Dick KellyPresident and CEOSeptember 28, 2005
Dick KellyPresident and CEOSeptember 28, 2005
Merrill LynchGlobal Power & Gas Leaders ConferenceMerrill LynchGlobal Power & Gas Leaders Conference
This material includes forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements include projected earnings, cash flows, capital expenditures and other statements and are identified in this document by the words “anticipate,”“estimate,” “expect,” “projected,” “objective,” “outlook,” “possible,”“potential” and similar expressions. Actual results may vary materially. Factors that could cause actual results to differ materially include, but are not limited to: general economic conditions, including the availability of credit, actions of rating agencies and their impact on capital expenditures; business conditions in the energy industry; competitive factors; unusual weather; effects of geopolitical events, including war and acts of terrorism; changes in federal or state legislation; regulation; final approval and implementation of the pending settlement of the securities, ERISA and derivative litigation; costs and other effects of legal administrative proceedings, settlements, investigations and claims; actions of accounting regulatory bodies; risks associated with the California power market; the higher degree of risk associated with Xcel Energy’s nonregulated businesses compared with Xcel Energy’s regulated business; and other risk factors listed from time to time by Xcel Energy in reports filed with the SEC, including Exhibit 99.01 to Xcel Energy’s report on Form 10-K for year 2004.
This material includes forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements include projected earnings, cash flows, capital expenditures and other statements and are identified in this document by the words “anticipate,”“estimate,” “expect,” “projected,” “objective,” “outlook,” “possible,”“potential” and similar expressions. Actual results may vary materially. Factors that could cause actual results to differ materially include, but are not limited to: general economic conditions, including the availability of credit, actions of rating agencies and their impact on capital expenditures; business conditions in the energy industry; competitive factors; unusual weather; effects of geopolitical events, including war and acts of terrorism; changes in federal or state legislation; regulation; final approval and implementation of the pending settlement of the securities, ERISA and derivative litigation; costs and other effects of legal administrative proceedings, settlements, investigations and claims; actions of accounting regulatory bodies; risks associated with the California power market; the higher degree of risk associated with Xcel Energy’s nonregulated businesses compared with Xcel Energy’s regulated business; and other risk factors listed from time to time by Xcel Energy in reports filed with the SEC, including Exhibit 99.01 to Xcel Energy’s report on Form 10-K for year 2004.
Safe HarborSafe Harbor
Strategy Strategy —— Building the CoreBuilding the Core
Invest in utility assets AND
Earn our allowed return on equity
Invest in utility assets AND
Earn our allowed return on equity
Investment FocusInvestment Focus
Customer service
Supply
Fuel mix
Transmission
Environment
Customer service
Supply
Fuel mix
Transmission
Environment
2005 2006 2007 2008 2009 Total20052005 20062006 20072007 20082008 20092009 TotalTotal
Base level capitalexpenditures $ 991 $ 917 $1,021 $ 929 $1,085 $4,943
Minnesota MERP 191 404 197 125 56 973Comanche 3 59 179 287 298 125 948Total $1,241 $1,500 $1,505 $1,352 $1,266 $6,864
Anticipated annualgrowth in averagerate base 4% 4% 7% 5% 2%
Base level capitalBase level capitalexpenditures expenditures $ 991$ 991 $ 917$ 917 $1,021$1,021 $ 929$ 929 $1,085$1,085 $4,943$4,943
Minnesota MERPMinnesota MERP 191191 404404 197197 125125 5656 973973Comanche 3 Comanche 3 5959 179179 287287 298298 125125 948948TotalTotal $1,241$1,241 $1,500$1,500 $1,505$1,505 $1,352$1,352 $1,266$1,266 $6,864$6,864
Anticipated annualAnticipated annualgrowth in averagegrowth in averagerate baserate base 4%4% 4%4% 7%7% 5%5% 2%2%
Capital Expenditure ForecastCapital Expenditure Forecast
Dollars in millionsDollars in millions
Drivers to Value Creation*Drivers to Value Creation*
Average rate base $10.5 B $13 B 4.4%Average rate base $10.5 B $13 B 4.4%
*All figures except 2004 depreciation are on an estimated regulatory basis,which differs from GAAP reporting. A reconciliation from GAAP reportingis shown in the appendix.
