item number 2 - interchange.puc.texas.gov

Control Number : 38147

Item Number : 2

Addendum StartPage : 0

DOCKET NO. 38147

APPLICATION OF SOUTHWESTERNPUBLIC SERVICE COMPANY FORAUTHORITY TO CHANGE RATESAND TO RECONCILE FUEL ANDPURCHASED POWER COSTS FOR2008 AND 2009

§ -§ PUBLIC UTILITY COMMISSION

§§§ OF TEXAS

§

TABLE OF CONTENTS

APPLICATION OF SOUTHWESTERN PUBLIC SERVICE COMPANY FOR:AUTHORITY TO CHANGE RATES AND TO RECONCILE FUEL AND

PURCHASED POWER COSTS FOR 2008 AND 2009

(Filename: SPSToCRFP2010.doc)

Volume Witness Description of Attachment Page

Revenue Reguirements Section

APP Table of Contents

Application IAttachment A Proposed Notice 19Attachment B Bill Comparison 22Attachment C Protective Order 25

Certificate of Service 45

Executive Summary 46

RR 1 Gary N. Lakey IGNL-RR-1 Revenue Increase Summary 92GNL-RR-2 Map of SPS Transmission System 93GNL-RR-3 Summary of Rate Case Expenses 94GNL-RR-4 Organization Chart 95

Summary of XES Expenses to SPS by Affiliate Class andGNL-RR-A Billing Method 96

XES Expenses to all Affiliates by Affiliate Class,GNL-RR-B Activity, Billing Method, and FERC Account 97

Exclusions from XES Expenses by Affiliate Class andGNL-RR-C FERC Account 119

Pro Forma Adjustments to XES Expenses by AffiliateGNL-RR-D Class and FERC Account 120

GNL-RR-5 Workpaper 121

Table of ContentsSouthwestern Public Service Company Application forAuthority to Change Rates and to Reconcile Fuel and

Purchased Power Costs for 2008 and 2009Page 1

RR 2

Charles E. Anderson No Attachments 122

George E. Tyson 135Description of the ratings used by S&P, Moody's and

GET-RR-1 Fitch 161GET-RR-2(CONF) S&P Ratings Direct, Criteria Methodology 164GET-RR-3(CONF) S&P Ratings Direct, SPS, November 18, 2009 165

GET-RR-4 Moody's Investors Service, Rating Methodology 166Moody's Investors Service, Credit Opinion, SPS

GET-RR-5 December 8, 2009 210

Robert B. Hevert 215RBH-RR-1 Resume and Testimony Listing 287RBH-RR-2 DCF Results 296RBH-RR-3 Beta Calculation 299RBH-RR-4 CAPM 302RBH-RR-5 Risk Premium 320RBH-RR-6 Capital Expenditures 322RBH-RR-7 Small Size Premium 323RBH-RR-8 Flotation Costs 324RBH-RR-9 Capital Structure 325

Michael A. Laros 327Summary of Previous Testimony Appearances and

MAL-RR-1 Filings 381

Kimberly S. Locker 382Xcel Energy List of Holding Company Affiliates by

KSL-RR-1 Group 485

KSL-RR-2 Total XES Billings to Legal Entities 491

KSL-RR-3 XES Training 492

KSL-RR-4 XES Affiliate Classes and Witnesses 1

KSL-RR-5 XES Affiliate Class Roll Up Pictorial View 2

KSL-RR-6 XES Service Agreement with SPS 3

KSL-RR-7 XES Policies and Procedures 20

KSL-RR-8 XES 2009 Form 60 34

KSL-RR-9 XES Six-Digit Work Orders and Amounts Billed to SPS 83XES Eight-Digit Work Orders and Per Book Amounts

KSL-RR-10 Billed to SPS 91XES Five Digit Direct O&M Work Order and Per Book

KSL-RR-11 Amount Billed to SPS 93

KSL-RR-12 XES Three-Digit Work Order Summary Schedules 94

KSL-RR-13 XES Three-Digit Work Order Calculations 199

KSL-RR-14 XES Shared Asset Agreement with SPS 317

Total XES Billings to SPS with Balance SheetKSL-RR-15 Exclusions 321

XES Billings to SPS with Exclusions from the Cost ofKSL-RR-16 Service 323KSL-RR-17 XES Billings to SPS with Pro Forma Adjustments 325

KSL-RR-18 All Other Affiliate Billing Except XES 327



APP - ') nf '70 2

XES Billings to SPS by Witness Before Pro FormaKSL-RR-19 Adjustments 330KSL-RR-20 Xcel Energy List of Affiliates Pictorical View 331KSL-RR-21 Total XES Three-Digit Work Orders Billed by Affiliate 335KSL-RR-22 XES Six-Digit Work Orders by Affiliate Class 337

XES Estimated Impact on Three-Digit Work Orders forKSL-RR-23 Lubbock Sale 347

Summary of XES Expenses to SPS by Affiliate Class andKSL-RR-A Billing Method 362

XES Expenses to all Affiliates by Affiliate Class,KSL-RR-B Activity, Billing Method, and FERC Account 381

RR 3

RR 4

XES Expenses to all Affiliates by Affiliate Class,KSL-RR-B Activity, Billing Method, and FERC Account 1

Exclusions from XES Expenses by Affiliate Class andKSL-RR-C FERC Account 470

Pro Forma Adjustments to XES Expenses by AffiliateKSL-RR-D Class and FERC Account 482

Lisa H. PerkettCapital Additions, January 2008 through December 2009,

LHP-RR-1 Separated by Sponsoring Witness 56Capital Additions, Separated by Cost Component and

LHP-RR-2 Sponsoring Witness 232FERC, Uniform System of Accounts, Components of

LHP-RR-3 Construction Cost 248LHP-RR-4 Affiliate Charge - Cost Components 260LHP-RR-5 Allocating Software Work Orders 262

LHP-RR-6 Xcel Energy Shared Asset and Service Company Policy 264LHP-RR-7 Example of Software Allocated Charge Processing 276

LHP-RR-8 TLG Revised Dismantling Study 277Comparison of Net Salvage Rate Proposed to TLG

LHP-RR-9 Dismantling Costs 341

LHP-RR-10 Theoretical Example of Cost of Removal Tracker 345

LHP-RR-11 Calculation to Unblend Depreciation Reserve 346Calculation of Accumulated Deferred Federal Income

LHP-RR-12 Tax Adjustment 354

Amy L. Stitt 355Organizational Charts for Organizations Providing

ALS-RR-1 Affiliate Services 396Summary of XES Expenses to SPS by Affiliate Class and

ALS-RR-A Billing Method 407XES Expenses to all Affiliates by Affiliate Class,

ALS-RR-B Activity, Billing Method, and FERC Account 410Exclusions from XES Expenses by Affiliate Class and

ALS-RR-C FERC Account 530Pro Forma Adjustments to XES Expenses by Affiliate

ALS-RR-D Class and FERC Account 531



APP -1 nf 70 3

RR 5

RR 6

Nancy J. Held 1NJH-RR-1 Organization Chart 89

Summary of XES Expenses to SPS by Affiliate Class andNJH-RR-A Billing Method 90

XES Expenses to all Affiliates by Affiliate Class,NJH-RR-B Activity, Billing Method, and FERC Account 91

Exclusions from XES Expenses to SPS by Affiliate ClassNJH-RR-C and FERC Account 143

Pro Forma Adjustments to XES Expenses by AffiliateNJH-RR-D Class and FERC Account 144NJH-RR-2 Capital Additions 145NJH-RR-3 Workpapers 148

Alan L. Bellinghausen 149ALB-RR-1 Customer Care Class Organization Chart 185ALB-RR-2 SPS OSHA rates for the years 2006 through 2009 187

Summary of XES Expenses to SPS by Affiliate Class andALB-RR-A Billing Method 188

XES Expenses to all Affiliates by Affiliate Class,ALB-RR-B Activity, Billing Method, and FERC Account 189

Exclusions from XES Expenses to SPS by Affiliate ClassALB-RR-C and FERC Account 273

Pro Forma Adjustments to XES Expenses by AffiliateALB-RR-D Class and FERC Account 274

Byron R. Craig 275BRC-RR-1 Transmission Capital Additions 295

BRC-RR-2 Summary of Transmission Capital Projects 309

Gary J. O'Hara 319

GJO-RR-1 Supply Chain Organization Chart 346

CAPS Research - Cross-Industry Standard BenchmarksGJO-RR-2 Utilities Industry 347

Summary of XES Expenses to SPS by Witness andGJO-RR-A Affiliate Class 348

XES Expenses to SPS by Witness, Affiliate Class,GJO-RR-B Activity, and Billing Method 349

Exclusions from XES Expenses to SPS by Witness andGJO-RR-C Affiliate Class 351

Pro Forma Adjustments to XES Expenses by AffiliateGJO-RR-D Class 352

David T. Hudson 353

DTH-RR-1 Organizational Chart of the Distribution Utilities Group 390

DTH-RR-2 Distribution Capital Additions 391

Summary of XES Expenses to SPS by Witness andDTH-RR-A Affiliate Class I

XES Expenses to SPS by Witness, Affiliate Class,DTH-RR-B Activity, and Billing Method 2



A rlrl A .,r 'In ^+

Exclusions from XES Expenses to SPS by Witness andDTH-RR-C Affiliate Class

Pro Forma Adjustments to XES Expenses by AffiliateDTH-RR-D Class

Micheal C. GersackMCG-RR-1

MCG-RR-A

MCG-RR-B

MCG-RR-C

MCG-RR-D

Mark D. FreemanMDF-RR-1MDF-RR-2MDF-RR-3MDF-RR-4

MDF-RR-A

MDF-RR-B

MDF-RR-C

MDF-RR-D

David C. HarknessDCH-RR-1DCH-RR-2

DCH-RR-A

DCH-RR-B

DCH-RR-C

DCH-RR-D

RR 7 Michael C. ConnellyMCC-RR-1

MCC-RR-A

MCC-RR-B

MCC-RR-C

MCC-RR-D

Customer Solutions Organizational ChartSummary of XES Expenses to SPS by Affiliate Class andBilling MethodXES Expenses to all Affiliates by Affiliate Class,Activity, Billing Method, and FERC AccountExclusions from XES Expenses by Affiliate Class andFERC AccountPro Forma Adjustments to XES Expenses by AffiliateClass and FERC Account

Energy Supply Affiliate Class Organizational ChartGeneration Costs BenchmarkingEnergy Supply Capital AdditionsGeneration Capital BenchmarkingSummary of XES Expenses to SPS by Witness andAffiliate ClassXES Expenses to SPS by Witness, Affiliate Class,Activity, and Billing MethodExclusions from XES Expenses to SPS by Witness andAffiliate ClassPro Forma Adjustments to XES Expenses by AffiliateClass

Organization ChartCapital AdditionsSummary of XES Expenses to SPS by Affiliate Class andBilling MethodXES Expenses to all Affiliates by Affiliate Class,Activity, Billing Method, and FERC AccountExclusions from XES Expenses to SPS by Affiliate Classand FERC AccountPro Forma Adjustments to XES Expenses by AffiliateClass and FERC Account

General Counsel Organizational ChartSummary of XES Expenses to SPS by Affiliate Class andBilling MethodXES Expenses to all Affiliates by Affiliate Class,Activity, Billing Method, and FERC AccountExclusions from XES Expenses by Affiliate Class andFERC AccountPro Forma Adjustments to XES Expenses by AffiliateClass and FERC Account

26

27

2857

58

59

90

91

92149150152170

171

172

295

296

298342345

349

351

467

468

141

42

43

72

73

Table of Contents

Southwestern Public Service Company Application forAuthority to Change Rates and to Reconcile Fuel and


ADD G „F '70 5

Mark R. McCloskey 74MRM-RR-1(HS) 2009 Xcel Energy Non-bargaining Annual Incentive Plan 152

2009 Wholesale Marketing & Trading SupplementalMRM-RR-2(HS) Incentive Program 153MRM-RR-3(HS) 2010 Towers Watson Utility Compensation Study 154

Percentages of Annual Incentive Plan Compensation DueMRM-RR-4 to Operational v. Financial Goals 155

MRM-RR-5(HS) Watson Wyatt's Comparison Study 156MRM-RR-6(HS) Towers Perrin Health Care 360 Study 157

