☒ | 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 |
( |
New Mexico | 001-3034 | 75-0575400 | ||||||||||||||||||
(State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||||||||
790 South Buchanan Street | Amarillo | Texas | 79101 | |||||||||||||||||
( | ||||||||||||||||||||
(Zip Code) |
571-7511 | |||||
(Registrant’s Telephone Number, Including Area Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
N/A | N/A | N/A |
Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | ||||||||||||||
Non-accelerated Filer | ☒ | Smaller Reporting Company | ☐ | ||||||||||||||
Emerging growth company | ☐ |
Class | Oct. | |||||||
Common Stock, $1.00 par value | 100 shares |
PART I | FINANCIAL INFORMATION | ||||||||
Item | |||||||||
Statements of Income | |||||||||
Item 2 — | |||||||||
Item 4 — | |||||||||
PART II | OTHER INFORMATION | ||||||||
Item 1 — | |||||||||
Item 1A — | |||||||||
Item 6 — | |||||||||
Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||||
Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
Xcel Energy Inc.’s Subsidiaries and Affiliates (current and former) | |||||
NSP-Minnesota | Northern States Power Company, a Minnesota corporation | ||||
NSP-Wisconsin | Northern States Power Company, a Wisconsin corporation | ||||
PSCo | Public Service Company of Colorado | ||||
SPS | Southwestern Public Service Company | ||||
Utility subsidiaries | NSP-Minnesota, NSP-Wisconsin, PSCo and SPS | ||||
Xcel Energy | Xcel Energy Inc. and its subsidiaries | ||||
Federal and State Regulatory Agencies | |||||
D.C. Circuit | United States Court of Appeals for the District of Columbia Circuit | ||||
EPA | United States Environmental Protection Agency | ||||
FERC | Federal Energy Regulatory Commission | ||||
IRS | Internal Revenue Service | ||||
New Mexico Public Regulation Commission | |||||
PUCT | Public Utility Commission of Texas | ||||
SEC | Securities and Exchange Commission | ||||
Electric, Purchased Gas and Resource Adjustment Clauses | |||||
DSM | Demand side management | ||||
FPPCAC | Fuel and Purchased Power Cost Adjustment Clause | ||||
Other | |||||
Allowance for funds used during construction | |||||
FASB Accounting Standards Codification | |||||
Commercial and Industrial | |||||
CEO | Chief executive officer | ||||
CFO | Chief financial officer | ||||
Novel coronavirus | |||||
ETR | Effective tax rate | ||||
FASB | Financial Accounting Standards Board | ||||
FTR | Financial transmission right | ||||
GAAP | Generally accepted accounting principles | ||||
IPP | Independent power producers | ||||
NOL | Net operating loss | ||||
O&M | Operating and maintenance | ||||
OATT | Open access transmission tariff | ||||
PPA | Power purchase agreement | ||||
PTC | Production tax credit | ||||
ROE | Return on equity | ||||
RTO | Regional Transmission Organization | ||||
SPP | Southwest Power Pool, Inc. | ||||
Variable interest entity | |||||
Forward-Looking Statements |
Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Operating revenues | $ | 615.3 | $ | 533.1 | $ | 1,433.7 | $ | 1,397.7 | |||||||||||||||
Operating expenses | |||||||||||||||||||||||
Electric fuel and purchased power | 240.0 | 240.2 | 626.6 | 651.0 | |||||||||||||||||||
Operating and maintenance expenses | 78.9 | 74.1 | 206.8 | 216.6 | |||||||||||||||||||
Demand side management expenses | 4.6 | 4.5 | 12.2 | 12.9 | |||||||||||||||||||
Depreciation and amortization | 100.2 | 61.3 | 223.3 | 172.3 | |||||||||||||||||||
Taxes (other than income taxes) | 28.8 | 17.6 | 68.5 | 53.1 | |||||||||||||||||||
Total operating expenses | 452.5 | 397.7 | 1,137.4 | 1,105.9 | |||||||||||||||||||
Operating income | 162.8 | 135.4 | 296.3 | 291.8 | |||||||||||||||||||
Other (expense) income, net | (0.3) | 1.5 | (2.2) | 2.4 | |||||||||||||||||||
Allowance for funds used during construction — equity | 10.1 | 3.2 | 23.9 | 22.2 | |||||||||||||||||||
Interest charges and financing costs | |||||||||||||||||||||||
Interest charges — includes other financing costs of $1.0, $0.9, $2.8 and $2.5, respectively | 39.1 | 26.0 | 89.0 | 76.0 | |||||||||||||||||||
Allowance for funds used during construction — debt | (4.4) | (1.5) | (10.4) | (10.2) | |||||||||||||||||||
Total interest charges and financing costs | 34.7 | 24.5 | 78.6 | 65.8 | |||||||||||||||||||
Income before income taxes | 137.9 | 115.6 | 239.4 | 250.6 | |||||||||||||||||||
Income tax expense (benefit) | 10.8 | 10.5 | (2.1) | 32.6 | |||||||||||||||||||
Net income | $ | 127.1 | $ | 105.1 | $ | 241.5 | $ | 218.0 | |||||||||||||||
See Notes to Financial Statements |
Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating revenues | $ | 533.1 | $ | 540.1 | $ | 1,397.7 | $ | 1,468.6 | |||||||
Operating expenses | |||||||||||||||
Electric fuel and purchased power | 240.2 | 284.0 | 651.0 | 795.6 | |||||||||||
Operating and maintenance expenses | 74.1 | 71.5 | 216.6 | 203.7 | |||||||||||
Demand side management expenses | 4.5 | 4.6 | 12.9 | 13.5 | |||||||||||
Depreciation and amortization | 61.3 | 52.2 | 172.3 | 150.2 | |||||||||||
Taxes (other than income taxes) | 17.6 | 16.8 | 53.1 | 50.0 | |||||||||||
Total operating expenses | 397.7 | 429.1 | 1,105.9 | 1,213.0 | |||||||||||
Operating income | 135.4 | 111.0 | 291.8 | 255.6 | |||||||||||
Other income (expense), net | 1.5 | (1.0 | ) | 2.4 | (2.4 | ) | |||||||||
Allowance for funds used during construction — equity | 3.2 | 5.0 | 22.2 | 11.6 | |||||||||||
Interest charges and financing costs | |||||||||||||||
Interest charges — includes other financing costs of $0.9, $0.7, $2.5 and $2.1, respectively | 26.0 | 21.0 | 76.0 | 61.8 | |||||||||||
Allowance for funds used during construction — debt | (1.5 | ) | (2.2 | ) | (10.2 | ) | (5.5 | ) | |||||||
Total interest charges and financing costs | 24.5 | 18.8 | 65.8 | 56.3 | |||||||||||