*All figures except 2004 depreciation are on an estimated regulatory basis,which differs from GAAP reporting. A reconciliation from GAAP reportingis shown in the appendix.
PotentialResult2009
PotentialResult2009
GrowthRate
2004-2009
GrowthRate
2004-200920042004
Drivers to Value Creation*Drivers to Value Creation*
Average rate base $10.5 B $13 B 4.4%Regulatory equity ratio 50.4% 50 – 52%Equity rate base $5.3 B $6.5 – 6.76 B
Average rate base $10.5 B $13 B 4.4%Regulatory equity ratio 50.4% 50 – 52%Equity rate base $5.3 B $6.5 – 6.76 B
*All figures except 2004 depreciation are on an estimated regulatory basis,which differs from GAAP reporting. A reconciliation from GAAP reportingis shown in the appendix.
*All figures except 2004 depreciation are on an estimated regulatory basis,which differs from GAAP reporting. A reconciliation from GAAP reportingis shown in the appendix.
PotentialResult2009
PotentialResult2009
GrowthRate
2004-2009
GrowthRate
2004-200920042004
Drivers to Value Creation*Drivers to Value Creation*
Average rate base $10.5 B $13 B 4.4%Regulatory equity ratio 50.4% 50 – 52%Equity rate base $5.3 B $6.5 – 6.76 BRegulatory return on equity 9.6% 10 – 11%
Average rate base $10.5 B $13 B 4.4%Regulatory equity ratio 50.4% 50 – 52%Equity rate base $5.3 B $6.5 – 6.76 BRegulatory return on equity 9.6% 10 – 11%
*All figures except 2004 depreciation are on an estimated regulatory basis,which differs from GAAP reporting. A reconciliation from GAAP reportingis shown in the appendix.
*All figures except 2004 depreciation are on an estimated regulatory basis,which differs from GAAP reporting. A reconciliation from GAAP reportingis shown in the appendix.
PotentialResult2009
PotentialResult2009
GrowthRate
2004-2009
GrowthRate
2004-200920042004
Drivers to Value Creation*Drivers to Value Creation*
Average rate base $10.5 B $13 B 4.4%Regulatory equity ratio 50.4% 50 – 52%Equity rate base $5.3 B $6.5 – 6.76 BRegulatory return on equity 9.6% 10 – 11%Regulatory net income $506 M $650 – $744 M 5 – 8%Depreciation – Cash flow $735 M $910 M**Potential net income anddepreciation from regulatedoperations $1,241 M $1,560 – $1,654 M
Average rate base $10.5 B $13 B 4.4%Regulatory equity ratio 50.4% 50 – 52%Equity rate base $5.3 B $6.5 – 6.76 BRegulatory return on equity 9.6% 10 – 11%Regulatory net income $506 M $650 – $744 M 5 – 8%Depreciation – Cash flow $735 M $910 M**Potential net income anddepreciation from regulatedoperations $1,241 M $1,560 – $1,654 M
*All figures except 2004 depreciation are on an estimated regulatory basis,which differs from GAAP reporting. A reconciliation from GAAP reportingis shown in the appendix.
** Assumes depreciation grows at the same rate as rate base.
*All figures except 2004 depreciation are on an estimated regulatory basis,which differs from GAAP reporting. A reconciliation from GAAP reportingis shown in the appendix.
