NORTHERN STATES POWER CO /WI/, 10-Q filed on 8/5/2013
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 30, 2013
Aug. 5, 2013
Document and Entity Information [Abstract]
 
 
Entity Registrant Name
NORTHERN STATES POWER CO /WI/ 
 
Entity Central Index Key
0000072909 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Non-accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Jun. 30, 2013 
 
Document Fiscal Year Focus
2013 
 
Document Fiscal Period Focus
Q2 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
933,000 
Entity Well-known Seasoned Issuer
No 
 
Entity Voluntary Filers
No 
 
Entity Current Reporting Status
Yes 
 
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Operating revenues
 
 
 
 
Electric
$ 185,374 
$ 179,105 
$ 376,185 
$ 361,106 
Natural gas
24,555 
14,830 
74,912 
56,322 
Other
246 
238 
493 
544 
Total operating revenues
210,175 
194,173 
451,590 
417,972 
Operating expenses
 
 
 
 
Electric fuel and purchased power, non-affiliates
1,862 
4,467 
6,032 
7,914 
Purchased power, affiliates
100,043 
98,813 
198,985 
197,980 
Cost of natural gas sold and transported
14,302 
7,123 
45,287 
34,002 
Operating and maintenance expenses
42,992 
42,492 
84,668 
80,992 
Conservation program expenses
3,118 
3,620 
6,110 
7,122 
Depreciation and amortization
19,051 
17,093 
37,906 
34,102 
Taxes (other than income taxes)
6,341 
6,217 
12,735 
12,598 
Total operating expenses
187,709 
179,825 
391,723 
374,710 
Operating income
22,466 
14,348 
59,867 
43,262 
Other income (expense), net
155 
(40)
270 
460 
Allowance for funds used during construction — equity
780 
765 
1,726 
1,764 
Interest charges and financing costs
 
 
 
 
Interest charges — includes other financing costs of $380, $384, $761 and $810, respectively
6,814 
6,044 
13,669 
12,059 
Allowance for funds used during construction — debt
(400)
(139)
(809)
(225)
Total interest charges and financing costs
6,414 
5,905 
12,860 
11,834 
Income before income taxes
16,987 
9,168 
49,003 
33,652 
Income taxes
6,443 
3,426 
18,774 
13,032 
Net income
$ 10,544 
$ 5,742 
$ 30,229 
$ 20,620 
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Parenthetical) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Interest charges and financing costs
 
 
 
 
Other financing costs
$ 380 
$ 384 
$ 761 
$ 810 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Comprehensive income:
 
 
 
 
Net income
$ 10,544 
$ 5,742 
$ 30,229 
$ 20,620 
Derivative instruments:
 
 
 
 
Reclassification of losses to net income, net of tax of $14, $12, $26 and $25, respectively
18 
19 
37 
38 
Other comprehensive income
18 
19 
37 
38 
Comprehensive income
$ 10,562 
$ 5,761 
$ 30,266 
$ 20,658 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Derivative instruments:
 
 
 
 
Reclassification of losses to net income, net of tax
$ 14 
$ 12 
$ 26 
$ 25 
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Operating activities
 
 
Net income
$ 30,229 
$ 20,620 
Adjustments to reconcile net income to cash provided by operating activities:
 
 
Depreciation and amortization
38,476 
34,680 
Deferred income taxes
15,407 
14,638 
Amortization of investment tax credits
(332)
(312)
Allowance for equity funds used during construction
(1,726)
(1,764)
Net derivative (gains) losses
(344)
63 
Changes in operating assets and liabilities:
 
 
Accounts receivable
1,134 
(9,458)
Accrued unbilled revenues
9,928 
9,625 
Inventories
1,913 
7,696 
Other current assets
3,442 
(712)
Accounts payable
(5,435)
1,860 
Net regulatory assets and liabilities
(806)
4,479 
Other current liabilities
1,670 
588 
Pension and other employee benefit obligations
(10,234)
(11,730)
Change in other noncurrent assets
329 
(228)
Change in other noncurrent liabilities
630 
582 
Net cash provided by operating activities
84,281 
70,627 
Investing activities
 
 
Utility capital/construction expenditures
(81,603)
(72,230)
Allowance for equity funds used during construction
1,726 
1,764 
Other, net
(230)
1,105 
Net cash used in investing activities
(80,107)
(69,361)
Financing activities
 
 
(Repayments of) proceeds from short-term borrowings, net
(37,000)
13,000 
(Repayments of) proceeds from notes payable to affiliate
(80)
50 
Repayments of long-term debt
(92)
(32)
Capital contributions from parent
45,093 
2,162 
Dividends paid to parent
(15,186)
(16,225)
Net cash used in financing activities
(7,265)
(1,045)
Net change in cash and cash equivalents
(3,091)
221 
Cash and cash equivalents at beginning of period
4,459 
1,571 
Cash and cash equivalents at end of period
1,368 
1,792 
Supplemental disclosure of cash flow information:
 
 
Cash paid for interest (net of amounts capitalized)
(12,122)
(11,302)
Cash received (paid) for income taxes, net
39 
(706)
Supplemental disclosure of non-cash investing transactions:
 
 
Property, plant and equipment additions in accounts payable
$ 9,134 
$ 5,748 
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Current assets
 
 
Cash and cash equivalents
$ 1,368 
$ 4,459 
Accounts receivable, net
49,584 
50,706 
Accrued unbilled revenues
39,210 
49,138 
Inventories
17,773 
19,685 
Regulatory assets
15,197 
12,048 
Prepaid taxes
22,490 
24,688 
Deferred income taxes
2,445 
0 
Prepayments and other
2,251 
4,394 
Total current assets
150,318 
165,118 
Property, plant and equipment, net
1,343,713 
1,298,236 
Other assets
 
 
Regulatory assets
236,085 
240,459 
Other investments
3,461 
3,232 
Other
3,662 
4,040 
Total other assets
243,208 
247,731 
Total assets
1,737,239 
1,711,085 
Current liabilities
 
 
Current portion of long-term debt
103 
1,246 
Short-term debt
2,000 
39,000 
Notes payable to affiliates
470 
550 
Accounts payable
26,838 
30,723 
Accounts payable to affiliates
29,461 
31,556 
Dividends payable to parent
7,757 
7,667 
Regulatory liabilities
7,718 
6,086 
Environmental liabilities
17,561 
23,427 
Accrued interest
7,470 
7,304 
Other
11,577 
11,794 
Total current liabilities
110,955 
159,353 
Deferred credits and other liabilities
 
 
Deferred income taxes
280,604 
261,800 
Deferred investment tax credits
9,294 
8,911 
Regulatory liabilities
125,016 
123,746 
Environmental liabilities
87,170 
84,655 
Customer advances
16,449 
15,631 
Pension and employee benefit obligations
53,394 
63,643 
Other
8,672 
8,923 
Total deferred credits and other liabilities
580,599 
567,309 
Commitments and contingencies
   
