QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
001-3034 | 75-0575400 | |
(Commission File Number) | (I.R.S. Employer Identification No.) |
(Registrant, State of Incorporation or Organization, Address of Principal Executive Officers and Telephone Number) | |||
Southwestern Public Service Company | |||
New Mexico |
790 South Buchanan Street |
Texas | 79101 |
303 | 571-7511 |
Title of each class | ||||
N/A | ||||
Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | ||
Non-accelerated Filer | ☒ | Smaller Reporting Company | ☐ | ||
Emerging growth company | ☐ |
Class | ||
Common Stock, | 100 shares |
PART I — FINANCIAL INFORMATION | |||
Item l — | |||
Item 2 — | |||
Item 4 — | |||
PART II — OTHER INFORMATION | |||
Item 1 — | |||
Item 1A — | |||
Item 6 — | |||
Certifications Pursuant to Section 302 | |||
Certifications Pursuant to Section 906 | |||
Xcel Energy Inc.’s Subsidiaries and Affiliates (current and former) | |
NSP-Minnesota | Northern States Power Company, a Minnesota corporation |
NSP-Wisconsin | Northern States Power Company, a Wisconsin corporation |
PSCo | Public Service Company of Colorado |
SPS | Southwestern Public Service Company |
Utility subsidiaries | NSP-Minnesota, NSP-Wisconsin, PSCo and SPS |
Xcel Energy | Xcel Energy Inc. and its subsidiaries |
Federal and State Regulatory Agencies | |
D.C. Circuit | United States Court of Appeals for the District of Columbia Circuit |
EPA | Environmental Protection Agency |
FERC | Federal Energy Regulatory Commission |
IRS | Internal Revenue Service |
NERC | North American Electric Reliability Corporation |
NMPRC | New Mexico Public Regulation Commission |
NMSC | New Mexico Supreme Court |
PUCT | Public Utility Commission of Texas |
SEC | Securities and Exchange Commission |
Electric and Resource Adjustment Clauses | |
DSM | Demand side management |
TCRF | Transmission cost recovery factor (recovers transmission infrastructure improvement costs and changes in wholesale transmission charges) |
Other Terms and Abbreviations | |
ACE | Affordable Clean Energy |
ADIT | Accumulated deferred income tax |
AFUDC | Allowance for funds used during construction |
ALJ | Administrative Law Judge |
ASC | FASB Accounting Standards Codification |
ASU | FASB Accounting Standards Update |
ATRR | Annual transmission revenue requirement |
C&I | Commercial and Industrial |
ETR | Effective tax rate |
FASB | Financial Accounting Standards Board |
FTR | Financial transmission right |
GAAP | Generally accepted accounting principles |
IPP | Independent power producers |
NAV | Net asset value |
NOL | Net operating loss |
O&M | Operating and maintenance |
OATT | Open access transmission tariff |
PPA | Purchased power agreement |
PTC | Production tax credit |
ROE | Return on equity |
ROU | Right-of-use |
RTO | Regional Transmission Organization |
SPP | Southwest Power Pool, Inc. |
TCJA | 2017 federal tax reform enacted as Public Law No: 115-97, commonly referred to as the Tax Cuts and Jobs Act |
VIE | Variable interest entity |
Measurements | |
MW | Megawatts |
MWh | Megawatt hours |
Three Months Ended Sept. 30 | Nine Months Ended Sept. 30, | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||
Operating revenues | $ | 540,063 | $ | 551,623 | $ | 1,468,633 | $ | 1,491,491 | $ | 410.5 | $ | 481.3 | $ | 864.6 | $ | 928.6 | ||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||||
Electric fuel and purchased power | 284,006 | 294,400 | 795,592 | 816,027 | 179.9 | 257.6 | 410.8 | 511.6 | ||||||||||||||||||||||
Operating and maintenance expenses | 71,444 | 65,540 | 203,660 | 211,101 | 70.1 | 66.1 | 142.5 | 132.2 | ||||||||||||||||||||||
Demand side management expenses | 4,590 | 4,236 | 13,527 | 11,802 | 3.8 | 4.8 | 8.4 | 8.9 | ||||||||||||||||||||||
Depreciation and amortization | 52,204 | 47,548 | 150,199 | 144,781 | 57.8 | 49.6 | 111.0 | 98.0 | ||||||||||||||||||||||
Taxes (other than income taxes) | 16,814 | 16,743 | 50,033 | 50,222 | 17.0 | 15.6 | 35.5 | 33.3 | ||||||||||||||||||||||
Total operating expenses | 429,058 | 428,467 | 1,213,011 | 1,233,933 | 328.6 | 393.7 | 708.2 | 784.0 | ||||||||||||||||||||||
Operating income | 111,005 | 123,156 | 255,622 | 257,558 | 81.9 | 87.6 | 156.4 | 144.6 | ||||||||||||||||||||||
Other expense, net | (1,026 | ) | (464 | ) | (2,512 | ) | (1,795 | ) | ||||||||||||||||||||||
Other income (expense), net | 0.5 | (0.8 | ) | 0.9 | (1.5 | ) | ||||||||||||||||||||||||
Allowance for funds used during construction — equity | 5,019 | 2,453 | 11,637 | 6,457 | 8.7 | 3.2 | 19.0 | 6.6 | ||||||||||||||||||||||
Interest charges and financing costs | ||||||||||||||||||||||||||||||
Interest charges — includes other financing costs of $710, $625, $2,106, and $1,781, respectively | 21,006 | 21,444 | 61,782 | 66,128 | ||||||||||||||||||||||||||
Interest charges — includes other financing costs of $0.8, $0.7, $1.6 and $1.4 respectively | 25.6 | 20.6 | 50.0 | 40.7 | ||||||||||||||||||||||||||
Allowance for funds used during construction — debt | (2,223 | ) | (1,349 | ) | (5,526 | ) | (3,816 | ) | (4.2 | ) | (1.5 | ) | (8.7 | ) | (3.3 | ) | ||||||||||||||
Total interest charges and financing costs | 18,783 | 20,095 | 56,256 | 62,312 | 21.4 | 19.1 | 41.3 | 37.4 | ||||||||||||||||||||||
Income before income taxes | 96,215 | 105,050 | 208,491 | 199,908 | 69.7 | 70.9 | 135.0 | 112.3 | ||||||||||||||||||||||
Income taxes | 14,674 | 37,269 | 35,400 | 71,710 | 10.9 | 12.4 | 22.1 | 20.7 | ||||||||||||||||||||||
Net income | $ | 81,541 | $ | 67,781 | $ | 173,091 | $ | 128,198 | $ | 58.8 | $ | 58.5 | $ | 112.9 | $ | 91.6 |
Three Months Ended Sept. 30, | Nine Months Ended Sept. 30, | Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||
Net income | $ | 81,541 | $ | 67,781 | $ | 173,091 | $ | 128,198 | $ | 58.8 | $ | 58.5 | $ | 112.9 | $ | 91.6 | ||||||||||||||||
Other comprehensive income | ||||||||||||||||||||||||||||||||
Pension and retiree medical benefits: | ||||||||||||||||||||||||||||||||