** Assumes depreciation grows at the same rate as rate base.
PotentialResult2009
PotentialResult2009
GrowthRate
2004-2009
GrowthRate
2004-200920042004
Regulatory, Legislative and Environmental Regulatory, Legislative and Environmental Support for Capital ExpendituresSupport for Capital Expenditures
Minnesota MERP rider
Comanche 3 decision — Forward CWIPand higher equity
Minnesota and Texas transmissioninvestment legislation
Minnesota MERP rider
Comanche 3 decision — Forward CWIPand higher equity
Minnesota and Texas transmissioninvestment legislation
Environmental InitiativesEnvironmental InitiativesEnvironmental Initiatives
60,000
64,000
68,000
72,000
76,000
80,000
84,000
2000 2001 2002 2003 2004
Owned Generation (GWh)Owned Generation (GWh)Owned Generation (GWh) Pounds per MWhPounds per MWhPounds per MWh
3.0
4.0
5.0
Nitrogen Oxide emissionsNitrogen Oxide emissionsNitrogen Oxide emissionsSulfur Dioxide emissionsSulfur Dioxide emissionsSulfur Dioxide emissions
Owned generation (GWh)Owned generation (GWh)Owned generation (GWh)
Renewable Energy SourcesRenewable Energy Sources
Hydro 1,885 MWWind 953 MWBiomass 95 MWSolar 40 KW
Total 2,933 MW
HydroHydro 1,885 MW1,885 MWWindWind 953 MW953 MWBiomassBiomass 95 MW95 MWSolarSolar 40 KW40 KW
TotalTotal 2,933 MW2,933 MW
TypeType Capacity Capacity *
* Owned and purchased** Nameplate rating** Owned and purchasedOwned and purchased**** Nameplate ratingNameplate rating
> 12% of 2004 system capacity> 12% of 2004 system capacity> 12% of 2004 system capacity
**
Electric Fuel and Purchased EnergyElectric Fuel and Purchased EnergyCost Recovery MechanismsCost Recovery Mechanisms
Minnesota: Monthly recovery of prospective costs
Colorado: Recovery of costs with sharing of deviations up to + $11.25 millionfrom benchmark
Texas: File for semi-annual adjustments –required if + 4% annually
Wisconsin: Biennial rate case – file for interim adjustment if costs fall outside + 2% annually
New Mexico: Recovery of costs with 2 month lag
Minnesota: Monthly recovery of prospective costs
Colorado: Recovery of costs with sharing of deviations up to + $11.25 millionfrom benchmark
Texas: File for semi-annual adjustments –required if + 4% annually
Wisconsin: Biennial rate case – file for interim adjustment if costs fall outside + 2% annually
New Mexico: Recovery of costs with 2 month lag
Retail Electric Rate* ComparisonRetail Electric RateRetail Electric Rate** ComparisonComparison
0
2
4
6
8
10
12
14
16
18
0
2
4
6
8
10
12
14
16
18 * EEI typical bills – Summer 2004* EEI typical bills * EEI typical bills –– Summer 2004Summer 2004Cents per KWhCents per KWhCents per KWh
Amarillo
Amarillo
Amarillo
Kansas City
Kansas City
Kansas CityDenverDenverDenver
Mpls/St. Paul
Mpls/St. Paul
Mpls/St. Paul
BostonBostonBoston
Des Moines
Des Moines
Des Moines
Chicago
Chicago
Chicago
Milwaukee
Milwaukee
Milwaukee
Phoenix
Phoenix
Phoenix
Salt Lake City
Salt Lake City
Salt Lake City
4.874.874.876.066.066.066.016.016.01
St. Louis
St. Louis
St. Louis
MiamiMiamiMiami
New York
New York
New York
Rate Cases with Potential RevenueRate Cases with Potential RevenueIncreases Effective in 2006Increases Effective in 2006
Colorado Gas – Requested $34 million
Wisconsin Electric and Gas – Requested$48 million
Minnesota Electric
North Dakota Electric
Colorado Gas – Requested $34 million
Wisconsin Electric and Gas – Requested$48 million
Minnesota Electric
North Dakota Electric
Rate Cases with Potential RevenueRate Cases with Potential RevenueIncreases Effective in 2007Increases Effective in 2007
Colorado Electric
South Dakota Electric
Texas Electric
New Mexico Electric
Colorado Electric
South Dakota Electric
Texas Electric
New Mexico Electric
Funding the StrategyFunding the Strategy
Growing cash from operations
Tax loss carry-forward
Proceeds from asset sales
Financing:— Dividend reinvestment program— Modest debt issuance— No equity issuance necessary through 2006
Uncertain whether there is a need forpublic equity issuance in 2007 or 2008