   
Capitalization
 
 
Long-term debt
468,494 
467,317 
Common stock — 1,000,000 shares authorized of $100 par value; 933,000 shares outstanding at June 30, 2013 and Dec. 31, 2012, respectively
93,300 
93,300 
Additional paid in capital
234,961 
189,867 
Retained earnings
249,330 
234,376 
Accumulated other comprehensive loss
(400)
(437)
Total common stockholder’s equity
577,191 
517,106 
Total liabilities and equity
$ 1,737,239 
$ 1,711,085 
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) (USD $)
Jun. 30, 2013
Dec. 31, 2012
Capitalization
 
 
Common stock, shares authorized (in shares)
1,000,000 
1,000,000 
Common stock, par value (in dollars per share)
$ 100 
$ 100 
Common stock, shares outstanding (in shares)
933,000 
933,000 
Management's Opinion
Management's Opinion
In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly, in accordance with accounting principles generally accepted in the United States of America (GAAP), the financial position of NSP-Wisconsin and its subsidiaries as of June 30, 2013 and Dec. 31, 2012; the results of its operations, including the components of net income and comprehensive income, for the three and six months ended June 30, 2013 and 2012; and its cash flows for the six months ended June 30, 2013 and 2012.  All adjustments are of a normal, recurring nature, except as otherwise disclosed.  Management has also evaluated the impact of events occurring after June 30, 2013 up to the date of issuance of these consolidated financial statements.  These statements contain all necessary adjustments and disclosures resulting from that evaluation.  The Dec. 31, 2012 balance sheet information has been derived from the audited 2012 consolidated financial statements included in the NSP-Wisconsin Annual Report on Form 10-K for the year ended Dec. 31, 2012.  These notes to the consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q.  Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP on an annual basis have been condensed or omitted pursuant to such rules and regulations.  For further information, refer to the consolidated financial statements and notes thereto, included in the NSP-Wisconsin Annual Report on Form 10-K for the year ended Dec. 31, 2012, filed with the SEC on Feb. 25, 2013.  Due to the seasonality of NSP-Wisconsin’s electric and natural gas sales, interim results are not necessarily an appropriate base from which to project annual results.
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

The significant accounting policies set forth in Note 1 to the consolidated financial statements in the NSP-Wisconsin Annual Report on Form 10-K for the year ended Dec. 31, 2012, appropriately represent, in all material respects, the current status of accounting policies and are incorporated herein by reference.

The electric production and transmission system of NSP-Minnesota and NSP-Wisconsin (NSP System) is operated on an integrated basis and managed by NSP-Minnesota. The electric production and transmission costs of the NSP System are shared by NSP-Minnesota and NSP-Wisconsin. A Federal Energy Regulatory Commission (FERC) approved Interchange Agreement between the two companies provides for the sharing of all generation and transmission costs of the NSP System. Such costs include current and potential obligations of NSP-Minnesota related to its nuclear generating facilities.
Accounting Pronouncements
Accounting Pronouncements
Accounting Pronouncements

Recently Adopted

Balance Sheet Offsetting — In December 2011, the Financial Accounting Standards Board (FASB) issued Balance Sheet (Topic 210) — Disclosures about Offsetting Assets and Liabilities (Accounting Standards Update (ASU) No. 2011-11), which requires disclosures regarding netting arrangements in agreements underlying derivatives, certain financial instruments and related collateral amounts, and the extent to which an entity’s financial statement presentation policies related to netting arrangements impact amounts recorded to the financial statements.  In January 2013, the FASB issued Balance Sheet (Topic 210) – Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (ASU No. 2013-01) to clarify the specific instruments that should be considered in these disclosures.  These disclosure requirements do not affect the presentation of amounts in the consolidated balance sheets, and were effective for annual reporting periods beginning on or after Jan. 1, 2013, and interim periods within those annual reporting periods.  NSP-Wisconsin implemented the disclosure guidance effective Jan. 1, 2013, and the implementation did not have a material impact on its consolidated financial statements.  See Note 8 for the required disclosures.

Comprehensive Income Disclosures — In February 2013, the FASB issued Comprehensive Income (Topic 220)  — Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (ASU No. 2013-02), which requires detailed disclosures regarding changes in components of accumulated other comprehensive income and amounts reclassified out of accumulated other comprehensive income.  These disclosure requirements do not change how net income or comprehensive income are presented in the consolidated financial statements.  These disclosure requirements were effective for annual reporting periods beginning on or after Dec. 15, 2012, and interim periods within those annual reporting periods.  NSP-Wisconsin implemented the disclosure guidance effective Jan. 1, 2013, and the implementation did not have a material impact on its consolidated financial statements.  See Note 12 for the required disclosures.
Selected Balance Sheet Data
Selected Balance Sheet Data
Selected Balance Sheet Data
(Thousands of Dollars)
 
June 30, 2013
 
Dec. 31, 2012
Accounts receivable, net
 
 
 
 
Accounts receivable
 
$
53,700

 
$
55,039

Less allowance for bad debts
 
(4,116
)
 
(4,333
)
 
 
$
49,584

 
$
50,706


(Thousands of Dollars)
 
June 30, 2013
 
Dec. 31, 2012
Inventories
 
 
 
 

Materials and supplies
 
$
6,541

 
$
6,172

Fuel
 
7,268

 
6,664

Natural gas
 
3,964

 
6,849

 
 
$
17,773

 
$
19,685


(Thousands of Dollars)
 
June 30, 2013
 
Dec. 31, 2012
Property, plant and equipment, net
 
 
 
 

Electric plant
 
$
1,848,303

 
$
1,795,239

Natural gas plant
 
227,790

 
224,625

Common and other property
 
112,043

 
111,319

Construction work in progress
 
77,144

 
62,629

Total property, plant and equipment
 
2,265,280

 
2,193,812

Less accumulated depreciation
 
(921,567
)
 
(895,576
)
 
 
$
1,343,713

 
$
1,298,236

Income Taxes
Income Taxes
Income Taxes

Except to the extent noted below, the circumstances set forth in Note 6 to the consolidated financial statements included in NSP-Wisconsin’s Annual Report on Form 10-K for the year ended Dec. 31, 2012 appropriately represent, in all material respects, the current status of other income tax matters, and are incorporated herein by reference.

Federal Audit — NSP-Wisconsin is a member of the Xcel Energy affiliated group that files a consolidated federal income tax return. The statute of limitations applicable to Xcel Energy’s 2008 federal income tax return expired in September 2012.  The statute of limitations applicable to Xcel Energy’s 2009 federal income tax return expires in June 2015.  In the third quarter of 2012, the Internal Revenue Service (IRS) commenced an examination of tax years 2010 and 2011.  As of June 30, 2013, the IRS had not proposed any material adjustments to tax years 2010 and 2011.

State Audits — NSP-Wisconsin is a member of the Xcel Energy affiliated group that files consolidated state income tax returns. As of June 30, 2013, NSP-Wisconsin’s earliest open tax year that is subject to examination by state taxing authorities under applicable statutes of limitations is 2008.  In the first quarter of 2013, the state of Wisconsin commenced an examination of tax years 2009 through 2011.  As of June 30, 2013, no material adjustments had been proposed for these years.  There are currently no other state income tax audits in progress.