Amortization of losses included in net periodic benefit cost, net of tax of $5, $9, $15 and $27, respectively | 18 | 16 | 55 | 46 | ||||||||||||||||||||||||||||
Derivative instruments: | ||||||||||||||||||||||||||||||||
Reclassification of losses to net income, net of tax of $0 | 0.1 | — | 0.1 | — | ||||||||||||||||||||||||||||
Derivative instruments: | ||||||||||||||||||||||||||||||||
Reclassification of losses to net income, net of tax of $3, $6, $10 and $18, respectively | 13 | 10 | 37 | 29 | ||||||||||||||||||||||||||||
Other comprehensive income | 31 | 26 | 92 | 75 | 0.1 | — | 0.1 | — | ||||||||||||||||||||||||
Comprehensive income | $ | 81,572 | $ | 67,807 | $ | 173,183 | $ | 128,273 | $ | 58.9 | $ | 58.5 | $ | 113.0 | $ | 91.6 |
Nine Months Ended Sept. 30, | Six Months Ended June 30, | |||||||||||||
2018 | 2017 | 2019 | 2018 | |||||||||||
Operating activities | ||||||||||||||
Net income | $ | 173,091 | $ | 128,198 | $ | 112.9 | $ | 91.6 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | 150,403 | 144,664 | 112.1 | 98.1 | ||||||||||
Demand side management program amortization | 1,255 | 1,255 | — | 0.8 | ||||||||||
Deferred income taxes | 14,395 | 101,388 | 3.3 | (2.3 | ) | |||||||||
Amortization of investment tax credits | (39 | ) | (99 | ) | ||||||||||
Allowance for equity funds used during construction | (11,637 | ) | (6,457 | ) | (19.0 | ) | (6.6 | ) | ||||||
Net derivative losses | 47 | 47 | ||||||||||||
Other, net | (5 | ) | 9 | |||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accounts receivable | (25,096 | ) | (25,134 | ) | (1.3 | ) | (25.3 | ) | ||||||
Accrued unbilled revenues | 9,648 | (13,682 | ) | (11.3 | ) | 2.3 | ||||||||
Inventories | 7,032 | (2,845 | ) | (9.9 | ) | 7.9 | ||||||||
Prepayments and other | 641 | 19,361 | 5.2 | 0.7 | ||||||||||
Accounts payable | (935 | ) | 7,817 | (24.5 | ) | 0.6 | ||||||||
Net regulatory assets and liabilities | 58,832 | 24,856 | 37.0 | 46.2 | ||||||||||
Other current liabilities | 12,972 | 19,748 | 1.1 | 13.9 | ||||||||||
Pension and other employee benefit obligations | (7,907 | ) | (21,638 | ) | (16.3 | ) | (7.9 | ) | ||||||
Other, net | 0.5 | — | ||||||||||||
Change in other noncurrent assets | 3,546 | (1,697 | ) | (0.3 | ) | 4.4 | ||||||||
Change in other noncurrent liabilities | (235 | ) | (18,690 | ) | 0.5 | (0.5 | ) | |||||||
Net cash provided by operating activities | 386,008 | 357,101 | 190.0 | 223.9 | ||||||||||
Investing activities | ||||||||||||||
Utility capital/construction expenditures | (621,641 | ) | (400,957 | ) | (364.2 | ) | (471.7 | ) | ||||||
Allowance for equity funds used during construction | 11,637 | 6,457 | ||||||||||||
Investments in utility money pool arrangement | (46,000 | ) | — | (100.0 | ) | (46.0 | ) | |||||||
Repayments from utility money pool arrangement | 111,000 | — | — | 111.0 | ||||||||||
Other, net | — | (493 | ) | |||||||||||
Net cash used in investing activities | (545,004 | ) | (394,993 | ) | (464.2 | ) | (406.7 | ) | ||||||
Financing activities | ||||||||||||||
Proceeds from short-term borrowings, net | 35,000 | (50,000 | ) | |||||||||||
Proceeds from issuance of long-term debt, net | — | 442,651 | ||||||||||||
Proceeds from (repayments of) short-term borrowings, net | (42.0 | ) | 132.0 | |||||||||||
Proceeds from (repayments of) from issuance of long-term debt, net | 292.8 | — | ||||||||||||
Borrowings under utility money pool arrangement | 446,000 | 323,000 | 283.0 | 180.0 | ||||||||||
Repayments under utility money pool arrangement | (423,000 | ) | (323,000 | ) | (283.0 | ) | (80.0 | ) | ||||||
Capital contributions from parent | 181,484 | 45,000 | 378.8 | 0.4 | ||||||||||
Repayment of long-term debt | — | (271,613 | ) | |||||||||||
Dividends paid to parent | (90,705 | ) | (82,599 | ) | (137.7 | ) | (60.1 | ) | ||||||
Other, net | (31 | ) | — | |||||||||||
Net cash provided by financing activities | 148,748 | 83,439 | ||||||||||||
Net cash provided by (used in) financing activities | 491.9 | 172.3 | ||||||||||||
Net change in cash and cash equivalents | (10,248 | ) | 45,547 | 217.7 | (10.5 | ) | ||||||||
Cash and cash equivalents at beginning of period | 10,871 | 844 | 44.0 | 10.9 | ||||||||||
Cash and cash equivalents at end of period | $ | 623 | $ | 46,391 | $ | 261.7 | $ | 0.4 | ||||||
Supplemental disclosure of cash flow information: | ||||||||||||||
Cash paid for interest (net of amounts capitalized) | $ | (57,924 | ) | $ | (58,581 | ) | $ | (39.9 | ) | $ | (36.7 | ) | ||
Cash (paid) received for income taxes, net | (15,251 | ) | 37,899 | |||||||||||
Supplemental disclosure of non-cash investing transactions: | ||||||||||||||
Cash paid for income taxes, net | — | (7.6 | ) | |||||||||||
Supplemental disclosure of non-cash investing and financing transactions: | ||||||||||||||
Property, plant and equipment additions in accounts payable | $ | 54,601 | $ | 40,861 | $ | 68.6 | $ | 43.3 | ||||||
Inventory transfer additions in PPE | 12.6 | 11.2 | ||||||||||||
Operating lease right-of-use assets | 548.3 | — | ||||||||||||
Allowance for equity funds used during construction | 19.0 | 6.6 |
Sept. 30, 2018 | Dec. 31, 2017 | June 30, 2019 | Dec. 31, 2018 | |||||||||||
Assets | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | $ | 623 | $ | 10,871 | $ | 261.7 | $ | 44.0 | ||||||
Accounts receivable, net | 101,870 | 79,581 | 93.3 | 90.7 | ||||||||||
Accounts receivable from affiliates | 4,085 | 1,297 | 5.3 | 10.5 | ||||||||||
Investments in utility money pool arrangement | — | 65,000 | 100.0 | — | ||||||||||
Accrued unbilled revenues | 120,156 | 129,804 | 125.7 | 114.5 | ||||||||||
Inventories | 33,401 | 40,433 | 31.2 | 33.9 | ||||||||||
Regulatory assets | 23,387 | 31,538 | 23.8 | 26.0 | ||||||||||
Derivative instruments | 28,436 | 15,882 | 25.5 | 17.8 | ||||||||||
Prepaid taxes | 15,821 | 15,025 | — | 14.2 | ||||||||||
Prepayments and other | 10,137 | 10,341 | 19.8 | 10.7 | ||||||||||