Income before income taxes | 115.6 | 96.2 | 250.6 | 208.5 | |||||||||||
Income taxes | 10.5 | 14.7 | 32.6 | 35.4 | |||||||||||
Net income | $ | 105.1 | $ | 81.5 | $ | 218.0 | $ | 173.1 |
Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net income | $ | 105.1 | $ | 81.5 | $ | 218.0 | $ | 173.1 | ||||||||
Other comprehensive income | ||||||||||||||||
Pension and retiree medical benefits: | ||||||||||||||||
Amortization of losses included in net periodic benefit cost, net of tax of $0 | — | 0.1 | 0.1 | 0.1 | ||||||||||||
Other comprehensive income | — | 0.1 | 0.1 | 0.1 | ||||||||||||
Comprehensive income | $ | 105.1 | $ | 81.6 | $ | 218.1 | $ | 173.2 |
Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net income | $ | 127.1 | $ | 105.1 | $ | 241.5 | $ | 218.0 | |||||||||||||||
Other comprehensive income | |||||||||||||||||||||||
Pension and retiree medical benefits: | |||||||||||||||||||||||
Reclassification of loss to net income, net of tax of $0 | 0 | 0 | 0.1 | 0.1 | |||||||||||||||||||
Total other comprehensive income | 0 | 0 | 0.1 | 0.1 | |||||||||||||||||||
Total comprehensive income | $ | 127.1 | $ | 105.1 | $ | 241.6 | $ | 218.1 | |||||||||||||||
Nine Months Ended Sept. 30 | |||||||||||
2020 | 2019 | ||||||||||
Operating activities | |||||||||||
Net income | $ | 241.5 | $ | 218.0 | |||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||
Depreciation and amortization | 225.2 | 174.0 | |||||||||
Deferred income taxes | 25.4 | 16.2 | |||||||||
Allowance for equity funds used during construction | (23.9) | (22.2) | |||||||||
Provision for bad debts | 4.7 | 4.0 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | (30.5) | (30.5) | |||||||||
Accrued unbilled revenues | (3.5) | (10.4) | |||||||||
Inventories | (24.1) | (16.3) | |||||||||
Prepayments and other | (14.0) | 6.0 | |||||||||
Accounts payable | (2.9) | (15.1) | |||||||||
Net regulatory assets and liabilities | (95.6) | 17.6 | |||||||||
Other current liabilities | 14.5 | 14.1 | |||||||||
Pension and other employee benefit obligations | (15.2) | (17.6) | |||||||||
Other, net | 3.7 | 2.0 | |||||||||
Net cash provided by operating activities | 305.3 | 339.8 | |||||||||
Investing activities | |||||||||||
Utility capital/construction expenditures | (845.4) | (632.8) | |||||||||
Investments in utility money pool arrangement | (4.0) | (133.0) | |||||||||
Repayments from utility money pool arrangement | 4.0 | 133.0 | |||||||||
Net cash used in investing activities | (845.4) | (632.8) | |||||||||
Financing activities | |||||||||||
Repayments of short-term borrowings, net | 0 | (42.0) | |||||||||
Proceeds from issuance of long-term debt, net | 342.7 | 292.2 | |||||||||
Borrowings under utility money pool arrangement | 721.0 | 283.0 | |||||||||
Repayments under utility money pool arrangement | (711.0) | (283.0) | |||||||||
Capital contributions from parent | 435.4 | 400.8 | |||||||||
Dividends paid to parent | (257.4) | (255.0) | |||||||||
Other, net | (0.3) | 0 | |||||||||
Net cash provided by financing activities | 530.4 | 396.0 | |||||||||
Net change in cash and cash equivalents | (9.7) | 103.0 | |||||||||
Cash and cash equivalents at beginning of period | 16.2 | 44.0 | |||||||||
Cash and cash equivalents at end of period | $ | 6.5 | $ | 147.0 | |||||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid for interest (net of amounts capitalized) | $ | (69.1) | $ | (60.3) | |||||||
Cash received (paid) for income taxes, net | 4.0 | (4.4) | |||||||||
Supplemental disclosure of non-cash investing and financing transactions: | |||||||||||
Accrued property, plant and equipment additions | $ | 111.1 | $ | 67.5 | |||||||
Inventory transfers to property, plant and equipment | 21.9 | 18.7 | |||||||||
Operating lease right-of-use assets | 0 | 548.3 | |||||||||
Allowance for equity funds used during construction | 23.9 | 22.2 |
Nine Months Ended Sept. 30, | |||||||
2019 | 2018 | ||||||
Operating activities | |||||||
Net income | $ | 218.0 | $ | 173.1 | |||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||
Depreciation and amortization | 174.0 | 150.4 | |||||
Demand side management program amortization | — | 1.3 | |||||
Deferred income taxes | 16.2 | 14.4 | |||||
Allowance for equity funds used during construction | (22.2 | ) | (11.6 | ) | |||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (26.5 | ) | (25.1 | ) | |||
Accrued unbilled revenues | (10.4 | ) | 9.6 | ||||
Inventories | (16.3 | ) | 7.0 | ||||
Prepayments and other | 6.0 | 0.6 | |||||
Accounts payable | (15.1 | ) | (0.9 | ) | |||
Net regulatory assets and liabilities | 17.6 | 58.8 | |||||
Other current liabilities | 14.1 | 13.0 | |||||
Pension and other employee benefit obligations | (17.6 | ) | (7.9 | ) | |||
Change in other noncurrent assets | 0.7 | 3.5 | |||||
Change in other noncurrent liabilities | 1.3 | (0.2 | ) | ||||
Net cash provided by operating activities | 339.8 | 386.0 | |||||
Investing activities | |||||||
Utility capital/construction expenditures | (632.8 | ) | (610.0 | ) | |||
Investments in utility money pool arrangement | (133.0 | ) | (46.0 | ) | |||
Repayments from utility money pool arrangement | 133.0 | 111.0 | |||||
Net cash used in investing activities | (632.8 | ) | (545.0 | ) | |||
Financing activities | |||||||
(Repayments of) Proceeds from short-term borrowings, net | (42.0 | ) | 35.0 | ||||
Proceeds from issuance of long-term debt, net | 292.2 | — | |||||
Borrowings under utility money pool arrangement | 283.0 | 446.0 | |||||
Repayments under utility money pool arrangement | (283.0 | ) | (423.0 | ) | |||
Capital contributions from parent | 400.8 | 181.4 | |||||
Dividends paid to parent | (255.0 | ) | (90.7 | ) | |||
Net cash provided by financing activities | 396.0 | 148.7 | |||||
