UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2022~~2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ___________

Commission File Number: 001-03280


Public Service Company of Colorado
(Exact Name of Registrant as Specified in its Charter)


Colorado						84-0296600
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

1800 Larimer Street, Suite 1100

Denver

80202

(Address of Principal Executive Offices)

(Zip Code)

(303)

571-7511

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class						Outstanding at ~~Apr. 28, 2022~~April 27, 2023
Common Stock, $0.01 par value						100 shares

Public Service Company of Colorado meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced disclosure format specified in General Instruction H(2) to such Form 10-Q.

TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION
Item 1 —	Financial Statements (unaudited)	4
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Cash Flows	6
	Consolidated Balance Sheets	7
	Consolidated Statements of Common Stockholder’s Equity	8
	Notes to Consolidated Financial Statements	9
Item 2 —	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 4 —	Controls and Procedures	1918

PART II — OTHER INFORMATION
Item 1 —	Legal Proceedings	19
Item 1A —	Risk Factors	19
Item 6 —	Exhibits	19

SIGNATURES		20

This Form 10-Q is filed by PSCo, a Colorado corporation. PSCo is a wholly owned subsidiary of Xcel Energy Inc. Additional information on Xcel Energy is available in various filings with the SEC. This report should be read in its entirety.

Definitions of Abbreviations


Xcel Energy Inc.’s Subsidiaries and Affiliates (current and former)
e prime			e prime inc.
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
CPUC			Colorado Public Utilities Commission
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
SEC			Securities and Exchange Commission


~~Electric, Purchased Gas and Resource Adjustment Clauses~~
~~PSIA~~			~~Pipeline System Integrity Adjustment~~


Other
C&I			Commercial and Industrial
CCR			Coal combustion residuals
CCR Rule			Final rule (40 CFR 257.50 - 257.107) published by the EPA regulating the management, storage and disposal of CCRs as a nonhazardous waste
CEO			Chief executive officer
CERCLA			Comprehensive Environmental Response, Compensation, and Liability Act
CFO			Chief financial officer
CORE			CORE Electric Cooperative
~~COVID-19~~			~~Novel coronavirus~~
~~CPCN~~			~~Certificate of Public Convenience and Necessity~~
CSPV			Crystalline Silicon Photovoltaic
ECA			Retail electric commodity adjustment
ETR			Effective Tax Rate
GAAP			United States generally accepted accounting principles
GCA			Gas cost adjustment
IPP			Independent power producing entity
LDC			Local distribution company
MGP			Manufactured gas plant
NOPR			Notice of proposed rulemaking
O&M			Operating and maintenance
PFAS			Per- and Polyfluoroalkyl Substances
PIM			Performance incentive mechanism
PPA			Power purchase agreement
PTC			Production tax credit
ROE			Return on equity
RFP			Request for proposal
TCA			Transmission cost adjustment
UCA			Colorado Office of the Utility Consumer Advocate


Measurements
MW			Megawatts


Forward-Looking Statements

Except for the historical statements contained in this report, the matters discussed herein are forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements, including those relating to future sales, future expenses, future tax rates, future operating performance, estimated base capital expenditures and financing plans, projected capital additions and forecasted annual revenue requirements with respect to rider filings, expected rate increases to customers, expectations and intentions regarding regulatory proceedings, and expected impact on our results of operations, financial condition and cash flows of resettlement calculations and credit losses relating to certain energy transactions, as well as assumptions and other statements are intended to be identified in this document by the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “objective,” “outlook,” “plan,” “project,” “possible,” “potential,” “should,” “will,” “would” and similar expressions. Actual results may vary materially. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update any forward-looking information. The following factors, in addition to those discussed in PSCo’s Annual Report on Form 10-K for the fiscal year ended Dec. 31, ~~2021~~2022, and subsequent filings with the SEC, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: uncertainty around the impacts and duration of the COVID-19 pandemic, including potential workforce impacts resulting from vaccination requirements, quarantine policies or government restrictions, and sales volatility; operational safety; successful long-term operational planning; commodity risks associated with energy markets and production; rising energy prices and fuel costs; qualified employee work force and third-party contractor factors; violations of our ~~Code~~Codes of Conduct; our ability to recover costs; changes in regulation; reductions in our credit ratings and the cost of maintaining certain contractual relationships; general economic conditions, including recessionary conditions, inflation rates, monetary fluctuations, supply chain constraints and their impact on capital expenditures and/or the ability of PSCo to obtain financing on favorable terms; availability or cost of capital; our customers’ and counterparties’ ability to pay their debts to us; assumptions and costs relating to funding our employee benefit plans and health care benefits; tax laws; uncertainty regarding epidemics, the duration and magnitude of business restrictions including shutdowns (domestically and globally), the potential impact on the workforce, including shortages of employees or third-party contractors due to quarantine policies, vaccination requirements or government restrictions, impacts on the transportation of goods and the generalized impact on the economy; effects of geopolitical events, including war and acts of terrorism; cyber security threats and data security breaches; seasonal weather patterns; changes in environmental laws and regulations; climate change and other ~~weather;~~weather events; natural disaster and resource depletion, including compliance with any accompanying legislative and regulatory changes; ~~and~~ costs of potential regulatory penalties; ~~and~~ regulatory changes and/or limitations related to the use of natural gas as an energy ~~source.~~source; challenging labor market conditions and our ability to attract and retain a qualified workforce; and our ability to execute on our strategies or achieve expectations related to environmental, social and governance matters including as a result of evolving legal, regulatory and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs, the availability of requisite financing, and changes in carbon markets.

Table of Contents

PART I — FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS

PUBLIC SERVICE CO. OF COLORADO AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(amounts in millions)


		Three Months Ended March 31				Three Months Ended March 31
		2022		2021				2023		2022
Operating revenues	Operating revenues						Operating revenues
Electric	Electric	$	828	$	733		Electric	$	920	$	828
Natural gas	Natural gas	578		415			Natural gas	811		578
Other	Other	17		13			Other	16		17
Total operating revenues	Total operating revenues	1,423		1,161			Total operating revenues	1,747		1,423

Operating expenses	Operating expenses						Operating expenses
Electric fuel and purchased power	Electric fuel and purchased power	344		271			Electric fuel and purchased power	382		344
Cost of natural gas sold and transported	Cost of natural gas sold and transported	329		170			Cost of natural gas sold and transported	501		329
Cost of sales — other	Cost of sales — other	5		3			Cost of sales — other	5		5
Operating and maintenance expenses	Operating and maintenance expenses	216		207			Operating and maintenance expenses	230		216
Demand side management expenses	Demand side management expenses	34		32			Demand side management expenses	36		34
Depreciation and amortization	Depreciation and amortization	193		183			Depreciation and amortization	228		193
Taxes (other than income taxes)	Taxes (other than income taxes)	65		66			Taxes (other than income taxes)	73		65
Total operating expenses	Total operating expenses	1,186		932			Total operating expenses	1,455		1,186

Operating income	Operating income	237		229			Operating income	292		237

Other income, net	Other income, net	—		2			Other income, net	1		—
Allowance for funds used during construction — equity	Allowance for funds used during construction — equity	6		5			Allowance for funds used during construction — equity	7		6

Interest charges and financing costs	Interest charges and financing costs						Interest charges and financing costs
Interest charges — includes other financing costs of $2 and $2 , respectively		60		60
Interest charges — includes other financing costs of $2							Interest charges — includes other financing costs of $2	73		60
Allowance for funds used during construction — debt	Allowance for funds used during construction — debt	(2)		(2)			Allowance for funds used during construction — debt	(4)		(2)
Total interest charges and financing costs	Total interest charges and financing costs	58		58			Total interest charges and financing costs	69		58

Income before income taxes	Income before income taxes	185		178			Income before income taxes	231		185
Income tax expense	Income tax expense	9		11			Income tax expense	17		9
Net income	Net income	$	176	$	167		Net income	$	214	$	176

See Notes to Consolidated Financial Statements

Table of Contents

PUBLIC SERVICE CO. OF COLORADO AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(amounts in millions)


		Three Months Ended March 31				Three Months Ended March 31
		2022		2021				2023		2022
Net income	Net income	$	176	$	167		Net income	$	214	$	176
Other comprehensive income	Other comprehensive income						Other comprehensive income
Derivative instruments:
Reclassification of loss to net income, net of tax of $— and $—, respectively		—		1
Pension and retiree medical benefits:							Pension and retiree medical benefits:
Reclassification of loss to net income, net of tax of $—							Reclassification of loss to net income, net of tax of $—	1		—

Total other comprehensive income	Total other comprehensive income	—		1			Total other comprehensive income	1		—
Total comprehensive income	Total comprehensive income	$	176	$	168		Total comprehensive income	$	215	$	176

See Notes to Consolidated Financial Statements

Table of Contents

PUBLIC SERVICE CO. OF COLORADO AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(amounts in millions)


		Three Months Ended March 31					Three Months Ended March 31
		2022		2021			2023		2022
Operating activities	Operating activities					Operating activities
Net income	Net income	$	176	$	167	Net income	$	214	$	176
Adjustments to reconcile net income to cash provided by operating activities:	Adjustments to reconcile net income to cash provided by operating activities:					Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	194		177		Depreciation and amortization	230		194
Deferred income taxes	Deferred income taxes	(2)		5		Deferred income taxes	(31)		(2)
Amortization of investment tax credits		(1)		(1)

Allowance for equity funds used during construction	Allowance for equity funds used during construction	(6)		(5)		Allowance for equity funds used during construction	(7)		(6)
Provision for bad debts	Provision for bad debts	7		5		Provision for bad debts	10		7

Net realized and unrealized hedging and derivative transactions		9		(1)

Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable	Accounts receivable	(73)		(63)		Accounts receivable	40		(73)
Accrued unbilled revenues	Accrued unbilled revenues	65		66		Accrued unbilled revenues	200		65
Inventories	Inventories	55		17		Inventories	120		55
Other current assets	Other current assets	4		10		Other current assets	24		4
Accounts payable	Accounts payable	8		(44)		Accounts payable	(195)		8
Net regulatory assets and liabilities	Net regulatory assets and liabilities	36		(555)		Net regulatory assets and liabilities	62		36
Other current liabilities	Other current liabilities	57		18		Other current liabilities	98		57
Pension and other employee benefit obligations	Pension and other employee benefit obligations	(16)		(48)		Pension and other employee benefit obligations	—		(16)
Other, net	Other, net	(31)		(1)		Other, net	(5)		(23)
Net cash provided by (used in) operating activities		482		(253)
Net cash provided by operating activities						Net cash provided by operating activities	760		482

Investing activities	Investing activities					Investing activities
Utility capital/construction expenditures	Utility capital/construction expenditures	(384)		(320)		Utility capital/construction expenditures	(464)		(384)
Investments in utility money pool arrangement		—		(180)
Repayments from utility money pool arrangement		—		167

Net cash used in investing activities	Net cash used in investing activities	(384)		(333)		Net cash used in investing activities	(464)		(384)

Financing activities	Financing activities					Financing activities
Repayments of short-term borrowings, net	Repayments of short-term borrowings, net	(142)		(136)		Repayments of short-term borrowings, net	65		(142)
Borrowings under utility money pool arrangement	Borrowings under utility money pool arrangement	101		435		Borrowings under utility money pool arrangement	—		101
Repayments under utility money pool arrangement	Repayments under utility money pool arrangement	(63)		(492)		Repayments under utility money pool arrangement	—		(63)
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	(1)		738		Proceeds from issuance of long-term debt	—		(1)

Repayments of long-term debt						Repayments of long-term debt	(250)		—
Capital contributions from parent	Capital contributions from parent	92		307		Capital contributions from parent	74		92
Dividends paid to parent	Dividends paid to parent	(104)		(105)		Dividends paid to parent	(173)		(104)

Net cash (used in) provided by financing activities		(117)		747
Net cash used in financing activities						Net cash used in financing activities	(284)		(117)

Net change in cash, cash equivalents and restricted cash	Net change in cash, cash equivalents and restricted cash	(19)		161		Net change in cash, cash equivalents and restricted cash	12		(19)
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	25		28		Cash, cash equivalents and restricted cash at beginning of period	10		25
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	6	$	189	Cash, cash equivalents and restricted cash at end of period	$	22	$	6

Supplemental disclosure of cash flow information:	Supplemental disclosure of cash flow information:					Supplemental disclosure of cash flow information:
Cash paid for interest (net of amounts capitalized)	Cash paid for interest (net of amounts capitalized)	$	(77)	$	(83)	Cash paid for interest (net of amounts capitalized)	$	(79)	$	(77)
Cash paid for income taxes, net		(2)		(22)
Cash received (paid) for income taxes, net						Cash received (paid) for income taxes, net	20		(2)