Growing cash from operations
Tax loss carry-forward
Proceeds from asset sales
Financing:— Dividend reinvestment program— Modest debt issuance— No equity issuance necessary through 2006
Uncertain whether there is a need forpublic equity issuance in 2007 or 2008
2005 EPS Guidance 2005 EPS Guidance Continuing Operations*Continuing Operations*
Regulated utility $1.27 – 1.37Holding Company & other (0.09)Total earnings fromcontinuing operations $1.18 – 1.28
Regulated utility $1.27 – 1.37Holding Company & other (0.09)Total earnings fromcontinuing operations $1.18 – 1.28
2005 Guidance
2005 Guidance
* 2005 Guidance includes COLI tax benefits of 9 cents per share* 2005 Guidance includes COLI tax benefits of 9 cents per share
DividendDividend
Annual dividend increased by 3 centsMay 2005
Current annual dividend rate of 86 cents
Annual dividend increases consistentwith long-term earnings growth of 2 – 4%
Annual dividend increased by 3 centsMay 2005
Current annual dividend rate of 86 cents
Annual dividend increases consistentwith long-term earnings growth of 2 – 4%
Investing to meet the growing energyneeds of our region
Regulatory, legislative and environmental support for investment strategy
Deliver low-risk, competitive total return
Investing to meet the growing energyneeds of our region
Regulatory, legislative and environmental support for investment strategy
Deliver low-risk, competitive total return
Appendix
Customers:3.3 Million Electric1.8 Million Gas
Customers:3.3 Million Electric1.8 Million Gas
4th largest US electricand gas utility —
4th largest US electricand gas utility —
Public Service Company of
Colorado
Northern States Power Company-
Wisconsin
Northern States Power Company-
Minnesota
Southwestern Public Service
Unemployment rate —June 2005
US 5.2%Xcel service area 4.2%
Job growth – 2005 ForecastXcel service area 2.4%
Xcel annual sales growth —2005-2009
Electric 2.0%Gas 1.2%
Unemployment rate —June 2005
US 5.2%Xcel service area 4.2%
Job growth – 2005 ForecastXcel service area 2.4%
Xcel annual sales growth —2005-2009
Electric 2.0%Gas 1.2%
Strong Regional Economy
Strong Regional Economy
Organizational StructureOrganizational Structure2004 Results2004 Results
Xcel Energy Inc.$527
RegulatedRegulated NonregulatedNonregulated
NorthernStatesPower
Company -Minnesota
NorthernStatesPower
Company -Wisconsin
PublicService
Company ofColorado
SouthwesternPublic
ServiceCompany
$230 $54 $218 $55 $13
Income from ContinuingOperations (Dollars in millions)Income from ContinuingIncome from ContinuingOperations (Dollars in millions)Operations (Dollars in millions)
SubsidiariesEloigneQuixx
HoldingCompany
$(43)
Rate Base Earned Auth- Equity2004 ROE orized Ratio
Average 2004 ROE 2004
Rate Base Earned Auth- Equity2004 ROE orized Ratio
Average 2004 ROE 2004
Rate Base and ReturnsRate Base and ReturnsDollars in millionsDollars in millions
Minnesota - Electric retail $2,992 10.73% (1) 11.47% 50.3%Minnesota - Gas retail 402 8.50 10.40 (2) 50.3North Dakota - Electric retail 166 10.80 12.00 50.3North Dakota - Gas retail 39 8.18 11.50 47.6Colorado - Electric retail 3,042 9.18 10.75 50.1Colorado - Gas retail 996 8.76 11.00 50.1Texas - Electric retail 889 9.39 11.50 48.7NSP (W) - Retail electric 538 NR 11.90 55.8NSP (W) - Retail gas 70 NR 11.90 55.8Non-reported 1.4 BTotal including non-reported 10.5 B
Minnesota - Electric retail $2,992 10.73% (1) 11.47% 50.3%Minnesota - Gas retail 402 8.50 10.40 (2) 50.3North Dakota - Electric retail 166 10.80 12.00 50.3North Dakota - Gas retail 39 8.18 11.50 47.6Colorado - Electric retail 3,042 9.18 10.75 50.1Colorado - Gas retail 996 8.76 11.00 50.1Texas - Electric retail 889 9.39 11.50 48.7NSP (W) - Retail electric 538 NR 11.90 55.8NSP (W) - Retail gas 70 NR 11.90 55.8Non-reported 1.4 BTotal including non-reported 10.5 B
(1) Projected 2005 ROE of 8.96% based on normal conditions. 2004 result reflects strong trading margins and change in decommissioning accrual.