Net change in cash and cash equivalents | 103.0 | (10.3 | ) | ||||
Cash and cash equivalents at beginning of period | 44.0 | 10.9 | |||||
Cash and cash equivalents at end of period | $ | 147.0 | $ | 0.6 | |||
Supplemental disclosure of cash flow information: | |||||||
Cash paid for interest (net of amounts capitalized) | $ | (60.3 | ) | $ | (57.9 | ) | |
Cash paid for income taxes, net | (4.4 | ) | (15.3 | ) | |||
Supplemental disclosure of non-cash investing and financing transactions: | |||||||
Property, plant and equipment additions in accounts payable | $ | 67.5 | $ | 54.6 | |||
Inventory transfer additions in PPE | 18.7 | 17.0 | |||||
Operating lease right-of-use assets | 548.3 | — | |||||
Allowance for equity funds used during construction | 22.2 | 11.6 |
Sept. 30, 2019 | Dec. 31, 2018 | Sept. 30, 2020 | Dec. 31, 2019 | |||||||||||||||
Assets | Assets | |||||||||||||||||
Current assets | Current assets | |||||||||||||||||
Cash and cash equivalents | $ | 147.0 | $ | 44.0 | Cash and cash equivalents | $ | 6.5 | $ | 16.2 | |||||||||
Accounts receivable, net | 113.9 | 90.7 | Accounts receivable, net | 110.8 | 92.7 | |||||||||||||
Accounts receivable from affiliates | 6.1 | 10.5 | Accounts receivable from affiliates | 11.1 | 4.2 | |||||||||||||
Accrued unbilled revenues | 124.9 | 114.5 | Accrued unbilled revenues | 118.3 | 115.1 | |||||||||||||
Inventories | 31.4 | 33.9 | Inventories | 33.2 | 31.0 | |||||||||||||
Regulatory assets | 20.8 | 26.0 | Regulatory assets | 75.4 | 20.0 | |||||||||||||
Derivative instruments | 20.4 | 17.8 | Derivative instruments | 14.3 | 15.0 | |||||||||||||
Prepaid taxes | 1.5 | 14.2 | Prepaid taxes | 17.5 | 0.8 | |||||||||||||
Prepayments and other | 17.6 | 10.7 | Prepayments and other | 19.9 | 21.4 | |||||||||||||
Total current assets | 483.6 | 362.3 | Total current assets | 407.0 | 316.4 | |||||||||||||
Property, plant and equipment, net | 6,441.9 | 5,946.4 | Property, plant and equipment, net | 7,368.5 | 6,631.6 | |||||||||||||
Other assets | Other assets | |||||||||||||||||
Regulatory assets | 362.0 | 366.2 | Regulatory assets | 362.2 | 364.0 | |||||||||||||
Derivative instruments | 13.4 | 15.8 | Derivative instruments | 10.3 | 12.6 | |||||||||||||
Operating lease right-of-use assets | 529.0 | — | Operating lease right-of-use assets | 497.1 | 522.4 | |||||||||||||
Other | 4.4 | 5.1 | Other | 3.4 | 3.9 | |||||||||||||
Total other assets | 908.8 | 387.1 | Total other assets | 873.0 | 902.9 | |||||||||||||
Total assets | $ | 7,834.3 | $ | 6,695.8 | Total assets | $ | 8,648.5 | $ | 7,850.9 | |||||||||
Liabilities and Equity | Liabilities and Equity | |||||||||||||||||
Current liabilities | Current liabilities | |||||||||||||||||
Short-term debt | $ | — | $ | 42.0 | ||||||||||||||
Borrowings under utility money pool arrangement | Borrowings under utility money pool arrangement | $ | 10.0 | $ | 0 | |||||||||||||
Accounts payable | 168.3 | 191.8 | Accounts payable | 230.6 | 168.1 | |||||||||||||
Accounts payable to affiliates | 14.9 | 19.9 | Accounts payable to affiliates | 16.7 | 20.4 | |||||||||||||
Regulatory liabilities | 116.8 | 85.8 | Regulatory liabilities | 77.2 | 118.1 | |||||||||||||
Taxes accrued | 51.5 | 41.6 | Taxes accrued | 50.9 | 40.4 | |||||||||||||
Accrued interest | 29.1 | 25.8 | Accrued interest | 33.4 | 26.2 | |||||||||||||
Dividends payable to parent | 45.6 | 45.2 | Dividends payable to parent | 55.0 | 46.3 | |||||||||||||
Derivative instruments | 3.7 | 3.6 | Derivative instruments | 3.6 | 3.7 | |||||||||||||
Operating lease liabilities | Operating lease liabilities | 27.8 | 26.9 | |||||||||||||||
Other | 53.0 | 28.3 | Other | 25.2 | 30.7 | |||||||||||||
Total current liabilities | 482.9 | 484.0 | Total current liabilities | 530.4 | 480.8 | |||||||||||||
Deferred credits and other liabilities | Deferred credits and other liabilities | |||||||||||||||||
Deferred income taxes | 653.4 | 619.1 | Deferred income taxes | 719.4 | 671.8 | |||||||||||||
Regulatory liabilities | 736.5 | 780.9 | Regulatory liabilities | 715.8 | 732.3 | |||||||||||||
Asset retirement obligations | 49.9 | 32.4 | Asset retirement obligations | 80.0 | 77.3 | |||||||||||||
Derivative instruments | 13.7 | 16.4 | Derivative instruments | 10.1 | 12.8 | |||||||||||||
Pension and employee benefit obligations | 75.2 | 92.4 | Pension and employee benefit obligations | 51.9 | 67.0 | |||||||||||||
Operating lease liabilities | 502.2 | — | Operating lease liabilities | 469.3 | 495.3 | |||||||||||||
Other | 9.0 | 7.9 | Other | 12.1 | 9.4 | |||||||||||||
Total deferred credits and other liabilities | 2,039.9 | 1,549.1 | Total deferred credits and other liabilities | 2,058.6 | 2,065.9 | |||||||||||||
Commitments and contingencies | Commitments and contingencies | |||||||||||||||||
Capitalization | Capitalization | |||||||||||||||||
Long-term debt | 2,419.3 | 2,126.1 | Long-term debt | 2,763.7 | 2,419.7 | |||||||||||||
Common stock — 200 shares authorized of $1.00 par value; 100 shares outstanding at Sept. 30, 2019 and Dec. 31, 2018, respectively | — | — | ||||||||||||||||
Common stock — 200 shares authorized of $1.00 par value; 100 shares outstanding at Sept. 30, 2020 and Dec. 31, 2019, respectively | Common stock — 200 shares authorized of $1.00 par value; 100 shares outstanding at Sept. 30, 2020 and Dec. 31, 2019, respectively | 0 | 0 | |||||||||||||||
Additional paid in capital | 2,325.3 | 1,932.3 | Additional paid in capital | 2,786.9 | 2,350.9 | |||||||||||||
Retained earnings | 568.2 | 605.7 | Retained earnings | 510.2 | 535.0 | |||||||||||||
Accumulated other comprehensive loss | (1.3 | ) | (1.4 | ) | Accumulated other comprehensive loss | (1.3) | (1.4) | |||||||||||
Total common stockholder’s equity | 2,892.2 | 2,536.6 | ||||||||||||||||