Supplemental disclosure of non-cash investing and financing transactions:	Supplemental disclosure of non-cash investing and financing transactions:					Supplemental disclosure of non-cash investing and financing transactions:
Accrued property, plant and equipment additions	Accrued property, plant and equipment additions	$	121	$	112	Accrued property, plant and equipment additions	$	154	$	121
Inventory transfers to property, plant and equipment	Inventory transfers to property, plant and equipment	9		9		Inventory transfers to property, plant and equipment	15		9

Operating lease right-of-use assets						Operating lease right-of-use assets	17		—
Allowance for equity funds used during construction	Allowance for equity funds used during construction	6		5		Allowance for equity funds used during construction	7		6

See Notes to Consolidated Financial Statements

Table of Contents

PUBLIC SERVICE CO. OF COLORADO AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(amounts in millions, except share and per share data)


		March 31, 2022		Dec. 31, 2021			March 31, 2023		Dec. 31, 2022
Assets	Assets					Assets
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	6	$	25	Cash and cash equivalents	$	22	$	10
Accounts receivable, net	Accounts receivable, net	441		374		Accounts receivable, net	513		562
Accounts receivable from affiliates	Accounts receivable from affiliates	—		13		Accounts receivable from affiliates	—		11

Accrued unbilled revenues	Accrued unbilled revenues	285		350		Accrued unbilled revenues	319		519
Inventories	Inventories	180		245		Inventories	184		319
Regulatory assets	Regulatory assets	380		353		Regulatory assets	450		411
Derivative instruments	Derivative instruments	36		39		Derivative instruments	38		65
Prepayments and other	Prepayments and other	100		104		Prepayments and other	83		103
Total current assets	Total current assets	1,428		1,503		Total current assets	1,609		2,000

Property, plant and equipment, net	Property, plant and equipment, net	18,641		18,444		Property, plant and equipment, net	19,891		19,652

Other assets	Other assets					Other assets
Regulatory assets	Regulatory assets	1,300		1,293		Regulatory assets	1,209		1,277
Derivative instruments	Derivative instruments	24		27		Derivative instruments	19		22
Operating lease right-of-use assets	Operating lease right-of-use assets	385		409		Operating lease right-of-use assets	432		437
Other	Other	269		246		Other	266		231
Total other assets	Total other assets	1,978		1,975		Total other assets	1,926		1,967
Total assets	Total assets	$	22,047	$	21,922	Total assets	$	23,426	$	23,619

Liabilities and Stockholder's Equity
Liabilities and Equity						Liabilities and Equity
Current liabilities	Current liabilities					Current liabilities
Current portion of long-term debt	Current portion of long-term debt	$	550	$	300	Current portion of long-term debt	$	—	$	250
Borrowings under utility money pool arrangement		38		—

Short-term debt	Short-term debt	5		147		Short-term debt	359		294
Accounts payable	Accounts payable	503		531		Accounts payable	512		764
Accounts payable to affiliates	Accounts payable to affiliates	79		69		Accounts payable to affiliates	86		75
Regulatory liabilities	Regulatory liabilities	132		95		Regulatory liabilities	70		59
Taxes accrued	Taxes accrued	328		252		Taxes accrued	353		242
Accrued interest	Accrued interest	37		58		Accrued interest	47		59
Dividends payable to parent	Dividends payable to parent	129		104		Dividends payable to parent	130		120
Derivative instruments	Derivative instruments	36		30		Derivative instruments	20		30
Operating lease liabilities	Operating lease liabilities	77		84		Operating lease liabilities	90		80
Other	Other	109		109		Other	112		115
Total current liabilities	Total current liabilities	2,023		1,779		Total current liabilities	1,779		2,088

Deferred credits and other liabilities	Deferred credits and other liabilities					Deferred credits and other liabilities
Deferred income taxes	Deferred income taxes	1,970		1,960		Deferred income taxes	1,965		1,983

Regulatory liabilities	Regulatory liabilities	2,434		2,397		Regulatory liabilities	2,532		2,489
Asset retirement obligations	Asset retirement obligations	427		422		Asset retirement obligations	482		476
Derivative instruments	Derivative instruments	22		29		Derivative instruments	10		9
Customer advances	Customer advances	156		160		Customer advances	142		144
Pension and employee benefit obligations	Pension and employee benefit obligations	4		23		Pension and employee benefit obligations	13		13
Operating lease liabilities	Operating lease liabilities	334		351		Operating lease liabilities	365		379
Other	Other	187		190		Other	200		198
Total deferred credits and other liabilities	Total deferred credits and other liabilities	5,534		5,532		Total deferred credits and other liabilities	5,709		5,691

Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies
Capitalization	Capitalization					Capitalization
Long-term debt	Long-term debt	5,919		6,167		Long-term debt	6,611		6,610
Common stock — 100 shares authorized of $0.01 par value; 100 shares outstanding at March 31, 2022 and Dec. 31, 2021, respectively		—		—
Common stock — 100 shares authorized of $0.01 par value; 100 shares outstanding at March 31, 2023 and Dec. 31, 2022, respectively						Common stock — 100 shares authorized of $0.01 par value; 100 shares outstanding at March 31, 2023 and Dec. 31, 2022, respectively	—		—
Additional paid in capital	Additional paid in capital	6,506		6,426		Additional paid in capital	7,057		6,992
Retained earnings	Retained earnings	2,087		2,040		Retained earnings	2,291		2,260
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(22)		(22)		Accumulated other comprehensive loss	(21)		(22)
Total common stockholder's equity	Total common stockholder's equity	8,571		8,444		Total common stockholder's equity	9,327		9,230
Total liabilities and stockholder's equity		$	22,047	$	21,922
Total liabilities and equity						Total liabilities and equity	$	23,426	$	23,619

See Notes to Consolidated Financial Statements

Table of Contents

PUBLIC SERVICE CO. OF COLORADO AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER’S EQUITY (UNAUDITED)

(amounts in millions, except share data)


		Common Stock Issued					Retained Earnings		Accumulated Other Comprehensive Loss			Total Common Stockholder's Equity			Common Stock Issued						Retained Earnings		Accumulated Other Comprehensive Loss		Total Common Stockholder's Equity
		Shares	Par Value		Additional Paid In Capital						Shares					Par Value		Additional Paid In Capital
Three Months Ended March 31, 2022 and 2021
Balance at Dec. 31, 2020		100	$	—	$	5,770	$	1,846	$	(24)		$	7,592
Net income							167					167
Other comprehensive income									1			1
Dividends declared to parent							(115)					(115)
Contribution of capital by parent					300							300
Balance at March 31, 2021		100	$	—	$	6,070	$	1,898	$	(23)		$	7,945

Three Months Ended March 31, 2023 and 2022														Three Months Ended March 31, 2023 and 2022
Balance at Dec. 31, 2021	Balance at Dec. 31, 2021	100	$	—	$	6,426	$	2,040	$	(22)		$	8,444	Balance at Dec. 31, 2021	100		$	—	$	6,426	$	2,040	$	(22)	$	8,444
Net income	Net income						176					176		Net income							176				176

Dividends declared to parent	Dividends declared to parent						(129)					(129)		Dividends declared to parent							(129)				(129)
Contribution of capital by parent	Contribution of capital by parent				80							80		Contribution of capital by parent					80						80
Balance at March 31, 2022	Balance at March 31, 2022	100	$	—	$	6,506	$	2,087	$	(22)		$	8,571	Balance at March 31, 2022	100		$	—	$	6,506	$	2,087	$	(22)	$	8,571

Balance at Dec. 31, 2022														Balance at Dec. 31, 2022	100		$	—	$	6,992	$	2,260	$	(22)	$	9,230
Net income														Net income							214				214
Other comprehensive income														Other comprehensive income									1		1
Dividends declared to parent														Dividends declared to parent							(183)				(183)
Contribution of capital by parent														Contribution of capital by parent					65						65
Balance at March 31, 2023														Balance at March 31, 2023	100		$	—	$	7,057	$	2,291	$	(21)	$	9,327

See Notes to Consolidated Financial Statements

Table of Contents

PUBLIC SERVICE CO. OF COLORADO AND SUBSIDIARIES

Notes to Consolidated Financial Statements (UNAUDITED)

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly, in accordance with GAAP, the financial position of PSCo and its subsidiaries as of March 31, ~~2022~~2023 and Dec. 31, ~~2021;~~2022; the results of PSCo’s operations, including the components of net income, comprehensive income and changes in stockholder’s equity for the three months ended March 31, ~~2022~~2023 and ~~2021;~~2022; and PSCo’s cash flows for the three months ended March 31, ~~2022~~2023 and ~~2021.~~2022.

All adjustments are of a normal, recurring nature, except as otherwise disclosed. Management has also evaluated the impact of events occurring after March 31, ~~2022,~~2023, up to the date of issuance of these consolidated financial statements. These statements contain all necessary adjustments and disclosures resulting from that evaluation. The Dec. 31, ~~2021~~2022 balance sheet information has been derived from the audited ~~2021~~2022 consolidated financial statements included in the PSCo Annual Report on Form 10-K for the year ended Dec. 31, ~~2021.~~2022.

Notes to the consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP on an annual basis have been condensed or omitted pursuant to such rules and regulations. For further information, refer to the consolidated financial statements and notes thereto included in the PSCo Annual Report on Form 10-K for the year ended Dec. 31, ~~2021,~~2022, filed with the SEC on Feb. 23, ~~2022.~~2023. Due to the seasonality of PSCo’s electric and natural gas sales, interim results are not necessarily an appropriate base from which to project annual results.


1. Summary of Significant Accounting Policies

The significant accounting policies set forth in Note 1 to the consolidated financial statements in the PSCo Annual Report on Form 10-K for the year ended Dec. 31, ~~2021~~2022 appropriately represent, in all material respects, the current status of accounting policies and are incorporated herein by reference.


2. Accounting Pronouncements

As of March 31, ~~2022,~~2023, there was no material impact from the recent adoption of new accounting pronouncements, nor expected material impact from recently issued accounting pronouncements yet to be adopted, on PSCO’s consolidated financial statements.


3. Selected Balance Sheet Data


(Millions of Dollars)	(Millions of Dollars)	March 31, 2022		Dec. 31, 2021		(Millions of Dollars)	March 31, 2023		Dec. 31, 2022
Accounts receivable, net	Accounts receivable, net					Accounts receivable, net
Accounts receivable	Accounts receivable	$	484	$	414	Accounts receivable	$	570	$	616
Less allowance for bad debts	Less allowance for bad debts	(43)		(40)		Less allowance for bad debts	(57)		(54)
Accounts receivable, net	Accounts receivable, net	$	441	$	374	Accounts receivable, net	$	513	$	562


(Millions of Dollars)	(Millions of Dollars)	March 31, 2022		Dec. 31, 2021		(Millions of Dollars)	March 31, 2023		Dec. 31, 2022
Inventories	Inventories					Inventories
Materials and supplies	Materials and supplies	$	72	$	70	Materials and supplies	$	80	$	80
Fuel	Fuel	59		71		Fuel	48		68
Natural gas	Natural gas	49		104		Natural gas	56		171
Total inventories	Total inventories	$	180	$	245	Total inventories	$	184	$	319


(Millions of Dollars)	(Millions of Dollars)	March 31, 2022		Dec. 31, 2021		(Millions of Dollars)	March 31, 2023		Dec. 31, 2022
Property, plant and equipment, net	Property, plant and equipment, net					Property, plant and equipment, net
Electric plant	Electric plant	$	16,680	$	16,543	Electric plant	$	15,928	$	15,771
Natural gas plant	Natural gas plant	5,537		5,471		Natural gas plant	6,021		5,949
Common and other property	Common and other property	1,279		1,224		Common and other property	1,424		1,415
Plant to be retired (a)	Plant to be retired (a)	166		182		Plant to be retired (a)	1,288		1,305
Construction work in progress	Construction work in progress	757		681		Construction work in progress	1,015		877
Total property, plant and equipment	Total property, plant and equipment	24,419		24,101		Total property, plant and equipment	25,676		25,317
Less accumulated depreciation	Less accumulated depreciation	(5,778)		(5,657)		Less accumulated depreciation	(5,785)		(5,665)
Property, plant and equipment, net	Property, plant and equipment, net	$	18,641	$	18,444	Property, plant and equipment, net	$	19,891	$	19,652

(a)~~Includes regulator-approved retirements of~~Amounts include Comanche Units 2 and 3, Craig Units 1 and 2, Hayden Units 1 and 2 and ~~jointly owned Craig Unit 1. Also includes PSCo’s planned retirement~~coal generation assets at Pawnee pending facility gas conversion. Amounts are presented net of ~~the jointly owned Craig Unit 2.~~accumulated depreciation.


