated Aug. 10, 2011 | 001-03789 | 4.01 | |
4.05* | SPS Form 8-K dated Aug. 10, 2011 | 001-03789 | 4.02 | |
4.06* | ||||
SPS Form 8-K dated June 9, 2014 | 001-03789 | 4.02 | ||
4.07* | SPS Form 8-K | 001-03789 | 4.02 | |
4.08* | SPS Form 8-K dated Aug. 9, 2017 | 001-03789 | 4.02 |
4.09* | SPS Form 8-K dated Nov. 5, 2018 | 001-03789 | 4.02 | |
4.10* | SPS Form 8-K dated June 18, 2019 | 001-03789 | 4.02 | |
10.01*+ | Xcel Energy Inc. Form 10-K | 001-03034 | 10.02 | |
10.02*+ | Xcel Energy Inc. Form 10-K | 001-03034 | 10.05 | |
10.03*+ | Xcel Energy Inc. Form 10-K |
001-03034 | 10.08 | |||
10.04*+ | ||||
Xcel Energy Inc. Form U5B | 001-03034 | H-1 | ||
10.05*+ | Xcel Energy Inc. Form 10-K | 001-03034 | 10.17 | |
10.06*+ | ||||
Xcel Energy | 001-03034 | 10.06 | ||
10.07*+ | Xcel Energy Inc. Form 10-Q | 001-03034 | 10.08 | |
10.08*+ | ||||
Xcel Energy Inc. Definitive Proxy Statement | 001-03034 | Appendix A | ||
10.09*+ | Xcel Energy Inc. Definitive Proxy Statement | 001-03034 | Appendix A | |
10.10*+ | Xcel Energy Inc. Form 10-K | 001-03034 | 10.07 | |
10.11*+ | Xcel Energy | 001-03034 | 10.18 | |
10.12*+ | Xcel Energy Inc. | 001-03034 | 10.17 | |
10.13*+ | Xcel Energy Inc. | 001-03034 | 10.01 | |
10.14*+ | Xcel Energy | 001-03034 | 10.02 | |
10.15*+ | Xcel Energy Inc. | 001-03034 | 10.22 | |
10.16*+ | ||||
Stock Equivalent Program for Non-Employee Directors of Xcel Energy Inc. | Xcel Energy Inc. Form 8-K | 001-03034 | 10.02 | |
10.17*+ | Xcel Energy Inc. Form 10-Q for the quarter ended June 30, 2016 | 001-03034 | 10.01 | |
10.18*+ | Xcel Energy Inc. Form 10-Q for the quarter ended Sept. 30, 2016 | 001-03034 | 10.01 | |
10.19*+ | Xcel Energy Inc. Form 10-Q for the quarter ended Sept. 30, 2017 | 001-03034 | 10.1 | |
10.20*+ | Xcel Energy Inc. Form 10-K for the year ended Dec. 31, 2017 | 001-03034 | 10.30 | |
10.21*+ | Xcel Energy Inc. Form 10-Q for the quarter ended June 30, 2018 | 001-03034 | 10.01 | |
10.22*+ | Xcel Energy Inc. Form 10-K for the year ended Dec. 31, 2018 | 001-03034 | 10.34 | |
10.23*+ | ||||
Plan | Xcel Energy Inc. | 001-03034 | 10.35 | |
10.24*+ | Xcel Energy Inc. | 001-03034 | 10.36 | |
001-03034 | 99.04 | |||
10.26*+ | Xcel Energy Inc. Form 10-K | 001-03034 | 10.33 | |
Consent of Independent Registered Public Accounting Firm. | ||||
101.INS | ||||
101.CAL | XBRL Calculation | |||
101.DEF | XBRL Definition | |||
101.LAB | XBRL Label |
101.PRE | XBRL Presentation | |||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Additions | ||||||||||||||||||||
Balance at Jan. 1 | Charged to Costs and Expenses | Charged to Other Accounts(a) | Deductions from Reserves (b) | Balance at Dec. 31 | ||||||||||||||||
Allowance for bad debts: | ||||||||||||||||||||
2016 | $ | 5,888 | $ | 6,066 | $ | 907 | $ | 6,482 | $ | 6,379 | ||||||||||
2015 | 5,839 | 4,655 | 1,036 | 5,642 | 5,888 | |||||||||||||||
2014 | 5,475 | 4,137 | 1,089 | 4,862 | 5,839 |
Allowance for bad debts | ||||||||||||
(Millions of Dollars) | 2019 | 2018 | 2017 | |||||||||
Balance at Jan. 1 | $ | 5.6 | $ | 6.4 | $ | 6.4 | ||||||
Additions charged to costs and expenses | 5.7 | 4.9 | 5.1 | |||||||||
Additions charged to other accounts (a) | 1.5 | 1.0 | 1.2 | |||||||||
Deductions from reserves (b) | (7.5 | ) | (6.7 | ) | (6.3 | ) | ||||||
Balance at Dec. 31 | $ | 5.3 | $ | 5.6 | $ | 6.4 |
(a) | Recovery of amounts previously written off. |
(b) | Deductions |
ITEM 16 — FORM 10-K SUMMARY |
SOUTHWESTERN PUBLIC SERVICE COMPANY | ||
Feb. | /s/ ROBERT C. FRENZEL | |
Robert C. Frenzel | ||
Executive Vice President, Chief Financial Officer and Director | ||
(Principal Financial Officer) |
/s/ BEN FOWKE | /s/ DAVID T. HUDSON | |
Ben Fowke | David T. Hudson | |
Chairman, Chief Executive Officer and Director | President and Director | |
(Principal Executive Officer) | ||
/s/ ROBERT C. FRENZEL | /s/ JEFFREY S. SAVAGE | |
Robert C. Frenzel | Jeffrey S. Savage | |
Executive Vice President, Chief Financial Officer and Director | Senior Vice President, Controller | |
(Principal Financial Officer) | (Principal Accounting Officer) | |
/s/ | ||
Executive Vice President, Group President, Utilities and Director |