Total common stockholder's equity | Total common stockholder's equity | 3,295.8 | 2,884.5 | |||||||||||||||
Total liabilities and equity | $ | 7,834.3 | $ | 6,695.8 | Total liabilities and equity | $ | 8,648.5 | $ | 7,850.9 |
Common Stock Issued | Retained Earnings | Accumulated Other Comprehensive Loss | Total Common Stockholder's Equity | ||||||||||||||||||||||||||||||||
Shares | Par Value | Additional Paid In Capital | |||||||||||||||||||||||||||||||||
Three Months Ended Sept. 30, 2020 and 2019 | |||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | 100 | $ | 0 | $ | 2,307.3 | $ | 577.7 | $ | (1.3) | $ | 2,883.7 | ||||||||||||||||||||||||
Net income | 105.1 | 105.1 | |||||||||||||||||||||||||||||||||
Dividends declared to parent | (114.6) | (114.6) | |||||||||||||||||||||||||||||||||
Contributions of capital by parent | 18.0 | 18.0 | |||||||||||||||||||||||||||||||||
Balance at Sept. 30, 2019 | 100 | $ | 0 | $ | 2,325.3 | $ | 568.2 | $ | (1.3) | $ | 2,892.2 | ||||||||||||||||||||||||
Balance at June 30, 2020 | 100 | $ | 0 | $ | 2,786.9 | $ | 519.1 | $ | (1.3) | $ | 3,304.7 | ||||||||||||||||||||||||
Net income | 127.1 | 127.1 | |||||||||||||||||||||||||||||||||
Dividends declared to parent | (136.0) | (136.0) | |||||||||||||||||||||||||||||||||
Balance at Sept. 30, 2020 | 100 | $ | 0 | $ | 2,786.9 | $ | 510.2 | $ | (1.3) | $ | 3,295.8 | ||||||||||||||||||||||||
Common Stock Issued | Retained Earnings | Accumulated Other Comprehensive Loss | Total Common Stockholder's Equity | ||||||||||||||||||||||||||||||||
Shares | Par Value | Additional Paid In Capital | |||||||||||||||||||||||||||||||||
Nine Months Ended Sept. 30, 2020 and 2019 | |||||||||||||||||||||||||||||||||||
Balance at Dec. 31, 2018 | 100 | $ | 0 | $ | 1,932.3 | $ | 605.7 | $ | (1.4) | $ | 2,536.6 | ||||||||||||||||||||||||
Net income | 218.0 | 218.0 | |||||||||||||||||||||||||||||||||
Other comprehensive income | 0.1 | 0.1 | |||||||||||||||||||||||||||||||||
Dividends declared to parent | (255.5) | (255.5) | |||||||||||||||||||||||||||||||||
Contributions of capital by parent | 393.0 | 393.0 | |||||||||||||||||||||||||||||||||
Balance at Sept. 30, 2019 | 100 | $ | 0 | $ | 2,325.3 | $ | 568.2 | $ | (1.3) | $ | 2,892.2 | ||||||||||||||||||||||||
Balance at Dec. 31, 2019 | 100 | $ | 0 | $ | 2,350.9 | $ | 535.0 | $ | (1.4) | $ | 2,884.5 | ||||||||||||||||||||||||
Net income | 241.5 | 241.5 | |||||||||||||||||||||||||||||||||
Other comprehensive income | 0.1 | 0.1 | |||||||||||||||||||||||||||||||||
Dividends declared to parent | (266.2) | (266.2) | |||||||||||||||||||||||||||||||||
Contributions of capital by parent | 436.0 | 436.0 | |||||||||||||||||||||||||||||||||
Adoption of ASC Topic 326 | (0.1) | (0.1) | |||||||||||||||||||||||||||||||||
Balance at Sept. 30, 2020 | 100 | $ | 0 | $ | 2,786.9 | $ | 510.2 | $ | (1.3) | $ | 3,295.8 | ||||||||||||||||||||||||
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 | ||||||||||||||||||||
Three Months Ended Sept. 30, 2019 and 2018 | ||||||||||||||||||||||
Balance at June 30, 2018 | 100 | $ | — | $ | 1,591.4 | $ | 569.2 | $ | (1.5 | ) | $ | 2,159.1 | ||||||||||
Net income | 81.5 | 81.5 | ||||||||||||||||||||
Other comprehensive income | 0.1 | 0.1 | ||||||||||||||||||||
Dividends declared to parent | (40.0 | ) | (40.0 | ) | ||||||||||||||||||
Contributions of capital by parent | 180.0 | 180.0 | ||||||||||||||||||||
Balance at Sept. 30, 2018 | 100 | $ | — | $ | 1,771.4 | $ | 610.7 | $ | (1.4 | ) | $ | 2,380.7 | ||||||||||
Balance at June 30, 2019 | 100 | $ | — | $ | 2,307.3 | $ | 577.7 | $ | (1.3 | ) | $ | 2,883.7 | ||||||||||
Net income | 105.1 | 105.1 | ||||||||||||||||||||
Dividends declared to parent | (114.6 | ) | (114.6 | ) | ||||||||||||||||||
Contributions of capital by parent | 18.0 | 18.0 | ||||||||||||||||||||
Balance at Sept. 30, 2019 | 100 | $ | — | $ | 2,325.3 | $ | 568.2 | $ | (1.3 | ) | $ | 2,892.2 | ||||||||||
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 | ||||||||||||||||||||
Nine Months Ended Sept. 30, 2019 and 2018 | ||||||||||||||||||||||
Balance at Dec. 31, 2017 | 100 | $ | — | $ | 1,590.2 | $ | 541.6 | $ | (1.5 | ) | $ | 2,130.3 | ||||||||||
Net income | 173.1 | 173.1 | ||||||||||||||||||||
Other comprehensive income | 0.1 | 0.1 | ||||||||||||||||||||
Dividends declared to parent | (104.0 | ) | (104.0 | ) | ||||||||||||||||||
Contributions of capital by parent | — | — | 181.2 | 181.2 | ||||||||||||||||||
Balance at Sept. 30, 2018 | 100 | $ | — | $ | 1,771.4 | $ | 610.7 | $ | (1.4 | ) | $ | 2,380.7 | ||||||||||
Balance at Dec. 31, 2018 | 100 | $ | — | $ | 1,932.3 | $ | 605.7 | $ | (1.4 | ) | $ | 2,536.6 | ||||||||||
Net income | 218.0 | 218.0 | ||||||||||||||||||||
Other comprehensive income | 0.1 | 0.1 | ||||||||||||||||||||
Dividends declared to parent | (255.5 | ) | (255.5 | ) | ||||||||||||||||||
Contributions of capital by parent | 393.0 | 393.0 | ||||||||||||||||||||
Balance at Sept. 30, 2019 | 100 | $ | — | $ | 2,325.3 | $ | 568.2 | $ | (1.3 | ) | $ | 2,892.2 | ||||||||||
See Notes to Financial Statements |
1. | Summary of Significant Accounting Policies |
2. | Accounting Pronouncements |
3. | Selected Balance Sheet Data |
(Millions of Dollars) | Sept. 30, 2020 | Dec. 31, 2019 | ||||||||||||
Accounts receivable, net | ||||||||||||||
Accounts receivable | $ | 117.9 | $ | 98.0 | ||||||||||
Less allowance for bad debts | (7.1) | (5.3) | ||||||||||||
Accounts receivable, net | $ | 110.8 | $ | 92.7 |
(Millions of Dollars) | Sept. 30, 2019 | Dec. 31, 2018 | ||||||
Accounts receivable, net | ||||||||
Accounts receivable | $ | 119.5 | $ | 96.3 | ||||
Less allowance for bad debts | (5.6 | ) | (5.6 | ) | ||||
Accounts receivable, net | $ | 113.9 | $ | 90.7 |