4. Borrowings and Other Financing Instruments

Short-Term Borrowings

PSCo meets its short-term liquidity requirements primarily through the issuance of commercial paper and borrowings under its credit facility and the money pool.

Money Pool — Xcel ~~Energy Inc.~~Energy. and its utility subsidiaries have established a money pool arrangement that allows for short-term investments in and borrowings between the utility subsidiaries. Xcel Energy ~~Inc.~~ may make investments in the utility subsidiaries at market-based interest rates; however, the money pool arrangement does not allow the utility subsidiaries to make investments in Xcel ~~Energy Inc.~~Energy.

Money pool ~~borrowings for PSCo:~~borrowings:


(Amounts in Millions, Except Interest Rates)	(Amounts in Millions, Except Interest Rates)	Three Months Ended March 31, 2022			Year Ended Dec. 31, 2021			(Amounts in Millions, Except Interest Rates)	Three Months Ended March 31, 2023		Year Ended Dec. 31, 2022
Borrowing limit	Borrowing limit	$	250		$	250		Borrowing limit	$	250	$	250
Amount outstanding at period end	Amount outstanding at period end	38			—			Amount outstanding at period end	—		—
Average amount outstanding	Average amount outstanding	5			12			Average amount outstanding	—		29
Maximum amount outstanding	Maximum amount outstanding	38			243			Maximum amount outstanding	—		250
Weighted average interest rate, computed on a daily basis	Weighted average interest rate, computed on a daily basis	0.15		%	0.07		%	Weighted average interest rate, computed on a daily basis	N/A		1.66		%
Weighted average interest rate at period end	Weighted average interest rate at period end	0.19			N/A			Weighted average interest rate at period end	N/A		N/A

Commercial Paper — Commercial paper ~~outstanding for PSCo:~~outstanding:


(Amounts in Millions, Except Interest Rates)	(Amounts in Millions, Except Interest Rates)	Three Months Ended March 31, 2022			Year Ended Dec. 31, 2021			(Amounts in Millions, Except Interest Rates)	Three Months Ended March 31, 2023			Year Ended Dec. 31, 2022
Borrowing limit	Borrowing limit	$	700		$	700		Borrowing limit	$	700		$	700
Amount outstanding at period end	Amount outstanding at period end	5			147			Amount outstanding at period end	359			294
Average amount outstanding	Average amount outstanding	98			26			Average amount outstanding	276			71
Maximum amount outstanding	Maximum amount outstanding	328			322			Maximum amount outstanding	454			328
Weighted average interest rate, computed on a daily basis	Weighted average interest rate, computed on a daily basis	0.26		%	0.19		%	Weighted average interest rate, computed on a daily basis	4.90		%	2.56		%
Weighted average interest rate at period end	Weighted average interest rate at period end	0.60			0.22			Weighted average interest rate at period end	5.24			4.73

Letters of Credit — PSCo uses letters of credit, generally with terms of one year, to provide financial guarantees for certain obligations. At both March 31, ~~2022~~2023 and Dec. 31, ~~2021,~~2022, there ~~were $26~~were $27 million ~~and $8 million~~ of letters of credit outstanding under the credit ~~facility, respectively.~~facility. Amounts approximate their fair value and are subject to fees.

~~Table of Contents~~

Revolving Credit Facility — In order to issue its commercial paper, PSCo must have a revolving credit facility ~~in place at least~~ equal toor greater than the amount of its commercial paper borrowing limit and cannot issue commercial paper exceeding available capacity under this credit facility.

Table of Contents

The credit facility provides short-term financing in the form of notes payable to banks, letters of credit and back-up support for commercial paper borrowings.

PSCo has the right to request an extension of the revolving credit facility termination date for 2two additional one-year periods. All extension requests are subject to majority bank group approval.

At March 31, ~~2022,~~2023, PSCo had the following committed revolving credit facility available (in millions of dollars):


Credit Facility (a)	Credit Facility (a)	Drawn (b)		Available		Credit Facility (a)	Drawn (b)		Available
$	700	$	31	$	669	700	$	385	$	315

(a) Expires in ~~June 2024.~~September 2027.

(b) Includes outstanding commercial paper and letters of credit.

All credit facility bank borrowings, outstanding letters of credit and outstanding commercial paper reduce the available capacity under the credit facility. PSCo had nono direct advances on the credit facility outstanding at March 31, ~~2022~~2023 and Dec. 31, ~~2021.~~2022.

Long-Term Borrowings

On April 3, 2023, PSCo issued $850 million of 5.25% first mortgage bonds due April 1, 2053.


5. Revenues

Revenue is classified by the type of goods/services rendered and market/customer type. PSCo’s operating revenues consisted of the following:


		Three Months Ended March 31, 2022									Three Months Ended March 31, 2023
(Millions of Dollars)	(Millions of Dollars)	Electric		Natural Gas		All Other		Total		(Millions of Dollars)	Electric		Natural Gas		All Other		Total
Major revenue types	Major revenue types									Major revenue types
Revenue from contracts with customers:	Revenue from contracts with customers:									Revenue from contracts with customers:
Residential	Residential	$	302	$	386	$	3	$	691	Residential	$	333	$	541	$	4	$	878
C&I	C&I	383		142		2		527		C&I	423		216		12		651
Other	Other	12		—		—		12		Other	14		—		—		14
Total retail	Total retail	697		528		5		1,230		Total retail	770		757		16		1,543
Wholesale	Wholesale	66		—		—		66		Wholesale	75		—		—		75
Transmission	Transmission	19		—		—		19		Transmission	25		—		—		25
Other	Other	12		43		—		55		Other	11		44		—		55
Total revenue from contracts with customers	Total revenue from contracts with customers	794		571		5		1,370		Total revenue from contracts with customers	881		801		16		1,698
Alternative revenue and other	Alternative revenue and other	34		7		12		53		Alternative revenue and other	39		10		—		49
Total revenues	Total revenues	$	828	$	578	$	17	$	1,423	Total revenues	$	920	$	811	$	16	$	1,747


		Three Months Ended March 31, 2021									Three Months Ended March 31, 2022
(Millions of Dollars)	(Millions of Dollars)	Electric		Natural Gas		All Other		Total		(Millions of Dollars)	Electric		Natural Gas		All Other		Total
Major revenue types	Major revenue types									Major revenue types
Revenue from contracts with customers:	Revenue from contracts with customers:									Revenue from contracts with customers:
Residential	Residential	$	246	$	239	$	3	$	488	Residential	$	302	$	386	$	3	$	691
C&I	C&I	326		84		9		419		C&I	383		142		2		527
Other	Other	12		—		—		12		Other	12		—		—		12
Total retail	Total retail	584		323		12		919		Total retail	697		528		5		1,230
Wholesale	Wholesale	87		—		—		87		Wholesale	66		—		—		66
Transmission	Transmission	18		—		—		18		Transmission	19		—		—		19
Other	Other	8		46		—		54		Other	12		43		—		55
Total revenue from contracts with customers	Total revenue from contracts with customers	697		369		12		1,078		Total revenue from contracts with customers	794		571		5		1,370
Alternative revenue and other	Alternative revenue and other	36		46		1		83		Alternative revenue and other	34		7		12		53
Total revenues	Total revenues	$	733	$	415	$	13	$	1,161	Total revenues	$	828	$	578	$	17	$	1,423


6. Income Taxes

~~Note 7 to the consolidated financial statements included in PSCo’s Annual Report on~~ ~~Form 10-K~~ ~~for the year ended Dec. 31, 2021 represents, in all material respects, the current status of other income tax matters except to the extent noted below and are incorporated herein by reference.~~

~~Difference~~Reconciliation between the statutory rate and ~~effective tax rate:~~ETR:


		Three Months Ended March 31					Three Months Ended March 31
		2022		2021			2023		2022
Federal statutory rate	Federal statutory rate	21.0	%	21.0	%	Federal statutory rate	21.0	%	21.0	%
State tax (net of federal tax effect)	State tax (net of federal tax effect)	3.6		3.6		State tax (net of federal tax effect)	3.5		3.6
(Decreases) increases in tax from:
Increases (decreases):						Increases (decreases):
Wind PTCs(a)	Wind PTCs(a)	(14.8)		(12.9)		Wind PTCs(a)	(11.7)		(14.8)
Plant regulatory differences ~~(a)~~(b)	Plant regulatory differences ~~(a)~~(b)	(3.8)		(4.3)		Plant regulatory differences ~~(a)~~(b)	(4.8)		(3.8)
Other tax credits, net operating loss & tax credit allowances	Other tax credits, net operating loss & tax credit allowances	(1.3)		(0.9)		Other tax credits, net operating loss & tax credit allowances	(0.9)		(1.3)
Other (net)	Other (net)	0.2		(0.3)		Other (net)	0.3		0.2
Effective income tax rate	Effective income tax rate	4.9	%	6.2	%	Effective income tax rate	7.4	%	4.9	%

(a)Wind PTCs are credited to customers (reduction to revenue) and do not materially impact net income.

(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~~taxes are offset by corresponding revenue reductions.


7. Fair Value of Financial Assets and Liabilities

Fair Value Measurements

Accounting guidance for fair value measurements and disclosures provides a ~~single definition of fair value and requires disclosures about assets and liabilities measured at fair value. A~~ hierarchical framework for disclosing the observability of the inputs utilized in measuring assets and liabilities at fair ~~value is established by this guidance.~~value.

•Level 1 — Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. The types of assets and liabilities included in Level 1 are ~~highly liquid and~~ actively traded instruments with ~~quoted~~observable actual trading prices.

•Level 2 — Pricing inputs are other than ~~quoted~~actual trading prices in active markets but are either directly or indirectly observable as of the reporting date. The types of assets and liabilities included in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.

•Level 3 — Significant inputs to pricing have little or no observability as of the reporting date. The types of assets and liabilities included in Level 3 ~~are~~include those valued with models requiring significant ~~management~~ judgment or estimation.

Specific valuation methods include:

~~Cash equivalents~~Interest Rate Derivatives ~~— The fair values of cash equivalents are generally based on cost plus accrued interest; money market funds are measured using quoted net asset value.~~

~~Interest rate derivatives~~ — ~~The fair~~ Fair values of interest rate derivatives are based on broker quotes that utilize current market interest rate forecasts.

~~Table of Contents~~

Commodity ~~derivatives~~Derivatives — ~~The methods~~Methods used to measure the fair value of commodity derivative forwards and options utilize forward prices and volatilities, as well as pricing adjustments for specific delivery locations, and are generally assigned a Level 2 classification. When ~~contractual settlements~~contracts relate to inactive delivery locations or extend to periods beyond those readily observable on active exchanges, ~~or quoted by brokers,~~ the significance of the use of less observable inputs on a valuation is evaluated and may result in Level 3 classification.

Derivative ~~Instruments~~Activities and Fair Value Measurements

PSCo enters into derivative instruments, including forward contracts, futures, swaps and options, for trading purposes and to manage risk in connection with changes in interest rates and utility commodity ~~prices and vehicle fuel~~ prices.

Table of Contents

Interest Rate Derivatives— PSCo enters into ~~various instruments~~contracts that effectively fix the ~~yield or price~~interest rate on a specified principal amount of a hypothetical future debt issuance. These financial swaps net settle based on changes in a specified benchmark interest rate, ~~for an~~acting as a hedge of changes in market interest rates that will impact specified anticipated debt ~~issuance for a specific period.~~issuances. These derivative instruments are ~~generally~~ designated as cash flow hedges for accounting purposes, with changes in fair value prior to ~~settlement~~occurrence of the hedged transactions recorded as other comprehensive income.

At March 31, ~~2022,~~2023, accumulated other comprehensive loss related to interest rate derivatives included $1 million of net losses expected to be reclassified into earnings during the next 12 months as the hedged transactions impact earnings. As of March 31, ~~2022,~~2023, PSCo had no unsettled interest rate derivatives.

Wholesale and Commodity Trading ~~Risk~~ — PSCo conducts various wholesale and commodity trading activities, including the purchase and sale of electric capacity, energy, energy-related instruments and natural gas-related instruments, including derivatives. PSCo is allowed to conduct these activities within guidelines and limitations as approved by its risk management committee, comprised of management personnel not directly involved in the activities governed by this policy.