Total current assets | 337,916 | 399,772 | 686.3 | 362.3 | ||||||||||
Property, plant and equipment, net | 5,539,200 | 5,095,609 | 6,228.5 | 5,946.4 | ||||||||||
Other assets | ||||||||||||||
Regulatory assets | 366,885 | 362,943 | 361.3 | 366.2 | ||||||||||
Derivative instruments | 16,584 | 18,954 | 14.2 | 15.8 | ||||||||||
Operating lease right-of-use assets | 535.5 | — | ||||||||||||
Other | 4,602 | 11,266 | 5.0 | 5.1 | ||||||||||
Total other assets | 388,071 | 393,163 | 916.0 | 387.1 | ||||||||||
Total assets | $ | 6,265,187 | $ | 5,888,544 | $ | 7,830.8 | $ | 6,695.8 | ||||||
Liabilities and Equity | ||||||||||||||
Current liabilities | ||||||||||||||
Short-term debt | $ | 35,000 | $ | — | $ | — | $ | 42.0 | ||||||
Borrowings under utility money pool arrangement | 23,000 | — | ||||||||||||
Accounts payable | 191,874 | 211,756 | 160.4 | 191.8 | ||||||||||
Accounts payable to affiliates | 17,308 | 22,577 | 15.9 | 19.9 | ||||||||||
Regulatory liabilities | 112,585 | 68,835 | 136.9 | 85.8 | ||||||||||
Taxes accrued | 53,453 | 35,243 | 44.6 | 41.6 | ||||||||||
Accrued interest | 20,396 | 23,275 | 25.8 | 25.8 | ||||||||||
Dividends payable | 40,071 | 26,753 | ||||||||||||
Dividends payable to parent | 48.3 | 45.2 | ||||||||||||
Derivative instruments | 3,565 | 3,565 | 3.8 | 3.6 | ||||||||||
Other | 25,548 | 29,641 | 50.8 | 28.3 | ||||||||||
Total current liabilities | 522,800 | 421,645 | 486.5 | 484.0 | ||||||||||
Deferred credits and other liabilities | ||||||||||||||
Deferred income taxes | 601,294 | 574,906 | 634.5 | 619.1 | ||||||||||
Regulatory liabilities | 795,424 | 784,564 | 749.2 | 780.9 | ||||||||||
Asset retirement obligations | 29,664 | 28,524 | 49.3 | 32.4 | ||||||||||
Derivative instruments | 17,275 | 19,949 | 14.6 | 16.4 | ||||||||||
Pension and employee benefit obligations | 82,369 | 90,266 | 76.2 | 92.4 | ||||||||||
Operating lease liabilities | 509.0 | — | ||||||||||||
Other | 4,816 | 8,386 | 8.3 | 7.9 | ||||||||||
Total deferred credits and other liabilities | 1,530,842 | 1,506,595 | 2,041.1 | 1,549.1 | ||||||||||
Commitments and contingencies | ||||||||||||||
Capitalization | ||||||||||||||
Long-term debt | 1,830,796 | 1,829,941 | 2,419.5 | 2,126.1 | ||||||||||
Common stock — 200 shares authorized of $1.00 par value; 100 shares outstanding at Sept. 30, 2018 and Dec. 31, 2017, respectively | — | — | ||||||||||||
Common stock — 200 shares authorized of $1.00 par value; 100 shares outstanding at June 30, 2019 and Dec. 31, 2018, respectively | — | — | ||||||||||||
Additional paid in capital | 1,771,469 | 1,590,242 | 2,307.3 | 1,932.3 | ||||||||||
Retained earnings | 610,655 | 541,588 | 577.7 | 605.7 | ||||||||||
Accumulated other comprehensive loss | (1,375 | ) | (1,467 | ) | (1.3 | ) | (1.4 | ) | ||||||
Total common stockholder’s equity | 2,380,749 | 2,130,363 | 2,883.7 | 2,536.6 | ||||||||||
Total liabilities and equity | $ | 6,265,187 | $ | 5,888,544 | $ | 7,830.8 | $ | 6,695.8 |
SOUTHWESTERN PUBLIC SERVICE COMPANY STATEMENTS OF COMMON STOCKHOLDER’S EQUITY (UNAUDITED) (amounts in millions, except share data) | ||||||||||||||||||||||||||
Common Stock Issued | Retained Earnings | Accumulated Other Comprehensive Loss | Total Common Stockholders’ Equity | |||||||||||||||||||||||
Shares | Par Value | Additional Paid In Capital | ||||||||||||||||||||||||
Three Months Ended June 30, 2019 and 2018 | ||||||||||||||||||||||||||
Balance at March 31, 2018 | 100 | $ | — | $ | 1,590.2 | $ | 541.4 | $ | (1.5 | ) | $ | 2,130.1 | ||||||||||||||
Net income | 58.5 | 58.5 | ||||||||||||||||||||||||
Dividends declared to parent | (30.7 | ) | (30.7 | ) | ||||||||||||||||||||||
Contributions of capital by parent | 1.2 | 1.2 | ||||||||||||||||||||||||
Balance at June 30, 2018 | 100 | $ | — | — | $ | 1,591.4 | — | $ | 569.2 | — | $ | (1.5 | ) | — | $ | 2,159.1 | ||||||||||
Balance at March 31, 2019 | 100 | $ | — | — | $ | 1,932.3 | $ | 602.3 | $ | (1.4 | ) | $ | 2,533.2 | |||||||||||||
Net income | 58.8 | 58.8 | ||||||||||||||||||||||||
Other comprehensive income | 0.1 | 0.1 | ||||||||||||||||||||||||
Dividends declared to parent | (83.4 | ) | (83.4 | ) | ||||||||||||||||||||||
Contributions of capital by parent | 375.0 | 375.0 | ||||||||||||||||||||||||
Balance at June 30, 2019 | 100 | $ | — | $ | 2,307.3 | $ | 577.7 | $ | (1.3 | ) | $ | 2,883.7 | ||||||||||||||
See Notes to Financial Statements |
SOUTHWESTERN PUBLIC SERVICE COMPANY STATEMENTS OF COMMON STOCKHOLDER’S EQUITY (UNAUDITED) (amounts in millions, except share data) | ||||||||||||||||||||||
Common Stock Issued | Retained Earnings | Accumulated Other Comprehensive Loss | Total Common Stockholders’ Equity | |||||||||||||||||||
Shares | Par Value | Additional Paid In Capital | ||||||||||||||||||||
Six Months Ended June 30, 2019 and 2018 | ||||||||||||||||||||||
Balance at Dec. 31, 2017 | 100 | $ | — | $ | 1,590.2 | $ | 541.6 | $ | (1.5 | ) | $ | 2,130.3 | ||||||||||
Net income | 91.6 | 91.6 | ||||||||||||||||||||
Dividends declared to parent | (64.0 | ) | (64.0 | ) | ||||||||||||||||||
Contributions of capital by parent | — | — | 1.2 | 1.2 | ||||||||||||||||||
Balance at June 30, 2018 | 100 | $ | — | $ | 1,591.4 | $ | 569.2 | $ | (1.5 | ) | $ | 2,159.1 | ||||||||||
Balance at Dec. 31, 2018 | 100 | $ | — | $ | 1,932.3 | $ | 605.7 | $ | (1.4 | ) | $ | 2,536.6 | ||||||||||
Net income | 112.9 | 112.9 | ||||||||||||||||||||
Other comprehensive income | 0.1 | 0.1 | ||||||||||||||||||||
Dividends declared to parent | (140.9 | ) | (140.9 | ) | ||||||||||||||||||
Contributions of capital by parent | 375.0 | 375.0 | ||||||||||||||||||||
Balance at June 30, 2019 | 100 | $ | — | $ | 2,307.3 | $ | 577.7 | $ | (1.3 | ) | $ | 2,883.7 | ||||||||||
See Notes to Financial Statements |
1. | Summary of Significant Accounting Policies |
2. | Accounting Pronouncements |
3. | Selected Balance Sheet Data |
(Millions of Dollars) | June 30, 2019 | Dec. 31, 2018 | ||||||