(Millions of Dollars) | Sept. 30, 2020 | Dec. 31, 2019 | ||||||||||||
Inventories | ||||||||||||||
Materials and supplies | $ | 26.2 | $ | 24.7 | ||||||||||
Fuel | 7.0 | 6.3 | ||||||||||||
Total inventories | $ | 33.2 | $ | 31.0 |
(Millions of Dollars) | Sept. 30, 2020 | Dec. 31, 2019 | ||||||||||||
Property, plant and equipment, net | ||||||||||||||
Electric plant | $ | 8,751.8 | $ | 8,453.0 | ||||||||||
Construction work in progress | 1,075.1 | 485.4 | ||||||||||||
Total property, plant and equipment | 9,826.9 | 8,938.4 | ||||||||||||
Less accumulated depreciation | (2,458.4) | (2,306.8) | ||||||||||||
Property, plant and equipment, net | $ | 7,368.5 | $ | 6,631.6 |
(Millions of Dollars) | Sept. 30, 2019 | Dec. 31, 2018 | ||||||
Inventories | ||||||||
Materials and supplies | $ | 24.8 | $ | 25.7 | ||||
Fuel | 6.6 | 8.2 | ||||||
Total inventories | $ | 31.4 | $ | 33.9 |
(Millions of Dollars) | Sept. 30, 2019 | Dec. 31, 2018 | ||||||
Property, plant and equipment, net | ||||||||
Electric plant | $ | 8,296.6 | $ | 7,227.7 | ||||
Construction work in progress | 419.2 | 847.3 | ||||||
Total property, plant and equipment | 8,715.8 | 8,075.0 | ||||||
Less accumulated depreciation | (2,273.9 | ) | (2,128.6 | ) | ||||
Property, plant and equipment, net | $ | 6,441.9 | $ | 5,946.4 |
4. Borrowings and Other Financing Instruments |
(Amounts in Millions, Except Interest Rates) | Three Months Ended Sept. 30, 2019 | Year Ended Dec. 31, 2018 | ||||||
Borrowing limit | $ | 100 | $ | 100 | ||||
Amount outstanding at period end | — | — | ||||||
Average amount outstanding | — | 29 | ||||||
Maximum amount outstanding | — | 100 | ||||||
Weighted average interest rate, computed on a daily basis | N/A | 1.96 | % | |||||
Weighted average interest rate at period end | N/A | N/A |
(Amounts in Millions, Except Interest Rates) | Three Months Ended Sept. 30, 2020 | Year Ended Dec. 31, 2019 | ||||||||||||
Borrowing limit | $ | 100 | $ | 100 | ||||||||||
Amount outstanding at period end | 10 | 0 | ||||||||||||
Average amount outstanding | 0 | 8 | ||||||||||||
Maximum amount outstanding | 10 | 100 | ||||||||||||
Weighted average interest rate, computed on a daily basis | 0.09 | % | 2.42 | % | ||||||||||
Weighted average interest rate at period end | 0.90 | N/A |
(Amounts in Millions, Except Interest Rates) | Three Months Ended Sept. 30, 2019 | Year Ended Dec. 31, 2018 | ||||||
Borrowing limit | $ | 500 | $ | 400 | ||||
Amount outstanding at period end | — | 42 | ||||||
Average amount outstanding | — | 30 | ||||||
Maximum amount outstanding | — | 144 | ||||||
Weighted average interest rate, computed on a daily basis | N/A | 2.27 | % | |||||
Weighted average interest rate at period end | N/A | 2.80 |
(Amounts in Millions, Except Interest Rates) | Three Months Ended Sept. 30, 2020 | Year Ended Dec. 31, 2019 | ||||||||||||
Borrowing limit | $ | 500 | $ | 500 | ||||||||||
Amount outstanding at period end | 0 | 0 | ||||||||||||
Average amount outstanding | 0 | 72 | ||||||||||||
Maximum amount outstanding | 0 | 316 | ||||||||||||
Weighted average interest rate, computed on a daily basis | N/A | 2.68 | % | |||||||||||
Weighted average interest rate at period end | N/A | N/A |
Credit Facility (a) | Drawn (b) | Available | ||||||||||||
$ | 500 | $ | 2 | $ | 498 |
Credit Facility (a) | Outstanding (b) | Available | ||||||||
$ | 500 | $ | 2 | $ | 498 |
(b)Includes outstanding letters of credit. |
5. Revenues |
Three Months Ended Sept. 30 | ||||||||||||||
(Millions of Dollars) | 2020 | 2019 | ||||||||||||
Major revenue types | ||||||||||||||
Revenue from contracts with customers: | ||||||||||||||
Residential | $ | 120.6 | $ | 119.3 | ||||||||||
C&I | 219.5 | 222.4 | ||||||||||||
Other | 12.9 | 12.8 | ||||||||||||
Total retail | 353.0 | 354.5 | ||||||||||||
Wholesale | 109.4 | 106.6 | ||||||||||||
Transmission | 73.5 | 64.4 | ||||||||||||
Other | 1.4 | 0.6 | ||||||||||||
Total revenue from contracts with customers | 537.3 | 526.1 | ||||||||||||
Alternative revenue and other | 78.0 | 7.0 | ||||||||||||
Total revenues | $ | 615.3 | $ | 533.1 | ||||||||||
Nine Months Ended Sept. 30 | ||||||||||||||
(Millions of Dollars) | 2020 | 2019 | ||||||||||||
Major revenue types | ||||||||||||||
Revenue from contracts with customers: | ||||||||||||||
Residential | $ | 278.3 | $ | 277.8 | ||||||||||
C&I | 552.3 | 619.6 | ||||||||||||
Other | 29.5 | 32.3 | ||||||||||||
Total retail | 860.1 | 929.7 | ||||||||||||
Wholesale | 264.2 | 263.4 | ||||||||||||
Transmission | 212.1 | 181.8 | ||||||||||||
Other | 2.6 | 2.0 | ||||||||||||
Total revenue from contracts with customers | 1,339.0 | 1,376.9 | ||||||||||||
Alternative revenue and other | 94.7 | 20.8 | ||||||||||||
Total revenues | $ | 1,433.7 | $ | 1,397.7 |
Three Months Ended | ||||||||
(Millions of Dollars) | Sept. 30, 2019 | Sept. 30, 2018 | ||||||
Major revenue types | ||||||||
Revenue from contracts with customers: | ||||||||
Residential | $ | 119.3 | $ | 114.4 | ||||
C&I | 222.4 | 229.4 | ||||||
Other | 12.8 | 13.0 | ||||||
Total retail | 354.5 | 356.8 | ||||||
Wholesale | 106.6 | 118.0 | ||||||
Transmission | 64.4 | 60.7 | ||||||
Other | 0.6 | 1.8 | ||||||
Total revenue from contracts with customers | 526.1 | 537.3 | ||||||
Alternative revenue and other | 7.0 | 2.8 | ||||||
Total revenues | $ | 533.1 | $ | 540.1 |
Nine Months Ended | ||||||||
(Millions of Dollars) | Sept. 30, 2019 | Sept. 30, 2018 | ||||||
Major revenue types | ||||||||
Revenue from contracts with customers: | ||||||||
Residential | $ | 277.8 | $ | 279.5 | ||||
C&I | 619.6 | 626.0 | ||||||
Other | 32.3 | 34.0 | ||||||
Total retail | 929.7 | 939.5 | ||||||
Wholesale | 263.4 | 326.8 | ||||||
Transmission | 181.8 | 175.4 | ||||||
Other | 2.0 | 12.2 | ||||||