Unrecognized Tax Benefits — The unrecognized tax benefit balance includes permanent tax positions, which if recognized would affect the annual effective tax rate (ETR).  In addition, the unrecognized tax benefit balance includes temporary tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.  A change in the period of deductibility would not affect the ETR but would accelerate the payment of cash to the taxing authority to an earlier period.

A reconciliation of the amount of unrecognized tax benefit is as follows:
(Millions of Dollars)
 
June 30, 2013
 
Dec. 31, 2012
Unrecognized tax benefit — Permanent tax positions
 
$
0.1

 
$
0.1

Unrecognized tax benefit — Temporary tax positions
 
1.3

 
1.2

Total unrecognized tax benefit
 
$
1.4

 
$
1.3



The unrecognized tax benefit amounts were reduced by the tax benefits associated with net operating loss (NOL) and tax credit carryforwards.  The amounts of tax benefits associated with NOL and tax credit carryforwards are as follows:
(Millions of Dollars)
 
June 30, 2013
 
Dec. 31, 2012
NOL and tax credit carryforwards
 
$
(0.9
)
 
$
(0.9
)


It is reasonably possible that NSP-Wisconsin’s amount of unrecognized tax benefits could significantly change in the next 12 months as the IRS and state audits progress.  As the IRS examination moves closer to completion, it is reasonably possible that the amount of unrecognized tax benefit could decrease up to approximately $1 million.

The payable for interest related to unrecognized tax benefits is partially offset by the interest benefit associated with NOL and tax credit carryforwards.  The payables for interest related to unrecognized tax benefits at June 30, 2013 and Dec. 31, 2012 were not material.  No amounts were accrued for penalties related to unrecognized tax benefits as of June 30, 2013 or Dec. 31, 2012.
Rate Matters (Notes)
Rate Matters
Rate Matters

Except to the extent noted below, the circumstances set forth in Note 10 to the consolidated financial statements included in NSP-Wisconsin’s Annual Report on Form 10-K for the year ended Dec. 31, 2012 appropriately represent, in all material respects, the current status of other rate matters, and are incorporated herein by reference.

Pending Regulatory Proceedings — Public Service Commission of Wisconsin (PSCW)

Base Rate

NSP-Wisconsin – Wisconsin 2014 Electric and Gas Rate Case — On May 31, 2013, NSP-Wisconsin filed a request with the PSCW to increase rates for electric and natural gas service effective Jan. 1, 2014. NSP-Wisconsin requested an overall increase in annual electric rates of $40.0 million, or 6.5 percent, and an increase in natural gas rates of $4.7 million, or 3.8 percent.

The rate filing is based on a 2014 forecast test year, a return on equity (ROE) of 10.4 percent, an equity ratio of 52.5 percent, and a forecasted average net investment rate base of approximately $895.3 million for the electric utility and $89.8 million for the natural gas utility.
 
Next steps in the procedural schedule are expected to be as follows:

•
Staff and Intervenor Direct Testimony – Oct. 4, 2013
•
Rebuttal Testimony – Oct. 18, 2013
•
Surrebuttal testimony – Oct. 28, 2013
•
Hearing – Oct. 30, 2013
•
Initial Brief – Nov. 13, 2013
•
Reply Brief – Nov. 20, 2013

A PSCW decision is anticipated in December 2013, with final rates going into effect in January 2014.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies

Except as noted below and in Note 5, the circumstances set forth in Notes 10 and 11 to the consolidated financial statements in NSP-Wisconsin’s Annual Report on Form 10-K for the year ended Dec. 31, 2012 appropriately represent, in all material respects, the current status of commitments and contingent liabilities and are incorporated herein by reference.  The following include commitments, contingencies and unresolved contingencies that are material to NSP-Wisconsin’s financial position.

Guarantees — NSP-Wisconsin provides a guarantee for payment of customer loans related to NSP-Wisconsin’s farm rewiring program.  NSP-Wisconsin’s exposure under the guarantee is based upon the net liability under the agreement.  The guarantee issued by NSP-Wisconsin limits the exposure of NSP-Wisconsin to a maximum amount stated in the guarantee.  The guarantee contains no recourse provisions and requires no collateral.

The following table presents the guarantee issued and outstanding for NSP-Wisconsin:

(Millions of Dollars)
 
June 30, 2013
 
Dec. 31, 2012
Guarantee issued and outstanding
 
$
1.0

 
$
1.0

Current exposure under the guarantee
 
0.4

 
0.4



Environmental Contingencies

Ashland Manufactured Gas Plant (MGP) Site — NSP-Wisconsin has been named a potentially responsible party (PRP) for contamination at a site in Ashland, Wis.  The Ashland/Northern States Power Lakefront Superfund Site (the Ashland site) includes property owned by NSP-Wisconsin, which was a site previously operated by a predecessor company as a MGP facility (the Upper Bluff), and two other properties: an adjacent city lakeshore park area (Kreher Park), on which an unaffiliated third party previously operated a sawmill and conducted creosote treating operations; and an area of Lake Superior’s Chequamegon Bay adjoining the park (the Sediments).

The U.S. Environmental Protection Agency (EPA) issued its Record of Decision (ROD) in 2010, which describes the preferred remedy the EPA has selected for the cleanup of the Ashland site.  In 2011, the EPA issued special notice letters identifying several entities, including NSP-Wisconsin, as PRPs, for future remediation at the site.  The special notice letters requested that those PRPs participate in negotiations with the EPA regarding how the PRPs intended to conduct or pay for the remediation at the Ashland site.  As a result of those settlement negotiations, the EPA agreed to segment the Ashland site into separate areas.  The first area (Phase I Project Area) includes soil and groundwater in Kreher Park and the Upper Bluff.  The second area includes the Sediments.

In October 2012, a settlement among the EPA, the Wisconsin Department of Natural Resources (WDNR), the Bad River and Red Cliff Bands of the Lake Superior Tribe of Chippewa Indians and NSP-Wisconsin was approved by the U.S. District Court for the Western District of Wisconsin.  This settlement resolves claims against NSP-Wisconsin for its alleged responsibility for the remediation of the Phase I Project Area.  Under the terms of the settlement, NSP-Wisconsin agreed to perform the remediation of the Phase I Project Area, but does not admit any liability with respect to the Ashland site.  The settlement reflects a cost estimate for the clean up of the Phase I Project Area of $40 million.  The settlement also resolves claims by the federal, state and tribal trustees against NSP-Wisconsin for alleged natural resource damages at the Ashland site, including both the Phase I Project Area and the Sediments.  As part of the settlement, NSP-Wisconsin has conveyed approximately 1,390 acres of land to the State of Wisconsin and tribal trustees.  Fieldwork to address the Phase I Project Area at the Ashland site began at the end of 2012 and continues in 2013.