Summary of XES Expenses to SPS by Affiliate Class andMRM-RR-A Billing Method 158

XES Expenses to all Affiliates by Affiliate Class,MRM-RR-B Activity, Billing Method, and FERC Account 160

Exclusions from XES Expenses by Affiliate Class andMRM-RR-C FERC Account 191

Pro Forma Adjustments to XES Expenses by AffiliateMRM-RR-D Class and FERC Account 192

Eduardo E. Gonzales 1932008 & 2009 Steam Heat Rates for Utilities Serving

EEG-RR-1 Texas 2262008 & 2009 Steam Heat Rates for Utilities Serving

EEG-RR-2 Texas Coal Units Only 228

EEG-RR-3 Tolk Station Annual Equivalent Availability Factors 230Harrington Station Annual Equivalent Availability

EEG-RR-4 Factors 231Gas Units (200-299 MW) Annual Equivalent Availability

EEG-RR-5 Factors 232

EEG-RR-6 Tolk Station Annual Forced Outage Rates 233

EEG-RR-7 Harrington Station Annual Forced Outage Rates 234

EEG-RR-8 Gas Units (200-299 MW) Forced Outage Rates 235

Dane A. Watson 236Southwestern Public Service Company Technical Updateof Book Depreciation Accrual Rates at December 31,

DAW-RR-1 2009 265

Christopher A. Arend 321

CAA-RR-1(CONF) Calculation of Year-by-Year Fair Share 365Fair Share Calculation with Cover by Pre-existing PSCo

CAA-RR-2(CONF) Group and Pre-existing NSP Group 366Fair Share Calculation with Exclusion of the NRG Stock

CAA-RR-3(CONF) Loss 367Calculation of Pro Forma Impact of All Jurisdictions

CAA-RR-4(CONF) Including NRG Loss in 15-Year Calculation 368Calculation of Future Effect of Including the NRG Stock

CAA-RR-5(CONF) Loss in the Fair Share Calculations 369CAA-RR-6 Effect of 15 Years of Rate Reduction 370

CAA-RR-7(CONF) Effect of SPS Calculation Over 15 Years 371

CAA-RR-8(CONF) 15-Year Cumulative Fair Share Calculation 372



APP-hnf 70 6

RR 8

Gene H. Wickes 373Copies of Regulatory Decisions of Prepaid Pension

GHW-RR-1 Assets 397

Copies of Regulatory Decisions of Prepaid PensionGHW-RR-1 Assets (cont.) 1

Mark P. Moeller 231MPM-RR-1 Calculation of Prepaid Pension Asset Amount 253MPM-RR-2 FAS 87/FAS 106 Discount Rate History 254

James M. Love 255JML-RR-1 Coal Costs Included in Base Rates 274

Tim Kawakami 275TK-RR-1 Summary of SPS Purchase Power Agreements 294

Summary of Fuel and Capacity Related Costs IncurredTK-RR-2 Under PPAs 298

Peter Narog 300PN-RR-1 Excerpts from Order in Docket No. 35763 323

Ruth M. Sakya 326Pages Related to Energy Efficiency in the Unanimous

RMS-RR-1 Stipulation in Docket No. 35763 378

RMS-RR-2 Order on Certified Issues in Docket No. 35763 380Pages Related to Energy Efficiency in the Order in

RMS-RR-3 Docket No. 35763 384RMS-RR-4 Energy Efficiency Under-recovery Balance 387

RMS-RR-5 ICO and Saver's Switch Tariffs 388

RMS-RR-6 Summary of ICO Program 401

Pages Related to Renewable Energy Credits in the OrderRMS-RR-7 in Docket No. 35763 402

RMS-RR-8 REC Tracker 405Calculation of Ongoing REC Costs Included in Cost of

RMS-RR-9 Service 407Availability of Electric Utility System Cost Data, filed

RMS-RR-10 February 12, 2010 408

RMS-RR-11 SPP OATT Schedule 12 (FERC Assessments) 423

RMS-RR-12 Summary of SPP Wheeling Charges 425

RMS-RR-13 SPP OATT Attachment J and Schedule 11 426

RMS-RR-14 SPP OATT Schedule 1-A 496

SPP Portion of Membership Agreement Related toRMS-RR-15 Assessments 498

Summary of the Adjusted SPP Administrative Fees byRMS-RR-16 Category 500

RMS-RR-17 Calculation of the Adjusted SPP Assessments 501RMS-RR-18 2010 SPP Base Plan Charges Assignable to SPS 502

RMS-RR-19 Wheeling Revenues 503

RMS-RR-20 2010 SPP Base Plan Upgrade Revenues 506

RMS-RR-21 SPP Proposed Tariffs 507



7APP _7 nf 70

RR 9 RMS-RR-22

RR 10 RMS-RR-22

Timothy L. WillemsenTLW-RR-1TLW-RR-2

RR 11 TLW-RR-2TLW-RR-3

TLW-RR-4TLW-RR-5

Workpapers

Workpapers

Cost of Service StudySafety, Conservation and Customer Program Advertising

Safety, Conservation and Customer Program AdvertisingImpact of Consolidated Tax Savings AdjustmentPro Forma Adjustment for Sale of Distribution Assets tothe City of LubbockWorkpapers

1

1

86142217

1239

240

275

Rate Design Section

RD 1 Richard M. LuthRML-RD-1RML-RD-2RML-RD-3RML-RD-4RML-RD-5RML-RD-6RML-RD-7RML-RD-8RML-RD-9

RML-RD-10RML-RD-11RML-RD-12RML-RD-13RML-RD-14RML-RD-15RML-RD-16

Luke JaramilloLJ-RD-1

Jurisdictional Allocation FactorsPresent RevenuesFunctional Cost of ServiceCost ClassificationAverage and Excess 4CPClass Revenue DistributionService Availability Charge DeterminationSystem Capacity Charge DeterminationBase Energy Charge DeterminationResidential and Residential Space Heating Rate DesignStreet and Area Lighting Rate DesignRate Comparison - Present vs. ProposedRevenue at Proposed RatesClass Revenue Distribution Without LubbockJurisdictional Allocation Factors - Lubbock RemovedWorkpapers

1656672160173175179180184185186201207212213214

Ford J. Brown

Fuel Reconciliation Section

FR 1 Karen R. RobertsExcerpts from Stipulation and Final Order in Docket No.

KR-FR-1 32766

Charles E. Anderson No Attachments

Eduardo E. Gonzales2008 & 2009 Steam Heat Rates for Utilities Serving

EEG-FR-1 Texas

552568

570

1

24

29

46

80

Table of ContentsSouthwestern Public Service Company Application for

Authority to Change Rates and to Reconcile Fuel andPurchased Power Costs for 2008 and 2009

Page 8

APP - Q nf '74 8

2008 & 2009 Steam Heat Rates for Utilities ServingEEG-FR-2 Texas Coal Units Only 82EEG-FR-3 Tolk Station Annual Equivalent Availability Factors 84

Harrington Station Annual Equivalent AvailabilityEEG-FR-4 Factors 85

Gas Units (200-299 MW) Annual Equivalent AvailabilityEEG-FR-5 Factors 86EEG-FR-6 Tolk Station Annual Forced Outage Rates 87EEG-FR-7 Harrington Station Annual Forced Outage Rates 88EEG-FR-8 Gas Units (200-299 MW) Forced Outage Rates 89

John T. Welch 90Summary of EIS Market Charges During the

JTW-FR-1 Reconciliation Period 110Xcel Energy Inc.'s First Amended Joint Operating

JTW-FR-2 Agreement 112

Timothy J. Carter 163Copy of RFP for November 2008 through March 2009

TJC-FR-1 Term Purchases 180SPS's Term Gas Purchases during the Reconciliation

TJC-FR-2 Period 181

TJC-FR-3 Copy of RFP for December 2009 Spot Purchases 182

James M. Love 183

JML-FR-1 2008 and 2009 Eligible Coal Costs 204

Tim Kawakami 205TK-FR-1 Summary of SPS Purchased Power Agreements 224

TK-FR-2 Summary of PPA Charges and Method of Recovery 228

Richard M. Luth 230RML-FR-1 Report by Scott Madden, Inc. 243

John S. Fulton 259TJC-FR-1 Req for Proposals for Nov.06- Mar.07 Gas Purchases 288

Michael E. Mally 347

MEM-FR-1 Fuel Cost Over/Under-Recovery by Month 371

MEM-FR-2 Total Eligible Fuel and Fuel Related Costs 372

MEM-FR-3 Fuel Cost Over/Under-Recovery by Class 373MEM-FR-4 Wholesale Non-firm Sales Margin Credits by Month 400

MEM-FR-5 Wholesale Non-firm Sales Margin Credits by Class 401

MEM-FR-6 Workpapers

Schedules

Volume

SCH 1

Schedule Description

A Overall Cost of ServiceA-1 Cost of Service - Texas Retail 4



ADD 0 _V '70 7

A-2 Cost of Service Detail by Account 5

A-3 Adjustments to Test Year 7A-4 Detail TYE Trial Balance 37A-5 Unadjusted O&M 59

B Rate Base and ReturnB-1 Total Company 63

B-1.1 Texas Retail 64B-1.2 Percentage of Plant in Service 65B-1.3 Penalties or Fines 66B-1.4 Post Test Year Adjustments 67

B-2 Accumulated Provision Balances 73B-2.1 Accumulated Provision Policies 74

C Original Cost of PlantC-1 Original Cost of Utility Plant 75C-2 Detail of Original Cost of Utility Plant 76C-3 Monthly Detail of Utility Plant in Service 80C-4 Construction Work in Progress (CWIP)

C-4.1 CWIP by Functional Group 88C-4.2 CWIP Allowed in Rate Base 91

C-5 AFUDC or IDC 92C-6 Nuclear Fuel 96

D Accumulated Depreciation 97

D-1 By Functional Group and/or Primary Account 98D-2 Booking Methods 102

D-3 Plant Held for Future Use 103D-4 Depreciation and Amortization Expense 108D-5 Depreciation Rate Study 122

D-6 Retirement Data for All Generating Units 178

D-7 Summary of Book Salvage 179

D-8 Service Life 180

E Short Term Assets and InventoriesE-1 Monthly Balances of Short Term Assets 182

E-1.1 Detail of Short Term Assets 183

E-1.2 Obsolete Assets 187

E-1.3 Short Term Asset Policies 188

E-2 Fossil Fuel InventoriesE-2.1 Inventory Policies 189

E-2.2 Inventory Evaluation 190

E-2.3 Fuel Inventories 191

E-2.4 Inventory Levels 193

E-2.5 Inventory Values 196

E-3 Fossil Fuel Supply DisruptionsE-3.1 Fuel Oil Burns 197

E-3.2 Natural Gas Supply Disruptions 207

E-3.3 Coal or Lignite Supply Disruptions 208

E-4 Working Cash Allowances 209

E-5 Prepayments and Materials and Supplies 211

E-6 Customer Deposits 212

F Description of Company 213

G Accounting Information



ADD In -F '70 10

SCH 2

G1 Payroll Information 218G1.1 Regular and Overtime Payroll 219G1.2 Regular Payroll by Category 220G1.3 Payroll Capitalized vs. Expensed 221G-1.4 Payroll by Company 222

G1.5 Number of Employees 223G-1.6 Payments Other Than Standard Pay 224

G2 General Employee Benefit Information 225G-2.1 Pension Expense 246G-2.2 Postretirement Benefits Other Than Pension 248

G2.3 Administration Fees 250

G-3 Bad Debt Expense I

G-4 Summary of Advertising, Contributions & Dues 6G-4.1 Summary of Advertising Expense 7

G4.1a Summary of Information/Instructional Advertising 8G4.1b Summary of Advertising to Promote & Retain Usage 10G4.1c Summary of General Advertising Expense 11

G4.1d Capitalized Advertising 14

G4.2 Summary of Contribution and Donation Expense 15

G-4.2a Summary of Educational Contributions & Donations 16Summary of Community Service Contributions &

G-4.2b Donations 18Summary of Economic Development Contributions &

G-4.2c Donations 29

G4.3 Summary of Membership Dues Expense 30G4.3a Summary of Industry Organization Dues 31