Total revenue from contracts with customers | 1,376.9 | 1,453.9 | ||||||
Alternative revenue and other | 20.8 | 14.7 | ||||||
Total revenues | $ | 1,397.7 | $ | 1,468.6 |
6. | Income Taxes |
Nine Months Ended Sept. 30 | ||||||||||||||
2020 | 2019 | |||||||||||||
Federal statutory rate | 21.0 | % | 21.0 | % | ||||||||||
State tax (net of federal tax effect) | 2.4 | 2.2 | ||||||||||||
Decreases in tax from: | ||||||||||||||
Wind PTCs | (15.6) | (3.9) | ||||||||||||
Plant regulatory differences (a) | (6.2) | (4.7) | ||||||||||||
Prior period adjustments | (1.5) | (0.5) | ||||||||||||
Other tax credits, net NOL & tax credit allowances | (0.7) | (0.6) | ||||||||||||
Other (net) | (0.3) | (0.5) | ||||||||||||
Effective income tax rate | (0.9) | % | 13.0 | % |
Nine Months Ended Sept. 30, | ||||||
2019 | 2018 | |||||
Federal statutory rate | 21.0 | % | 21.0 | % | ||
State tax (net of federal tax effect) | 2.2 | 2.3 | ||||
Decreases in tax from: | ||||||
Plant regulatory differences (a) | (4.7 | ) | (3.8 | ) | ||
Wind PTCs | (3.9 | ) | — | |||
Other tax credits and tax credit and NOL allowances (net) | (0.6 | ) | (0.7 | ) | ||
Prior period adjustments | (0.5 | ) | (1.8 | ) | ||
Other (net) | (0.5 | ) | — | |||
Effective income tax rate | 13.0 | % | 17.0 | % |
(a)Regulatory differences for income tax primarily relate to the credit of excess deferred taxes to customers through the average rate assumption method. Income tax benefits associated with the credit of excess deferred credits are offset by corresponding revenue reductions. Federal Tax Loss Carryback Claims—In 2020, Xcel Energy identified certain expenses related to tax years 2009-2011 that qualify for an extended carryback claim. SPS is not expected to accrue any income tax expense related to this adjustment. |
Tax | Expiration | |||||||
2014 — 2016 | ||||||||
(Millions of Dollars) | Sept. 30, 2019 | Dec. 31, 2018 | ||||||
Unrecognized tax benefit — Permanent tax positions | $ | 3.5 | $ | 3.0 | ||||
Unrecognized tax benefit — Temporary tax positions | 1.5 | 1.5 | ||||||
Total unrecognized tax benefit | $ | 5.0 | $ | 4.5 |
(Millions of Dollars) | Sept. 30, 2020 | Dec. 31, 2019 | ||||||||||||
Unrecognized tax benefit — Permanent tax positions | $ | 2.9 | $ | 3.7 | ||||||||||
Unrecognized tax benefit — Temporary tax positions | 0.1 | 1.5 | ||||||||||||
Total unrecognized tax benefit | $ | 3.0 | $ | 5.2 |
(Millions of Dollars) | Sept. 30, 2019 | Dec. 31, 2018 | ||||||
NOL and tax credit carryforwards | $ | (4.4 | ) | $ | (3.8 | ) |
(Millions of Dollars) | Sept. 30, 2020 | Dec. 31, 2019 | ||||||||||||
NOL and tax credit carryforwards | $ | (2.2) | $ | (4.4) |
7. | Fair Value of Financial Assets and Liabilities |
Amounts in Millions (a) | Sept. 30, 2020 | Dec. 31, 2019 | ||||||||||||
Megawatt hours of electricity | 8.3 | 6.4 |
(Amounts in Millions) (a) | Sept. 30, 2019 | Dec. 31, 2018 | ||||
Mwh of electricity | 9.4 | 5.5 |
Sept. 30, 2020 | Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value Total | Netting (a) | Total | Fair Value | Fair Value Total | Netting (a) | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Millions of Dollars) | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current derivative assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other derivative instruments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Electric commodity | $ | 0 | $ | 0 | $ | 11.2 | $ | 11.2 | $ | (0.1) | $ | 11.1 | $ | 0 | $ | 0 | $ | 11.8 | $ | 11.8 | $ | 0 | $ | 11.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total current derivative assets | $ | 0 | $ | 0 | $ | 11.2 | $ | 11.2 | $ | (0.1) | 11.1 | $ | 0 | $ | 0 | $ | 11.8 | $ | 11.8 | $ | 0 | 11.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
PPAs (b) | 3.2 | 3.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current derivative instruments | $ | 14.3 | $ | 15.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncurrent derivative assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PPAs (b) | $ | 10.3 | $ | 12.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncurrent derivative instruments | $ | 10.3 | $ | 12.6 |
Sept. 30, 2019 | Dec. 31, 2018 | Sept. 30, 2020 | Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value | Fair Value | Fair Value Total | Netting (a) | Total | Fair Value | Fair Value Total | Netting (a) | 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 | (Millions of Dollars) | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current derivative assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other derivative instruments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Electric commodity | $ | — | $ | — | $ | 17.3 | $ | 17.3 | $ | — | $ | 17.3 | $ | — | $ | — | $ | 14.9 | $ | 14.9 | $ | (0.2 | ) | $ | 14.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total current derivative assets | $ | — | $ | — | $ | 17.3 | $ | 17.3 | $ | — | 17.3 | $ | — | $ | — | $ | 14.9 | $ | 14.9 | $ | (0.2 | ) | 14.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PPAs (b) | 3.1 | 3.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current derivative instruments | $ | 20.4 | $ | 17.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncurrent derivative assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PPAs (b) | 13.4 | 15.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncurrent derivative instruments | $ | 13.4 | $ | 15.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current derivative liabilities | Current derivative liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other derivative instruments: | Other derivative instruments: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Electric commodity | $ | — | $ | — | $ | 0.2 | $ | 0.2 | $ | — | $ | 0.2 | $ | — | $ | — | $ | 0.2 | $ | 0.2 | $ | (0.2 | ) | $ | — | Electric commodity | $ | 0 | $ | 0 | $ | 0.1 | $ | 0.1 | $ | (0.1) | $ | 0 | $ | 0 | $ | 0 | $ | 0.1 | $ | 0.1 | $ | 0 | $ | 0.