Negotiations between the EPA and NSP-Wisconsin regarding who will pay or perform the cleanup of the Sediments are ongoing.  The EPA’s ROD for the Ashland site includes estimates that the cost of the preferred remediation related to the Sediments is between $63 million and $77 million, with a potential deviation in such estimated costs of up to 50 percent higher to 30 percent lower.

In August 2012, NSP-Wisconsin also filed litigation against other PRPs for their share of the cleanup costs for the Ashland site.  Trial for this matter has been scheduled for June 2014. Negotiations between the EPA, NSP-Wisconsin and several of the other PRPs regarding the PRPs’ fair share of the cleanup costs for the Ashland site are also ongoing.

At June 30, 2013 and Dec. 31, 2012, NSP-Wisconsin had recorded a liability of $101.3 million and $103.7 million, respectively, for the Ashland site based upon potential remediation and design costs together with estimated outside legal and consultant costs; of which $14.3 million and $20.1 million, respectively, was considered a current liability.  The reduction in recorded liability at June 30, 2013 reflects that cleanup has now commenced and costs are being incurred with respect to the Phase I Project Area.  NSP-Wisconsin’s potential liability, the actual cost of remediation and the time frame over which the amounts may be paid are subject to change.  NSP-Wisconsin also continues to work to identify and access state and federal funds to apply to the ultimate remediation cost of the entire site.  Unresolved issues or factors that could result in higher or lower NSP-Wisconsin remediation costs for the Ashland site include the cleanup approach implemented for the Sediments, which party implements the cleanup, the timing of when the cleanup is implemented, potential contributions by other PRPs and whether federal or state funding may be directed to help offset remediation costs at the Ashland site.

NSP-Wisconsin has deferred the estimated site remediation costs, as a regulatory asset, based on an expectation that the PSCW will continue to allow NSP-Wisconsin to recover payments for environmental remediation from its customers.  The PSCW has consistently authorized in NSP-Wisconsin rates recovery of all remediation costs incurred at the Ashland site, and has authorized recovery of MGP remediation costs by other Wisconsin utilities.  External MGP remediation costs are subject to deferral in the Wisconsin retail jurisdiction and are reviewed for prudence as part of the Wisconsin retail rate case process.  Under an existing PSCW policy, utilities have recovered remediation costs for MGPs in natural gas rates, amortized over a four-to six-year period.  The PSCW historically has not allowed utilities to recover their carrying costs on unamortized regulatory assets for MGP remediation.

In a recent rate case decision, the PSCW recognized the potential magnitude of the future liability for the cleanup at the Ashland site.  In December 2012, the PSCW granted an exception to its existing policy at the request of NSP-Wisconsin.  The elements of this exception include: 1) approval to begin recovery of estimated Phase 1 Project costs beginning on Jan. 1, 2013; 2) approval to amortize these estimated costs over a ten-year period; and 3) approval to apply a three percent carrying cost to the unamortized regulatory asset.  Implementation of this exception will help mitigate the rate impact to natural gas customers and the risk to NSP-Wisconsin from a longer amortization period.

Environmental Requirements

Greenhouse Gas (GHG) New Source Performance Standard Proposal (NSPS) and Emission Guideline for Existing Sources — In April 2012, the EPA proposed a GHG NSPS for newly constructed power plants. The proposal requires that carbon dioxide (CO2) emission rates be equal to a natural gas combined-cycle plant, even if the plant is coal-fired. The EPA also proposed that NSPS not apply to modified or reconstructed existing power plants and that installation of control equipment on existing plants would not constitute a “modification” to those plants under the NSPS program. On June 25, 2013, President Obama issued a memorandum directing the EPA to re-propose GHG emission standards for new power plants and develop GHG emission standards for existing power plants. It is not possible to evaluate the impact of these regulations until the upcoming proposals and final requirements are known.

Cross-State Air Pollution Rule (CSAPR) — In 2011, the EPA issued the CSAPR to address long range transport of particulate matter (PM) and ozone by requiring reductions in sulfur dioxide (SO2) and nitrogen oxide (NOx) from utilities in the eastern half of the United States, including Wisconsin.  The CSAPR would have set more stringent requirements than the proposed Clean Air Transport Rule.  The rule also would have created an emissions trading program.

In August 2012, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) vacated the CSAPR and remanded it back to the EPA.  The D.C. Circuit stated that the EPA must continue administering the Clean Air Interstate Rule (CAIR) pending adoption of a valid replacement.  Although the D.C. Circuit had denied all requests for rehearing, in June 2013, the U.S. Supreme Court elected to review the D.C. Circuit’s 2012 decision to vacate the CSAPR. The Court has ordered the parties to file briefs in the appeal this fall and will likely issue a decision by June 2014.

As the EPA continues administering the CAIR while the CSAPR or a replacement rule is pending, NSP-Wisconsin expects to comply with the CAIR as described below.

CAIR — In 2005, the EPA issued the CAIR to further regulate SO2 and NOx emissions.  Under the CAIR’s cap and trade structure, companies can comply through capital investments in emission controls or purchase of emission allowances from other utilities making reductions on their systems.  NSP-Wisconsin purchased allowances in 2012 and plans to continue to purchase allowances in 2013 to comply with the CAIR.  At June 30, 2013, the estimated annual CAIR NOx allowance cost for NSP-Wisconsin did not have a material impact on the results of operations, financial position or cash flows.

Federal Clean Water Act - Effluent Limitations Guidelines (ELG) — In June 2013, the EPA published a proposed ELG rule for power plants that use coal, natural gas, oil or nuclear materials as fuel and discharge treated effluent to surface waters as well as utility-owned landfills that receive coal combustion residuals (CCR). Refuse derived fuel, biomass and other alternatively fueled power plants are not addressed by the proposed revisions. The proposed rule identifies four potential regulatory options and invites comments on those regulatory approaches. The options differ in the number of waste streams covered, size of the units controlled and stringency of controls. The EPA is also seeking comment on the interaction between the ELG proposal and its proposed CCR rule, which is another proposed rule that would also regulate surface impoundments that store coal combustion byproducts (coal ash) and whether to regulate coal ash as hazardous or nonhazardous waste. A final rule is anticipated in 2014. Under the current proposed rule, facilities would need to comply as soon as possible after July 1, 2017 but no later than July 1, 2022. The impact of this rule on NSP-Wisconsin is uncertain at this time.

Legal Contingencies

NSP-Wisconsin is involved in various litigation matters that are being defended and handled in the ordinary course of business.  The assessment of whether a loss is probable or is a reasonable possibility, and whether the loss or a range of loss is estimable, often involves a series of complex judgments about future events.  Management maintains accruals for such losses that are probable of being incurred and subject to reasonable estimation.  Management is sometimes unable to estimate an amount or range of a reasonably possible loss in certain situations, including but not limited to when (1) the damages sought are indeterminate, (2) the proceedings are in the early stages, or (3) the matters involve novel or unsettled legal theories.  In such cases, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss.  For current proceedings not specifically reported herein, management does not anticipate that the ultimate liabilities, if any, arising from such current proceedings would have a material effect on NSP-Wisconsin’s financial statements.  Unless otherwise required by GAAP, legal fees are expensed as incurred.