G-4.3b Summary of Business/Economic Dues 32

G4.3c Summary of Professional Dues 34Summary of Social, Recreational, Fraternal or Religious

G4.3d Expense 40

G-4.3e Summary of Political Organizations Expense 41

G5 Summary of Exclusions from Test Year Expense 42

G-5.1 Analysis of Legislative Advocacy 43

G5.1a Payments to Registered Lobbyists 44

G5.1b Payments for Monitoring Legislation 45

G-5.2 Summary of Penalties and Fines 46

G5.3 Other Exclusions 47

G5.4 Analysis of Prior Rate Case Exclusions 48

G-5.5 Comparison of Prior Rate Case Exclusions to Current 49

G6 Summary of Test Year Affiliate Transactions 50

G6.1 Summary of Test Year Expense by Affiliate 51Summary of Adjustments to Test Year Expense by

G6.2 Affiliate 65G7 Federal Income Taxes

Reconciliation of Test Year Book Net Income to TaxableG7.1 Net Income 69

G7.1a Reconciliation of Timing Differences 70

G7.2 Plant Adjustments 71

G7.3 Consolidation Taxes 72

G-7.3a Consolidation Benefits 73

G-7.3b Consolidation/Inter-Corp. Tax Allocation 74



APP -I I of 79 II

G7.4 ADFIT 75

G-7.4a ADFIT - Description of Timing Differences 85G-7.4b Adjustments to ADFIT 94G7.4c ADFIT and ITC - Plant Adjustments & Additions 97G-7.4d ADFIT - Rate Case Expense 98

G-7.5 Analysis of ITCs 99G-7.5a Utilized 100G-7.5b Generated but Not Utilized 101G-7.5c Utilized - Stand Alone Basis 102G-7.5d ICT Election 103G-7.5e FERC Account 255 Balance 104

Analysis of Test Year FIT and Requested FIT - TaxG-7.6 Method 1 105

G7.6a Analysis of Deferred FIT 106G-7.7 Analysis of Additional Depreciation Requested 108

Analysis of Test Year FIT and Requested FIT - TaxG-7.8 Method 0 109

Amortization of Protected & Unprotected ExcessG-7.9 Deferred Taxes 110

G-7.9a Analysis of Excess Deferred Taxes by Timing Difference 111G7.9b Reconciliation of Excess 112

Analysis of Reserve Accounting for Excess DeferredG-7.9c Taxes 113

G7.10 Effects of Accounting Order Deferrals 114G-7.11 Effects of Post Test Year Adjustments 115G-7.12 Effects of Rate Moderation Plan 116

G-7.12a Treatment of FIT and ADFIT in Rate Moderation Plan 117

G-7.13 List of FIT Testimony 118

G-7.13a History of Tax Normalization 119

G-7.13b Tax Elections 120

G-7.13c Changes in Accounting for Deferred FIT 121

G7.13d IRS Audit Status 122

G7.13e Private Letter Rulings 123Method of Accounting for ADFIT Related to NOL Carry

G-7.13f forward 124

G-8 Outside Services Employed - FERC 900 Series Expenses 126

G-9 Taxes Other than Income Taxes 134

G-9.1 Ad Valorem Taxes & Plant Balances 140

G-10 Factoring Expense 141

Gll Deferred Expense from Prior pockets 142

G12 Below the Line Expenses 143

G-13 Nonrecurring or Extraordinary Items 144

G-14 Regulatory Commission Expense 145

G-14.1 Rate Case Expenses 146

G14.2 Rate Case Expenses - Prior Rate Applications 147

G-15 Monthly O&M Expense 148

H Engineering InformationH-1 Summary of Test Year Production O&M Expenses 155A

H-1.1 Nuclear Company-wide O&M Expenses Summary 156

H-1.1a Nuclear Plant O&M Summary 157H-1.1a1 Nuclear Unit O&M Summary 158



A DU 1) -f' '70 12

H-1.2 Fossil Company-wide O&M Expenses Summary 159H-1.2a Natural Gas Plant O&M Summary 160

H-1.2a1 Natural Gas (Steam Generation) 161H-1.2a2 Natural Gas (Combustion Turbine) 168H-1.2b Coal Plant O&M Summary 173H-1.2c Lignite Plant O&M Summary 176H-1.2d Other Plant O&M Summary 177

Summary of Adjusted Test Year Production O&MH-2 Expenses 180

H-3 Summary of Actual Production O&M Expenses Incurred 181H-4 Major O&M Projects 182H-5 Production Plant Capital Costs

H-5.1 Capital Cost Methodology 185H-5.2 Capital Costs

H-5.2a Nuclear Capital Costs Projects 202H-5.2b Fossil Capital Costs Projects 203

H-5.3 Capital ExpendituresNuclear Capital Expenditures (Historical, Present,

H-5.3a Projected) 219Fossil Capital Expenditures (Historical, Present,

H-5.3b Projected) 220H-6 Unit Outages

H-6.1(all) Nuclear Unit Outage 262H-6.2 Fossil Unit Outage

H-6.2a Fossil Unit Forced Outage History 263

H-6.2b Fossil Unit Planned Outage Data 277H-6.2c Fossil Unit Outage Planning 280

H-6.3 Incremental Outage CostsH-6.3a Nuclear Unit Incremental Outage Costs 282

H-6.3b Fossil Unit Incremental Outage Costs 283H-7 Production O&M Personnel Information

H-7.1 Company-wide Staffing Plan 287H-7.2 Production Plant/Unit Staffing Study 288H-7.3 Personnel Assigned for Plant/Unit 289

H-7.4 Average Personnel Assigned 290

H-7.5 Production O&M Organizational Charts 291

H-8 Production Operations Programs 292

H-9 Production Maintenance Programs 296

H-10 Nuclear Decommissioning Cost Studies 304

H-11 O&M Production Percentages by Primary Fuel TypeH-11.1 O&M Expenses per Production Plant Expenses 305

H-11.2 Maintenance Man-hour Ratio 306

H-11.3 O&M Cost per MWh 311H-12 Technical Data

H-12.1 Supply and Load Data 325

H-12.2 Summary of Production by Unit DataH-12.2a MWh Production by Unit (Lignite, Coal & Nuclear) 326

MWh Production for Previous 5 Years (Lignite, Coal &H-12.2a1 Nuclear) 327

H-12.2b MWh Production by Unit (Natural Gas/Oil) 330MWh Production by Unit for Previous 5 Years (Natural

H-12.2b1 Gas/Oil) 334



ADD 1 z „f '70 13

H-12.2c MWh Production by Unit (Hydro & Other) 340H-12.2c1 MWh Production for Previous 5 Years (Hydro & Other) 341

H-12.3 Summary of Generating Unit DataH-12.3a Unit Data 344H-12.3b Unit Characteristics 425H-12.3c Efficiency and Control Systems 469

SCH 3

1-2I-31-41-5

H-12.4 Summary of Purchases Power DataH-12.4a Firm Purchased Power 499H-12.4b Firm Purchased Power Energy Costs 500H-12.4c Firm Purchased Power Fixed Costs 501H-12.4d Firm Purchased Power Energy Costs per MWh 502H-12.4e Non-Firm Purchased Power 503H-12.4f Non-Firm Purchased Power Energy Costs 508H-12.4g Non-Firm Purchased Power Energy Costs per MWh 514

H-12.5 Summary of System Sales DataH-12.5a Line Losses & System's Own Use 1H-12.5b Off-System Sales (Economic & Firm) 2

H-12.5c Off-System Sales Revenue (Energy Charge Component) 6H-12.5d Off-System Sales Revenue (Fixed Charge Component) 11H-12.5e Off-System Sales Revenue (Energy Charge/MWh) 12

H-12.5f On-System Sales (Wholesale & Retail) 16

H-12.6 Load CurvesH-12.6a Monthly Minimum & Peak Demand 19

H-12.6b-c Load Duration Curves 20

H-13 Quality of ServiceH-13.1 Quality of Service Information 150

H-13.la Voltage Surveys 151

H-13.1b Circuit Breaker Operations 152

H-13.1c Quality of Service Complaints 159

H-13.1d Tree Trimming Program 161

H-13.1e Quality of Service Improvements 162

H-13.2 IE-417R Reports 166

H-13.3 Continuity of Service 167

II-14 Transmission Wheeling DataII-14.1 Capacity Wheeling

H-14.1a Availability Capacity Wheeling 171

H-14.1b Planned Capacity Wheeling 173

H-14.2 Wheeling Information 174

I Fuel and Purchased Power InformationI-1 Fuel and Purchased Power Information

I 1.1 Fuel by Account Number 191

I 1.2 Fuel Burned 192

11.3 Fossil Fuel Purchased 217

I 1.4 Nonrecurring Fuel and Purchased Power Expenses 218Fuel and Purchased Power Procurement Practices 219

Fuel and Purchased Power Committees 223

Fuel and Fuel-Related Contracts 224

Combustion Residuals1-5.1 Combustion Residual Production 354



APP - 14 nf 79 14

SCH 4

1-5.2 Combustion Residual Disposal 3551-5.3 Combustion Residual Disposal Costs 356

1-6 Natural Gas Delivery System 3571-7 Natural Gas Storage Description 3581-8 Fuel Properties 3591-9 Employee Organization Charts 3601-10 Employee Ethics 385I-11 Fuel and Purchased Power Assumptions Narrative 4101-12 Fossil Fuel Mix 4111-13 Ethics - Relationship with Fuel Supplier 4121-14 Fuel Audits 4131-15 Fuel Contract Analysis - Reconciliation Period 414

1-16 Reconcilable Fuel Costs 4201-16.1 Fossil Fuel Mix (Burned) 4461-16.2 Fossil Fuel Mix (Purchased) 4721-16.3 Competitive Spot Fossil Fuel Purchases 4981-16.4 Other Spot Fossil Fuel Purchases 528

1-17 Coal and Lignite Costs1-17.1 Coal Cost Breakdown 5291-17.2 Lignite Cost Breakdown 5301-17.3 Coal Cost Description 531

1-18 Coal and Lignite Supplier Locations 5321-19 Rail Car Data

1-19.1 Rail Haul Distance 5331-19.2 Unit Trains 5341-19.3 Cycle Time 5351-19.4 Rail Cars 536

1-19.5 Rail Car Leases 5371-19.6 Rail Car Maintenance 538

1-19.7 Rail Car Repairs 539

1-20 Fuel Management Travel 1

1-21 Fuel Management 32

1-22 Fuel Cost Over/Under Recovery 35

J Financial StatementsJ-1 Reconciliation - Total Company to Total Electric 134

J-2 Consolidated Financial Statements 135

K Financial Information (Investor-Owned Utilities)K-1 Weighted Average Cost of Capital 466

K-2 Weighted Average Cost of Preferred Stock 467K-3 Weighted Average Cost of Debt 468

K-4 Notes Payable 475K-5 Security Issuance Restrictions 476

K-6 Financial Ratios 478

K-7 Capital Requirements and Acquisition Plant 480Historical Growth in Earnings, Dividends, and Book

K-8 Value 481K-9 Rating Agency Reports 485



APP- 1_5 of 79 15

SCH 5 L Financial Information (River Authorities) IM Nuclear Plant Decommissioning 2N Energy Efficiency Plan

N-1 Demand Side Management Program Status 3N-2 Demand Side Management Program Costs

N-2.1 Costs by Account Number 4N-2.2 Costs by Type of Expenditure 9N-2.3 Capitalization 12N-2.4 Advertising 13N-2.5 Consulting Services 19N-2.6 Studies and Research 23N-2.7 Test Year Adjustments 28N-2.8 Pro-Rated Overhead Costs 29N-2.9 Historical and Budgeted Costs 33N-2.10 Allocation of Costs 34

N-3 Demand-Side Management Program ImpactsN-3.1 Participation 35N-3.2 Peak Demand and Energy Impact 36N-3.3 Rate Year Impact 37N-3.4 Impact on Generating Facilities 38