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total current derivative liabilities | $ | — | $ | — | $ | 0.2 | $ | 0.2 | $ | — | 0.2 | $ | — | $ | — | $ | 0.2 | $ | 0.2 | $ | (0.2 | ) | — | Total current derivative liabilities | $ | 0 | $ | 0 | $ | 0.1 | $ | 0.1 | $ | (0.1) | 0 | $ | 0 | $ | 0 | $ | 0.1 | $ | 0.1 | $ | 0 | 0.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PPAs (b) | 3.5 | . | 3.6 | PPAs (b) | 3.6 | 3.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current derivative instruments | $ | 3.7 | $ | 3.6 | Current derivative instruments | $ | 3.6 | $ | 3.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncurrent derivative liabilities | Noncurrent derivative liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PPAs (b) | 13.7 | 16.4 | PPAs (b) | $ | 10.1 | $ | 12.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncurrent derivative instruments | $ | 13.7 | $ | 16.4 | Noncurrent derivative instruments | $ | 10.1 | $ | 12.8 |
(a)SPS nets derivative instruments and related collateral on its 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 Sept. 30, 2020 and Dec. 31, 2019. At Sept. 30, 2020 and Dec. 31, 2019, derivative assets and liabilities include 0 obligations to return cash collateral or rights to reclaim cash collateral. The counterparty netting excludes settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements. (b)During 2006, SPS qualified these contracts under the normal purchase exception. Based on this qualification, the contracts are no longer adjusted to fair value and the previous carrying value of these contracts will be amortized over the remaining contract lives along with the offsetting regulatory assets and liabilities. |
Three Months Ended Sept. 30, | ||||||||
(Millions of Dollars) | 2019 | 2018 | ||||||
Balance at July 1 | $ | 22.2 | $ | 35.4 | ||||
Purchases | 4.4 | 3.2 | ||||||
Settlements | (5.2 | ) | (10.1 | ) | ||||
Net transactions recorded during the period: | ||||||||
Net losses recognized as regulatory assets and liabilities | (4.3 | ) | (3.2 | ) | ||||
Balance at Sept. 30 | $ | 17.1 | $ | 25.3 |
Nine Months Ended Sept. 30, | ||||||||
(Millions of Dollars) | 2019 | 2018 | ||||||
Balance at Jan. 1 | $ | 14.7 | $ | 12.7 | ||||
Purchases | 25.5 | 22.5 | ||||||
Settlements | (24.9 | ) | (35.3 | ) | ||||
Net transactions recorded during the period: | ||||||||
Net gains recognized as regulatory assets and liabilities | 1.8 | 25.4 | ||||||
Balance at Sept. 30 | $ | 17.1 | $ | 25.3 |
Three Months Ended Sept. 30 | ||||||||||||||
(Millions of Dollars) | 2020 | 2019 | ||||||||||||
Balance at July 1 | $ | 15.7 | $ | 22.2 | ||||||||||
Purchases | 0.3 | 4.4 | ||||||||||||
Settlements | (1.3) | (5.2) | ||||||||||||
Net transactions recorded during the period: | ||||||||||||||
Net losses recognized as regulatory assets and liabilities | (3.6) | (4.3) | ||||||||||||
Balance at Sept. 30 | $ | 11.1 | $ | 17.1 | ||||||||||
Nine Months Ended Sept. 30 | ||||||||||||||
(Millions of Dollars) | 2020 | 2019 | ||||||||||||
Balance at Jan. 1 | $ | 11.7 | $ | 14.7 | ||||||||||
Purchases | 21.1 | 25.5 | ||||||||||||
Settlements | (18.2) | (24.9) | ||||||||||||
Net transactions recorded during the period: | ||||||||||||||
Net (losses) gains recognized as regulatory assets and liabilities | (3.5) | 1.8 | ||||||||||||
Balance at Sept. 30 | $ | 11.1 | $ | 17.1 |
Sept. 30, 2019 | Dec. 31, 2018 | |||||||||||||||
(Millions of Dollars) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Long-term debt | $ | 2,419.3 | $ | 2,763.2 | $ | 2,126.1 | $ | 2,139.8 |
Sept. 30, 2020 | Dec. 31, 2019 | |||||||||||||||||||||||||
(Millions of Dollars) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||||
Long-term debt | $ | 2,763.7 | $ | 3,314.4 | $ | 2,419.7 | $ | 2,706.1 |
8. | Benefit Plans and Other Postretirement Benefits |
Three Months Ended Sept. 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) | (7.1 | ) | (7.1 | ) | (0.5 | ) | (0.6 | ) | ||||||||
Amortization of prior service credit (a) | — | — | (0.1 | ) | (0.1 | ) | ||||||||||
Amortization of net loss (gain) (a) | 2.8 | 3.5 | (0.1 | ) | (0.1 | ) | ||||||||||
Net periodic benefit cost (credit) | 2.9 | 3.4 | (0.1 | ) | (0.1 | ) | ||||||||||
Credits (costs) not recognized due to the effects of regulation | 0.5 | (0.4 | ) | — | — | |||||||||||
Net benefit cost (credit) recognized for financial reporting | $ | 3.4 | $ | 3.0 | $ | (0.1 | ) | $ | (0.1 | ) |
Three Months Ended Sept. 30 | ||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
(Millions of Dollars) | Pension Benefits | Postretirement Health Care Benefits | ||||||||||||||||||||||||
Service cost | $ | 2.4 | $ | 2.2 | $ | 0.3 | $ | 0.2 | ||||||||||||||||||
Interest cost (a) | 4.5 | 5.0 | 0.3 | 0.4 | ||||||||||||||||||||||
Expected return on plan assets (a) | (7.4) | (7.1) | (0.5) | (0.5) | ||||||||||||||||||||||
Amortization of prior service credit (a) | 0 | 0 | (0.1) | (0.1) | ||||||||||||||||||||||
Amortization of net loss (gain) (a) | 3.3 | 2.8 | (0.1) | (0.1) | ||||||||||||||||||||||
Net periodic benefit cost (credit) | 2.8 | 2.9 | (0.1) | (0.1) | ||||||||||||||||||||||
Effects of regulation | 0.5 | 0.5 | 0 | 0 | ||||||||||||||||||||||
Net benefit cost (credit) recognized for financial reporting | $ | 3.3 | $ | 3.4 | $ | (0.1) | $ | (0.1) |
Nine Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||
(Millions of Dollars) | Pension Benefits | Postretirement Health Care Benefits | (Millions of Dollars) | Pension Benefits | Postretirement Health Care Benefits | |||||||||||||||||||||||||||||||||||||