Accounts receivable, net | ||||||||
Accounts receivable | $ | 98.6 | $ | 96.3 | ||||
Less allowance for bad debts | (5.3 | ) | (5.6 | ) | ||||
$ | 93.3 | $ | 90.7 |
(Thousands of Dollars) | Sept. 30, 2018 | Dec. 31, 2017 | ||||||
Accounts receivable, net | ||||||||
Accounts receivable | $ | 107,709 | $ | 85,929 | ||||
Less allowance for bad debts | (5,839 | ) | (6,348 | ) | ||||
$ | 101,870 | $ | 79,581 |
(Millions of Dollars) | June 30, 2019 | Dec. 31, 2018 | ||||||
Inventories | ||||||||
Materials and supplies | $ | 24.3 | $ | 25.7 | ||||
Fuel | 6.9 | 8.2 | ||||||
$ | 31.2 | $ | 33.9 |
(Thousands of Dollars) | Sept. 30, 2018 | Dec. 31, 2017 | ||||||
Inventories | ||||||||
Materials and supplies | $ | 25,380 | $ | 26,218 | ||||
Fuel | 8,021 | 14,215 | ||||||
$ | 33,401 | $ | 40,433 |
(Millions of Dollars) | June 30, 2019 | Dec. 31, 2018 | ||||||
Property, plant and equipment, net | ||||||||
Electric plant | $ | 8,241.0 | $ | 7,227.7 | ||||
Construction work in progress | 207.4 | 847.3 | ||||||
Total property, plant and equipment | 8,448.4 | 8,075.0 | ||||||
Less accumulated depreciation | (2,219.9 | ) | (2,128.6 | ) | ||||
Total | $ | 6,228.5 | $ | 5,946.4 |
(Thousands of Dollars) | Sept. 30, 2018 | Dec. 31, 2017 | ||||||
Property, plant and equipment, net | ||||||||
Electric plant | $ | 7,115,175 | $ | 6,765,371 | ||||
Construction work in progress | 533,538 | 351,875 | ||||||
Total property, plant and equipment | 7,648,713 | 7,117,246 | ||||||
Less accumulated depreciation | (2,109,513 | ) | (2,021,637 | ) | ||||
$ | 5,539,200 | $ | 5,095,609 |
Nine Months Ended Sept. 30, | ||||||
2018 | 2017 | |||||
Federal statutory rate | 21.0 | % | 35.0 | % | ||
State tax (net of federal tax effect) | 2.3 | 2.3 | ||||
Increases (decreases) in tax from: | ||||||
Regulatory differences - ARAM (a) | (4.0 | ) | — | |||
Regulatory differences - ARAM deferral (b) | 1.7 | — | ||||
Regulatory differences - reversal of prior quarters' ARAM deferral (b) | (0.2 | ) | — | |||
Regulatory differences - other utility plant items | (1.3 | ) | (0.8 | ) | ||
Tax credits (net of federal income tax expense) | (0.7 | ) | (0.7 | ) | ||
Other (net) | (1.8 | ) | 0.1 | |||
Effective income tax rate | 17.0 | % | 35.9 | % |
(Millions of Dollars) | Sept. 30, 2018 | Dec. 31, 2017 | ||||||
Unrecognized tax benefit — Permanent tax positions | $ | 2.8 | $ | 2.3 | ||||
Unrecognized tax benefit — Temporary tax positions | 1.6 | 2.0 | ||||||
Total unrecognized tax benefit | $ | 4.4 | $ | 4.3 |
(Millions of Dollars) | Sept. 30, 2018 | Dec. 31, 2017 | ||||||
NOL and tax credit carryforwards | $ | (6.9 | ) | $ | (5.9 | ) |
(Amounts in Millions, Except Interest Rates) | Three Months Ended Sept. 30, 2018 | Year Ended Dec. 31, 2017 | ||||||
Borrowing limit | $ | 100 | $ | 100 | ||||
Amount outstanding at period end | 23 | — | ||||||
Average amount outstanding | 76 | 13 | ||||||
Maximum amount outstanding | 100 | 100 | ||||||
Weighted average interest rate, computed on a daily basis | 1.97 | % | 1.12 | % | ||||
Weighted average interest rate at period end | 1.99 | N/A |
(Amounts in Millions, Except Interest Rates) | Three Months Ended June 30, 2019 | Year Ended Dec. 31, 2018 | ||||||
Borrowing limit | $ | 100 | $ | 100 | ||||
Amount outstanding at period end | — | — | ||||||
Average amount outstanding | 13 | 29 | ||||||
Maximum amount outstanding | 89 | 100 | ||||||
Weighted average interest rate, computed on a daily basis | 2.45 | % | 1.96 | % | ||||
Weighted average interest rate at period end | N/A | N/A |
(Amounts in Millions, Except Interest Rates) | Three Months Ended June 30, 2019 | Year Ended Dec. 31, 2018 | ||||||
Borrowing limit | $ | 500 | $ | 400 | ||||
Amount outstanding at period end | — | 42 | ||||||
Average amount outstanding | 202 | 30 | ||||||
Maximum amount outstanding | 316 | 144 | ||||||
Weighted average interest rate, computed on a daily basis | 2.68 | % | 2.27 | % | ||||
Weighted average interest rate at period end | N/A | 2.80 |
(Amounts in Millions, Except Interest Rates) | Three Months Ended Sept. 30, 2018 | Year Ended Dec. 31, 2017 | ||||||
Borrowing limit | $ | 400 | $ | 400 | ||||
Amount outstanding at period end | 35 | — | ||||||
Average amount outstanding | 63 | 69 | ||||||
Maximum amount outstanding | 144 | 176 | ||||||
Weighted average interest rate, computed on a daily basis | 2.25 | % | 1.13 | % | ||||
Weighted average interest rate at period end | 2.35 | N/A |
Credit Facility (a) | Credit Facility (a) | Drawn (b) | Available | Credit Facility (a) | Outstanding (b) | Available | ||||||||||||||
$ | 400 | $ | 37 | $ | 363 | 500 | $ | 2 | $ | 498 |
(a) | This credit facility expires in June |
(b) | Includes outstanding |
Three Months Ended | ||||||||
(Millions of Dollars) | June 30, 2019 | June 30, 2018 | ||||||
Major revenue types | ||||||||
Revenue from contracts with customers: | ||||||||
Residential | $ | 70.4 | $ | 85.1 | ||||
C&I | 191.4 | 200.8 | ||||||
Other | 9.9 | 11.3 | ||||||
Total retail | 271.7 | 297.2 | ||||||
Wholesale | 72.0 | 115.6 | ||||||
Transmission | 60.0 | 59.0 | ||||||
Other | 0.4 | 2.9 | ||||||
Total revenue from contracts with customers | 404.1 | 474.7 | ||||||
Alternative revenue and other | 6.4 | 6.6 | ||||||
Total revenues | $ | 410.5 | $ | 481.3 |
Six Months Ended | ||||||||
(Millions of Dollars) | June 30, 2019 | June 30, 2018 | ||||||
Major revenue types | ||||||||
Revenue from contracts with customers: | ||||||||
Residential | $ | 158.5 | $ | 165.2 | ||||
C&I | 397.2 | 396.5 | ||||||
Other | 19.5 | 21.0 | ||||||
Total retail | 575.2 | 582.7 | ||||||
Wholesale | 156.8 | 208.9 | ||||||
Transmission | 117.4 | 114.6 | ||||||
Other | 1.4 | 10.4 | ||||||
Total revenue from contracts with customers | 850.8 | 916.6 | ||||||
Alternative revenue and other | 13.8 | 12.0 | ||||||
Total revenues | $ | 864.6 | $ | 928.6 |
Income Taxes |
Six Months Ended June 30, | ||||||
2019 | 2018 | |||||