Environmental Litigation

Native Village of Kivalina vs. Xcel Energy Inc. et al. — In February 2008, the City and Native Village of Kivalina, Alaska, filed a lawsuit in the U.S. District Court for the Northern District of California against Xcel Energy and 23 other utility, oil, gas and coal companies.  Plaintiffs claim that defendants’ emission of CO2 and other greenhouse gases contribute to global warming, which is harming their village.  Xcel Energy believes the claims asserted in this lawsuit are without merit and joined with other utility defendants in filing a motion to dismiss in June 2008.  In October 2009, the U.S. District Court dismissed the lawsuit on constitutional grounds.  In November 2009, plaintiffs filed a notice of appeal to the U.S. Court of Appeals for the Ninth Circuit (Ninth Circuit).  In October 2012, the Ninth Circuit affirmed the U.S. District Court’s dismissal and subsequently rejected plaintiffs’ request for rehearing.  In May 2013, the U.S. Supreme Court denied plaintiffs’ request for review, which brings this litigation to a close.  No accrual has been recorded for this matter.

Comer vs. Xcel Energy Inc. et al. — In May 2011, less than a year after their initial lawsuit was dismissed, plaintiffs in this purported class action lawsuit filed a second lawsuit against more than 85 utility, oil, chemical and coal companies in the U.S. District Court in Mississippi.  The complaint alleges defendants’ CO2 emissions intensified the strength of Hurricane Katrina and increased the damage plaintiffs purportedly sustained to their property.  Plaintiffs base their claims on public and private nuisance, trespass and negligence.  Among the defendants named in the complaint are Xcel Energy Inc., SPS, PSCo, NSP-Wisconsin and NSP-Minnesota.  The amount of damages claimed by plaintiffs is unknown.  The defendants believe this lawsuit is without merit and filed a motion to dismiss the lawsuit.  In March 2012, the U.S. District Court granted this motion for dismissal.  In April 2012, plaintiffs appealed this decision to the U.S. Court of Appeals for the Fifth Circuit.  In May 2013, the Fifth Circuit affirmed the district court’s dismissal of this lawsuit. It is uncertain whether plaintiffs will seek further review of this decision. Although Xcel Energy believes the likelihood of loss is remote based upon existing case law, it is not possible to estimate the amount or range of reasonably possible loss in the event of an adverse outcome of this matter.  No accrual has been recorded for this matter.
Borrowings and Other Financing Instruments
Borrowings and Other Financing Instruments
Borrowings and Other Financing Instruments

Commercial Paper — NSP-Wisconsin meets its short-term liquidity requirements primarily through the issuance of commercial paper and borrowings under its credit facility.  Commercial paper outstanding for NSP-Wisconsin was as follows:
(Amounts in Millions, Except Interest Rates)
 
Three Months Ended June 30, 2013
 
Twelve Months Ended Dec. 31, 2012
Borrowing limit
 
$
150

 
$
150

Amount outstanding at period end
 
2

 
39

Average amount outstanding
 
11

 
61

Maximum amount outstanding
 
27

 
116

Weighted average interest rate, computed on a daily basis
 
0.27
%
 
0.39
%
Weighted average interest rate at period end
 
0.22

 
0.40



Letters of Credit — NSP-Wisconsin may use letters of credit, generally with terms of one year, to provide financial guarantees for certain operating obligations.  At June 30, 2013 and Dec. 31, 2012, there were no letters of credit outstanding.

Credit Facility — In order to use its commercial paper program to fulfill short-term funding needs, NSP-Wisconsin must have a revolving credit facility in place at least equal to the amount of its commercial paper borrowing limit and cannot issue commercial paper in an aggregate amount exceeding available capacity under this credit facility.  The line of credit provides short-term financing in the form of notes payable to banks, letters of credit and back-up support for commercial paper borrowings.

At June 30, 2013, NSP-Wisconsin had the following committed credit facility available (in millions of dollars):
Credit Facility (a)
 
Drawn (b)
 
Available
$
150.0

 
$
2.0

 
$
148.0


(a) 
Credit facility expires in July 2017.
(b) 
Includes outstanding commercial paper.

All credit facility bank borrowings, outstanding letters of credit and outstanding commercial paper reduce the available capacity under the credit facility.  NSP-Wisconsin had no direct advances on the credit facility outstanding at June 30, 2013 and Dec. 31, 2012.

Other Short-Term Borrowings — The following table presents the notes payable of Clearwater Investments, Inc., a NSP-Wisconsin subsidiary, to Xcel Energy Inc.:
(Amounts in Millions, Except Interest Rates)
 
June 30, 2013
 
Dec. 31, 2012
Notes payable to affiliates
 
$
0.5

 
$
0.6

Weighted average interest rate
 
0.27
%
 
0.33
%
Fair Value of Financial Assets and Liabilities
Fair Value of Financial Assets and Liabilities
Fair Value of Financial Assets and Liabilities

Fair Value Measurements

The accounting guidance for fair value measurements and disclosures provides a single definition of fair value and requires certain disclosures about assets and liabilities measured at fair value.  A hierarchical framework for disclosing the observability of the inputs utilized in measuring assets and liabilities at fair value is established by this guidance. The three levels in the hierarchy are as follows:

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

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

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

Specific valuation methods include the following:

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

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

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

Derivative Instruments Fair Value Measurements

NSP-Wisconsin enters into derivative instruments, including forward contracts, futures, swaps and options, to manage risk in connection with changes in interest rates and utility commodity prices.

Interest Rate Derivatives — NSP-Wisconsin enters into various instruments that effectively fix the interest payments on certain floating rate debt obligations or effectively fix the yield or price on a specified benchmark interest rate for an anticipated debt issuance for a specific period.  These derivative instruments are generally designated as cash flow hedges for accounting purposes.

At June 30, 2013, accumulated other comprehensive loss related to interest rate derivatives included $0.1 million of net losses expected to be reclassified into earnings during the next 12 months as the related hedged interest rate transactions impact earnings.

There were immaterial pre-tax losses related to interest rate derivatives reclassified from accumulated other comprehensive loss into earnings during the three months ended June 30, 2013 and 2012, and $0.1 million of net losses reclassified from accumulated other comprehensive loss into earnings during the six months ended June 30, 2013 and 2012.

Commodity Derivatives — NSP-Wisconsin may enter into derivative instruments to manage variability of future cash flows from changes in commodity prices in its electric and natural gas operations, including the sale of natural gas or the purchase of natural gas for resale.

The following table details the gross notional amounts of commodity forwards and options at June 30, 2013 and Dec. 31, 2012:

(Amounts in Thousands) (a)(b)
 
June 30, 2013
 
Dec. 31, 2012
Million British thermal units (MMBtu) of natural gas
 
377

 
53


(a) 
Amounts are not reflective of net positions in the underlying commodities.
(b) 
Notional amounts for options are included on a gross basis, but are weighted for the probability of exercise.