Service cost | $ | 6.6 | $ | 7.3 | $ | 0.7 | $ | 0.8 | Service cost | $ | 7.2 | $ | 6.6 | $ | 0.7 | $ | 0.7 | |||||||||||||||||||||||||
Interest cost (a) | 15.1 | 13.8 | 1.3 | 1.2 | Interest cost (a) | 13.4 | 15.1 | 1.1 | 1.3 | |||||||||||||||||||||||||||||||||
Expected return on plan assets (a) | (21.5 | ) | (21.2 | ) | (1.5 | ) | (1.8 | ) | Expected return on plan assets (a) | (22.0) | (21.5) | (1.4) | (1.5) | |||||||||||||||||||||||||||||
Amortization of prior service credit (a) | (0.1 | ) | (0.1 | ) | (0.4 | ) | (0.3 | ) | Amortization of prior service credit (a) | (0.1) | (0.1) | (0.3) | (0.4) | |||||||||||||||||||||||||||||
Amortization of net loss (gain) (a) | 8.5 | 10.5 | (0.3 | ) | (0.3 | ) | Amortization of net loss (gain) (a) | 9.9 | 8.5 | (0.3) | (0.3) | |||||||||||||||||||||||||||||||
Net periodic benefit cost (credit) | 8.6 | 10.3 | (0.2 | ) | (0.4 | ) | Net periodic benefit cost (credit) | 8.4 | 8.6 | (0.2) | (0.2) | |||||||||||||||||||||||||||||||
Credits not recognized due to the effects of regulation | 1.3 | 1.3 | — | — | ||||||||||||||||||||||||||||||||||||||
Effects of regulation | Effects of regulation | 1.5 | 1.3 | 0 | 0 | |||||||||||||||||||||||||||||||||||||
Net benefit cost (credit) recognized for financial reporting | $ | 9.9 | $ | 11.6 | $ | (0.2 | ) | $ | (0.4 | ) | Net benefit cost (credit) recognized for financial reporting | $ | 9.9 | $ | 9.9 | $ | (0.2) | $ | (0.2) |
9. | Commitments and Contingencies |
(Millions of Dollars) | Sept. 30, 2019 | |||
PPAs | $ | 500.3 | ||
Other | 48.0 | |||
Gross operating lease ROU assets | 548.3 | |||
Accumulated amortization | (19.3 | ) | ||
Net operating lease ROU assets | $ | 529.0 |
(Millions of Dollars) | Three Months Ended Sept. 30, 2019 | Nine Months Ended Sept. 30, 2019 | ||||||
Operating leases | ||||||||
PPA capacity payments | $ | 11.4 | $ | 36.8 | ||||
Other operating leases (a) | 1.2 | 3.7 | ||||||
Total operating lease expense (b) | $ | 12.6 | $ | 40.5 |
(Millions of Dollars) | PPA (a) (b) Operating Leases | Other Operating Leases | Total Operating Leases | |||||||||
2019 | $ | 11.6 | $ | 0.8 | $ | 12.4 | ||||||
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 | 647.2 | 69.1 | 716.3 | |||||||||
Interest component of obligation | (165.3 | ) | (22.0 | ) | (187.3 | ) | ||||||
Present value of minimum obligation | 481.9 | 47.1 | 529.0 | |||||||||
Less current portion | (26.8 | ) | ||||||||||
Noncurrent operating lease liabilities | $ | 502.2 | ||||||||||
Weighted-average remaining lease term in years | 14.3 |
(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 |
ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Results of Operations |
Nine Months Ended Sept. 30 | ||||||||||||||
(Millions of Dollars) | 2020 | 2019 | ||||||||||||
Electric revenues | $ | 1,433.7 | $ | 1,397.7 | ||||||||||
Electric fuel and purchased power | (626.6) | (651.0) | ||||||||||||
Electric margin | $ | 807.1 | $ | 746.7 |
Nine Months Ended Sept. 30 | ||||||||
(Millions of Dollars) | 2019 | 2018 | ||||||
Electric revenues | $ | 1,397.7 | $ | 1,468.6 | ||||
Electric fuel and purchased power | (651.0 | ) | (795.6 | ) | ||||
Electric margin | $ | 746.7 | $ | 673.0 |
(Millions of Dollars) | 2020 vs. 2019 | |||||||
Regulatory rate outcomes (Texas and New Mexico)(a) | $ | 87.8 | ||||||
Wholesale transmission revenue (net) | 19.7 | |||||||
Purchased capacity costs | 9.3 | |||||||
Estimated impact of weather | 7.5 | |||||||
PTCs flowed back to customers (offset by lower ETR) | (35.1) | |||||||
Firm wholesale generation | (10.5) | |||||||
New Mexico tax reform related regulatory settlement (2019) | (10.2) | |||||||
Sales and demand(b) | (8.0) | |||||||
Other (net) | (0.1) | |||||||
Total increase in electric margin | $ | 60.4 |
(Millions of Dollars) | 2019 vs 2018 | |||
Purchased capacity costs | $ | 31.9 | ||
Regulatory rate outcomes | 23.7 | |||
Demand revenue | 19.2 | |||
Wholesale transmission, net | 14.5 | |||
Non-fuel riders | 9.8 | |||
Retail sales growth | 3.4 | |||
Firm wholesale | (16.9 | ) | ||
PTC sharing | (4.4 | ) | ||
Estimated weather impact | (4.2 | ) | ||
Other, net | (3.3 | ) | ||
Total increase in electric margin | $ | 73.7 |
Public Utility Regulation |
Proceeding | Amount (in millions) | Filing Date | Approval | |||||||||||||||||
2019 Texas Electric Rate Case | $88 | August 2019 | Received | |||||||||||||||||
2020 New Mexico Electric Rate Case | TBD | January 2021 | Pending Filing | |||||||||||||||||
2020 Texas Electric Rate Case | TBD | February 2021 | Pending Filing |
Revenue Request (Millions of Dollars) | ||||
Hale Wind Farm | $ | 62 | ||
Capital investments | 47 | |||
Depreciation rate change (including Tolk) | 34 | |||
Cost of capital | 10 | |||
Expiring purchased power contracts | (28 | ) | ||
Other, net | 11 | |||
New revenue request | $ | 136 |
(Millions of Dollars) | Nine Months Ended Sept. 30, 2020 | |||||||
Revenue surcharge accrual | $ | 70 | ||||||
Depreciation and amortization | (37) | |||||||
O&M expense | (15) | |||||||
Interest expense | (11) | |||||||
Taxes other than income taxes | (7) |
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 |
Environmental |
ITEM 4 — CONTROLS AND PROCEDURES |
ITEM 1 — LEGAL PROCEEDINGS |
ITEM 1A — RISK FACTORS |
ITEM 6 — EXHIBITS |
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* | SPS Form 10-K for the year ended Dec. 31, 2018 | 001-03789 | 3.02 | |||||||||||
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) |
Southwestern Public Service Company | ||||||||
Oct. 29, 2020 | By: | |||||||
/s/ JEFFREY S. SAVAGE | ||||||||
Jeffrey S. Savage | ||||||||
Senior Vice President, Controller | ||||||||
(Principal Accounting Officer) | ||||||||
/s/ | ||||||||
Executive Vice President, Chief Financial Officer and Director | ||||||||
(Principal Financial Officer) |