Federal statutory rate | 21.0 | % | 21.0 | % | ||
State tax (net of federal tax effect) | 2.1 | 2.4 | ||||
Increases (decreases) in tax from: | ||||||
Plant regulatory differences (a) | (4.8 | ) | (4.4 | ) | ||
Prior period adjustments | (0.7 | ) | (0.2 | ) | ||
Other tax credits (net) | (0.6 | ) | (0.8 | ) | ||
Wind PTCs | (0.2 | ) | — | |||
Other (net) | (0.4 | ) | 0.4 | |||
Effective income tax rate | 16.4 | % | 18.4 | % |
(a) | Regulatory differences for income tax primarily relate to the flow back of excess deferred taxes to customers through the average rate assumption method and the impact of AFUDC - Equity. Year-to-date variations primarily relates to the deferral of the flow back of excess deferred taxes in 2018, as a result of pending regulatory decisions. Treatment of most tax reform items was established prior to the first quarter of 2019, resulting in a reduction in deferred amounts. Income tax benefits associated with the flow back of excess deferred credits are offset by corresponding revenue reductions. |
Tax Year(s) | Expiration | |
2009 - 2013 | June 2020 | |
2014 - 2016 | September 2020 | |
2017 | September 2021 |
(Millions of Dollars) | June 30, 2019 | Dec. 31, 2018 | ||||||
Unrecognized tax benefit — Permanent tax positions | $ | 3.3 | $ | 3.0 | ||||
Unrecognized tax benefit — Temporary tax positions | 1.5 | 1.5 | ||||||
Total unrecognized tax benefit | $ | 4.8 | $ | 4.5 |
(Millions of Dollars) | June 30, 2019 | Dec. 31, 2018 | ||||||
NOL and tax credit carryforwards | $ | (4.1 | ) | $ | (3.8 | ) |
7. | Fair Value of Financial Assets and Liabilities |
(Amounts in Thousands) (a) | Sept. 30, 2018 | Dec. 31, 2017 | ||||
Megawatt hours of electricity | 8,594 | 4,251 |
(Amounts in Millions) (a) | June 30, 2019 | Dec. 31, 2018 | ||||
Mwh of electricity | 15.5 | 5.5 |
(a) | Amounts are not reflective of net positions in the underlying commodities. |
Sept. 30, 2018 | June 30, 2019 | Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value Total | Counterparty Netting (b) | Fair Value | Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Thousands of Dollars) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Millions of Dollars) | Level 1 | Level 2 | Level 3 | Fair Value Total | Netting (a) | Total | Level 1 | Level 2 | Level 3 | Fair Value Total | Netting (a) | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current derivative assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other derivative instruments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Electric commodity | $ | — | $ | — | $ | 25,666 | $ | 25,666 | $ | (389 | ) | $ | 25,277 | $ | — | $ | — | $ | 22.7 | $ | 22.7 | $ | (0.3 | ) | $ | 22.4 | $ | — | $ | — | $ | 14.9 | $ | 14.9 | $ | (0.2 | ) | $ | 14.7 | |||||||||||||||||||||||||||||||||
Total current derivative assets | $ | — | $ | — | $ | 25,666 | $ | 25,666 | $ | (389 | ) | 25,277 | $ | — | $ | — | $ | 22.7 | $ | 22.7 | $ | (0.3 | ) | 22.4 | $ | — | $ | — | $ | 14.9 | $ | 14.9 | $ | (0.2 | ) | 14.7 | ||||||||||||||||||||||||||||||||||||
PPAs (a) | 3,159 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PPAs (b) | 3.1 | 3.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current derivative instruments | $ | 28,436 | $ | 25.5 | $ | 17.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncurrent derivative assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PPAs (a) | $ | 16,584 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PPAs (b) | 14.2 | 15.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncurrent derivative instruments | $ | 16,584 | $ | 14.2 | $ | 15.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current derivative liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other derivative instruments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Electric commodity | $ | — | $ | — | $ | 389 | $ | 389 | $ | (389 | ) | $ | — | $ | — | $ | — | $ | 0.5 | $ | 0.5 | $ | (0.3 | ) | $ | 0.2 | $ | — | $ | — | $ | 0.2 | $ | 0.2 | $ | (0.2 | ) | $ | — | |||||||||||||||||||||||||||||||||
Total current derivative liabilities | $ | — | $ | — | $ | 389 | $ | 389 | $ | (389 | ) | — | $ | — | $ | — | $ | 0.5 | $ | 0.5 | $ | (0.3 | ) | 0.2 | $ | — | $ | — | $ | 0.2 | $ | 0.2 | $ | (0.2 | ) | — | ||||||||||||||||||||||||||||||||||||
PPAs (a) | 3,565 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PPAs (b) | 3.6 | . | 3.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current derivative instruments | $ | 3,565 | $ | 3.8 | $ | 3.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncurrent derivative liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PPAs (a) | $ | 17,275 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PPAs (b) | 14.6 | 16.4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncurrent derivative instruments | $ | 17,275 | $ | 14.6 | $ | 16.4 |
(a) |
SPS nets derivative instruments and related collateral in its balance sheet when supported by a legally enforceable master netting agreement, and all derivative instruments and related collateral amounts were subject to master netting agreements at |
Dec. 31, 2017 | ||||||||||||||||||||||||
Fair Value | Fair Value Total | Counterparty Netting (b) | ||||||||||||||||||||||
(Thousands of Dollars) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Current derivative assets | ||||||||||||||||||||||||
Other derivative instruments: | ||||||||||||||||||||||||
Electric commodity | $ | — | $ | — | $ | 14,717 | $ | 14,717 | $ | (1,994 | ) | $ | 12,723 | |||||||||||
Total current derivative assets | $ | — | $ | — | $ | 14,717 | $ | 14,717 | $ | (1,994 | ) | 12,723 | ||||||||||||
PPAs (a) | 3,159 | |||||||||||||||||||||||
Current derivative instruments | $ | 15,882 | ||||||||||||||||||||||
Noncurrent derivative assets | ||||||||||||||||||||||||
PPAs (a) | $ | 18,954 | ||||||||||||||||||||||
Noncurrent derivative instruments | $ | 18,954 | ||||||||||||||||||||||
Current derivative liabilities | ||||||||||||||||||||||||