Demand-Side Management Program Studies andN-4 Research

N-4.1 Test Year Studies and Research 39N-4.2 Current Studies and Research 41

N-5 Energy Efficiency Plan Updates 42N-6 Energy Efficiency Plan 43

0 Key Operating Statistics0-1 Summary of Test Year Adjustments

0-1.1 Test Year Data by Rate Class 800-1.2 Monthly Data by Rate Class 810-1.3 Unadjusted Test Year Data by Rate Class 1400-1.4 Monthly Adjusted Test Year Data by Rate Class 1720-1.5 System Information 2230-1.6 System Load Factor 2250-1.7 Adjustments to Billing Demand 2260-1.8 Operating Statistics Narrative 2290-1.9 Peak Demand by Rate Class 2300-1.10 Break Down of Rate Class Sales 231

0-2 Model Analysis Results0-2.1 Model Information 2320-2.2 Model Data 2330-2.3 Raw Model Data 234

0-3 Customer Adjustments0-3.1 Number of Customers 2350-3.2 Customer Adjustment Methodology 2430-3.3 Other Customer Adjustment Information 244

0-4 Revenue Impacts of Adjustments0-4.1 kWh Sales and kW Demand 2450-4.2 Revenue Methodologies 246

0-5 Variability of Average Fuel Costs with kWh Sales 247



APP - lfiof 79 16

SCH 6

SCH 7

0-6 Net Energy Load0-6.1 Unadjusted kWh Sales by Month of the Test Year 2490-6.2 Adjusted kWh Sales Data 2500-6.3 System Line Loss Calculations 251

0-7 Rate Year Sales and Demand Forecast0-7.1 Sales and Demand Data 3140-7.2 Historical Sales Data 315

0-8 Weather Data0-8.1 Historical Weather Data 336

Historical Weather Data after Weighting and Billing0-8.2 Cycle Adjustments 3420-8.3 Normal Heating and Cooling Degree Days 3470-8.4 64 Deg. F Base Temperature Responses 348

0-9 Rate Year Forecast Models0-9.1 Rate Year Forecast Model Information 3490-9.2 Model Data 381

0-9.2 - cont. Model Data 10-9.3 Raw Model Data 100

0-10 Economic and Demographic Data0-10.1 Historical Data 3610-10.2 Personal Income Data 3670-10.3 Price of Electricity 372

P Class Cost of Service AnalysisP-1 Rate of Return

P-1.1 Proposed Rate Schedules/Proposed Rate Classes 410

P-1.2 Existing Rate Schedules/Proposed Rate Classes 411

P-1.3 Existing Rate Schedules/Existing Rate Classes 412

P-1.4 Proposed Rate Schedules/Existing Rate Classes 413

P-1.5 Financial Data for Non-Investor-Owned Utilities 414Allocation of Revenue Deductions to Proposed Rate

P-2-P-3 Classes 415

P-4 Separation of Expenses 428

P-5 Separation of Rate Base 460

P-6 Unit Cost Analysis 484

P-7 Allocation Factors 485

P-8 Classification Factors 486

P-9 Demand and Energy Loss Factors 498

P-10 Payroll Expense Distribution 499

P-11 Distribution Plant Study 505

P-12 Support for Production Allocation Methodology 509

P-13 Summary of Changes in Allocation Factors 510

Q Rate DesignQ-1 Revenue Summary 1

Q-1.1 Revenue Summary 3

Q-2 Power Cost Recovery 4

Q-3 Proposed Changes in Miscellaneous Charges 5

Q-4 Rate Class DefinitionQ-4.1 Present and Proposed Rate Classes 6

Q-4.2 Justification of Proposed Changes 7

Table of ContentsSouthwestern Public Service Company Application for

Authority to Change Rates and to Reconcile Fuel andPurchased Power Costs for 2008 and 2009

Page 17

APP - 17 t.f 70 17

Q-5 Load Research DataQ-5.1 Demand Data by Customer Class 8Q-5.2 Demand, Consumption, and Customer Data by Strata 11Q-5.3 Demand Estimates Methodology 21

Q-6 Justification for Consumption Level-Based Rates 22Q-7 Proof of Revenue Statement 23Q-8 Rate Design Analysis Data

Q-8.1 Marginal and Average Cost Schedules 40Q-8.2 Expected Annual Load Duration Curve 42

Q-8.3&8.4 Representative Marginal and Average Energy Costs 43Q-8.5 Billing Determinants 48Q-8.6 Contract Prices 50Q-8.7 Wholesale Tariffs 51Q-8.8 Tariff Schedules 52Q-8.9 Bill Comparisons 139

R Financial Information (Cooperatives) 142

S Test Year Review (By Independent Accountants) 143S-1 Scope of Review 144

S-2 Errors and Exceptions noted by independent Accountants 148S-3 Communications with Independent Accountants 149S-4 Adjusting Journal Entries 150

S-5 Passed Adjusting Journal Entries 151

S-6 Workpaper Review 152

T Notice 153U Compliance with PUC Orders 155V Request for Waiver of RFP Requirements 156

W Confidentiality Disclosure Agreement 157

Work Papers to Schedules

Volume Schedule Description

WPS 1 A Overall Cost of ServiceA-3 Adjustments to Test Year 1

E Short Term Assets and InventoriesE-2.3 51

E-3.1 62

G-2 85

G-2.1 90G-2.2 119G-2.3 Administration Fees 136

G-3 1451-5.3 147

1-9 Employee Organization Charts 428

1-15 Fuel Contract Analysis - Reconciliation Period 429

1-17.1 Coal Cost Breakdown 482K-5 Certificate of Incorporation 483

K-6 Financial Ratios 484

P-7 Adjusted Test Year Data by Rate Class 485


Purchased Power Costsfor 2008 and 2009Page 18

APIP -1R..f 7Q 1R

Q-1 Proforma Fuel and PCRF Revenue Summary 486Q-7 Proforma Rate Component Summary 499

Vol 1 of 7 WP/Schedule E-4V Working Cash Allowances I



Vol 4 of 7 WP/Schedule E-4V Working Cash Allowances 1




CONF WP/Schedule E-4V Working Cash Allowances 1

CONF WP/Schedule E-4V Working Cash Allowances I

Vol 1 of 1 WP/Schedule G-7.13 List of FIT Testimony 1

Vol 1 of 9 WP/Schedule 1-4 Fuel and Fuel-Related Contracts I

Vol 2 of 9 WP/Schedule 1-4 Fuel and Fuel-Related Contracts 1

Vol 3 of 9 WP/Schedule 1-4 Fuel and Fuel-Related Contracts I









A DID 10 r.f 7Q 1 9

DOCKET NO. 38147

APPLICATION OF SOUTHWESTERN §PUBLIC SERVICE COMPANY FOR § PUBLIC UTILITY COMMISSIONAUTHORITY TO CHANGE RATES §AND TO RECONCILE FUEL AND §

OF TEXASPURCHASED POWER COSTS FOR §2008 AND 2009 §

SOUTHWESTERN PUBLIC SERVICE COMPANY'SSTATEMENT OF INTENT AND APPLICATION FOR AUTHORITY TOCHANGE RATES AND TO RECONCILE ITS FUEL AND PURCHASED

POWER COSTS FOR 2008 AND 2009

(Filename: SPSApplication2010.doc; Total Pages: 45)

Table of Contents

1. ......................................Jurisdiction and Affected Parties .......................... 7II. Authorized Representatives and Service of Documents ............................ . 8III. Effective Date ........................... ................................................................. . 9IV. .................................................Notice ........................................................ . 9V. Proposed Tariff Schedules .. ....................................................................... . 9VI. Supporting Documentation ......................................................................... . 9VII. Summary of Proposed Rate Changes ......................................................... . 9

A. Statement of Intent to Change Base Rates .................................................. 9B. Effect of Sale of Assets to Lubbock ......................................................... 11C. Separate Charge for Municipal Franchise Fees ... ..................................... 12D. Reconciliation of Fuel and Purchased Power Costs ................................. 12

VIII. Prospective Adjustments to Fuel and Purchased Power Expense ............ 13A. Removal of Capacity Payments from Base Rates ..................................... 13B. Elimination of the PCRF and True-up of the Existing PCRF

Balance .. .. ... .. .. . .. .... . ... .. . .. . .. . .. .... .... .. .. .. . ... ...... ..... ... ...... .... .. .. .. ... . ... ... .. .. .... .. . 14C. Electric Commodity Trading Margins ...................................................... 14D. Renewable Energy Credits ........................................................................ 15E. Line Loss Factors ...................................................................................... 15

IX. Request for Good Cause Exception .................. ........................................ 15X. Request for Approval of Tariffs ................................................................ 16XI. Request for Waivers of RFP Requirements .............................................. 16XII. Confidentiality and Protective Order ........................................................ 16XIII. Conclusion and Prayer for Relief .............................................................. 17

Docket No. 38147Southwestern Public Service Company's

Statement ofIntent and Application to Change RatesPage 1

APP - ?0 nf 79 20

Attachment A - Proposed Form of Notice ....................................................................... 19Attachment B- Bill Comparison ....................................................................................... 22Attachment C - Proposed Form of Protective Order ........................................................ 25Certificate of Service ........................................................................................................ 45



APP - 21 of 79 21

DOCKET NO. 38147

APPLICATION OF SOUTHWESTERN § PUBLIC UTILITY COMMISSIONPUBLIC SERVICE COMPANY FOR §AUTHORITY TO CHANGE RATES §AND TO RECONCILE FUEL AND §PURCHASED POWER COSTS FOR § OF TEXAS2008 AND 2009 §

SOUTHWESTERN PUBLIC SERVICE COMPANY'SSTATEMENT OF INTENT AND APPLICATION FOR AUTHORITY TOCHANGE RATES, AND TO RECONCILE ITS FUEL AND PURCHASED

POWER COSTS FOR 2008 AND 2009

Southwestern Public Service Company ("SPS") requests authority to change its

base rates and to reconcile its fuel and purchased power costs incurred for calendar years

2008 and 2009. Specifically, SPS requests that the Commission:

(1) authorize SPS to increase its base rate charges for the Texas retail

jurisdiction by $62,026,302 based upon a Texas retail base rate revenue

requirement of $431,114,624 and a return on common equity of 11.35

percent;l as part of this approval, SPS further requests that the

Commission:

(a) approve SPS's proposed depreciation rates and practices for steam

production plant and distribution plant, including the proposal, as

' The request to increase base rates by $62,026,302 assumes that the proposed sale of certaindistribution assets by SPS to the City of Lubbock has not closed. If the sale closes and the effect isreflected in rates, the requested rate increase will be reduced by approximately $5.2 million.

SPS has also included $2.9 million of energy efficiency expenses in its rate increase request. Ifthe Commission, in its pending rulemaking project on the energy efficiency rule (Project No. 37623),concludes that SPS is covered by the cost recovery provisions in P.U.C. SUBST. R. 25.181, then the $2.9million of energy efficiency costs may be removed from SPS's revenue requirement.

SPS currently collects revenue through a Transmission Cost Recovery Factor ("TCRF").Application of Southwestern Public Service Company for Approval of a Transmission Cost RecoveryFactor, Order (Jan. 21, 2010). When the new rates approved in this docket become effective, SPS will setits TCRF to $0. See P.U.C. SUBST. R. 25.239(f). Of the $62.0 million requested increase in base revenue,$4.7 million is currently being recovered through the TCRF.

Docket No. 38147Southwestern Public Service Company 's

Statement of Intent and Application to Change RatesPage 3

APP - ??of 79 22

discussed in detail in the direct testimony of SPS witness Lisa H.