Results of derivative instrument transactions entered into for trading purposes are presented in the consolidated statements of income as electric revenues, net of any sharing with customers. These activities are not intended to mitigate commodity price risk associated with regulated electric and natural gas operations. Sharing of ~~any~~these margins is determined through state regulatory proceedings as well as the operation of the ~~FERC approved~~FERC-approved joint operating agreement.

Commodity Derivatives— PSCo enters into derivative instruments to manage variability of future cash flows from changes in commodity prices in its electric and natural gas ~~operations, as well as for trading purposes.~~operations. This could include the purchase or sale of energy or energy-related products, natural gas to generate electric energy, natural gas for resale, and vehicle fuel.

When PSCo enters into derivative instruments that mitigate commodity price risk on behalf of electric and natural gas customers, ~~but may~~the instruments are not betypically designated as qualifying hedging transactions. The classification of unrealized losses or gains ~~or losses for~~on these instruments as a regulatory asset or liability, if applicable, is based on approved regulatory recovery mechanisms.

As of March 31, ~~2022,~~2023, PSCo had no commodity contracts designated as cash flow hedges.

PSCo enters into commodity derivative instruments for trading purposes not directly related to commodity price risks associated with serving its electric and natural gas customers. Changes in the fair value of these commodity derivatives are recorded in electric operating revenues, net of amounts credited to customers under margin-sharing mechanisms.

Gross notional amounts of commodity forwards and options:

(Amounts in Millions) (a)(b)

March 31, 2022

Dec. 31, 2021

(Amounts in Millions) (a)(b)

March 31, 2023

Dec. 31, 2022

Megawatt hours of electricity

Million British thermal units of natural gas

(a)~~Amounts are not~~Not reflective of net positions in the underlying commodities.

(b)Notional amounts for options ~~are~~ included on a gross basis, but ~~are~~ weighted for the probability of exercise.

Consideration of Credit Risk and Concentrations— PSCo continuously monitors the creditworthiness of ~~the~~ counterparties to its interest rate derivatives and commodity derivative contracts prior to settlement and assesses each counterparty’s ability to perform on the transactions set forth in the contracts. ~~The impact~~Impact of credit risk was immaterial to the fair value of unsettled commodity derivatives presented on the consolidated balance sheets.

PSCo’s most significant concentrations of credit risk with particular entities or industries are contracts with counterparties to its wholesale, trading and non-trading commodity activities.

AtAs of March 31, ~~2022, 4~~2023, three of PSCo’s 10ten most significant counterparties for these activities, comprising ~~$47~~$37 million, or ~~38%~~45%, of this credit exposure, had investment grade credit ratings from S&P Global Ratings, Moody’s Investor Services or Fitch Ratings. ~~NaN~~

Five of the 10ten most significant counterparties, comprising ~~$20~~$24 million, or ~~16%~~29%, of this credit exposure, ~~was~~were not rated by these external ratings agencies, but based on PSCo’s internal analysis, had credit quality consistent with investment grade. ~~NaN~~

Two of these significant counterparties, comprising ~~$39~~$21 million, or ~~31%~~26%, of this credit exposure, had credit quality less than investment grade, based on internal analysis. ~~NaN~~Five of these significant counterparties are independent system operators, municipal or cooperative electric entities, Regional Transmission Organizations or other utilities.

~~Impact of Derivative Activity —~~

As of March 31, 2022 and 2021, changes in the fair value of interest rate derivatives resulted in no gains and $1 million gains that were recognized in accumulated other comprehensive loss, respectively.

Changes in the fair value of natural gas commodity derivatives resulted in $1 million net gains for the three months ended March 31, 2022, which were recognized as regulatory assets and liabilities. The classification as a regulatory asset or liability is based on commission approved regulatory recovery mechanisms. Immaterial net gains were recognized for the three months ended March 31, 2021.

Pre-Tax (Gains) Losses Reclassified into Income During the Period from: Pre-Tax Gains (Losses) Recognized During the Period in Income
(Millions of Dollars) Accumulated Other Comprehensive Loss Regulatory Assets and (Liabilities)
Three Months Ended March 31, 2022
Other derivative instruments
Natural gas commodity $ — $ 2 (b) $ (11) (b)(c)
Total $ — $ 2 $ (11)

~~Table of Contents~~

Pre-Tax (Gains) Losses Reclassified into Income During the Period from: Pre-Tax Gains (Losses) Recognized During the Period in Income
(Millions of Dollars) Accumulated Other Comprehensive Loss Regulatory Assets and (Liabilities)
Three Months Ended March 31, 2021
Other derivative instruments
Commodity trading $ — $ — $ 1 (a)
Natural gas commodity — 6 (b) (6) (b)(c)
Total $ — $ 6 $ (5)

~~(a)~~ Recorded to electric operating revenues. Portions of these gains and losses are subject to sharing with electric customers through margin-sharing mechanisms and deducted from gross revenue as appropriate.

~~(b)~~ Settlement losses related to natural gas operations are recorded to cost of natural gas sold and transported. These losses are subject to cost-recovery mechanisms and reclassified out of income to a regulatory asset, as appropriate.

~~(c)~~ ~~Relates primarily to option premium amortization.~~

~~PSCo had no derivative instruments designated as fair value hedges during the three months ended March 31, 2022 and 2021.~~

Credit Related Contingent Features — Contract provisions for derivative instruments that PSCo enters into, including those accounted for as normal ~~purchase-normal~~purchase and normal sale contracts and therefore not reflected on the consolidated balance sheets, may require the posting of collateral or settlement of the contracts for various reasons, including if PSCo’s credit ratings are downgraded below its investment grade credit rating by any of the major credit rating agencies.

AtAs of March 31, ~~2022~~2023 and Dec. 31, ~~2021,~~2022, there were no derivative liabilities position with such underlying contract provisions.

Certain contracts also contain cross default provisions that may require the posting of collateral or settlement of the contracts if there was a failure under ~~the~~ other financing arrangements related to payment terms or other covenants.

As of March 31, ~~2022~~2023 and Dec. 31, ~~2021,~~2022, there were ~~approximately $11 million and $16 million, respectively, of~~no derivative ~~liabilities~~instruments in a liability position with such underlying contract provisions.

Certain derivative instruments are also subject to contract provisions that contain adequate assurance clauses. These provisions allow counterparties to seek performance assurance, including cash collateral, in the event that PSCo’s ability to fulfill its contractual obligations is reasonably expected to be impaired. PSCo had no collateral posted related to adequate assurance clauses in derivative contracts as of March 31, ~~2022~~2023 and Dec. 31, ~~2021.~~

2022.

Recurring Derivative Fair Value Measurements

Changes in the fair value of natural gas commodity derivatives recognized as regulatory assets and liabilities included immaterial net losses and $1 million of net gains for the three months ended March 31, 2023 and 2022, respectively. The classification as a regulatory asset or liability is based on commission approved regulatory recovery mechanisms.

Table of Contents


	Pre-Tax Losses Reclassified into Income During the Period from:			Pre-Tax Losses Recognized During the Period in Income
(Millions of Dollars)	Regulatory Assets and Liabilities







Three Months Ended March 31, 2023



Other derivative instruments

Natural gas commodity	9		(a)	(12)		(a)(b)
Total	$	9		$	(12)











Three Months Ended March 31, 2022
Other derivative instruments

Natural gas commodity	2		(a)	(11)		(a)(b)
Total	$	2		$	(11)

(a) ~~— PSCo’s~~Recorded to cost of natural gas sold and transported. These losses are subject to cost-recovery mechanisms and reclassified out of income to a regulatory asset, as appropriate.

(b) Relates primarily to option premium amortization.

PSCo had no derivative instruments designated as fair value hedges during the three months ended March 31, 2023 and 2022.

Derivative assets and liabilities measured at fair value on a recurring basis were as follows:


		March 31, 2022													Dec. 31, 2021																March 31, 2023																			Dec. 31, 2022
		Fair Value						Fair Value Total		Netting (a)			Total		Fair Value						Fair Value Total			Netting (a)			Total				Fair Value								Fair Value Total				Netting (a)			Total				Fair Value										Fair Value Total			Netting (a)			Total
(Millions of Dollars)	(Millions of Dollars)	Level 1		Level 2		Level 3						Level 1			Level 2		Level 3						(Millions of Dollars)			Level 1				Level 2				Level 3								Level 1							Level 2				Level 3
Current derivative assets	Current derivative assets																																Current derivative assets
Other derivative instruments:	Other derivative instruments:																								Other derivative instruments:
Commodity trading	Commodity trading	$	31	$	111	$	11	$	153	$	(117)		$	36	$	12	$	97	$	—	$	109		$	(81)		$	28	Commodity trading		$	6			$	124	$	—		$	130			$	(92)		$	38			$	16			$	220		$	1		$	237		$	(184)		$	53
Natural gas commodity	Natural gas commodity	—		—		—		—		—			—		—		11		—		11			—			11		Natural gas commodity		—				—		—		—				—			—				—				12			—			12			—			12
Total current derivative assets	Total current derivative assets	$	31	$	111	$	11	$	153	$	(117)		$	36	$	12	$	108	$	—	$	120		$	(81)		$	39	Total current derivative assets		$	6			$	124	$	—	$	130			$	(92)		$	38			$	16			$	232		$	1		$	249		$	(184)		$	65
Noncurrent derivative assets	Noncurrent derivative assets																												Noncurrent derivative assets
Other derivative instruments:	Other derivative instruments:																								Other derivative instruments:
Commodity trading	Commodity trading	$	19	$	24	$	54	$	97	$	(73)		$	24	$	10	$	28	$	54	$	92		$	(65)		$	27	Commodity trading		$	8			$	22	$	11	$	41			$	(22)		$	19			$	12			$	32		$	9		$	53		$	(31)		$	22
Total noncurrent derivative assets	Total noncurrent derivative assets	$	19	$	24	$	54	$	97	$	(73)		$	24	$	10	$	28	$	54	$	92		$	(65)		$	27	Total noncurrent derivative assets		$	8			$	22	$	11	$	41			$	(22)		$	19			$	12			$	32		$	9		$	53		$	(31)		$	22


		March 31, 2022													Dec. 31, 2021																					March 31, 2023																									Dec. 31, 2022
		Fair Value						Fair Value Total		Netting (a)			Total		Fair Value						Fair Value Total				Netting (a)					Total						Fair Value													Fair Value Total				Netting (a)				Total				Fair Value												Fair Value Total				Netting (a)			Total
(Millions of Dollars)	(Millions of Dollars)	Level 1		Level 2		Level 3						Level 1			Level 2		Level 3						(Millions of Dollars)				Level 1								Level 2					Level 3												Level 1								Level 2				Level 3
Current derivative liabilities	Current derivative liabilities																																						Current derivative liabilities
Other derivative instruments:	Other derivative instruments:																									Other derivative instruments:
Commodity trading	Commodity trading	$	14	$	101	$	38	$	153	$	(117)		$	36	$	6	$	90	$	16	$	112			$	(85)				$	27	Commodity trading				$	1				$	133			$	1				$	135			$	(115)			$	20			$	5			$	237			$	1			$	243			$	(223)		$	20
Natural gas commodity	Natural gas commodity	—		—		—		—		—			—		—		3		—		3				—					3		Natural gas commodity				—					—				—				—				—				—				—				10				—				10				—			10
Total current derivative liabilities	Total current derivative liabilities	$	14	$	101	$	38	$	153	$	(117)		$	36	$	6	$	93	$	16	$	115			$	(85)				$	30	Total current derivative liabilities				$	1				$	133			$	1			$	135			$	(115)			$	20			$	5			$	247			$	1			$	253			$	(223)		$	30
Noncurrent derivative liabilities	Noncurrent derivative liabilities																															Noncurrent derivative liabilities
Other derivative instruments:	Other derivative instruments:																									Other derivative instruments:
Commodity trading	Commodity trading	$	7	$	1	$	96	$	104	$	(82)		$	22	$	3	$	—	$	101	$	104			$	(75)				$	29	Commodity trading				$	5				$	27			$	—			$	32			$	(22)			$	10			$	7			$	40			$	—			$	47			$	(38)		$	9
Total noncurrent derivative assets		$	7	$	1	$	96	$	104	$	(82)		$	22	$	3	$	—	$	101	$	104			$	(75)				$	29
Total noncurrent derivative liabilities																								Total noncurrent derivative liabilities				$	5				$	27				$	—				$	32			$	(22)			$	10			$	7			$	40			$	—			$	47			$	(38)			$	9

(a)PSCo nets derivative instruments and related collateral on its consolidated balance sheets when supported by a legally enforceable master netting ~~agreement, and all derivative instruments and related collateral amounts were subject to master netting agreements at March 31, 2022 and Dec. 31, 2021.~~agreement. At both March 31, ~~2022~~2023 and Dec. 31, ~~2021,~~2022, derivative assets and liabilities include no obligations to return cash collateral. At March 31, ~~2022~~2023 and Dec. 31, ~~2021,~~2022, derivative assets and liabilities include rights to reclaim cash collateral of ~~$10~~$23 million and ~~$14~~$46 million, respectively. ~~The counterparty~~Counterparty netting amounts presented exclude settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements.