Other derivative instruments: | ||||||||||||||||||||||||
Electric commodity | $ | — | $ | — | $ | 1,994 | $ | 1,994 | $ | (1,994 | ) | $ | — | |||||||||||
Total current derivative liabilities | $ | — | $ | — | $ | 1,994 | $ | 1,994 | $ | (1,994 | ) | — | ||||||||||||
PPAs (a) | 3,565 | |||||||||||||||||||||||
Current derivative instruments | $ | 3,565 | ||||||||||||||||||||||
Noncurrent derivative liabilities | ||||||||||||||||||||||||
PPAs (a) | $ | 19,949 | ||||||||||||||||||||||
Noncurrent derivative instruments | $ | 19,949 |
During 2006, SPS qualified these contracts under the normal purchase exception. Based on this qualification, the contracts are no longer adjusted to fair value and the previous carrying value of these contracts |
Three Months Ended Sept. 30, | ||||||||
(Thousands of Dollars) | 2018 | 2017 | ||||||
Balance at July 1 | $ | 35,389 | $ | 28,665 | ||||
Purchases | 3,169 | 43 | ||||||
Settlements | (10,068 | ) | (9,939 | ) | ||||
Net transactions recorded during the period: | ||||||||
Net (losses) gains recognized as regulatory assets and liabilities | (3,213 | ) | 1,669 | |||||
Balance at Sept. 30 | $ | 25,277 | $ | 20,438 |
Three Months Ended June 30, | ||||||||
(Millions of Dollars) | 2019 | 2018 | ||||||
Balance at April 1 | $ | 3.1 | $ | 5.3 | ||||
Purchases | 17.1 | 18.7 | ||||||
Settlements | (13.1 | ) | (14.8 | ) | ||||
Net transactions recorded during the period: | ||||||||
Net gains recognized as regulatory assets and liabilities | 15.1 | 26.2 | ||||||
Balance at June 30 | $ | 22.2 | $ | 35.4 |
Six Months Ended June 30, | ||||||||||||||||
Nine Months Ended Sept. 30, | ||||||||||||||||
(Thousands of Dollars) | 2018 | 2017 | ||||||||||||||
(Millions of Dollars) | 2019 | 2018 | ||||||||||||||
Balance at Jan. 1 | $ | 12,723 | $ | 1,955 | $ | 14.7 | $ | 12.7 | ||||||||
Purchases | 22,517 | 39,376 | 21.0 | 19.3 | ||||||||||||
Settlements | (35,305 | ) | (40,437 | ) | (19.7 | ) | (25.2 | ) | ||||||||
Net transactions recorded during the period: | ||||||||||||||||
Net gains recognized as regulatory assets and liabilities | 25,342 | 19,544 | 6.2 | 28.6 | ||||||||||||
Balance at Sept. 30 | $ | 25,277 | $ | 20,438 | ||||||||||||
Balance at June 30 | $ | 22.2 | $ | 35.4 |
Sept. 30, 2018 | Dec. 31, 2017 | June 30, 2019 | Dec. 31, 2018 | |||||||||||||||||||||||||||||
(Thousands 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 | $ | 1,830,796 | $ | 1,832,158 | $ | 1,829,941 | $ | 2,001,992 | $ | 2,419.5 | $ | 2,617.1 | $ | 2,126.1 | $ | 2,139.8 |
Three Months Ended Sept. 30 | Nine Months Ended Sept. 30, | |||||||||||||||
(Thousands of Dollars) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Interest income | $ | 473 | $ | 296 | $ | 771 | $ | 488 | ||||||||
Other nonoperating income | — | 1 | 2 | — | ||||||||||||
Other nonoperating expense | (1 | ) | — | — | — | |||||||||||
Insurance policy expense | (11 | ) | (12 | ) | (35 | ) | (36 | ) | ||||||||
Benefits non-service cost | (1,487 | ) | (749 | ) | (3,250 | ) | (2,247 | ) | ||||||||
Other expense, net | $ | (1,026 | ) | $ | (464 | ) | $ | (2,512 | ) | $ | (1,795 | ) |
Benefit Plans and Other Postretirement Benefits |
Three Months Ended June 30, | ||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(Millions of Dollars) | Pension Benefits | Postretirement Health Care Benefits | ||||||||||||||
Service cost | $ | 2.2 | $ | 2.4 | $ | 0.2 | $ | 0.3 | ||||||||
Interest cost (a) | 5.0 | 4.6 | 0.4 | 0.4 | ||||||||||||
Expected return on plan assets (a) | (7.2 | ) | (7.1 | ) | (0.5 | ) | (0.6 | ) | ||||||||
Amortization of prior service credit (a) | — | — | (0.1 | ) | (0.1 | ) | ||||||||||
Amortization of net loss (gain) (a) | 2.9 | 3.5 | (0.1 | ) | (0.1 | ) | ||||||||||
Net periodic benefit cost (credit) | 2.9 | 3.4 | (0.1 | ) | (0.1 | ) | ||||||||||
Credits not recognized due to the effects of regulation | 0.4 | 0.8 | — | — | ||||||||||||
Net benefit cost (credit) recognized for financial reporting | $ | 3.3 | $ | 4.2 | $ | (0.1 | ) | $ | (0.1 | ) |
Three Months Ended Sept. 30 | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(Thousands of Dollars) | Pension Benefits | Postretirement Health Care Benefits | ||||||||||||||
Service cost | $ | 2,429 | $ | 2,439 | $ | 280 | $ | 219 | ||||||||
Interest cost (a) | 4,603 | 4,928 | 410 | 415 | ||||||||||||
Expected return on plan assets (a) | (7,082 | ) | (6,971 | ) | (615 | ) | (589 | ) | ||||||||
Amortization of prior service credit (a) | (34 | ) | — | (101 | ) | (100 | ) | |||||||||
Amortization of net loss (gain) (a) | 3,517 | 3,245 | (114 | ) | (155 | ) | ||||||||||
Net periodic benefit cost (credit) | 3,433 | 3,641 | (140 | ) | (210 | ) | ||||||||||
(Costs) credits not recognized due to the effects of regulation | (468 | ) | 553 | — | — | |||||||||||
Net benefit cost (credit) recognized for financial reporting | $ | 2,965 | $ | 4,194 | $ | (140 | ) | $ | (210 | ) |
Nine Months Ended Sept. 30 | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(Thousands of Dollars) | Pension Benefits | Postretirement Health Care Benefits | ||||||||||||||
Service cost | $ | 7,289 | $ | 7,319 | $ | 839 | $ | 657 | ||||||||
Interest cost (a) | 13,808 | 14,783 | 1,231 | 1,245 | ||||||||||||
Expected return on plan assets (a) | (21,246 | ) | (20,913 | ) | (1,846 | ) | (1,767 | ) | ||||||||
Amortization of prior service credit (a) | (103 | ) | — | (302 | ) | (300 | ) | |||||||||
Amortization of net loss (gain) (a) | 10,551 | 9,735 | (340 | ) | (465 | ) | ||||||||||
Net periodic benefit cost (credit) | 10,299 | 10,924 | (418 | ) | (630 | ) | ||||||||||
Credits not recognized due to the effects of regulation | 1,267 | 1,275 | — | — | ||||||||||||
Net benefit cost (credit) recognized for financial reporting | $ | 11,566 | $ | 12,199 | $ | (418 | ) | $ | (630 | ) |
Six Months Ended June 30, | ||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(Millions of Dollars) | Pension Benefits | Postretirement Health Care Benefits | ||||||||||||||