(2) 2005 decision
(1) Projected 2005 ROE of 8.96% based on normal conditions. 2004 result reflects strong trading margins and change in decommissioning accrual.
(2) 2005 decision
NR: Non-reportableNR: Non-reportable
Reconciliation of Estimated Regulatory Reconciliation of Estimated Regulatory Reporting from GAAPReporting from GAAP
Common EquityCommon Equity
2004 GAAP common stockholder’s equity (1) $2,007 $433 $2,287 $781 $5,5072003 GAAP common stockholder’s equity (1) 1,809 425 2,140 814 5,188Average GAAP common stockholder’s equity 1,908 429 2,213 798 5,348Adjustments -5 -5 64 -11 43Adjusted average equity for purposes
of regulatory equity ratio $1,903 $424 $2,277 $787 $5,391
2004 GAAP common stockholder’s equity (1) $2,007 $433 $2,287 $781 $5,5072003 GAAP common stockholder’s equity (1) 1,809 425 2,140 814 5,188Average GAAP common stockholder’s equity 1,908 429 2,213 798 5,348Adjustments -5 -5 64 -11 43Adjusted average equity for purposes
of regulatory equity ratio $1,903 $424 $2,277 $787 $5,391
NSP (M) NSP (W) PSCo SPS TotalNSP (M) NSP (W) PSCo SPS Total
Dollars in millionsDollars in millions
DebtSource: 2004 Operating Company 10-K’sDebtSource: 2004 Operating Company 10-K’s
2004 GAAP total debt (1) (2) $2,032 $348 $2,502 $861 $5,7432003 GAAP total debt (1) (2) 2,003 337 1,845 825 5,010Average GAAP total debt 2,018 342 2,173 843 5,376Adjustments -140 -6 94 -16 -68Adjusted average debt for purposes
of regulatory equity ratio $1,878 $336 $2,267 $827 $5,308
Regulatory equity ratio 50.4%
2004 GAAP total debt (1) (2) $2,032 $348 $2,502 $861 $5,7432003 GAAP total debt (1) (2) 2,003 337 1,845 825 5,010Average GAAP total debt 2,018 342 2,173 843 5,376Adjustments -140 -6 94 -16 -68Adjusted average debt for purposes
of regulatory equity ratio $1,878 $336 $2,267 $827 $5,308
Regulatory equity ratio 50.4%
NSP (M) NSP (W) PSCo SPS TotalNSP (M) NSP (W) PSCo SPS Total
(1) Source: 2004 Operating Company 10-K’s (2) Consists of long-term debt, current portion of long-term debt and short-term debtSee note on the bottom of the following page for additional information
(1) Source: 2004 Operating Company 10-K’s (2) Consists of long-term debt, current portion of long-term debt and short-term debtSee note on the bottom of the following page for additional information
Reconciliation of Estimated Regulatory Reconciliation of Estimated Regulatory Reporting from GAAP Reporting from GAAP (Continued)(Continued)
Net IncomeNet Income
2004 GAAP net income (1) $230 $54 $218 $55 $557 Adjustments -25 -26 -51Adjusted net income for purposes of
regulatory net income $205 $54 $192 $55 $506
2004 GAAP net income (1) $230 $54 $218 $55 $557 Adjustments -25 -26 -51Adjusted net income for purposes of
regulatory net income $205 $54 $192 $55 $506
NSP (M) NSP (W) PSCo SPS TotalNSP (M) NSP (W) PSCo SPS TotalDollars in millionsDollars in millions
Depreciation & Amortization – Cash FlowsDepreciation & Amortization – Cash Flows
Financial results for regulatory reporting frequently differ from GAAP.Regulatory reporting includes the use of 12 and 13 month averages for capitalization, eliminates inter-company transactions, excludes non-regulated investments, includes or excludes revenues and or expenses associated with various recovery mechanisms and other factors, all of which may vary from one regulatory jurisdiction to another.