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Changes in Level 3 commodity derivatives:


		Three Months Ended March 31					Three Months Ended March 31
(Millions of Dollars)	(Millions of Dollars)	2022		2021		(Millions of Dollars)	2023		2022
Balance at Jan. 1	Balance at Jan. 1	$	(63)	$	(44)	Balance at Jan. 1	$	9	$	(63)
Settlements(a)	Settlements(a)	2		(1)		Settlements(a)	—		2
Net transactions recorded during the period:	Net transactions recorded during the period:					Net transactions recorded during the period:
(Losses) gains recognized in earnings (a)		(8)		7
Balance at Mar 31		$	(69)	$	(38)
Gains (losses) recognized in earnings (a)						Gains (losses) recognized in earnings (a)	1		(8)
Balance at March 31						Balance at March 31	$	10	$	(69)

(a)~~Level 3 net gains recognized in earnings are~~Relates to commodity trading and is subject to substantial offsetting ~~net~~ losses ofand gains on derivative instruments categorized as levels 1 and 2 in the income statement.

~~PSCo recognizes transfers between levels as of the beginning of each period. There were no transfers of amounts between levels for derivative instruments~~ See above tables for the ~~three months ended March 31, 2022~~income statement impact of derivative activity, including commodity trading gains and ~~2021.~~losses.

Fair Value of Long-Term Debt

~~Other~~As of March 31, 2023, other financial instruments for which the carrying amount did not equal fair value:


		March 31, 2022				Dec. 31, 2021					March 31, 2023				Dec. 31, 2022
(Millions of Dollars)	(Millions of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		(Millions of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion	Long-term debt, including current portion	$	6,469	$	6,560	$	6,467	$	7,291	Long-term debt, including current portion	$	6,611	$	5,801	$	6,860	$	5,881

Fair value of PSCo’s long-term debt is estimated based on recent trades and observable spreads from benchmark interest rates for similar securities. Fair value estimates are based on information available to management as of March 31, ~~2022~~2023 and Dec. 31, ~~2021~~2022 and given the observability of the inputs, fair values presented for long-term debt were assigned as Level 2.


8. Benefit Plans and Other Postretirement Benefits

Components of Net Periodic Benefit Cost (Credit)


		Three Months Ended March 31									Three Months Ended March 31
		2022		2021		2022		2021			2023		2022		2023		2022
(Millions of Dollars)	(Millions of Dollars)	Pension Benefits				Postretirement Health Care Benefits				(Millions of Dollars)	Pension Benefits				Postretirement Health Care Benefits
Service cost	Service cost	$	7	$	8	$	—	$	—	Service cost	$	5	$	7	$	—	$	—
Interest cost (a)	Interest cost (a)	10		10		3		3		Interest cost (a)	14		10		4		3
Expected return on plan assets (a)	Expected return on plan assets (a)	(19)		(18)		(4)		(4)		Expected return on plan assets (a)	(19)		(19)		(4)		(4)
Amortization of prior service credit (a)	Amortization of prior service credit (a)	—		—		(1)		(1)		Amortization of prior service credit (a)	—		—		—		(1)
Amortization of net loss (a)	Amortization of net loss (a)	6		8		—		1		Amortization of net loss (a)	1		6		1		—
Net periodic benefit cost (credit)		4		8		(2)		(1)

Net periodic benefit cost										Net periodic benefit cost	1		4		1		(2)
Effects of regulation	Effects of regulation	3		—		1		1		Effects of regulation	3		3		—		1
Net benefit cost (credit) recognized for financial reporting		$	7	$	8	$	(1)	$	—
Net benefit cost recognized for financial reporting										Net benefit cost recognized for financial reporting	$	4	$	7	$	1	$	(1)

(a)The components of net periodic cost other than the service cost component are included in the line item “Other income, ~~(expense),~~ net” in the consolidated statements of income or capitalized on the consolidated balance sheets as a regulatory asset.

In January ~~2022,~~2023, contributions oftotaling $50 million were made across ~~4 of~~ Xcel Energy’s pension plans, of which ~~$40 million~~none was attributable to PSCo. Xcel Energy does not expect additional pension contributions during ~~2022.~~2023.


9. Commitments and Contingencies

~~The following includes commitments, contingencies and unresolved contingencies that are material to PSCo’s financial position.~~

Legal

PSCo is involved in various litigation matters in the ordinary course of business. The assessment of whether a loss is probable or is a reasonable possibility, and whether the loss or a range of loss is estimable, often involves a series of complex judgments about future events. Management maintains accruals for losses probable of being incurred and subject to reasonable estimation. Management is sometimes unable to estimate an amount or range of a reasonably possible loss in certain situations, including but not limited to when (1) the damages sought are indeterminate, (2) the proceedings are in the early stages, or (3) the matters involve novel or unsettled legal theories.

In such cases, there is considerable uncertainty regarding the timing or ultimate resolution, including a possible eventual loss. For current proceedings not specifically reported herein, management does not anticipate that the ultimate liabilities, if any, would have a material effect on PSCo’s consolidated financial statements. Legal fees are generally expensed as incurred.

Comanche Unit 3 Litigation — In ~~September~~ 2021, CORE filed a lawsuit in Denver County District Court, ~~seeking an unspecified amount of damages. CORE alleges~~alleging PSCo breached ownership agreement terms by failing to operate Comanche Unit 3 in accordance with prudent utility practices. ~~PSCo filed a motion to dismiss several of CORE’s claims.~~ In January 2022, the Court granted PSCo’s motion ~~and dismissed~~to dismiss CORE’s claims for unjust enrichment, declaratory judgment and damages for replacement power costs. In ~~February~~April 2022, CORE filed a supplement to include the January 2022 outage and damages related to this event. Also in 2022, CORE sent notice of withdrawal from the ownership agreement based on the same alleged breaches. In February 2023, CORE disclosed ~~that it is claiming~~its expert witness, who estimated damages incurred of $270 million. Also in ~~excess~~February 2023, the court granted PSCo’s motion precluding CORE from seeking damages related to its withdrawal as part of ~~$125 million~~ ~~in total damages.~~the lawsuit. PSCo continues to believe CORE's claims are without merit and disputes CORE’s right to withdraw.

Rate Matters

PSCo is involved in various regulatory proceedings arising in the ordinary course of business. Until resolution, typically in the form of a rate order, uncertainties may exist regarding the ultimate rate treatment for certain activities and transactions. Amounts have been recognized for probable and reasonably estimable losses that may result. Unless otherwise disclosed, any reasonably possible range of loss in excess of any recognized amount is not expected to have a material effect on the consolidated financial statements.

Environmental

MGP, Landfill and Disposal Sites

PSCo is investigating, remediating or performing post-closure actions at 2two MGP, landfill or other disposal sites across its service ~~territory.~~territory, excluding sites that are being addressed under current coal ash regulations.

PSCo has recognized its best estimate of costs/liabilities from final resolution of these issues, however, the outcome and timing isare unknown. In addition, there may be insurance recovery and/or recovery from other potentially responsible parties, offsetting a portion of costs incurred.

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Environmental Requirements — Water and Waste

Coal Ash Regulation — PSCo’s operations are subject to federal and state regulations that impose requirements for handling, storage, treatment and disposal of solid waste. Under the CCR Rule, utilities are required to complete groundwater sampling around their ~~CCR~~applicable landfills and surface ~~impoundments. Currently,~~impoundments as well as perform corrective actions where offsite groundwater has been impacted.

As of March 31, 2023, PSCo has 5five regulated ash units in operation.

PSCo ~~is conducting groundwater sampling~~has executed an agreement with a third party that will excavate and ~~monitoring and implementing assessment of corrective measures~~process ash for beneficial use (at two sites) at certain CCR landfills and surface impoundments. Increases above background concentrations were detected at 4 locations. Based on further assessments, PSCo is evaluating options for corrective action at 2 locations, 1 of which indicates potential offsite impacts to groundwater. The total cost is uncertain, but could be up to $35 million. PSCo is continuing to assess the financial and regulatory impacts.

In August 2020, the EPA published its final rule to implement closure by April 2021 for all CCR impoundments affected by the August 2018 D.C. Circuit ruling. This final rule required PSCo to expedite closure plans for 1 impoundment.

~~PSCo also built an alternative collection and treatment system to remove~~ a ~~bottom ash pond from service. The total~~ cost of ~~the treatment system is~~ approximately ~~$25~~$45 million. ~~PSCo removed the pond from service in June 2021~~An estimated liability has been recorded and ~~did not meet the April 2021 deadline.~~

PSCo is in the process of negotiating a compliance order with the EPA addressing the closure deadline as well as other issues. PSCo is proceeding with the pond closure at an estimated cost of $3 million. Closure costs for existing impoundmentsamounts are ~~included in the calculation of the asset retirement obligation.~~

~~Federal CWA Section 316(b)~~ ~~— The federal CWA requires the EPA~~expected to regulate cooling water intake structures to assure that these structures reflect the best technology available for minimizing impingement and entrainment of aquatic species. PSCo estimates the likely future cost for complying with impingement and entrainment requirements is immaterial. PSCo anticipates these costs will be fully recoverable through regulatory mechanisms.

Investigation and feasibility studies for additional corrective action related to offsite groundwater are ongoing (at three sites). While the results are uncertain, additional costs are estimated to be at least $30 million. A liability has been recorded for the portion of these actions that are estimable/probable, and are expected to be fully recoverable through regulatory mechanisms.

Leases

PSCo evaluates contracts that may contain leases, including PPAs and arrangements for the use of office space and other facilities, vehicles and equipment. A contract contains a lease if it conveys the exclusive right to control the use of a specific asset.

Components of lease expense:


		Three Months Ended March 31					Three Months Ended March 31.
(Millions of Dollars)	(Millions of Dollars)	2022		2021		(Millions of Dollars)	2023		2022
Operating leases	Operating leases					Operating leases
PPA capacity payments	PPA capacity payments	$	25	$	26	PPA capacity payments	$	22	$	25
Other operating leases (a)	Other operating leases (a)	6		4		Other operating leases (a)	5		6
Total operating lease expense (b)	Total operating lease expense (b)	$	31	$	30	Total operating lease expense (b)	$	27	$	31
Finance leases	Finance leases					Finance leases
Amortization of ROU assets	Amortization of ROU assets	$	1	$	2	Amortization of ROU assets	$	1	$	1
Interest expense on lease liability	Interest expense on lease liability	4		4		Interest expense on lease liability	4		4
Total finance lease expense	Total finance lease expense	$	5	$	6	Total finance lease expense	$	5	$	5

(a)Includes immaterial short-term lease expense for ~~2022~~2023 and ~~2021.~~2022.

(b)PPA capacity payments are included in electric fuel and purchased power on the consolidated statements of income. Expense for other operating leases is included in O&M expense and electric fuel and purchased power.

Commitments under operating and finance leases as of March 31, ~~2022:~~2023:


(Millions of Dollars)	(Millions of Dollars)	PPA Operating Leases		Other Operating Lease		Total Operating Leases		Finance Leases		(Millions of Dollars)	PPA Operating Leases		Other Operating Lease		Total Operating Leases		Finance Leases
Total minimum obligation	Total minimum obligation	$	418	$	52	$	470	$	454	Total minimum obligation	$	437	$	72	$	509	$	432
Interest component of obligation	Interest component of obligation	(53)		(6)		(59)		(330)		Interest component of obligation	(46)		(8)		(54)		(316)
Present value of minimum obligation	Present value of minimum obligation	$	365	$	46	411		124		Present value of minimum obligation	$	391	$	64	455		116
Less current portion	Less current portion					(77)		(4)		Less current portion					(90)		(3)
Noncurrent operating and finance lease liabilities	Noncurrent operating and finance lease liabilities					$	334	$	120	Noncurrent operating and finance lease liabilities					$	365	$	113

Variable Interest Entities

Under certain PPAs, PSCo purchases power from IPPs for which PSCo is required to reimburse fuel costs, or to participate in tolling arrangements under which PSCo procures the natural gas required to produce the energy that they purchase. These specific PPAs create a variable interest in the IPP.