Perkett, to:

(i) use a net salvage rate to develop depreciation rates for

steam production plant that allows for a reasonable

recovery of plant removal costs;

(ii) track the dollar amount of steam production plant removal

costs reflected in the depreciation rate charged to customers

(through base rates) and record that dollar amount in a

regulatory liability and, then, as the removal work occurs,

reduce the regulatory liability account as the actual removal

expense is incurred; and

(iii) after the plant removal is complete, amortize the difference

between actual removal costs and the amount that was

recovered from customers through depreciation expense;

(b) approve separate cost recovery trackers for SPS's expenditures on

renewable energy credits, energy efficiency programs, and load

management programs (Interruptible Credit Option program and

Saver's Switch program), which would track the differences

between the level of annual expenditures included in SPS's

authorized cost of service and SPS's actual expenditures on these

items, with the differences (over-recoveries or under-recoveries)

being credited to or recovered from customers in SPS's next base

rate case;

(c) approve SPS's recovery of its rate case expenses incurred in

conjunction with this case;

(d) approve the movement of municipal franchise fees from base rates

to a direct charge to consumers in the applicable municipal

jurisdiction or, in the alternative, if the Commission does not

approve this proposed treatment of municipal franchise fees, then



APP - 23 of 79 23

approve an additional increase of $8,734,935 in Texas retail base

rates and a Texas retail base rate revenue requirement of

$439,849,559;

(e) approve the complete set of proposed tariff schedules presented in

Schedule Q-8.8 of the Electric Utility Rate Filing Package for

Generating Utilities ("RFP") that accompanies this application;

(2) reconcile all of SPS's fuel and purchased power expenses and fixed fuel

factor revenue for the Reconciliation Period from January 1, 2008 through

December 31, 2009 under P.U.C. SUBST. R. 25.236, and find that:

(a) SPS's fuel and purchased power expenses during the

Reconciliation Period were eligible fuel and purchase power

energy expenses under P.U.C. SUBST. R. 25.236(a);

(b) those expenses were incurred to provide reliable electric service

and were reasonable and necessary;

(c) SPS properly accounted for the amount of fuel-related revenues

collected through its fixed fuel factors;

(d) SPS's proposed line loss factors are reasonable and should be used

effective September 16, 2008; and

(e) SPS has established good cause for an exception to P.U.C. SUBST.

R. 25.236(a) to treat all revenues and costs associated with

nitrogen oxide ("NOx") allowances sold or surrendered as eligible

fuel costs;2

(3) on a going-forward basis, authorize SPS to calculate its fuel and purchased

power expense by:

(a) continuing the approved practice of retaining 10 percent of the

margins from wholesale non-firm sales in the manner set out in

2 If the Commission determines that costs associated with NOx allowances should be recoveredthrough base rates rather than as an eligible fuel expenses, then SPS will exclude NOx allowance expensesfrom eligible fuel costs, and SPS's requested base rate revenue requirement will increase by $838,122.



APP _7dnf 79 74

Section 10 of the Unanimous Stipulation in Docket No. 35763

prospectively from the effective date of the Commission's final

order in this case;

(b) giving Texas retail customers the benefit of the first $400,000 of

Electric Commodity Trading margins by reducing the revenue

requirement by that amount, and crediting SPS's Texas retail

customers with 50 percent of the net credits in excess of $400,000

through eligible fuel expense;

(c) eliminating from base rates a revenue credit associated with the

sale of capacity to Public Service Company of New Mexico

("PNM") and reflecting that credit in fuel and purchased power

costs for the remainder of the contract period;

(d) reducing the value of bundled renewable energy credits ("RECs")

from $5.00 per REC to $1.35 per REC; and

(f) applying the new line loss factors proposed by SPS to the fuel

factor in effect when the Commission issues the final order in this

docket, which will result in new voltage level fuel factors effective

when the new rates approved in this docket become effective;

(4) (a) authorize SPS to terminate the current Power Cost Recovery

Factor ("PCRF") and to, instead, recover through base rates those

costs that are currently recovered through the PCRF; and

(b) authorize SPS to file, no later than six months after the PCRF is

terminated, a final true-up of costs recovered through the PCRF to

ensure that SPS neither over-recovers nor under-recovers those

costs;

(5) grant a good cause exception to the affiliate transaction requirements for

short-term purchases of capacity by SPS from its affiliate, Public Service

Company of Colorado ("PSCo"); and



APP - 95 nf 79 Z_5

(6) approve the waivers to the RFP instructions presented in RFP Schedule V

that accompanies this application.

In support of these requests, SPS states as follows:

1. Jurisdiction and Affected Parties

1. SPS is an electric utility, a public utility, and a utility as those terms are

defined in §§ 11.004(1) and 31.002(6) of the Public Utility Regulatory Act3 ("PURA")

and is subject to the Commission's jurisdiction under PURA. The Commission has

jurisdiction over this matter under PURA §§ 14.001, 36.001-36.111, and 36.203-36.205

and P.U.C. SUBST. R. 25.231 and 25.236-25.238.

2. SPS serves retail electric customers in Texas and New Mexico, and serves

wholesale electric customers as well. The New Mexico Public Regulation Commission

regulates SPS's New Mexico retail operations. The Federal Energy Regulatory

Commission ("FERC") regulates SPS's wholesale power sales and SPS transmission of

electricity in interstate commerce.

3. SPS's business address is 600 South Tyler Street, Suite 2400, Amarillo,

Texas 79101.

4. SPS, a New Mexico corporation, is a wholly owned subsidiary of Xcel

Energy Inc. ("Xcel Energy"), which is a holding company under FERC regulations

adopted under the Public Utility Holding Company Act of 2005.4 Xcel Energy is also the

parent company of three other rate-regulated utility operating companies,5 a non-profit

service company that was established under the authority of the Securities and Exchange

Commission, but which is now under the supervision of the FERC,6 and other legal

entities.

3 TEX. UTIL. CODE ANN. Title 2 (Vernon 2007 and Supp. 2009).

4 18 C.F.R. Part 366.

5 Northern States Power Company, a Minnesota corporation; Northern States Power Company, aWisconsin corporation; and PSCo, a Colorado corporation.

6 Xcel Energy Services Inc.



APP - 26 of 79 26

5. The Commission has exclusive original jurisdiction over this application

for service provided to environs customers in Texas and to customers within the

corporate limits of those municipalities within SPS's Texas service territory that have

surrendered their regulatory jurisdiction to the Commission.7

6. Contemporaneous with this filing, SPS has filed a Statement of Intent and

Application for Authority to Change Rates with those municipalities who retain original

jurisdiction over SPS's rates within their corporate limits. Depending upon the actions

taken by the local regulatory authorities, SPS may appeal the municipal rate ordinances to

the Commission and request that the Commission consolidate those appeals with this case

and, if necessary, set the rates that the local regulatory authorities should have set.8

7. This application affects SPS and all of its Texas retail customers (all rate

classes and rate schedules).

II. Authorized Representatives and Service of Documents

8. SPS's authorized representatives are:

Stephen FogelXcel Energy Services Inc.816 Congress Ave., Suite 1650Austin, Texas 78701(512) 478-7267(512) 478-9232 (FAX)stephen. e. fo gelna,xc el energ. .

Ron H. MossGraves, Dougherty, Hearon & Moody401 Congress Avenue, Suite 2200Austin, Texas 78701(512) 480-5724(512) 480-5824 (FAX)rmoss@p,dhm.com

PURA §§ 32.001, 32.002, and 33.002.

g See PURA §§ 33.051, 33.053, and 33.054.



APP-77nf 79 77

SPS requests that all documents (motions, orders, discovery requests, etc.) be served on

its authorized representatives.

III. Effective Date

9. The proposed effective date of the base rate change is June 21, 2010.9

IV. Notice

10. SPS will provide notice in accordance with PURA § 36.103, P.U.C.

P1toC. R. 22.51(a), and P.U.C. Subst. R. 25.235(b). The proposed notice is in RFP

Schedule T and also is provided as Attachment A to this application.

V. Proposed Tariff Schedules

11. SPS's proposed tariff schedules are provided in RFP Schedule Q-8.8.

VI. Supporting Documentation

12. In support of this application, SPS has filed: (i) Schedules A through W,

with related work papers, as required by the RFP; and (ii) an Executive Summary, as

required by the RFP; and (iii) written testimony of its witnesses with attachments and

work papers.

VII. Summary of Proposed Rate Changes

13. SPS's application contains a base rate case, which, under P.U.C. SUBST.

R. 25.236(b), also contains a fuel reconciliation proceeding. The Test Year for the base

rate case is calendar year 2009, adjusted for known and measurable changes. The fuel

reconciliation covers SPS's fuel and purchased power costs for calendar years 2008 and

2009.

A. Statement of Intent to Change Base Rates

14. SPS requests that the Commission approve an overall increase in base

revenues of $62,026,302, an increase of 7 percent in overall rates. In the Test Year, SPS

9 For convenience, the rate year schedules included in the RFP are based on the new base rateshaving an effective date of June 1, 2010 rather than June 21, 2010.



APP - 7R nf 79 28

earned a 6.66 percent overall rate of return on its Texas retail operations and a 6.29

percent rate of return on common equity. Through this application, SPS seeks an overall

rate of return on investment of 9.243 percent, which reflects an equity ratio of 51 percent

and a rate of return on common equity of 11.35 percent.

15. The average Residential Service customer using 1000 kilowatt-hours of

energy per month will see an overall bill increase of $8.89 per month, or 10.7 percent,

under the proposed rates in this case. A bill comparison showing the effect of the change

on various classes is included as Attachment B.

16. In addition to the typical range of issues in a base rate case, SPS has

prepared a revised depreciation study and has presented two witnesses to support its

proposed depreciation rates and practices. SPS requests that the Commission approve

those new rates and practices. SPS further proposes that the Commission approve a

process in which SPS would file a separate application with the Commission for approval

of a site-specific decommissioning plan for each plant to be retired. Each application

would contain the following information: a site-specific dismantling plan; a request for

proposal for competitive acquisition of dismantling and removal services; an amortization

schedule for the dismantling costs to be recovered or refunded, and the expected revenue

requirements associated with such recovery. The proposed amortization to recover or

refund the difference between the removal cost estimates included in base rates and the

actual removal costs for the asset would be handled through the general rates by

reflecting the amortization and the return on either the regulatory asset or liability in the

revenue requirement calculation in the next rate proceeding. SPS requests that the

Commission approve this process and explicitly authorize SPS to institute the following:

(a) After the actual costs for removal are known, to create and adjust a

regulatory asset (in the instance the actual costs exceed the amount

recovered in rates) or regulatory liability (in the instance the actual costs

are less than those recovered in rates) for each plant by an amount equal to

any difference between:



APP - 29 of 79 29

(1). the level of dismantling or removal costs recovered through the

base rates approved in this proceeding that are associated with a

plant reaching its end of life; and

(2). the level of depreciation expense required to be recognized by SPS

in accordance with Generally Accepted Accounting Principles;

(b) to amortize the regulatory asset or the regulatory liability over the period

specified by the Commission as a result of this application; and

(c) to recover a return of and a return on such regulatory asset or regulatory

liability balance as the balances exist when general rates are established in

the next rate proceeding.

17. SPS proposes that the Commission approve separate cost recovery

trackers for SPS's expenditures on renewable energy credits, energy efficiency programs,

and load management programs (Interruptible Credit Option program and Saver's Switch

program). The requested cost recovery trackers would track the differences between the

level of annual expenditures included in SPS's authorized cost of service and SPS's

actual expenditures on these items, with the differences (over-recoveries or under-

recoveries) being credited to or recovered from customers in SPS's next base rate case.

18. SPS's base rate cost of service also includes rate case expenses. SPS

seeks to recover its rate case expenses, including reimbursements to municipalities for

their rate case expenses, incurred in conjunction with this case.

B. Effect of Sale of Assets to Lubbock

19. On November 12, 2009, SPS entered into an Asset Purchase Agreement to

sell its distribution assets within the City of Lubbock ("Lubbock") and certain areas

adjacent to Lubbock. The sale is pending regulatory approval from this Commission and

other regulatory bodies, and therefore it has not closed. If the sale closes, it is likely to

create a gain on sale and to result in ongoing cost savings for Texas retail customers.

SPS proposes to give Texas retail customers the entire gain on sale, amortized over a five

year period. SPS proposes to share the ongoing cost savings with Texas retail customers

on a 50-50 basis. SPS has included with its testimony a second cost of service study



APP - 10 of 79 30

showing the effect of the sale. See Direct Testimony of Timothy L. Willemsen,

Attachment TLW-RR-4. If the sale to Lubbock closes before this base rate case

concludes, SPS requests that the Commission adopt the cost of service study in

Attachment TLW-RR-4, as it may be modified by rebuttal testimony.

C. Separate Charge for Municipal Franchise Fees

20. SPS currently recovers a portion of municipal franchise fees through base

rates. In this docket, SPS seeks to recover all of its municipal franchise fees in a separate,

direct charge to consumers in the applicable municipality imposing the franchise fee,

rather than through base rates. SPS requests that if its proposed method for recovering

municipal franchise fees through a separate, direct charge is not accepted, then the

franchise fees continue to be recovered in base rates and SPS's requested change in base

revenue be increased by $8,734,935, for a total base rate increase of $70,761,237.