Consideration of Credit Risk and Concentrations — NSP-Wisconsin continuously monitors the creditworthiness of the counterparties to its interest rate and commodity derivative contracts prior to settlement, and assesses each counterparty’s ability to perform on the transactions set forth in the contracts.  Given this assessment, as well as an assessment of the impact of NSP-Wisconsin’s own credit risk when determining the fair value of derivative liabilities, the impact of considering credit risk was immaterial to the fair value of commodity derivatives presented in the consolidated balance sheets.

NSP-Wisconsin employs additional credit risk control mechanisms when appropriate, such as letters of credit, parental guarantees, standardized master netting agreements and termination provisions that allow for offsetting of positive and negative exposures.  Credit exposure is monitored and, when necessary, the activity with a specific counterparty is limited until credit enhancement is provided.

Financial Impact of Qualifying Cash Flow Hedges — The impact of qualifying interest rate cash flow hedges on NSP-Wisconsin’s accumulated other comprehensive loss, included as a component of common stockholder’s equity and in the consolidated statement of comprehensive income, is detailed in the following table: 
 
 
Three Months Ended June 30
(Thousands of Dollars)
 
2013
 
2012
Accumulated other comprehensive loss related to cash flow hedges at April 1
 
$
(418
)
 
$
(495
)
After-tax net realized losses on derivative transactions reclassified into earnings
 
18

 
19

Accumulated other comprehensive loss related to cash flow hedges at June 30
 
$
(400
)
 
$
(476
)

 
 
Six Months Ended June 30
(Thousands of Dollars)
 
2013
 
2012
Accumulated other comprehensive loss related to cash flow hedges at Jan. 1
 
$
(437
)
 
$
(514
)
After-tax net realized losses on derivative transactions reclassified into earnings
 
37

 
38

Accumulated other comprehensive loss related to cash flow hedges at June 30
 
$
(400
)
 
$
(476
)


During the three months ended June 30, 2013, changes in the fair value of natural gas commodity derivatives resulted in net losses of $0.2 million, recognized as regulatory assets and liabilities.  For the three months ended June 30, 2012, changes in the fair value of natural gas commodity derivatives resulted in immaterial net gains recognized as regulatory assets and liabilities.  During the six months ended June 30, 2013 and 2012, changes in the fair value of natural gas commodity derivatives resulted in net losses of $0.2 million and $0.4 million, respectively, recognized as regulatory assets and liabilities.  The classification as a regulatory asset or liability is based on commission approved regulatory recovery mechanisms.

Natural gas commodity derivatives settlement losses of $2.9 million were recognized during the six months ended June 30, 2012, and were subject to purchased natural gas cost recovery mechanisms, which result in reclassifications of derivative settlement gains and losses out of income to a regulatory asset or liability, as appropriate.  Such losses for the three and six months ended June 30, 2013, and the three months ended June 30, 2012, were immaterial.

NSP-Wisconsin had no derivative instruments designated as fair value hedges during the three and six months ended June 30, 2013 and 2012.

Recurring Fair Value Measurements — The following table presents for each of the fair value hierarchy levels, NSP-Wisconsin’s derivative assets measured at fair value on a recurring basis at June 30, 2013 and Dec. 31, 2012:
 
 
June 30, 2013
 
 
Fair Value
 
 
 
 
 
 
(Thousands of Dollars)
 
Level 1
 
Level 2
 
Level 3
 
Fair Value
Total
 
Counterparty
Netting (a)
 
Total (b)
Current derivative assets
 
 

 
 

 
 

 
 

 
 

 
 

Natural gas commodity
 
$
—

 
$
191

 
$
—

 
$
191

 
$
—

 
$
191


 
 
Dec. 31, 2012
 
 
Fair Value
 
 
 
 
 
 
(Thousands of Dollars)
 
Level 1
 
Level 2
 
Level 3
 
Fair Value
Total
 
Counterparty
Netting (a)
 
Total (c)
Current derivative liabilities
 
 

 
 

 
 

 
 

 
 

 
 

Natural gas commodity
 
$
—

 
$
11

 
$
—

 
$
11

 
$
—

 
$
11

 

(a) 
NSP-Wisconsin nets derivative instruments and related collateral in its consolidated balance sheet when supported by a legally enforceable master netting agreement, and all derivative instruments and related collateral amounts were subject to master netting agreements at June 30, 2013 and Dec. 31, 2012.  The counterparty netting amounts presented exclude settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements.
(b) 
Included in other current assets balance of $2.3 million at June 30, 2013 in the consolidated balance sheets.
(c) 
Included in other current liabilities balance of $11.8 million at Dec. 31, 2012 in the consolidated balance sheets.

Fair Value of Long-Term Debt

As of June 30, 2013 and Dec. 31, 2012, other financial instruments for which the carrying amount did not equal fair value were as follows:
 
 
June 30, 2013
 
Dec. 31, 2012
(Thousands of Dollars)
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Long-term debt, including current portion
 
$
468,597

 
$
531,979

 
$
468,563

 
$
576,353



The fair value of NSP-Wisconsin’s long-term debt is estimated based on recent trades and observable spreads from benchmark interest rates for similar securities.  The fair value estimates are based on information available to management as of June 30, 2013 and Dec. 31, 2012, and given the observability of the inputs to these estimates, the fair values presented for long-term debt have been assigned a Level 2.
Other Income (Expense), Net
Other Income (Expense), Net
Other Income (Expense), Net

Other income (expense), net consisted of the following:
 
 
Three Months Ended June 30
 
Six Months Ended June 30
(Thousands of Dollars)
 
2013
 
2012
 
2013
 
2012
Interest income (expense)
 
$
197

 
$
(25
)
 
$
396

 
$
632

Other nonoperating income
 
29

 
46

 
70

 
39

Insurance policy expense
 
(69
)
 
(61
)
 
(191
)
 
(211
)
Other nonoperating expense
 
(2
)
 
—

 
(5
)
 
—

Other income (expense), net
 
$
155

 
$
(40
)
 
$
270

 
$
460

Segment Information
Segment Information
Segment Information

Operating results from the regulated electric utility and regulated natural gas utility are each separately and regularly reviewed by NSP-Wisconsin’s chief operating decision maker.  NSP-Wisconsin evaluates performance based on profit or loss generated from the product or service provided.  These segments are managed separately because the revenue streams are dependent upon regulated rate recovery, which is separately determined for each segment.

NSP-Wisconsin has the following reportable segments: regulated electric utility, regulated natural gas utility and all other.

•
NSP-Wisconsin’s regulated electric utility segment generates electricity which is transmitted and distributed in Wisconsin and Michigan.  In addition, this segment includes sales for resale and provides wholesale transmission service to various entities primarily in Wisconsin.
•
NSP-Wisconsin’s regulated natural gas utility segment purchases, transports, stores and distributes natural gas in portions of Wisconsin and Michigan.
•
Revenues from operating segments not included above are below the necessary quantitative thresholds and are therefore included in the all other category.  Those primarily include investments in rental housing projects that qualify for low-income housing tax credits.