Financial results for regulatory reporting frequently differ from GAAP.Regulatory reporting includes the use of 12 and 13 month averages for capitalization, eliminates inter-company transactions, excludes non-regulated investments, includes or excludes revenues and or expenses associated with various recovery mechanisms and other factors, all of which may vary from one regulatory jurisdiction to another.
Estimated regulatory rate base ($10.5 B) x Regulatory equity ratio (50.4%)= Estimated equity rate base ($5.3 B)
Regulatory net income ($506 M) ÷ Estimated equity rate base ($5.3 B) = Estimated regulatoryreturn on equity (9.6%)
Estimated regulatory rate base ($10.5 B) x Regulatory equity ratio (50.4%)= Estimated equity rate base ($5.3 B)
Regulatory net income ($506 M) ÷ Estimated equity rate base ($5.3 B) = Estimated regulatoryreturn on equity (9.6%)
Calculation of Regulatory Net IncomeCalculation of Regulatory Net Income
2004 GAAP depreciationand amortization – cash flow (1) $352 $48 $234 $100 $735
2004 GAAP depreciationand amortization – cash flow (1) $352 $48 $234 $100 $735
NSP (M) NSP (W) PSCo SPS TotalNSP (M) NSP (W) PSCo SPS Total
(1) Source: 2004 Operating Company 10-K’s(1) Source: 2004 Operating Company 10-K’s
NSP NSP —— Minnesota Rate CasesMinnesota Rate Cases
North Dakota Gas Approved June $0.7 million increase
Minnesota Gas Approved July $5.8 million10.4% ROE increase
Minnesota Electric To be filed Winter 20052006 test yearInterim rates early 2006Decision Summer 2006
North Dakota To be filed Winter 2005Electric Interim rates early 2006
Decision Summer 2006South Dakota To be filed mid-2006Electric Decision 2007
North Dakota Gas Approved June $0.7 million increase
Minnesota Gas Approved July $5.8 million10.4% ROE increase
Minnesota Electric To be filed Winter 20052006 test yearInterim rates early 2006Decision Summer 2006
North Dakota To be filed Winter 2005Electric Interim rates early 2006
Decision Summer 2006South Dakota To be filed mid-2006Electric Decision 2007
PSCo Rate CasesPSCo Rate Cases
Colorado Gas Filed May 27Requested $34 million11% ROE55.49% common equityYear-end rate base Decision early 2006
Colorado Electric To be filed Spring 2006Decision early 2007
Colorado Gas Filed May 27Requested $34 million11% ROE55.49% common equityYear-end rate base Decision early 2006
Colorado Electric To be filed Spring 2006Decision early 2007
Wisconsin Electric and Gas Rate CaseWisconsin Electric and Gas Rate Case
Requested ROE 11.9%
Common equity ratio 56.32%
Electric requested: Revenue increase of $40.8 million
Gas requested: Revenue increase of $7.0 million
Rates expected to be in effect January 2006
Requested ROE 11.9%
Common equity ratio 56.32%
Electric requested: Revenue increase of $40.8 million
Gas requested: Revenue increase of $7.0 million
Rates expected to be in effect January 2006
SPS Rate CasesSPS Rate Cases
Texas Electric To be filed Summer 2006Decision 2007
New Mexico To be filed 2006 Electric Decision 2007
Texas Electric To be filed Summer 2006Decision 2007
New Mexico To be filed 2006 Electric Decision 2007