D. Reconciliation of Fuel and Purchased Power Costs

21. In Docket No. 35763, SPS reconciled its fuel and purchased power costs

for the two-year period January 2006 through December 2007. In this new case, as

required under P.U.C. SUBST. R. 25.236(b), SPS requests authority to reconcile its fuel

and purchased power costs for the Reconciliation Period of January 1, 2008, through

December 31, 2009.

22. During the Reconciliation Period, SPS incurred $1,011,738,069 of total

fuel and purchased power expenses for Texas retail customers, and it collected

$1,040,432,355 in revenues through its fixed fuel factors. After accounting for the

beginning balance, refunds, credits, adjustments, and revenues collected through

surcharges, SPS's under-collection as of December 31, 2009, was $3,258,286, not

including interest, as shown in the following table.



APP-11 nf 70 11

Description AmountDecember 31, 2007, Under-recovery Balance ($50,004,618.75)Fuel and Purchased Power Energy Cost: 1/08-12/09 ($1,011,738,069.77)Refunds, net of surcharge revenues: 1/08 - 12/09 ($4,331,604.52)

Fuel Revenue Collected: 1/08-12/09 $1,040,432,355.41Margin Credits : 1/08-12/09 $2,732,814.84

Docket Nos. 29801, 32766, 35763, 37060 CreditAdjustments - Texas Allocated Amount $19,650,836.71

December 31, 2009, Under-recovery Balance ($3,258,286.08)

23. In connection with its request to reconcile fuel and purchased power

expense, SPS requests that the Commission find that:

(a) SPS's fuel and purchased power expenses during the Reconciliation

Period were eligible fuel and purchase power energy expenses under

P.U.C. SUBST. R. 25.236(a);

(b) those expenses were incurred to provide reliable electric service and were

reasonable and necessary;

(c) SPS properly accounted for the amount of fuel-related revenues collected

through its fixed fuel factors;

(d) SPS's proposed line loss factors are reasonable and should be used

effective September 16, 2008; and

(e) SPS has established good cause for an exception to P.U.C. SUBST. R.

25.236(a) to treat all revenues and costs associated with NOx allowances

sold or surrendered as eligible fuel costs.

VIII. Prospective Adjustments to Fuel and Purchased Power Expense

A. Removal of Capacity Payments from Base Rates

24. SPS currently receives capacity and energy payments from PNM in

connection with a contract to provide interruptible capacity to PNM. Those payments are

reflected as a credit to SPS's cost of service and therefore reduce base rates. The contract



A DD 27 .,.r 'In J2

with PNM expires in May 2011, however, and therefore SPS will no longer receive the

actual revenue after that time. If the amount that SPS receives from PNM remains in

base rates, the new rates will reflect the revenue credit for the entire time the rates are in

effect, but SPS will receive the actual revenue for only a fraction of that time. SPS

accordingly requests that the Commission authorize SPS to remove the revenue credit

from base rates and to include it in fuel and purchased power costs for the remainder of

the time that it will exist.

B. Elimination of the PCRF and True-up of the Existing PCRF Balance

25. SPS currently recovers certain costs related to the Borger Energy

Associates, L.P. ("BEA") facility through a PCRF. Under the Commission's order in

Docket No. 17525, the PCRF expires in 2012.10 Rather than seek renewal of the PCRF

and continue using the PCRF rate rider, SPS proposes that, effective upon

implementation of new rates in this proceeding, the PCRF be terminated and non-energy

costs associated with the BEA contract be collected in base rates consistent with other

non-energy purchased power costs. The PCRF is calculated on an annual basis using

projected sales data, and therefore a true-up is necessary so that actual amounts recovered

through the PCRF match actual costs incurred. SPS proposes that a final PCRF charge be

allowed after the termination of the PCRF, and that any residual uncollected or over-

collected amounts remaining after the final true-up be incorporated into SPS's deferred

fuel cost under-recovery or over-recovery balance. The energy costs associated with the

BEA contract will continue to be recovered through eligible fuel regardless of the

Commission's treatment of non-energy costs.

C. Electric Commodity Trading Margins

26. SPS proposes to give its Texas retail customers the benefit of the first

$400,000 (Texas retail) in Electric Commodity Trading margins by: (1) reducing revenue

10 Application of Southwestern Public Service Company for Certification of Qualifying FacilityPurchased Power Contract Under Section 2.209 of PURA 95, Docket No. 17525, Final Order (Oct. 30,

1997).



A nn Il _P In

requirements by that amount; and (2) crediting 50 percent of amounts in excess of

$400,000 in net margins to eligible fuel expense.

D. Renewable Energy Credits

27. SPS is requesting that the value assigned to bundled RECs be reduced

from $5.00 per REC to $1.35. Should the Commission approve its request, SPS seeks to

implement the revised cost of bundled RECs, for purposes of calculating credits to

eligible fuel, effective as of the date new rates are implemented in this proceeding at a

value approved by the Commission.

E. Line Loss Factors

28. As noted above, SPS prepared a new line loss study in 2010. The revised

line loss factors resulting from the study will affect fuel and purchased power expense on

a going-forward basis.

IX. Request for Good Cause Exception

29. During the test year, SPS purchased short-term capacity from PSCo, and

SPS expects to incur similar amounts of capacity costs in the future. SPS proposes to

recover those capacity costs in base rates.

30. SPS seeks a good cause exception to P.U.C. SUBST. R. 25.236(a)(1)

insofar as the purchases of capacity from PSCo are concerned. Before purchasing

capacity from PSCo, SPS obtains bids from third parties to determine whether capacity is

available at a lower price, and SPS purchases capacity from PSCo only when it is the

most economical resource available to SPS. If the provisions of P.U.C. SUBST. R.

26.236(a)(1) were applied to the purchase of capacity from PSCo and strictly enforced,

SPS would be forced to choose between purchasing the most economic capacity and

being foreclosed from recouping the cost of that capacity, or forgoing purchases of the

most economic capacity and buying higher priced capacity. Such a result does not

benefit SPS or its Texas retail customers. Accordingly, SPS seeks a good cause

exception to the rule.



APP - za nf 70 34

X. Request for Approval of Tariffs

31. SPS requests that the Commission approve the complete set of proposed

tariff schedules presented in Schedule Q-8.8 of the RFP.

XI. Request for Waivers of RFP Requirements

32. For the reasons listed in RFP Schedule V, and as supported by the

witnesses listed on Schedule V, SPS requests that the Commission waive the requirement

for SPS to file the following RFP schedules: H-7.4, H-12.1, H-12.2-12.2c1, H-12.3-

12.3c, H-12.4-12.4g, H-12.5-12.5f, H-12.6-12.6c, 1-7, I-11 [all], 1-12 [all], Q-2 [all], Q-

8. 1, and Q-8.3.

33. Under the Commission's order in Docket No. 27751, SPS uses a formulaic

approach to revising its fixed fuel factors rather than setting fixed fuel factors every six

months. As a consequence of using this formulaic approach, it is unnecessary to provide

the projected fuel information requested in H-7.4, H-12.1, H-12.2-12.2c1, H-12.3-12.3c,

H-12.4-12.4g, H-12.5-12.5f, H-12.6-12.6c, 1-7, I-11 [all], 1-12 [all], Q-2 [all], Q-8.1, and

Q-8.3. Therefore, SPS requests a waiver of any requirements that those schedules be

filed.

XII. Confidentiality and Protective Order

34. Some of the testimony, attachments, schedules, and workpapers filed

supporting this application contain confidential or highly sensitive information. In

accordance with the RFP and to protect this information, the documents containing

confidential information include a statement to that effect. Additionally, in accordance

with the RFP, the confidential or highly sensitive information (proprietary information)

has been deleted, redacted, or summarized as necessary to preserve confidentiality.

35. Copies of all confidential and highly sensitive (proprietary) information

will be available, during normal business hours, at 401 Congress Avenue, Suite 2200,

Austin, Texas, for parties executing the confidentiality certificates.

36. In addition to the confidential and highly sensitive material in SPS's initial

filing, SPS may need to furnish in responses to requests for information, highly sensitive



APP-15nf 79 35

or confidential information, the disclosure of which to third parties would either place it

at a severe competitive disadvantage or cause it to violate contractual confidentiality

obligations.

37. The confidentiality agreement included as Schedule W to the RFP was

developed many years ago when competitive pressures were not as intense as those that

currently exist. The Commission has recognized the existence of these increased

competitive pressures for many years and, as a consequence, has engaged in a practice of

entering protective orders that contain dual levels of protected materials-confidential

materials and those that are entitled to an even higher level of protection, highly sensitive

protected materials. To conform to the Commission's established practice, SPS proposes

to use the protective order approved in Docket No. 37901,11 which is the same as the

protective orders approved in other recent SPS dockets before the Commission, as the

basis for the protective order in this new docket. Thus, SPS requests that the

Commission enter a protective order in the form attached to this application as

Attachment C that accompanies this application and that, pending entry of the protective

order, the parties treat the proposed protective order as a confidentiality agreement.

XIII. Conclusion and Prayer for Relief

For the reasons set out in this application and the accompanying testimony and

RFP schedules and workpapers, SPS requests that the Commission: (1) grant the relief set

out in the preamble to this application as explained in more detail in the numbered

paragraphs of this application; and (2) grant SPS such other relief to which SPS may be

entitled.

11 Southwestern Public Service Company's: (1) Report of Sale of Assets; (2) Request for a Findingthat the Sale of Assets is in the Public Interest; (3) Request for Authority to Discontinue Retail ElectricService in its Dually Certificated Service Area Within the City of Lubbock and Adjacent Areas; and (4)Request for Findings Regarding Wholesale Power Sales Agreements, Docket No. 37901, Application (Jan.

19, 2010).



ADD '2ti „F 10 36

Respectfully submitted,

XCEL ENERGY SERVICES INC. GRAVES, DOUGHERTY, HEARON & MOODY P.C.

Stephen FogelState Bar No. 07202010816 Congress Avenue, Ste. 1650Austin, Texas 78701-2471Office: (512) 478-7267Facsimile: (512) 478-9232e-mail: [email protected]

Ron H. MossState Bar No. 14591025Thomas B. Hudson, Jr.State Bar No. 10168500401 Congress Avenue, Suite 2200Austin, Texas 78701Office: (512) 480-5724Facsimile: (512) 480-5824e-mail: [email protected]: [email protected]

COURTNEY, COUNTISS, BRIAN & BAILEY, L.L.P.

Amy rA. elhamerState 13ar Nb. 240103600 S. Ty-Ter Street, Suite 1700Amarillo, Texas 79101Office: (806) 372-5569Facsimile: (806) 372-9761e-mail: [email protected]

ATTORNEYSFOR

SOUTHWESTERN PUBLIC SERVICE COMPANY



A PP _ 27 nf 79 37

Attachment A - Proposed Form of Notice

Notice ofRate Change Request

Public Notice of

Filing by Southwestern Public Service Company of Statement of Intent andApplication for Authority to Change Rates and to Reconcile Fuel and Purchased

Power Costs for 2008 and 2009

Southwestern Public Service Company (SPS), doing business as Xcel Energy, givesnotice that, in accordance with the Public Utility Regulatory Act and Public UtilityCommission of Texas (Commission) Substantive Rule 25.236, SPS has filed a statementof intent and application with the Commission for authority to change its rates and toreconcile its fuel and purchased power costs incurred for the years 2008 and 2009. SPSfiled this application with the Commission on May 17, 2010. Also on May 17, 2010, SPSserved a statement of intent and application on each Texas municipality that has originaljurisdiction over SPS's rates for authority to change its rates. All customers in SPS's

Texas retail rate classes are affected by the request.

Statement of Intent to Change Rates

SPS requests that the Commission approve an overall increase in base revenues of $62.03million, an increase of 7.0 percent in overall rates. SPS has requested that theCommission make this change effective June 21, 2010.

SPS's requested increase in base revenue does not reflect the effects of SPS's proposedsale of distribution assets to the City of Lubbock, Texas. If that transaction closes in timeto incorporate the rate effects of that transaction on SPS's revenue requirement, then SPSestimates that its requested base revenue increase would be reduced by approximately$5.2 million.