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

To report income from continuing operations for regulated electric and regulated natural gas utility segments, the majority of costs are directly assigned to each segment.  However, some costs, such as common depreciation, common operating and maintenance (O&M) expenses and interest expense are allocated based on cost causation allocators.  A general allocator is used for certain general and administrative expenses, including office supplies, rent, property insurance and general advertising.

(Thousands of Dollars)
 
Regulated
Electric
 
Regulated
Natural Gas
 
All
Other
 
Reconciling
Eliminations
 
Consolidated
Total
Three Months Ended June 30, 2013
 
 
 
 
 
 
 
 
 
 
Operating revenues
 
$
185,374

 
$
24,555

 
$
246

 
$
—

 
$
210,175

Intersegment revenues
 
83

 
278

 
—

 
(361
)
 
—

Total revenues
 
$
185,457

 
$
24,833

 
$
246

 
$
(361
)
 
$
210,175

Net income
 
$
10,068

 
$
201

 
$
275

 
$
—

 
$
10,544

(Thousands of Dollars)
 
Regulated
Electric
 
Regulated
Natural Gas
 
All
Other
 
Reconciling
Eliminations
 
Consolidated
Total
Three Months Ended June 30, 2012
 
 
 
 

 
 
 
 
 
 
Operating revenues
 
$
179,105

 
$
14,830

 
$
238

 
$
—

 
$
194,173

Intersegment revenues
 
109

 
61

 
—

 
(170
)
 
—

Total revenues
 
$
179,214

 
$
14,891

 
$
238

 
$
(170
)
 
$
194,173

Net income (loss)
 
$
6,127

 
$
(947
)
 
$
562

 
$
—

 
$
5,742


(Thousands of Dollars)
 
Regulated
Electric
 
Regulated
Natural Gas
 
All
Other
 
Reconciling
Eliminations
 
Consolidated
Total
Six Months Ended June 30, 2013
 
 
 
 
 
 
 
 
 
 
Operating revenues
 
$
376,185

 
$
74,912

 
$
493

 
$
—

 
$
451,590

Intersegment revenues
 
161

 
586

 
—

 
(747
)
 
—

Total revenues
 
$
376,346

 
$
75,498

 
$
493

 
$
(747
)
 
$
451,590

Net income
 
$
23,671

 
$
5,825

 
$
733

 
$
—

 
$
30,229

(Thousands of Dollars)
 
Regulated
Electric
 
Regulated
Natural Gas
 
All
Other
 
Reconciling
Eliminations
 
Consolidated
Total
Six Months Ended June 30, 2012
 
 
 
 

 
 
 
 
 
 
Operating revenues
 
$
361,106

 
$
56,322

 
$
544

 
$
—

 
$
417,972

Intersegment revenues
 
196

 
264

 
—

 
(460
)
 
—

Total revenues
 
$
361,302

 
$
56,586

 
$
544

 
$
(460
)
 
$
417,972

Net income
 
$
17,375

 
$
2,453

 
$
792

 
$
—

 
$
20,620

Benefit Plans and Other Postretirement Benefits
Benefit Plans and Other Postretirement Benefits
Benefit Plans and Other Postretirement Benefits

Components of Net Periodic Benefit Cost
 
 
Three Months Ended June 30
 
 
2013
 
2012
 
2013
 
2012
(Thousands of Dollars)
 
Pension Benefits
 
Postretirement Health
Care Benefits
Service cost
 
$
1,420

 
$
1,150

 
$
6

 
$
5

Interest cost
 
1,731

 
1,925

 
190

 
274

Expected return on plan assets
 
(2,498
)
 
(2,634
)
 
(10
)
 
(12
)
Amortization of transition obligation
 
—

 
—

 
—

 
43

Amortization of prior service cost (credit)
 
104

 
443

 
(88
)
 
(3
)
Amortization of net loss
 
1,981

 
1,487

 
241

 
128

Net benefit cost recognized for financial reporting
 
$
2,738

 
$
2,371

 
$
339

 
$
435


 
 
Six Months Ended June 30
 
 
2013
 
2012
 
2013
 
2012
(Thousands of Dollars)
 
Pension Benefits
 
Postretirement Health
Care Benefits
Service cost
 
$
2,841

 
$
2,284

 
$
12

 
$
10

Interest cost
 
3,462

 
3,835

 
380

 
538

Expected return on plan assets
 
(4,997
)
 
(5,245
)
 
(21
)
 
(25
)
Amortization of transition obligation
 
—

 
—

 
—

 
86

Amortization of prior service cost (credit)
 
208

 
886

 
(176
)
 
(7
)
Amortization of net loss
 
3,962

 
2,922

 
482

 
242

Net benefit cost recognized for financial reporting
 
$
5,476

 
$
4,682

 
$
677

 
$
844



In January 2013, contributions of $191.5 million were made across four of Xcel Energy’s pension plans, of which $11.3 million was attributable to NSP-Wisconsin.  Xcel Energy does not expect additional pension contributions during 2013.
Other Comprehensive Income
Other Comprehensive Income
Other Comprehensive Income

Changes in accumulated other comprehensive loss, net of tax, for the three and six months ended June 30, 2013 were as follows:
(Thousands of Dollars)
 
Gains and
Losses on Cash
Flow Hedges
Accumulated other comprehensive loss at April 1
 
$
(418
)
Losses reclassified from net accumulated other comprehensive loss
 
18

Net current period other comprehensive income
 
18

Accumulated other comprehensive loss at June 30
 
$
(400
)

(Thousands of Dollars)
 
Gains and
Losses on Cash
Flow Hedges
Accumulated other comprehensive loss at Jan. 1
 
$
(437
)
Losses reclassified from net accumulated other comprehensive loss
 
37

Net current period other comprehensive income
 
37

Accumulated other comprehensive loss at June 30
 
$
(400
)


Reclassifications from accumulated other comprehensive loss for the three and six months ended June 30, 2013 were as follows:
 
 
Amounts Reclassified from
Accumulated Other
Comprehensive Loss
 
(Thousands of Dollars)
 
Three Months Ended June 30, 2013
 
Six Months Ended June 30, 2013
 
Losses on cash flow hedges:
 
 

 
 
 
Interest rate derivatives
 
$
32

(a) 
$
63

(a) 
Total, pre-tax
 
32

 
63

 
Tax benefit
 
(14
)
 
(26
)

Total amounts reclassified, net of tax
 
$
18

 
$
37

 

(a) 
Included in interest charges.
Selected Balance Sheet Data (Tables)
Accounts Receivable, Net 
(Thousands of Dollars)
 
June 30, 2013
 
Dec. 31, 2012
Accounts receivable, net
 
 
 
 
Accounts receivable
 
$
53,700

 
$
55,039

Less allowance for bad debts
 
(4,116
)
 
(4,333
)
 
 
$
49,584

 
$
50,706

Inventories 
(Thousands of Dollars)
 
June 30, 2013
 
Dec. 31, 2012
Inventories
 
 
 
 

Materials and supplies
 
$
6,541

 
$
6,172

Fuel
 
7,268

 
6,664

Natural gas
 
3,964

 
6,849

 
 