PSCo had ~~approximately 1,518~~approximately 1,509 MW and 1,442 MW of capacity under long-term PPAs at ~~both~~ March 31, ~~2022~~2023 and Dec. 31, ~~2021~~2022 with entities that have been determined to be variable interest entities. PSCo concluded that these entities are not required to be consolidated in its financial statements because it does not have the power to direct the activities that most significantly impact the entities’ economic performance. The PPAs have expiration dates through 2032.


10. Other Comprehensive Income

Changes in accumulated other comprehensive loss, net of ~~tax, for the three months ended March 31, 2022 and 2021:~~tax:


		Three Months Ended March 31, 2022						Three Months Ended March 31, 2021							Three Months Ended March 31, 2023						Three Months Ended March 31, 2022
(Millions of Dollars)	(Millions of Dollars)	Gains and Losses on Cash Flow Hedges		Defined Benefit Pension and Postretirement Items		Total		Gains and Losses on Cash Flow Hedges		Defined Benefit Pension and Postretirement Items		Total		(Millions of Dollars)	Gains and Losses on Cash Flow Hedges		Defined Benefit Pension and Postretirement Items		Total		Gains and Losses on Cash Flow Hedges		Defined Benefit Pension and Postretirement Items		Total
Accumulated other comprehensive loss at Jan. 1	Accumulated other comprehensive loss at Jan. 1	$	(21)	$	(1)	$	(22)	$	(23)	$	(1)	$	(24)	Accumulated other comprehensive loss at Jan. 1	$	(20)	$	(2)	$	(22)	$	(21)	$	(1)	$	(22)
Losses reclassified from net accumulated other comprehensive loss:	Losses reclassified from net accumulated other comprehensive loss:													Losses reclassified from net accumulated other comprehensive loss:
Interest rate derivatives (net of taxes of $— and $—, respectively) (a)		—		—		—		1		—		1
Amortization of net actuarial loss (a)														Amortization of net actuarial loss (a)	—		1		1		—		—		—
Net current period other comprehensive income	Net current period other comprehensive income	—		—		—		1		—		1		Net current period other comprehensive income	—		1		1		—		—		—
Accumulated other comprehensive loss at March 31	Accumulated other comprehensive loss at March 31	$	(21)	$	(1)	$	(22)	$	(22)	$	(1)	$	(23)	Accumulated other comprehensive loss at March 31	$	(20)	$	(1)	$	(21)	$	(21)	$	(1)	$	(22)

(a) Included in ~~interest charges.~~the computation of net periodic pension and postretirement benefit costs. See Note 8 for further information.

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11. Segment Information

PSCo evaluates performance based on profit or loss generated from the product or service provided. These segments are managed separately because the revenue streams are dependent upon regulated rate recovery, which is separately determined for each segment.

PSCo has the following reportable segments:

•Regulated Electric — The regulated electric utility segment generates electricity which is transmitted and distributed in Colorado. This segment includes sales for resale and provides wholesale transmission service to various entities in the United States. The regulated electric utility segment also includes PSCo’s wholesale commodity and trading operations.

•Regulated Natural Gas — The regulated natural gas utility segment transports, stores and distributes natural gas in portions of Colorado.

PSCo also presents All Other, which includes operating segments with revenues below the necessary quantitative thresholds. Those operating segments primarily include steam revenue, appliance repair services and non-utility real estate activities.

Asset and capital expenditure information is not provided for PSCo’s reportable segments because, as an integrated electric and natural gas utility, PSCo operates significant assets that are not dedicated to a specific business segment and reporting assets and capital expenditures by business segment would require arbitrary and potentially misleading allocations, which may not necessarily reflect the assets that would be required for the operation of the business segments on a stand-alone basis.

Certain costs, such as common depreciation, common O&M expenses and interest expense are allocated based on cost causation allocators across each segment. In addition, a general allocator is used for certain general and administrative expenses, including office supplies, rent, property insurance and general advertising.

PSCo’s segment information:


		Three Months Ended March 31					Three Months Ended March 31
(Millions of Dollars)	(Millions of Dollars)	2022		2021		(Millions of Dollars)	2023		2022
Regulated Electric	Regulated Electric					Regulated Electric

Total revenues	Total revenues	$	828	$	733	Total revenues	$	920	$	828
Net income	Net income	96		81		Net income	99		96
Regulated Natural Gas	Regulated Natural Gas					Regulated Natural Gas

Total revenues	Total revenues	$	578	$	415	Total revenues	$	811	$	578
Net income	Net income	80		83		Net income	113		80
All Other	All Other					All Other
Total revenues (a)	Total revenues (a)	$	17	$	13	Total revenues (a)	$	16	$	17
Net income	Net income	—		3		Net income	2		—
Consolidated Total	Consolidated Total					Consolidated Total
Total revenues (a)	Total revenues (a)	$	1,423	$	1,161	Total revenues (a)	$	1,747	$	1,423

Net income	Net income	176		167		Net income	214		176

(a) Total revenues include $1 million of other affiliate revenue for both the three months ended March 31, ~~2022~~2023 and ~~2021.~~2022.


ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Discussion of financial condition and liquidity for PSCo is omitted per conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q for wholly owned subsidiaries. It is replaced with management’s narrative analysis of the results of operations set forth in General Instruction H(2)(a) of Form 10-Q for wholly owned subsidiaries (reduced disclosure format).

Non-GAAP Financial Measures

The following discussion includes financial information prepared in accordance with GAAP, as well as certain non-GAAP financial measures such as ongoing earnings. Generally, a non-GAAP financial measure is a measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are adjusted from measures calculated and presented in accordance with GAAP.

PSCo’s management uses non-GAAP measures for financial planning and analysis, for reporting of results to the Board of Directors, in determining performance-based compensation and communicating its earnings outlook to analysts and investors. Non-GAAP financial measures are intended to supplement investors’ understanding of our performance and should not be considered alternatives for financial measures presented in accordance with GAAP. These measures are discussed in more detail below and may not be comparable to other companies’ similarly titled non-GAAP financial measures.

Earnings Adjusted for Certain Items (Ongoing Earnings)

Ongoing earnings reflect adjustments to GAAP earnings (net income) for certain items.

We use this non-GAAP financial measure to evaluate and provide details of PSCo’s core earnings and underlying performance. We believe this measurement is useful to investors to evaluate the actual and projected financial performance and contribution of PSCo. For the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, there were no such adjustments to GAAP earnings and therefore GAAP earnings equal ongoing earnings.


Results of Operations

PSCo’s net income was $214 million for the three months ended March 31, 2023, compared to $176 million for the ~~first quarter, compared with $167 million for~~prior year. The higher earnings primarily reflect the ~~prior year,~~ ~~reflecting regulatory~~timing of recovery of ~~capital~~electric and natural gas infrastructure investment and ~~higher demand revenues,~~the impact of colder than normal weather, partially offset by increased depreciation, O&M expenses and ~~incremental~~interest charges. Incremental investment recovery was implemented for electric operations in April 2022 and natural gas operations in November 2022, resulting in higher revenues in the first quarter of 2023 compared to 2022. The year-over-year impact of these higher revenues is not expected to continue throughout the rest of the year. Earnings are not a result of higher natural gas prices as PSCo does not profit on fuel or power costs ~~from the Comanche Unit 3 outage.~~purchased for its customers.

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Electric Margin

Electric margin is presented as electric revenues less electric fuel and purchased power expenses. Expenses incurred for electric fuel and purchased power are generally recovered through various regulatory recovery mechanisms. As a result, changes in these expenses are generally offset in operating revenues.

Electric revenues and fuel and purchased power expenses are impacted by fluctuations in the price of natural gas and coal. However, these fluctuations have minimal impact on margin due to fuel recovery mechanisms. In addition, electric customers receive a credit for PTCs generated, which reduce electric revenue and margin (offset by lower tax expense).

~~Table of Contents~~

Electric ~~Revenues, Fuel~~revenues, fuel and ~~Purchased Power~~purchased power and ~~Electric Margin~~electric margin and explanation of the changes are listed as follows:

Three Months Ended March 31
(Millions of Dollars) 2022 2021
Electric revenues $ 828 $ 733
Electric fuel and purchased power (344) (271)
Electric margin $ 484 $ 462

~~Changes:~~


	Three Months Ended March 31
(Millions of Dollars)	2023		2022
Electric revenues	$	920	$	828
Electric fuel and purchased power	(382)		(344)
Electric margin	$	538	$	484


(Millions of Dollars)	Three Months Ended March 31, ~~2022~~2023 vs. ~~2021~~2022
Regulatory rate ~~outcome~~outcomes	$	1327
Wholesale transmission (net)	8
Non-fuel riders	94
Sales and demand (a)	73
~~Proprietary commodity trading, net of sharing~~ ~~(b)~~	~~(10)~~
~~Comanche Unit 3 outage~~ ~~(c)~~	~~(9)~~

Other, net	12
Total increase	$	2254

(a)Sales excludes weather impact, net of ~~decoupling in Colorado.~~

~~(b)Includes $11 million of trading margin recognized in the first quarter of 2021, driven by market changes associated with Winter Storm Uri.~~

~~(c)See Other section for further information.~~decoupling.

Natural Gas Margin

Natural gas margin is presented as natural gas revenues less the cost of natural gas sold and transported. Expenses incurred for the cost of natural gas sold are generally recovered through various regulatory recovery mechanisms. As a result, changes in these expenses are generally offset in operating revenues.

Natural gas ~~expense varies with changing sales and the cost of natural gas. However, fluctuations in the~~revenues, cost of natural gas ~~generally have minimal earnings impact due to cost recovery mechanisms.~~sold and transported and natural gas margin and explanation of the changes are listed as follows:

~~Natural Gas Revenues, Cost of Natural Gas Sold and Transported and Natural Gas Margin~~

Three Months Ended March 31
(Millions of Dollars) 2022 2021
Natural gas revenues $ 578 $ 415
Cost of natural gas sold and transported (329) (170)
Natural gas margin $ 249 $ 245

~~Changes:~~


	Three Months Ended March 31
(Millions of Dollars)	2023		2022
Natural gas revenues	$	811	$	578
Cost of natural gas sold and transported	(501)		(329)
Natural gas margin	$	310	$	249


(Millions of Dollars)	Three Months Ended March 31, ~~2022~~2023 vs. ~~2021~~2022
~~Gas sales and transport (excluding weather impact)~~Regulatory rate outcomes	$	347
Estimated impact of weather	18
Other, net	1 (4)
Total increase	$	461

Non-Fuel Operating Expenses and Other Items

O&M Expenses — O&M costs increased $9$14 million ~~primarily~~year-to-date. The increase is due to ~~additional investments in technology and customer programs,~~timing of regulatory recovery mechanisms, emergent maintenance at generation facilities, higher ~~regulatory fees and~~ ~~and additional~~ bad debt ~~expenses (primarily attributable to higher billings and/or increased commodity prices), partially offset by a reduction in employee benefit costs.~~expense and the impact of inflationary pressures, including labor increases.

Depreciation and Amortization — Depreciation and amortization expense increased ~~$10~~$35 million ~~for the first quarter.~~year-to-date. The increase was primarily due to normal system expansion and new electric and natural gas depreciation rates.

Interest Charges — Interest charges increased $13 million year-to-date, largely due to higher interest rates and increased long-term debt levels to fund capital investments.

Income Taxes — Income tax expense ~~decreased $2~~increased $8 million for the first ~~quarter. The decrease was~~quarter, primarily driven by ~~an increase in wind PTCs. Wind PTCs are credited to customers (recorded as a reduction to revenue) and do not have a material impact on net income. This was partially offset by~~ higher pretax ~~earnings in 2022.~~earnings.

In April 2022, the Internal Revenue Service published inflation factors used to determine the PTC rate. As a result, the 2022 PTC rate on the sale of electricity produced from wind is 2.7 cents per kilowatt hour, compared to 2.5 cents for 2021.

See Note 6 to the consolidated financial statements.


Public Utility Regulation and Other

The FERC and state and local regulatory commissions regulate PSCo. PSCo is subject to rate regulation by state utility regulatory agencies, which have jurisdiction with respect to the rates of electric and natural gas distribution companies in Colorado.

Rates are designed to recover plant investment, operating costs and an allowed return on investment. PSCo requests changes in utility rates through commission filings. Changes in operating costs can affect PSCo’s financial results, depending on the timing of rate cases and implementation of final rates. Other factors affecting rate filings are new investments, sales, conservation and demand side management efforts, and the cost of capital.