The increase in base revenues includes $13.41 million currently recovered through aPower Cost Recovery Factor (PCRF), which SPS proposes to eliminate. SPS also hasrequested approval to file a final true-up of costs recovered through the PCRF no laterthan six months after the effective date of rates set in this proceeding. If the Commissionrejects SPS's proposal to eliminate the PCRF, then SPS's requested increase in base ratewould be reduced by $13.41 million, but SPS would continue to collect the $13.41million of costs through the PCRF.

The increase in base revenues also includes $4.66 million currently recovered through aTransmission Cost Recovery Factor (TCRF), which will be reset to $0 when the rates inthis case become effective.

After considering the effect of eliminating the PCRF, setting the TCRF to $0, and therecovery of municipal franchise fees (described in the next part of this notice), therequested net increase in non-fuel revenues is $52.69 million.



APP _ 'IR nf 70 38

In 2009, SPS earned a 6.66 percent overall rate of return on its Texas retail operationsand a 6.29 percent rate of return on common equity. SPS has requested an overall rate ofreturn on investment of 9.24 percent, which reflects an equity ratio of 51.00 percent and arate of return on common equity of 11.35 percent.

The average Residential Service customer using 1000 kilowatt-hours of energy per monthwill see a bill increase of $8.89 per month, or 10.7 percent, under the proposed rates inthis proceeding.

Separate Charge for Municipal Franchise Fees

In addition to this requested increase in base revenues, SPS seeks to recover municipalfranchise fees in a separate, direct charge to consumers in the applicable municipalityimposing the franchise fee. The municipal franchise fees subject to this separate chargetotal $8.73 million. SPS has requested that if its proposed method for recoveringmunicipal franchise fees through a separate, direct charge is not accepted, then thefranchise fees be recovered in base rates and its requested change in base revenue beincreased by $8.73 million.

Reconciliation of Fuel and Purchased Power Costs

SPS has requested authority to reconcile its fuel and purchased power costs for the periodfrom January 1, 2008, through December 31, 2009. SPS requests that the Commissionfind that SPS had a balance of unrecovered fuel and purchased power costs of $3.26million as of December 31, 2009.

SPS also has requested authority to recover the cost of nitrogen oxide (NOx) emissionallowances through fuel and purchased power costs rather than through base rates. SPShas further requested that if its proposal to recover NOx emission allowances throughfuel and purchased power costs is not accepted, then the NOx emission allowancescontinue to be recovered in base rates. Recovering these costs through base rates wouldraise the requested increase in base revenue by $0.84 million.

SPS additionally has requested approval of new line loss factors effective September 16,2008. SPS also has proposed applying the new line loss factors to the fuel factor in effectwhen the Commission issues the final order in this docket, which would result in newvoltage level fuel factors effective when the new rates approved in this proceedingbecome effective.

Contact Information

Persons with questions or who want more information on this petition may contact SPS at600 South Tyler Street, Suite 2400, Amarillo, Texas 79101, or call 1-800-895-4999during normal business hours. A complete copy of this application is available forinspection at the address listed in the previous sentence.

Persons who wish to intervene in or comment upon these proceedings should notify thePublic Utility Commission of Texas (Commission) as soon as possible, as an interventiondeadline will be imposed. A request to intervene or for further information should referto Docket No. 38147. A request to intervene or for further information should be mailed



APP - 39 of 79 39

to the Public Utility Commission of Texas, P.O. Box 13326, Austin, Texas 78711-3326.Further information also may be obtained by calling the Public Utility Commission at(512) 936-7120 or (888) 782-8477. Hearing- and speech-impaired individuals with texttelephones (TTY) may contact the Commission at (512) 936-7136. The deadline forintervention in the proceeding is 45 days after the date the application was filed with theCommission.



APP - 40 nf 79 40

Attachment B - Bill Comparison

Residential Service

Service Availability Charge

Energy Charge per kWh SummerEnergy Charge per kWh Winter

PCRF per kWhTCRF per kWh

Fuel Factor per kWh SummerFuel Factor per kWh Winter

kWh Level 100 250 500

Current ProposedRates Rates Difference

$ 5.60 $ 7.00 $ 1.40

$ 0.053350 $ 0.061257 $ 0.00791

$ 0.043930 $ 0.054236 $ 0.01031

$ 0001461 $ - $ (0.00146)

$ 0.000555 $ - $ (0.00056)

$ 0.027196 $ 0.027196 S -S 0.028735 $ 0.028735 $ -

750 1,000 1,500 2,000 3,000

Current t3itP

Base Cost (Summer)Base Cost (Winter)

nt Fuel Factor (Summer)nt Fuel Factor (Winter)

Cost (Summer)Cost (Winter)

$ 10.94 $ 18.94 $ 32.28 $ 45.61 $ 58,95 $ 85.63 $ 112.30 $ 165 65$ 9.99 $ 16.58 $ 27.57 $ 38.55 $ 49.53 $ 71.50 $ 93.46 $ 137.39$ 0.15 $ 0.37 S 0.73 $ 1.10 $ 1.46 $ 2.19 $ 2.92 $ 4.38$ 0.06 $ 0.14 $ 0.28 $ 0 42 $ 0.56 $ 0.83 $ 1.11 $ 1.67$ 2.72 $ 6.80 $ 13.60 $ 20.40 $ 27.20 $ 40.79 $ 54.39 $ 81.59$ 2.87 $ 7.18 $ 14.37 $ 21.55 $ 28.74 $ 43.10 $ 57.47 $ 86.21$ 13.86 $ 26.24 $ 46.88 $ 67.52 $ 88.16 $ 129.44 $ 170.72 $ 253.29$ 13.07 $ 24.27 $ 42.94 $ 61.61 $ 80.28 $ 117.62 $ 154.96 $ 229.64

oseu nm-



Cost (Summer)

Cost (Winter)

$ 13.13 $ 22.31 $ 37.63 $ 52.94 $ 68.26 $ 98.89 $ 129.51 $ 190.77$ 12.42 $ 20.56 $ 34.12 $ 47.68 $ 61.24 $ 88.35 $ 115.47 $ 169.71

$ - $ $ - $ - $ - $ - $ - $$ - $ - $ - $ - $ - S - $ - $ -S 2 72 $ 6.80 $ 13.60 $ 20.40 $ 27.20 $ 40.79 $ 54:39 $ 81.59

$ 2.87 $ 7.18 $ 14 37 $ 21.55 $ 28.74 $ 43.10 $ 57.47 5 86.21

$ 15.85 $ 29.11 $ 51.23 $ 73.34 $ 95.45 $ 139.68 $ 183.91 $ 272.36

$ 15.30 $ 27.74 $ 48.49 $ 69.23 $ 89.97 $ 131.46 $ 172.94 $ 255.91

$ Change (Summer)

$ Change (Winter)

Percent Change (Summer)Percent Change (Winter)

$ 1.99 $ 2.87 $ 4.35 $ 5.82 $ 7.29 $ 10.24 $ 13.18 $ 19.07

S 2.23 $ 3.47 $ 5.54 $ 7.62 $ 9.69 $ 13.84 $ 17.98 $ 26.27

14.36% 10.95% 9.27% 8.62% 8.27% 7.91% 7.72% 7.53%

17.06% 14.31% 12.91% 12.36% 12 07% 11,76% 11.60% 11.44%



APP - 41 of 79 41

Residential Service with Space Heaters


Energy Charge per kWhEnergy Charge per kWh


Fuel Factor per kWhFuel Factor per kWh

kWh Level


$ 5.60 $ 7.00 $ 1.40

Summer 5 0.05335 $ 0.061257 $ 0.00791

Winter $ 0.03347 $ 0.045925 $ 0.01246

$ 0.001461 $ - $ (0.00146)

$ 0.000555 $ - $ (0.00056)

Summer $ 0.027196 $ 0.027196 $ -

Winter $ 0.028735 $ 0.028735 $ -

100 250 500 750 1,000 1,500 2,000 3,000

Base Cost (Summer)Base Cost (Winter)



$ 10.94 $ 18.94 $ 32.28 $ 45.61 $

$ 8.95 $ 13.97 $ 22.34 $ 30.70 $

$ 0.15 $ 0.37 $ 0.73 $ 1.10 $

$ 0 06 $ 0.14 $ 0.28 $ 0.42 $

$ 2.72 $ 6.80 $ 13.60 $ 20.40 $

$ 2.87 $ 7.18 $ 14.37 $ 21.55 $

$ 13.86 $ 26.24 $ 46.88 $ 67.52 $$ 12.02 $ 21.66 $ 37.71 $ 53.77 $

58.95 $ 85.63 $ 112.30 $ 165 65

39.07 $ 55.81 $ 72.54 $ 106.01

1.46 $ 2.19 $ 2.92 $ 4.38

0.56 $ 0.83 $ 1.11 $ 1.67

27.20 $ 4079 $ 54.39 $ 81.59

28.74 $ 43.10 $ 57.47 $ 86.21

88.16 $ 129.44 $ 170.72 $ 253.29

69.82 $ 101.93 $ 134.04 $ 198.26


Current Fuel Factor (Summer)Current Fuel Factor (Winter)Total Cost (Summer)Total Cost Winter

$ 13.13 $ 22.31 $ 37.63 $ 52.94 $

$ 11.59 $ 18.48 5 29.96 $ 41.44 $

$ - $ - $ $ - $

$ - $ - $ - $ - $

$ 2.72 $ 6.80 $ 13.60 $ 20.40 $$ 2.87 $ 7.18 $ 14.37 $ 21.55 $

$ 15.85 $ 29.11 $ 51.23 $ 73.34 $

$ 14.47 $ 25 67 $ 44.33 $ 63.00 $

68.26 $ 98.89 $ 129.51 $ 190.77

52.93 $ 75.89 $ 98.85 $ 144.78

$ $ $ -

- $ - $ $ -

27.20 $ 40.79 $ 54.39 $ 81.5928.74 $ 43.10 $ 57.47 $ 86.21

95.45 $ 139.68 $ 183.91 $ 272.36

81.66 $ 118.99 $ 156.32 $ 230.98

$ Change (Summer)

$ Change (Winter)


$ 1.99 $ 2.87 $ 4.35 $ 5.82 $

$ 2.44 $ 4.01 $ 6.62 $ 9.23 $

14.36% 10.95% 9.27% 8.62%

20.33% 18.52% 17.55% 17.17%

7.29 $ 10.24 $ 13.18 $ 19.07

11.84 $ 17.06 $ 22.28 $ 32.72

8.27% 7.91% 7.72% 7.53%

16.96% 16.74% 16.62% 16.50%



APP - 42 of 79 42

Small General Service


Energy Charge per kWhEnergy Charge per kWh


Fuel Factor per kWhFuel Factor per kWh

kWh Level


$ 10.91 $ 10.91 $ -

Summer $ 0.04445 $ 0.044738 $ 0.00029Winter $ 0,03504 $ 0.037597 $ 0.00256

$ 0.001325 $ - $ (0.00133)

$ 0.000359 $ - $ (0.00036)

Summer $ 0.027196 $ 0.027196 $ -Winter $ 0.028735 $ 0.028735 $ -

100 250 500 750 1,000 1,500 2,000 3,000


at Fuel Factor (Summer)at Fuel Factor (Winter)Cost (Summer)Cost (Winter)

$ 15.36 $ 22.02 $ 33.14 $ 44.25 $$ 14.41 $ 19.67 $ 28.43 $ 37.19 $$ 0.13 $ 0.33 $ 0.66 $ 0.99 $$ 0.04 $ 0 09 $ 0.18 $ 0.27 $$ 2.72 $ 6.80 $ 13.60 $ 20.40 $$ 2.87 $ 718 $ 14.37 $ 21.55 $$ 18.24 $ 29.24 $ 47.58 $ 65.91 $$ 17.46 $ 27.27 $ 43.64 $ 60.00 $