Capital Expenditures $6.9 BillionCapital Expenditures $6.9 Billion2005 2005 –– 20092009
Customer Additions27%
Customer Additions27%
Comanche 314%
Comanche 314%
MERP14%
MERP14%Generation
10%Generation
10%
Nuclear Fuel5%
Nuclear Fuel5%
Replace,Refurbish, Upgrade
15%
Replace,Refurbish, Upgrade
15%
Mandated, Safety & Other
15%
Mandated, Safety & Other
15%
Capital Expenditure ForecastCapital Expenditure Forecastby Operating Companyby Operating Company
NSP-Minnesota $ 645 $ 832 $ 713 $ 571 $ 605
NSP-Wisconsin 60 79 75 74 68
PSCo 425 499 593 591 488
SPS 111 90 124 116 105
Total $1,241 $1,500 $1,505 $1,352 $1,266
NSP-Minnesota $ 645 $ 832 $ 713 $ 571 $ 605
NSP-Wisconsin 60 79 75 74 68
PSCo 425 499 593 591 488
SPS 111 90 124 116 105
Total $1,241 $1,500 $1,505 $1,352 $1,266
2005 2006 2007 2008 20092005 2006 2007 2008 2009
Dollars in millionsDollars in millions
NSP NSP —— Minnesota Operating CompanyMinnesota Operating CompanyCapital Expenditure ForecastCapital Expenditure ForecastDollars in millionsDollars in millions
MERP $191 $404 $197 $125 $ 56 $ 973Excluding MERP 454 428 516 446 549 2,393Total $645 $832 $713 $571 $605 $3,366
MERP $191 $404 $197 $125 $ 56 $ 973Excluding MERP 454 428 516 446 549 2,393Total $645 $832 $713 $571 $605 $3,366
2005 2006 2007 2008 2009 Total2005 2006 2007 2008 2009 Total
MERP $ 973Transmission 459Nuclear fuel 336Balance of electric 1,250Gas 188Common 160Total $3,366
MERP $ 973Transmission 459Nuclear fuel 336Balance of electric 1,250Gas 188Common 160Total $3,366
PSCo Operating CompanyPSCo Operating CompanyCapital Expenditure ForecastCapital Expenditure Forecast
Comanche 3 $ 948Transmission 280Balance of electric 809Gas 438Common 98Thermal 16Non-utility 7Total $2,596
Comanche 3 $ 948Transmission 280Balance of electric 809Gas 438Common 98Thermal 16Non-utility 7Total $2,596
Dollars in millionsDollars in millions
Comanche 3 $ 59 $179 $287 $298 $125 $ 948Excl. Comanche 3 366 320 306 293 363 1,648Total $425 $499 $593 $591 $488 $2,596
Comanche 3 $ 59 $179 $287 $298 $125 $ 948Excl. Comanche 3 366 320 306 293 363 1,648Total $425 $499 $593 $591 $488 $2,596
2005 2006 2007 2008 2009 Total2005 2006 2007 2008 2009 Total
SPS Operating CompanySPS Operating CompanyCapital Expenditure ForecastCapital Expenditure ForecastDollars in millionsDollars in millions
Total $111 $90 $124 $116 $105 $546Total $111 $90 $124 $116 $105 $5462005 2006 2007 2008 2009 Total2005 2006 2007 2008 2009 Total
Transmission $140Balance of electric 406Total electric $546
Transmission $140Balance of electric 406Total electric $546
NSP NSP —— Wisconsin Operating CompanyWisconsin Operating CompanyCapital Expenditure ForecastCapital Expenditure ForecastDollars in millionsDollars in millions
Total $60 $79 $75 $74 $68 $356Total $60 $79 $75 $74 $68 $3562005 2006 2007 2008 2009 Total2005 2006 2007 2008 2009 Total
Transmission $ 73Balance of electric 200Gas 45Common 38Total $356
Transmission $ 73Balance of electric 200Gas 45Common 38Total $356
Capital expendituresCurrent year $191 $404 $197 $125 $56Cumulative $238 $642 $839 $964 $1,020