Service cost | $ | 4.4 | $ | 4.9 | $ | 0.4 | $ | 0.5 | ||||||||
Interest cost (a) | 10.1 | 9.2 | 0.9 | 0.8 | ||||||||||||
Expected return on plan assets (a) | (14.3 | ) | (14.2 | ) | (1.0 | ) | (1.2 | ) | ||||||||
Amortization of prior service credit (a) | (0.1 | ) | — | (0.3 | ) | (0.2 | ) | |||||||||
Amortization of net loss (gain) (a) | 5.7 | 7.0 | (0.2 | ) | (0.2 | ) | ||||||||||
Net periodic benefit cost (credit) | 5.8 | 6.9 | (0.2 | ) | (0.3 | ) | ||||||||||
Credits not recognized due to the effects of regulation | 0.8 | 1.7 | — | — | ||||||||||||
Net benefit cost (credit) recognized for financial reporting | $ | 6.6 | $ | 8.6 | $ | (0.2 | ) | $ | (0.3 | ) |
Three Months Ended Sept. 30, 2018 | ||||||||||||
(Thousands of Dollars) | Gains and Losses on Cash Flow Hedges | Defined Benefit and Postretirement Items | Total | |||||||||
Accumulated other comprehensive loss at July 1 | $ | (752 | ) | $ | (654 | ) | $ | (1,406 | ) | |||
Losses reclassified from net accumulated other comprehensive loss | 13 | 18 | 31 | |||||||||
Net current period other comprehensive income | 13 | 18 | 31 | |||||||||
Accumulated other comprehensive loss at Sept. 30 | $ | (739 | ) | $ | (636 | ) | $ | (1,375 | ) |
Three Months Ended Sept. 30, 2017 | ||||||||||||
(Thousands of Dollars) | Gains and Losses on Cash Flow Hedges | Defined Benefit and Postretirement Items | Total | |||||||||
Accumulated other comprehensive loss at July 1 | $ | (659 | ) | $ | (582 | ) | $ | (1,241 | ) | |||
Losses reclassified from net accumulated other comprehensive loss | 10 | 16 | 26 | |||||||||
Net current period other comprehensive income | 10 | 16 | 26 | |||||||||
Accumulated other comprehensive loss at Sept. 30 | $ | (649 | ) | $ | (566 | ) | $ | (1,215 | ) |
(Millions of Dollars) | June 30, 2019 | |||
PPAs | $ | 500.3 | ||
Other | 48.0 | |||
Gross operating lease ROU assets | 548.3 | |||
Accumulated amortization | (12.8 | ) | ||
Net operating lease ROU assets | $ | 535.5 |
Nine Months Ended Sept. 30, 2018 | ||||||||||||
(Thousands of Dollars) | Gains and Losses on Cash Flow Hedges | Defined Benefit and Postretirement Items | Total | |||||||||
Accumulated other comprehensive loss at Jan. 1 | $ | (776 | ) | $ | (691 | ) | $ | (1,467 | ) | |||
Losses reclassified from net accumulated other comprehensive loss | 37 | 55 | 92 | |||||||||
Net current period other comprehensive income | 37 | 55 | 92 | |||||||||
Accumulated other comprehensive loss at Sept. 30 | $ | (739 | ) | $ | (636 | ) | $ | (1,375 | ) |
Nine Months Ended Sept. 30, 2017 | ||||||||||||
(Thousands of Dollars) | Gains and Losses on Cash Flow Hedges | Defined Benefit and Postretirement Items | Total | |||||||||
Accumulated other comprehensive loss at Jan. 1 | $ | (678 | ) | $ | (612 | ) | $ | (1,290 | ) | |||
Losses reclassified from net accumulated other comprehensive loss | 29 | 46 | 75 | |||||||||
Net current period other comprehensive income | 29 | 46 | 75 | |||||||||
Accumulated other comprehensive loss at Sept. 30 | $ | (649 | ) | $ | (566 | ) | $ | (1,215 | ) |
Amounts Reclassified from Accumulated Other Comprehensive Loss | |||||||||
(Thousands of Dollars) | Three Months Ended Sept. 30, 2018 | Three Months Ended Sept. 30, 2017 | |||||||
Losses on cash flow hedges: | |||||||||
Interest rate derivatives | $ | 16 | (a) | $ | 16 | (a) | |||
Total, pre-tax | 16 | 16 | |||||||
Tax benefit | (3 | ) | (6 | ) | |||||
Total, net of tax | 13 | 10 | |||||||
Defined benefit pension and postretirement losses: | |||||||||
Amortization of net loss | 23 | (b) | 24 | (b) | |||||
Total, pre-tax | 23 | 24 | |||||||
Tax benefit | (5 | ) | (8 | ) | |||||
Total, net of tax | 18 | 16 | |||||||
Total amounts reclassified, net of tax | $ | 31 | $ | 26 |
Amounts Reclassified from Accumulated Other Comprehensive Loss | |||||||||
(Thousands of Dollars) | Nine Months Ended Sept. 30, 2018 | Nine Months Ended Sept. 30, 2017 | |||||||
Losses on cash flow hedges: | |||||||||
Interest rate derivatives | $ | 47 | (a) | $ | 47 | (a) | |||
Total, pre-tax | 47 | 47 | |||||||
Tax benefit | (10 | ) | (18 | ) | |||||
Total, net of tax | 37 | 29 | |||||||
Defined benefit pension and postretirement losses: | |||||||||
Amortization of net loss | 70 | (b) | 72 | (b) | |||||
Total, pre-tax | 70 | 72 | |||||||
Tax benefit | (15 | ) | (26 | ) | |||||
Total, net of tax | 55 | 46 | |||||||
Total amounts reclassified, net of tax | $ | 92 | $ | 75 |
(Millions of Dollars) | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | ||||||
Operating leases | ||||||||
PPA capacity payments | $ | 12.6 | $ | 25.4 | ||||
Other operating leases (a) | 1.3 | 2.5 | ||||||
Total operating lease expense (b) | $ | 13.9 | $ | 27.9 |
(a) | Includes short-term lease expense of $0.5 million for three months ended June 30, 2019 and $0.9 million for six months ended June 30, 2019. |
(b) |
Three Months Ended | ||||||||
(Thousands of Dollars) | Sept. 30, 2018 | Sept. 30, 2017 | ||||||
Major product lines | ||||||||
Revenue from contracts with customers: | ||||||||
Residential | $ | 114,387 | $ | 113,380 | ||||
Commercial and industrial (C&I) | 229,457 | 241,295 | ||||||
Other | 12,983 | 13,399 | ||||||
Total retail | 356,827 | 368,074 | ||||||
Wholesale | 117,949 | 116,635 | ||||||
Transmission | 60,726 | 56,143 | ||||||
Other | 1,792 | 3,862 | ||||||
Total revenue from contracts with customers | 537,294 | 544,714 | ||||||
Alternative revenue and other | 2,769 | 6,909 | ||||||
Total revenues | $ | 540,063 | $ | 551,623 |
(Millions of Dollars) | PPA (a) (b) Operating Leases | Other Operating Leases | Total Operating Leases | |||||||||
2019 | $ | 23.1 | $ | 1.7 | $ | 24.8 | ||||||
2020 | 46.2 | 3.4 | 49.6 | |||||||||
2021 | 46.2 | 3.3 | 49.5 | |||||||||
2022 | 46.2 | 3.4 | 49.6 | |||||||||
2023 | 46.2 | 3.4 | 49.6 | |||||||||
Thereafter | 450.8 | 54.8 | 505.6 | |||||||||
Total minimum obligation | 658.7 | 70.0 | 728.7 | |||||||||