55.36 $ 77.59 $ 99.81 $ 144.2645.95 $ 63.47 $ 80.99 $ 116.03

1.33 $ 1.99 $ 2.65 $ 3.980.36 $ 0.54 $ 0.72 $ 1.08

27.20 $ 40.79 $ 54.39 $ 81.5928.74 $ 43.10 $ 57.47 $ 86.2184.24 $ 120.91 $ 157.57 $ 230.9076.37 $ 109.10 $ 141.83 $ 207.29

osea um•


at Fuel Factor (Summer)nt Fuel Factor (Winter)Cost (Summer)Cost (Winter)

$ 15.38 $ 22.09 $ 33.28 $ 44.46 $$ 14.67 $ 20.31 $ 29.71 $ 39.11 $$ - $ - $ - $ - $$ - $ - $ - $ - $$ 2.72 $ 6.80 $ 13.60 $ 20.40 $$ 2.87 $ 7.18 $ 14.37 $ 21.55 $$ 18.10 $ 28.89 $ 46.88 $ 64.86 $$ 17.54 $ 27.49 $ 44.08 $ 60.66 $

55.65 $ 78.02 $ 100.39 $ 145.1248.51 $ 67.31 $ 86.10 $ 123.70

$ $ $- $ - $ - $ -

27.20 $ 40.79 $ 54.39 $ 81.5928.74 $ 43.10 $ 57.47 $ 86.2182.84 $ 118.81 $ 154.78 $ 226.71

77.24 $ 110.41 $ 143.57 $ 209.91

$ Change (Summer)$ Change (Winter)


$ (0.14) $ (0.35) $ (0.70) $ (1.05) $

$ 0.09 $ 0.22 $ 0.44 $ 0.65 $

-0.77% -1.19% -1.47% -1.59%00.50% 0.80% 1.00% 1.09%

(1.40) $ (2.09) $ (2.79) $ (4.19)0.87 $ 1.31 $ 1.75 $ 2.62

-1.66% -1.73% -1.77% -1.81%1.14% 1.20% 1.23% 1.26%



APP - 43 of 79 43

Attachment C - Proposed Form of Protective Order

DOCKET NO. 38147

APPLICATION OF SOUTHWESTERN §PUBLIC SERVICE COMPANY FOR § PUBLIC UTILITY COMMISSIONAUTHORITY TO CHANGE RATES §AND TO RECONCILE FUEL AND §

OF TEXASPURCHASED POWER COSTS FOR §2008 AND 2009 §

PROTECTIVE ORDER

This Protective Order shall govern the use of all information deemed confidential

(Protected Materials) or highly confidential (Highly Sensitive Protected Materials),

including information whose confidentiality is currently under dispute, by a party

providing information to the Public Utility Commission of Texas (Commission) or to any

other party to this proceeding.

It is ORDERED that:

1 Designation of Protected Materials. Upon producing or filing a document,

including, but not limited to, records on a computer disk or other similar

electronic storage medium in this proceeding, the producing party may designate

that document, or any portion of it, as confidential pursuant to this Protective

Order by typing or stamping on its face "PROTECTED PURSUANT TO

PROTECTIVE ORDER ISSUED IN DOCKET NO. 38147" (or words to this

effect) and consecutively Bates Stamping each page. Protected Materials and

Highly Sensitive Protected Materials include the documents so designated, as well

as the substance of the information contained in the documents and any

description, report, summary, or statement about the substance of the information

contained in the documents.

2. Materials Excluded from Protected Materials Desipnation. Protected

Materials shall not include any information or document contained in the public

files of the Commission or any other federal or state agency, court, or local



APP - 44 of 79 44

governmental authority subject to the Public Information Act.12 Protected

Materials also shall not include documents or information which at the time of, or

prior to disclosure in, a proceeding is or was public knowledge, or which becomes

public knowledge other than through disclosure in violation of this Protective

Order.

3. Reviewing Party. For the purposes of this Protective Order, a "Reviewing Party"

is any party to this docket.

4. Procedures for Designation of Protected Materials. On or before the date the

Protected Materials or Highly Sensitive Protected Materials are provided to the

Commission, the producing party shall file with the Commission and deliver to

each party to the proceeding a written statement, which may be in the form of an

objection, indicating: (a) any exemptions to the Public Information Act claimed to

apply to the alleged Protected Materials; (b) the reasons supporting the producing

party's claim that the responsive information is exempt from public disclosure

under the Public Information Act and subject to treatment as protected materials;

and (c) that counsel for the producing party has reviewed the information

sufficiently to state in good faith that the information is exempt from public

disclosure under the Public Information Act and merits the Protected Materials

designation.

5. Persons Permitted Access to Protected Materials. Except as otherwise

provided in this Protective Order, a Reviewing Party may access Protected

Materials only through its "Reviewing Representatives" who have signed the

Protective Order Certification Form (see Attachment A). Reviewing

Representatives of a Reviewing Party include its counsel of record in this

proceeding and associated attorneys, paralegals, economists, statisticians,

accountants, consultants, or other persons employed or retained by the Reviewing

Party and directly engaged in this proceeding. At the request of the PUC

Commissioners, copies of Protected Materials may be produced by Commission

12 TEx. GOV'T CODE ANN. §§ 552.001-552.353 (Vernon 2004 & Supp. 2009).



APP - 45 of 79 45

Staff. The Commissioners and their staff shall be informed of the existence and

coverage of this Protective Order and shall observe the restrictions of the

Protective Order.

6. Hiphly Sensitive Protected Material Described. The term "Highly Sensitive

Protected Materials" is a subset of Protected Materials and refers to documents or

information that a producing party claims is of such a highly sensitive nature that

making copies of such documents or information or providing access to such

documents to employees of the Reviewing Party (except as specified herein)

would expose a producing party to unreasonable risk of harm. Highly Sensitive

Protected Materials include but are not limited to: (a) customer-specific

information protected by § 32.101(c) of the Public Utility Regulatory Act;13 (b)

contractual information pertaining to contracts that specify that their terms are

confidential or that are confidential pursuant to an order entered in litigation to

which the producing party is a party; (c) market-sensitive fuel price forecasts,

wholesale transactions information and/or market-sensitive marketing plans; and

(d) business operations or financial information that is commercially sensitive.

Documents or information so classified by a producing party shall bear the

designation "HIGHLY SENSITIVE PROTECTED MATERIALS PROVIDED

PURSUANT TO PROTECTIVE ORDER ISSUED IN DOCKET NO. 38147" (or

words to this effect) and shall be consecutively Bates Stamped. The provisions of

this Protective Order pertaining to Protected Materials also apply to Highly

Sensitive Protected Materials, except where this Protective Order provides for

additional protections for Highly Sensitive Protected Materials. In particular, the

procedures herein for challenging the producing party's designation of

information as Protected Materials also apply to information that a producing

party designates as Highly Sensitive Protected Materials.

13 Public Utility Regulatory Act, TEx. UTIL. CovE ANN. §§ 11.001-66.016 (Vernon 2007 &

Supp. 2009) (PURA).

Docket No. 38147

Southwestern Public Service Company'sStatement of Intent and Application to Change Rates

Page 27

APP - 46 of 79 46

7. Restrictions on Copying and Inspection of Highly Sensitive Protected

Material. Except as expressly provided herein, copies of Highly Sensitive

Protected Materials may be made and kept in the possession of outside counsel

for a Reviewing Party and outside consultants having a need to access the

materials, except that additional copies may be made in order to have sufficient

copies for introduction of the material into the evidentiary record if the material is

to be offered for admission into the record. A record of any copies that are made

of Highly Sensitive Protected Material shall be kept and a copy of the record shall

be sent to the producing party at the time the copy or copies are made. The record

shall include information on the location and the person in possession of each

copy. Limited notes may be made of Highly Sensitive Protected Materials, and

such notes shall themselves be treated as Highly Sensitive Protected Materials

unless such notes are limited to a description of the document and a general

characterization of its subject matter in a manner that does not state any

substantive information contained in the document.

8. Restricting Persons Who May Have Access to Highly Sensitive Protected

Material. With the exception of Commission Staff, the Office of Public Utility

Counsel (OPC), and the Office of the Attorney General (OAG) when the OAG is

representing a party to the proceeding, and except as provided herein, the

Reviewing Representatives for the purpose of access to Highly Sensitive

Protected Materials may be persons who are: (1) outside counsel for the

Reviewing Party; (2) outside consultants for the Reviewing Party working under

the direction of Reviewing Party's counsel; or (3) employees of the Reviewing

Party or its members working with and under the direction of Reviewing Party's

counsel who have been authorized by the producing party or by the presiding

officer to review Highly Sensitive Protected Materials. The Reviewing Party

shall limit the number of Reviewing Representatives that review each Highly

Sensitive Protected document to the minimum number of persons necessary. The

Reviewing Party is under a good faith obligation to limit access to each portion of

any Highly Sensitive Protected Materials to two Reviewing Representatives



APP - 47 of 79 47

(other than outside counsel) whenever possible. Reviewing Representatives for

Commission Staff, OPC, and OAG, for the purpose of access to Highly Sensitive

Protected Materials, shall consist of their respective counsel of record in this

proceeding and associated attorneys, paralegals, economists, statisticians,

accountants, consultants, or other persons employed or retained by them and

directly engaged in these proceedings.

9. Copies Provided of Highly Sensitive Protected Material. A producing party

shall provide one copy of Highly Sensitive Protected Materials specifically

requested by the Reviewing Party to the person designated by the Reviewing

Party who must be a person authorized to review Highly Sensitive Protected

Material under Paragraph 8. Representatives of the Reviewing Party who are

authorized to view Highly Sensitive Protected Material may review the copy of

Highly Sensitive Protected Materials at the office of the Reviewing Party's

representative designated to receive the information. Any Highly Sensitive

Protected Materials provided to a Reviewing Party may not be copied except as

provided in Paragraph 7. The restrictions contained herein do not apply to

Commission Staff, OPC, and the OAG when the OAG is a representing a party to

the proceeding.

10. Procedures in Paragraphs 10-14 Apply to Commission Staff, OPC, and the

OAG and Control in the Event of Conflict. The procedures in Paragraphs 10

through 14 apply to responses to requests for documents or information that the

producing party designates as Highly Sensitive Protected Materials and provides

to Commission Staff, OPC, and the OAG in recognition of their purely public

functions. To the extent the requirements of Paragraphs 10 through 14 conflicts

with any requirements contained in other paragraphs of this Protective Order, the

requirements of these Paragraphs shall control.

11. Copy of Highly Sensitive Protected Material to be Provided to Commission

Staff, OPC and the OAG. When, in response to a request for information by a

Reviewing Party, the producing party makes available for review documents or



APP - 4R of 79 49

information claimed to be Highly Sensitive Protected Materials, the producing

party shall also deliver one copy of the Highly Sensitive Protected Materials to

the Commission Staff, OPC, and the OAG (if the OAG is representing a party) in

Austin, Texas. Provided however, that in the event such Highly Sensitive

Protected Materials are voluminous, the materials will be made available for

review by Commission Staff, OPC, and the OAG (if the OAG is representing a

party) at the designated office in Austin, Texas. The Commission Staff, OPC and

the OAG (if the OAG is representing a party) may request such copies as are

necessary of such voluminous material under the copying procedures specified

herein.

12. Delivery of the Copy of Highly Sensitive Protected Material to Commission

Staff and Outside Consultants. The Commission Staff, OPC, and the OAG (if

the OAG is representing a party) may deliver the copy of Highly Sensitive

Protected Materials received by them to the appropriate members of their staff for

review, provided such staff members first sign the certification specified by

Paragraph 15. After obtaining the agreement of the producing party, Commission

Staff, OPC, and the OAG (if the OAG is representing a party) may deliver the

copy of Highly Sensitive Protected Materials received by it to the agreed,

appropriate members of their outside consultants for review, provided such

outside consultants first sign the certification in Attachment A.

13. Restriction on Copying by Commission Staff, OPC and the OAG. Except as

allowed by Paragraph 7, Commission Staff, OPC and the OAG may not make

additional copies of the Highly Sensitive Protected Materials furnished to them

unless the producing party agrees in writing otherwise, or, upon a showing of

good cause, the presiding officer directs otherwise. Commission Staff, OPC, and

the OAG may make limited notes of Highly Sensitive Protected Materials

furnished to them, and all such handwritten notes will be treated as Highly

Sensitive Protected Materials as are the materials from which the notes are taken.



APP - 49 of 79 49