Equity ratio 48.5% 48.5% 48.5% 48.5% 48.5%
Return on equity 10.86% 10.86% 10.86% 10.86% 10.86%
Equity return $8 $24 $40 $48 $53
Capital expendituresCurrent year $191 $404 $197 $125 $56Cumulative $238 $642 $839 $964 $1,020
Equity ratio 48.5% 48.5% 48.5% 48.5% 48.5%
Return on equity 10.86% 10.86% 10.86% 10.86% 10.86%
Equity return $8 $24 $40 $48 $53
Minnesota MERP Minnesota MERP —— Potential EarningsPotential EarningsDollars in millionsDollars in millions
2005 2006 2007 2008 20092005 2006 2007 2008 2009
Capital expendituresCurrent year $59 $179 $287 $298 $125Cumulative $62 $241 $528 $826 $951
Equity ratio 56% 56% 56% 56% 56%
Return on equity 10.75% 10.75% 10.75% 10.75% 10.75%
Equity return $2 $9 $23 $41 $54
Capital expendituresCurrent year $59 $179 $287 $298 $125Cumulative $62 $241 $528 $826 $951
Equity ratio 56% 56% 56% 56% 56%
Return on equity 10.75% 10.75% 10.75% 10.75% 10.75%
Equity return $2 $9 $23 $41 $54
Comanche 3 Comanche 3 —— Potential EarningsPotential EarningsDollars in millionsDollars in millions
2005 2006 2007 2008 20092005 2006 2007 2008 2009
Energy Supply Mix Energy Supply Mix —— 20042004Owned and PurchasedOwned and Purchased
Owned Generation
68%
Owned Generation
68%
Gas21%Gas21%
Other11%
Other11%
Purchased Energy
Purchased Energy
Nuclear12%
Nuclear12%
Coal *54%
Coal *54%
Gas27%Gas27%
Renewable7%
Renewable7%
Fuel MixFuel Mix
* Low-sulfur, low-mercury western coal* Low-sulfur, low-mercury western coal
Coal Supply ContractedCoal Supply ContractedCoal Supply Contracted
2005 99% 100%2006 78 752007 65 452008 46 45
2005 99% 100%2006 78 752007 65 452008 46 45
CoalCoal Transportation
CoalCoal Transportation
Annual consumption: 32 Million tons of lowAnnual consumption: 32 Million tons of low--sulfur, sulfur, lowlow--mercury western coalmercury western coal
Senior Debt RatingsSenior Debt Ratings
Holding Co. -- Baa1 -- BBB-NSPM A2 A3 A- BBB-NSPW A2 A3 A- BBB PSCo A3 Baa1 A- BBB-SPS -- Baa1 -- BBB
Outlook Stable Stable
Holding Co. -- Baa1 -- BBB-NSPM A2 A3 A- BBB-NSPW A2 A3 A- BBB PSCo A3 Baa1 A- BBB-SPS -- Baa1 -- BBB
Outlook Stable Stable
Secured Unsecured Secured Unsecured Secured Unsecured Secured Unsecured Moody’sMoody’s S&PS&P
CompanyCompany--Owned Life Insurance (COLI)Owned Life Insurance (COLI)
IRS dispute over tax deductibility of COLI— $350 million potential exposure for tax
and interest— $65 million potential exposure for penalties— 2005 guidance includes $40 million tax benefit
or 9 cents per share for COLI— It will potentially take several years to resolve
Potential FASB financial reporting issue— Exposure draft issued on uncertain tax positions— Impacts financial reporting not cash flows
IRS dispute over tax deductibility of COLI— $350 million potential exposure for tax
and interest— $65 million potential exposure for penalties— 2005 guidance includes $40 million tax benefit
or 9 cents per share for COLI— It will potentially take several years to resolve
Potential FASB financial reporting issue— Exposure draft issued on uncertain tax positions— Impacts financial reporting not cash flows