Interest component of obligation | (170.6 | ) | (22.6 | ) | (193.2 | ) | ||||||
Present value of minimum obligation | 488.1 | 47.4 | 535.5 | |||||||||
Less current portion | (26.5 | ) | ||||||||||
Noncurrent operating lease liabilities | $ | 509.0 | ||||||||||
Weighted-average remaining lease term in years | 14.5 |
(a) | Amounts do not include PPAs accounted for as executory contracts and/or contingent payments, such as energy payments on renewable PPAs. |
(b) | PPA operating leases contractually expire at various dates through 2033. |
Nine Months Ended | ||||||||
(Thousands of Dollars) | Sept. 30, 2018 | Sept. 30, 2017 | ||||||
Major product lines | ||||||||
Revenue from contracts with customers: | ||||||||
Residential | $ | 279,543 | $ | 277,169 | ||||
C&I | 625,988 | 658,057 | ||||||
Other | 34,010 | 35,253 | ||||||
Total retail | 939,541 | 970,479 | ||||||
Wholesale | 326,810 | 309,669 | ||||||
Transmission | 175,342 | 166,715 | ||||||
Other | 12,181 | 7,872 | ||||||
Total revenue from contracts with customers | 1,453,874 | 1,454,735 | ||||||
Alternative revenue and other | 14,759 | 36,756 | ||||||
Total revenues | $ | 1,468,633 | $ | 1,491,491 |
(Millions of Dollars) | PPA (a) (b) Operating Leases | Other Operating Leases | Total Operating Leases | |||||||||
2019 | $ | 46.7 | $ | 5.2 | $ | 51.9 | ||||||
2020 | 46.2 | 5.2 | 51.4 | |||||||||
2021 | 46.2 | 5.1 | 51.3 | |||||||||
2022 | 46.2 | 5.1 | 51.3 | |||||||||
2023 | 46.2 | 5.1 | 51.3 | |||||||||
Thereafter | 450.8 | 56.3 | 507.1 |
(a) | Amounts do not include PPAs accounted for as executory contracts and/or contingent payments, such as energy payments on renewable PPAs. |
(b) | PPA operating leases contractually expire at various dates through 2033. |
Nine Months Ended Sept. 30 | Six Months Ended June 30 | |||||||||||||||
(Millions of Dollars) | 2018 | 2017 | 2019 | 2018 | ||||||||||||
Electric revenues before impact of the TCJA | $ | 1,513 | $ | 1,491 | ||||||||||||
Electric revenues | $ | 864.6 | $ | 928.6 | ||||||||||||
Electric fuel and purchased power | (802 | ) | (816 | ) | (410.8 | ) | (511.6 | ) | ||||||||
Electric margin before impact of the TCJA | $ | 711 | $ | 675 | ||||||||||||
Impact of the TCJA (offset as a reduction in income tax expense) | (38 | ) | — | |||||||||||||
Electric margin | $ | 673 | $ | 675 | $ | 453.8 | $ | 417.0 |
(Millions of Dollars) | 2018 vs 2017 | |||
Fuel and purchased power cost recovery | $ | (72 | ) | |
Firm wholesale | (12 | ) | ||
Trading | 42 | |||
Wholesale transmission revenue | 25 | |||
Estimated impact of weather | 18 | |||
Sales Growth | 5 | |||
Demand revenue | 5 | |||
Other, net | 11 | |||
Total increase in electric revenues before impact of the TCJA | $ | 22 | ||
Impact of TCJA (offset as a reduction in income tax expense) | (44 | ) | ||
Total decrease in electric revenues | $ | (22 | ) |
(Millions of Dollars) | 2018 vs 2017 | 2019 vs 2018 | ||||||
Purchased capacity costs | $ | 13.7 | ||||||
Demand revenue | 13.2 | |||||||
Regulatory rate outcomes | 11.8 | |||||||
Non-fuel riders | 7.2 | |||||||
Wholesale transmission, net | 6.8 | |||||||
Retail sales growth | 4.1 | |||||||
Estimated impact of weather | (12.5 | ) | ||||||
Firm wholesale | $ | (12 | ) | (5.5 | ) | |||
Estimated impact of weather | 18 | |||||||
Wholesale transmission revenue, net of costs | 12 | |||||||
Sales growth | 5 | |||||||
Demand revenue | 5 | |||||||
Other, net | 8 | (2.0 | ) | |||||
Total increase in electric margin before impact of the TCJA | $ | 36 | ||||||
Impact of TCJA (offset as a reduction in income tax expense) | (38 | ) | ||||||
Total decrease in electric margin | $ | (2 | ) | |||||
Total increase in electric margin | $ | 36.8 |
Mechanism | Utility Service | Amount Requested (in millions) | Filing Date | Approval | Additional Information | |||||
SPS (PUCT) | ||||||||||
Rate Case | Electric | $54 | August 2017 | Received | In November 2018, SPS filed an application with the PUCT requesting permission to recover $5.4 million in unbilled TCRF revenue from Jan. 23, 2018 through June 9, 2018. Application was approved in an order dated June 13, 2019. | |||||
SPS (NMPRC) | ||||||||||
Rate Case | Electric | $43 | October 2017 | Received | In February 2019, SPS and the NMPRC settled SPS' appeal to the NMSC regarding NMPRC's previous rate case order, including a $10.2 million refund of retroactive TCJA benefits. As a result, the NMPRC issued revised orders eliminating the retroactive refund and SPS reversed its previously recorded regulatory liability. The order also increased the ROE from 9.1% to 9.56% and the equity ratio from 51% to 53.97%, resulting in a prospective annual base rate increase of $4.5 million (incremental to $8.1 million approved in the initial order). New rates were effective March 11, 2019. |
Revenue Request (Millions of Dollars) | ||||
Hale Wind Farm | $ | 28 | ||
Other plant investment | 22 | |||
Wholesale sales reduction | 17 | |||
Allocator changes due to load growth | 15 | |||
Depreciation rate change (including Tolk) | 15 | |||
Base rate sales growth | (41 | ) | ||
Other, net | (5 | ) | ||
New revenue request | $ | 51 |
Exhibit Number | Description | Report or Registration Statement | SEC File or Registration Number | Exhibit Reference |
3.01* | SPS Form 10-Q for the quarter ended Sept. 30, 2017 | 001-03789 | 3.01 | |
3.02* | 001-03789 | 3.02 | ||
4.01* | SPS Form 8-K dated June 18, 2019 | 001-03789 | 4.01 | |
Xcel Energy Inc. Form 8-K dated June 7, 2019 | 001-03034 | 99.04 | ||
101 | The following materials from SPS’ Quarterly Report on Form 10-Q for the quarter ended |
Southwestern Public Service Company | ||
By: | /s/ JEFFREY S. SAVAGE | |
Jeffrey S. Savage | ||
Senior Vice President, Controller | ||
(Principal Accounting Officer) | ||
/s/ ROBERT C. FRENZEL | ||
Robert C. Frenzel | ||
Executive Vice President, Chief Financial Officer and Director | ||
(Principal Financial Officer) |