In addition, the regulatory commissions authorize the ROE, capital structure and depreciation rates in rate proceedings. Decisions by these regulators can significantly impact PSCo’s results of operations.

Except to the extent noted below, the circumstances set forth in Public Utility Regulation included in Item 7 of PSCo’s Annual Report on Form 10-K for the year ended Dec. 31, ~~2021,~~2022, appropriately represent, in all material respects, the current status of public utility regulation and are incorporated herein by reference.

Pending and Recently Concluded Regulatory Proceedings

Colorado ~~Natural Gas~~Electric Rate Case —In ~~January~~November 2022, PSCo filed ~~a request with the CPUC~~an electric rate case seeking a net increase ~~to retail natural gas rates~~ of ~~$107 million.~~$262 million, or 8.2%. The total ~~change to base rates is $215~~request reflects a $312 million increase, which ~~reflects the transfer~~includes $50 million of ~~$108 million previously~~authorized costs currently recovered ~~from customers~~ through ~~the PSIA rider.~~various rider mechanisms. The request is based on a 10.25% ROE, an equity ratio of ~~55.66%~~55.7% and a ~~2022 current~~2023 forecast test year with a ~~projected~~2023 year-end rate base of ~~$3.6~~$11.3 billion. PSCo ~~has~~ requested ~~a proposed~~rates effective ~~date of Nov. 1, 2022.~~in September 2023.

~~Additionally, PSCo’s request includes step revenue increases of $40 million (effective Nov. 1, 2023) and $41 million (effective Nov. 1, 2024) related to continued capital investment.~~


~~Revenue Request (millions of dollars)~~	~~2022~~
~~Changes since 2020 rate case:~~
~~Plant related investments~~ ~~(a)~~	$	~~210~~
~~Operations and maintenance, amortization and other expenses~~	11
~~Property tax expense~~	11
~~Sales growth~~	~~(17)~~
~~Net increase to revenue~~	~~215~~
~~Previously authorized costs:~~
~~Transfer of costs previously recovered through the PSIA rider~~	~~(108)~~
~~Total base revenue request~~	$	~~107~~

~~Projected 2022 year-end rate base (billions of dollars)~~	$	~~3.6~~

~~(a)~~ ~~Includes approximately $28 million as a result of the increase in ROE from 9.2% to 10.25%.~~

~~Table of Contents~~

Next steps in the procedural schedule are expected to be as follows:

•~~Intervenor testimony: June 15, 2022.~~Answer testimony May 3, 2023.

•Rebuttal testimony: ~~July 13, 2022.~~May 31, 2023.

•~~Settlement: Aug. 3, 2022.~~Settlement deadline: June 14, 2023.

•~~Evidentiary hearings: Aug. 17-23, 2022.~~Hearing: July 6-21, 2023.

•Statement of position: ~~Sept. 21, 2022.~~Aug. 10, 2023.

A CPUC decision is expected in the third quarter of 2023.

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Colorado ~~Electric Rate Request~~Resource Plan — In July 2021, PSCo filed a request with the CPUC seeking a net electric rate increase of $343 million (or 12.4%). The total request reflects a $470 million increase, which includes $127 million of previously authorized costs currently recovered through various rider mechanisms. The request was based on a 10.0% ROE, an equity ratio of 55.64%, a 2022 forecast test year, a rate base of $10.3 billion and impacts of a new depreciation study.

~~In March~~August 2022, the CPUC approved an ~~unopposed~~updated settlement, ~~without modification. Rates became effective April 1, 2022. Key settlement terms include:~~

•~~A net electric rate increase of $177 million. The total change in base rates is $299 million, which includes $122 million of revenue previously collected through various rider mechanisms.~~

•~~A ROE of 9.3% and an equity ratio of 55.69%.~~

•~~A current 2021 test year (average rate base) with the transfer of Cheyenne Ridge, the Wildfire Mitigation Plan and Advanced Grid Intelligence and Security investments at year-end rate base.~~

•~~Approval of all of PSCo’s proposed depreciation adjustments.~~

•~~Continuation of the property tax, qualified pension, and non-qualified pension trackers.~~

•~~Continuation of Advanced Grid Intelligence and Security deferral including interest equivalent to PSCo's weighted average cost of capital once the balance exceeds $50 million.~~

•~~Continuation of the Wildfire Mitigation Plan deferral, with a debt return.~~

~~Power Pathway Settlement~~— ~~In February 2022, the CPUC approved the CPCN for the Pathway Project. Key decisions include:~~

•~~The CPUC approved PSCo’s cost estimate of $1.7 billion and recovery through the transmission rider.~~

•The CPUC modified the Performance Incentive Mechanism proposed in the settlement agreement, which focused on cost controls, to add a separate mechanism to further incentivize timely delivery of the Pathway Project segments. Key details of the Perfo~~rmance Incentive Mechanisms are pending the CPUC’s written decision.~~

•~~The CPUC granted a conditional CPCN approval for the 345 kilovolt May Valley-Longhorn line extension, pending the level of renewables being added in that region through PSCo’s resource plan. The initial cost estimate for the extension is approximately $250 million.~~

~~Resource Plan Settlement— In April 2022, PSCo and multiple intervenors filed a revised settlement of the resource plan,~~ which will result in the further acceleration of the retirement of the Comanche Unit 3 coal plant, an expected carbon reduction of at least 85% and an 80% renewable mix by 2030. AThe CPUC deferred a decision ~~is expected in~~on the ~~second quarter~~method of ~~2022. Key settlement terms include:~~

•~~Early retirement~~cost recovery for the retiring coal units to a separate docket, which will consider accelerated depreciation, creation of ~~Hayden: Unit 2 in 2027 (was 2036);~~regulatory assets and ~~Unit 1 in 2028 (was 2030).~~

•~~Conversion of the Pawnee coal plant to natural gas by no later than Jan. 1, 2026.~~

•~~Early retirement of Comanche Unit 3 by Jan. 1, 2031 with reduced operations beginning in 2025.~~

•~~Addition of ~2,400 MW of wind.~~

•~~Addition of ~1,600 MW of universal-scale solar.~~

•~~Addition of 400 MW of storage.~~

•~~Addition of 1,300 MW of flexible, dispatchable generation.~~

•~~Addition of ~1,200 MW of distributed solar resources through our renewable energy programs~~

~~Partial Settlement —~~ securitization. In ~~October~~ ~~2021,~~April 2023, PSCo filed a ~~comprehensive~~coal cost recovery settlement with the CPUC ~~Staff and the Colorado Energy Office, which proposed to address four outstanding~~that includes regulatory ~~items, including~~asset recovery of ~~fuel costs related to Winter Storm Uri, disputed revenue associated with~~ the ~~2020 electric decoupling pilot program year, replacement power costs associated with an extended outage~~remaining plant balances at retirement and a potential bundled securitization of the remaining coal plant book values including Comanche Unit 3 ~~during 2020 and deferred customer bad debt balances associated~~in 2031.

In December 2022, PSCo commenced the RFP process for generation resources with ~~COVID-19. The Utility Consumer Advocate has not signed~~bids due in March 2023. After reviewing the ~~settlement. A hearing~~bids received, PSCo will file a report with the CPUC with recommended resource acquisitions and a CPUC decision on the ~~settlement~~resources to be acquired is expected in ~~the second quarter of 2022.~~

~~Key settlement terms include:~~

•PSCo would fully recover Winter Storm Uri deferred net natural gas, fuel and purchased energy costs of $263 million (electric utility) and $287 million (natural gas utility) over a 24-month and 30-month period, respectively, with no carrying charges through a rider mechanism. Recovery will likely commence in Q2 2022 for electric costs and April 1, 2022 for natural gas costs.

•~~PSCo will refund electric customers $41 million (previously deferred) related to the 2020 electric decoupling pilot program.~~

•PSCo agreed to forego recovery of $14 million for replacement power costs due to an extended outage at Comanche Unit 3 during 2020 (approved by the CPUC in February 2022 as part of the 2020 retail electric commodity adjustment settlement agreement).

•PSCo also agreed to not seek recovery of COVID-19 related bad debt expense, previously deferred as a regulatory asset, and recorded an additional $11 million of incremental bad debt expense for the period ended Dec. 31, 2021.November 2023.

Decoupling Filing — PSCo has a decoupling program, effective April 1, 2020 through Dec. 31, 2023. The program applies to Residential and metered small C&I customers who do not pay a demand charge. The program includes a refund and surcharge cap not to exceed 3% of forecasted base rate revenue for a specified period.

~~As of March 31, 2022, PSCo has recognized a refund for Residential customers and a surcharge for C&I customers based on 2020, 2021 and the first quarter of 2022 results.~~

In October 2021, a settlement was reached on Winter Storm Uri costs and also addressed certain components of ~~decoupling. See Partial Settlement disclosure above.~~

the 2020 decoupling refunds.

In April 2022, PSCo made its annual filing on this matter. In December 2022, the ALJ approved a settlement between PSCo, CPUC Staff and the UCA. In the first quarter of 2023, PSCo filed a petition for CPUC declaratory judgment to address the treatment of any expired balance under the 3% soft cap provisions. A decision is pending.

17As of March 31, 2023, PSCo has recognized a refund for Residential customers and a surcharge for small C&I customers based on 2020, 2021, 2022 and the first quarter of 2023 results.

~~Table of Contents~~

~~Comanche Unit 3~~Transmission Cost Adjustment — In ~~October 2021, a comprehensive settlement was reached, which addressed treatment~~December 2022, the CPUC suspended PSCo’s request for 2023 TCA rate changes. The CPUC Staff protested the TCA on the grounds that only projects resulting in new transmission should be included and no repair or replacement of ~~2020 Comanche Unit 3 replacement power costs. See Partial Settlement disclosure above and Note 9 accompanying~~existing infrastructure should be included. The CPUC consolidated the ~~consolidated financial statements~~matter with the pending electric rate case for ~~further information.~~assessment.

~~2019 Electric Rate Case Appeal~~ECA Fuel Recovery — — In ~~August 2020,~~December 2022, PSCo filed ~~an appeal with the Denver District Court seeking a review~~its first quarter 2023 ECA Advice Letter, which sought to recover $123 million of ~~CPUC decisions on gains and losses on sales~~under-recovered 2022 fuel costs over two quarters (instead of ~~assets, oil and gas royalty revenues, Board of Directors equity compensation and a true-up surcharge to collect the difference between rates from February through August 2020.~~ one quarter, as more typical). In ~~January~~December 2022, the ~~Denver District Court issued its decision~~CPUC found that the ~~CPUC’s approach~~$123 million should be removed from the proposed ECA rates, and required PSCo to ~~gains~~file a separate application to recover these costs.

In February 2023, PSCo submitted an interim ECA filing which included $70 million of the 2022 under-recovered costs and ~~losses~~collections commenced on ~~certain sales~~March 1, 2023. The remaining $53 million of ~~assets was legally erroneous~~under-recovered costs consists of $25 million of ordinary fuel and ~~confiscatory~~purchased energy costs and $28 million costs attributable to coal curtailments resulting from rail transportation labor shortages. PSCo expects to make filings in the second quarter regarding the prudence of costs associated with coal curtailments, and ~~set aside~~to request that recovery of the remaining $25 million of ordinary fuel and ~~remanded~~purchased energy costs commence in the ~~issue for further consideration. PSCo anticipates filing a Motion for Decision in Q2 2022.~~third quarter.

GCA NOPR — In June 2021, the CPUC issued a NOPR addressing the recovery of costs through the GCA. The CPUC has ~~reopened the GCA NOPR matter and~~ proposed a ~~2 step~~2-step process aimed at 1) considering near term process changes to the GCA ~~used by various utilities to be filed no later than July 1, 2022~~ and 2) a ~~longer term~~longer-term process to evaluate potential performance incentive structures. In step 1, consensus proposed rule amendments to update the process and filing requirements for GCA ~~structures~~and related filings have been submitted to ~~be filed no later than Nov. 1, 2022.~~the CPUC for consideration. PSCo worked with other utilities and stakeholders regarding consensus proposed rule amendments for step 2, including a provision that each LDC bring forward its own PIM in a future filing. In December 2022, the CPUC approved the consensus proposal. PSCo expects to file its proposed PIM in the second quarter of 2023.

In February 2023, the Governor of Colorado issued an open letter to the CPUC, utilities and other stakeholders directing agencies to take additional steps to address energy costs. It is likely this request will result in the opening of additional dockets to further explore the GCA and other related mechanisms. Additionally, the Colorado Legislature formed a Joint Select Committee to investigate the source of rising utility rates and explore potential actions to prevent future price instability. Legislation has been introduced by members of the Joint Select Committee on a number of topics including natural gas and electric fuel incentive mechanisms, natural gas planning rules, regulatory filing requirements, and non-recovery of certain expenses (e.g., certain organizational or membership dues, tax penalties or fines).

Natural Gas Planning — In the first quarter of 2023, final rules were issued to implement recent state legislation requiring natural gas utilities to develop clean heat plans to meet state greenhouse gas emission reduction targets, as well as updated demand-side management criteria. Additionally, the rules included new comprehensive natural gas infrastructure planning requirements and Certificate of Public Convenience and Necessity application procedures, changes in natural gas line extension policy, and details on emission accounting related to clean heat plans.

Real-Time Energy Imbalance Market — In April 2023, PSCo joined the SPP Western Energy Imbalance Service market which balances generation and load regionally and in real time for participants in the Western Interconnection. PSCo’s participation in the SPP Western Energy Imbalance Service market replaces its joint dispatch agreement while extending the geographic area for which energy sales are made.

Other

Supply Chain

PSCo’s ability to meet customer energy requirements, respond to storm-related disruptions and execute our capital expenditure program are dependent on maintaining an efficient supply chain. Manufacturing processes have experienced disruptions related to scarcity of certain raw materials and interruptions in production and shipping. These disruptions have been further exacerbated by inflationary pressures, labor shortages and the impact of international conflicts/issues. PSCo continues to monitor the situation as it remains fluid and seeks to mitigate the impacts by securing alternative suppliers, modifying design standards, and adjusting the timing of work.

Electric Meters and Transformers

Supply chain issues associated with semi-conductors have delayed the availability of ~~materials~~advanced infrastructure meters, which led to a reduced number of meters deployed in 2022. While we have seen improvements in the 2023 deployment plan, the supply chain challenges persist. Full 2023 impacts and mitigation plans are currently being evaluated.

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Additionally, the availability of certain transformers is an industry-wide issue that has ~~sought~~significantly impacted and in some cases may result in delays in projects and new customer connections. Proposed governmental actions related to transformer efficiency standards may compound these delays in the future. PSCo continues to seek alternative suppliers and prioritize work plans to mitigate impacts ~~by seeking alternative suppliers as necessary.~~of supply constraints.

Solar Resources

In April 2022, the U.S. Department of Commerce initiated an anti-circumvention investigation that would subject CSPV solar panels and cells imported from Malaysia, Vietnam, Thailand, and Cambodia with potential incremental tariffs ranging from 50% to 250%. These countries account for more than 80% of CSPV panel imports.

~~The uncertainty~~An interim stay on tariffs has been issued and many significant solar projects have resumed with modified costs and projected in-service dates, including certain PPAs in PSCo. Further policy action, a change in the interim stay of tariffs, or other restrictions on solar imports (i.e., as a result of implementation of the ~~investigation~~Uyghur Forced Labor Protection Act) could impact project timelines and ~~the adverse impact on potential tariffs has resulted in the cancellation or delay of certain domestic solar projects.~~

PSCo has several solar PPAs scheduled to go into service in late 2022 and early 2023. Some developers have indicated difficulty delivering the projects at the contract price and at the scheduled in-service date. Negotiations on a potential solution are on~~-going. PSCo is developing contingency plans in the event that the PPAs are not completed in time to meet the capacity needs of the 2023 summer season.~~costs.

Marshall Wildfire

In December 2021, a wildfire ignited in Boulder County, Colorado (the “Marshall Fire”), which burned over 6,000 acres and destroyed or damaged over 1,000 structures. Boulder County authorities are currently investigating the fire and have not yet determined a cause. There were no downed power lines in the ignition area, and nothing ~~the Company~~PSCo has seen to this point indicates that our equipment or operations caused the fire.

In Colorado, the standard of review governing liability differs from the “inverse condemnation” or strict liability standard utilized in California. In Colorado, courts look to whether electric power companies have operated their system with a heightened duty of care consistent with the practical conduct of its business, and liability does not extend to occurrences that cannot be reasonably anticipated. In addition, PSCo has been operating under a commission approved wildfire mitigation plan and carries wildfire liability insurance.

OnIn March ~~31,~~ 2022, a class action suit was filed in Boulder County pertaining to the Marshall Fire. In the remote event PSCo was found liable related to this litigation and were required to pay damages, such amounts could exceed our insurance coverage and have a material adverse effect on our financial condition, results of operations or cash flows.

~~Comanche Unit 3 Outage~~

In ~~January~~December 2022, ~~PSCo experienced an extended outage at~~ the ~~Comanche Unit 3 plant (750 MW, coal-fueled electric generating unit).PSCo will not seek recovery of any incremental replacement power costs, which are estimated~~District Court judge denied PSCo’s Motion to ~~be approximately $25 million, assuming normal weather, current market pricing and remediation in June 2022. Incremental replacement power costs incurred as of March 31, 2022 were $9 million.~~

~~Winter Storm Uri~~

~~In February 2021,~~Dismiss. An evidentiary hearing regarding our request to dismiss Xcel Energy, Inc. from the United States experienced Winter Storm Uri. Extreme cold temperatures impacted certain operational assets as well as the availability of renewable generation. The cold weather also affected the country’s supply and demandsuit is scheduled for natural gas. These factors contributed to extremely high market prices for natural gas and electricity. As a result of the extremely high market prices, PSCo incurred net natural gas, fuel and purchased energy costs of approximately $610 million (largely deferred as regulatory assets).

~~PSCo~~has natural gas, fuel and purchased energy mechanisms in each jurisdiction for recovering incurred costs. However, the utility subsidiaries have deferred February 2021 cost increases for future recovery and sought recovery of the cost increases over a period of up to 63 months to mitigate the impact to customer bills. Additionally, we did not request recovery of financing costs in order to further limit the impact to our customers.

~~Regulatory Overview~~—In May 2021, PSCo filed a request with the CPUC to recover $263 million in weather-related electric costs, $287 million in incremental natural gas costs and $4 million in incremental steam costs over 24 months with no financing charge.

In October, a partial settlement was reached with the Staff and the Colorado Energy Office, allowing full recovery of Winter Storm Uri deferred costs of $263 million (electric utility) and $287 million (natural gas utility) over a 24-month and 30-month period, respectively, with no carrying charges. A CPUC decision on the settlement is pending.

~~The statutory date for decision is July 15, 2022. In addition, the CPUC is considering prospective changes in fuel cost recovery.~~

2023.

~~Table of Contents~~

Environmental

~~Affordable~~ Clean ~~Energy~~Air Act

~~In July 2019,~~GHG Emissions Limits — It is anticipated the EPA ~~adopted the Affordable~~will propose rules to limit GHG emissions from new fossil fuel-fired electric generating units and natural gas-fired stationary combustion units under Clean ~~Energy rule, which requires states~~Air Act Section 111(b) as well as emission guidelines under Clean Air Act Section 111(d) to ~~develop plans by 2022 for greenhouse gas reductions~~limit GHG emissions from coal-fired power plants. In January 2021, the U.S. Court of Appeals for the D.C. Circuit issued a decision vacating and remanding the Affordable Clean Energy rule. That decision would allow the EPA to proceed with alternate regulation of coal-fired power plants. However, the Court of Appeals decision has been appealed to the U.S Supreme Court, where the Court heard argumentexisting fossil fuel-fired electric generating units in ~~February and is expected to rule by June on the nature and extent of the EPA’s greenhouse gas regulatory authority.~~ 2023.

If any new rules require additional investment, PSCo believes that the cost of these initiatives or replacement generation would be recoverable through rates based on prior state commission practices.

Coal Ash Regulation

In February 2023, the EPA entered into a Consent Decree committing the agency to either issue new proposed rules by May 5, 2023, to regulate inactive CCR landfills under the CCR Rule for the first time or to determine no such rules are necessary by that date.

If proposed rules are issued, the EPA has committed to a May 2024 effective date for those new rules. It is also anticipated that the EPA may issue other CCR proposed rules in 2023 that further expand the scope of the CCR Rule. Until proposed rules are issued, it is not certain what the impact will be on PSCo.

Emerging Contaminants of Concern

PFAS are man-made chemicals that are widely used in consumer products and can persist and bio-accumulate in the environment. PSCo does not manufacture PFAS but because PFAS are so ubiquitous in products and the environment, it may impact our operations.

In September 2022, the EPA proposed to designate two types of PFAS as “hazardous substances” under the CERCLA.

In March 2023, the EPA published a proposed rule that would establish enforceable drinking water standards for certain PFAS chemicals.

The proposed rules could result in new obligations for investigation and cleanup. PSCo is monitoring changes to state laws addressing PFAS. The impact of these proposed regulations is uncertain.

Effluent Limitation Guidelines

In March 2023, the EPA released a proposed rule under the Clean Water Act, setting forth proposed Effluent Limitations Guidelines and Standards for steam generating coal plants. This proposed rule establishes more stringent wastewater discharge standards for bottom ash transport water, flue-gas desulfurization wastewater, and combustion residuals leachate from steam electric power plants, particularly coal-fired power plants. Comments to the proposed regulations are due May 30, 2023. The impact of these proposed regulations is uncertain.


ITEM 4 — CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

PSCo maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms.

In addition, the disclosure controls and procedures ensure that information required to be disclosed is accumulated and communicated to management, including the CEO and CFO, allowing timely decisions regarding required disclosure.

As of March 31, ~~2022,~~2023, based on an evaluation carried out under the supervision and with the participation of PSCo’s management, including the CEO and CFO, of the effectiveness of its disclosure controls and procedures, the CEO and CFO have concluded that PSCo’s disclosure controls and procedures were effective.

Internal Control Over Financial Reporting

No changes in PSCo’s internal control over financial reporting occurred during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, PSCo’s internal control over financial reporting.

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PART II — OTHER INFORMATION


ITEM 1 — LEGAL PROCEEDINGS

Management is sometimes unable to estimate an amount or range of a reasonably possible loss in certain situations, including but not limited to, when (1) the damages sought are indeterminate, (2) the proceedings are in the early stages, or (3) the matters involve novel or unsettled legal theories. In such cases, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss.

For current proceedings not specifically reported herein, management does not anticipate that the ultimate liabilities, if any, would have a material effect on PSCo’s consolidated financial statements. Legal fees are generally expensed as incurred.

See Note 9 to the consolidated financial statements and Part I Item 2 for further information.


ITEM 1A — RISK FACTORS

PSCo’s risk factors are documented in Item 1A of Part I of its Annual Report on Form 10-K for the year ended Dec. 31, ~~2021,~~2022, which is incorporated herein by reference. There have been no material changes from the risk factors previously disclosed in the Form 10-K.


ITEM 6 — EXHIBITS

* Indicates incorporation by reference


Exhibit Number	Description	Report or Registration Statement	Exhibit Reference
3.01*	Amended and Restated Articles of Incorporation, dated July 15, 1998	PSCo Form 10-Q for the quarter ended Sept. 30, 2017	3.01
3.02*	Amended and Restated Bylaws of PSCo, dated Jan. 25, 2019	PSCo Form 10-K for the year ended Dec. 31, 2018	3.02
4.01*	Supplemental Indenture No. 34 dated as of March 1, 2023, between PSCo and U.S. Bank Trust Company, National Association, as successor Trustee, creating $850 million aggregate principal amount of 5.25% First Mortgage Bonds, Series No. 40 due April 1, 2053	PSCo Form 8-K dated April 3, 2023	4.01
31.01	Principal Executive Officer’s certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.02	Principal Financial Officer’s certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.01	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Schema
101.CAL	Inline XBRL Calculation
101.DEF	Inline XBRL Definition
101.LAB	Inline XBRL Label
101.PRE	Inline XBRL Presentation
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Public Service Company of Colorado

4/~~28/2022~~27/2023	By:	/s/ BRIAN J. VAN ABEL
		Brian J. Van Abel
		Executive Vice President, Chief Financial Officer
		(~~Duly Authorized~~Principal Accounting Officer and Principal Financial Officer)


	Pre-Tax (Gains) Losses Reclassified into Income During the Period from:					Pre-Tax Gains (Losses) Recognized During the Period in Income
(Millions of Dollars)	Accumulated Other Comprehensive Loss		Regulatory Assets and (Liabilities)
Three Months Ended March 31, 2022
Other derivative instruments

Natural gas commodity	$	—	$	2	(b)	$	(11)	(b)(c)
Total	$	—	$	2		$	(11)