$
17,773

 
$
19,685

Property, Plant and Equipment, Net 
(Thousands of Dollars)
 
June 30, 2013
 
Dec. 31, 2012
Property, plant and equipment, net
 
 
 
 

Electric plant
 
$
1,848,303

 
$
1,795,239

Natural gas plant
 
227,790

 
224,625

Common and other property
 
112,043

 
111,319

Construction work in progress
 
77,144

 
62,629

Total property, plant and equipment
 
2,265,280

 
2,193,812

Less accumulated depreciation
 
(921,567
)
 
(895,576
)
 
 
$
1,343,713

 
$
1,298,236

Income Taxes (Tables)
Reconciliation of Unrecognized Tax Benefits 
A reconciliation of the amount of unrecognized tax benefit is as follows:
(Millions of Dollars)
 
June 30, 2013
 
Dec. 31, 2012
Unrecognized tax benefit — Permanent tax positions
 
$
0.1

 
$
0.1

Unrecognized tax benefit — Temporary tax positions
 
1.3

 
1.2

Total unrecognized tax benefit
 
$
1.4

 
$
1.3

Tax Benefits Associated with NOL and Tax Credit Carryforwards 
The unrecognized tax benefit amounts were reduced by the tax benefits associated with net operating loss (NOL) and tax credit carryforwards.  The amounts of tax benefits associated with NOL and tax credit carryforwards are as follows:
(Millions of Dollars)
 
June 30, 2013
 
Dec. 31, 2012
NOL and tax credit carryforwards
 
$
(0.9
)
 
$
(0.9
)
Commitments and Contingencies (Tables)
Guarantee Issued and Outstanding
The following table presents the guarantee issued and outstanding for NSP-Wisconsin:

(Millions of Dollars)
 
June 30, 2013
 
Dec. 31, 2012
Guarantee issued and outstanding
 
$
1.0

 
$
1.0

Current exposure under the guarantee
 
0.4

 
0.4

Borrowings and Other Financing Instruments (Tables)
Committed Credit Facility Available 
At June 30, 2013, NSP-Wisconsin had the following committed credit facility available (in millions of dollars):
Credit Facility (a)
 
Drawn (b)
 
Available
$
150.0

 
$
2.0

 
$
148.0


(a) 
Credit facility expires in July 2017.
(b) 
Includes outstanding commercial paper.
Short-Term Borrowings 
Commercial Paper — NSP-Wisconsin meets its short-term liquidity requirements primarily through the issuance of commercial paper and borrowings under its credit facility.  Commercial paper outstanding for NSP-Wisconsin was as follows:
(Amounts in Millions, Except Interest Rates)
 
Three Months Ended June 30, 2013
 
Twelve Months Ended Dec. 31, 2012
Borrowing limit
 
$
150

 
$
150

Amount outstanding at period end
 
2

 
39

Average amount outstanding
 
11

 
61

Maximum amount outstanding
 
27

 
116

Weighted average interest rate, computed on a daily basis
 
0.27
%
 
0.39
%
Weighted average interest rate at period end
 
0.22

 
0.40

Short-Term Borrowings 
Other Short-Term Borrowings — The following table presents the notes payable of Clearwater Investments, Inc., a NSP-Wisconsin subsidiary, to Xcel Energy Inc.:
(Amounts in Millions, Except Interest Rates)
 
June 30, 2013
 
Dec. 31, 2012
Notes payable to affiliates
 
$
0.5

 
$
0.6

Weighted average interest rate
 
0.27
%
 
0.33
%
Fair Value of Financial Assets and Liabilities (Tables)
Gross Notional Amounts of Commodity Forwards and Options 
The following table details the gross notional amounts of commodity forwards and options at June 30, 2013 and Dec. 31, 2012:

(Amounts in Thousands) (a)(b)
 
June 30, 2013
 
Dec. 31, 2012
Million British thermal units (MMBtu) of natural gas
 
377

 
53


(a) 
Amounts are not reflective of net positions in the underlying commodities.
(b) 
Notional amounts for options are included on a gross basis, but are weighted for the probability of exercise.
Financial Impact of Qualifying Cash Flow Hedges on Accumulated Other Comprehensive Loss 
Financial Impact of Qualifying Cash Flow Hedges — The impact of qualifying interest rate cash flow hedges on NSP-Wisconsin’s accumulated other comprehensive loss, included as a component of common stockholder’s equity and in the consolidated statement of comprehensive income, is detailed in the following table: 
 
 
Three Months Ended June 30
(Thousands of Dollars)
 
2013
 
2012
Accumulated other comprehensive loss related to cash flow hedges at April 1
 
$
(418
)
 
$
(495
)
After-tax net realized losses on derivative transactions reclassified into earnings
 
18

 
19

Accumulated other comprehensive loss related to cash flow hedges at June 30
 
$
(400
)
 
$
(476
)

 
 
Six Months Ended June 30
(Thousands of Dollars)
 
2013
 
2012
Accumulated other comprehensive loss related to cash flow hedges at Jan. 1
 
$
(437
)
 
$
(514
)
After-tax net realized losses on derivative transactions reclassified into earnings
 
37

 
38

Accumulated other comprehensive loss related to cash flow hedges at June 30
 
$
(400
)
 
$
(476
)
Derivative Assets and Liabilities Measured at Fair Value on a Recurring Basis by Hierarchy Level 
Recurring Fair Value Measurements — The following table presents for each of the fair value hierarchy levels, NSP-Wisconsin’s derivative assets measured at fair value on a recurring basis at June 30, 2013 and Dec. 31, 2012:
 
 
June 30, 2013
 
 
Fair Value
 
 
 
 
 
 
(Thousands of Dollars)
 
Level 1
 
Level 2
 
Level 3
 
Fair Value
Total
 
Counterparty
Netting (a)
 
Total (b)
Current derivative assets
 
 

 
 

 
 

 
 

 
 

 
 

Natural gas commodity
 
$
—

 
$
191

 
$
—

 
$
191

 
$
—

 
$
191


 
 
Dec. 31, 2012
 
 
Fair Value
 
 
 
 
 
 
(Thousands of Dollars)
 
Level 1
 
Level 2
 
Level 3
 
Fair Value
Total
 
Counterparty
Netting (a)
 
Total (c)
Current derivative liabilities
 
 

 
 

 
 

 
 

 
 

 
 

Natural gas commodity
 
$
—

 
$
11

 
$
—

 
$
11

 
$
—

 
$
11

 

(a) 
NSP-Wisconsin nets derivative instruments and related collateral in its consolidated balance sheet when supported by a legally enforceable master netting agreement, and all derivative instruments and related collateral amounts were subject to master netting agreements at June 30, 2013 and Dec. 31, 2012.  The counterparty netting amounts presented exclude settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements.
(b) 
Included in other current assets balance of $2.3 million at June 30, 2013 in the consolidated balance sheets.
(c) 
Included in other current liabilities balance of $11.8 million at Dec. 31, 2012 in the consolidated balance sheets.
Carrying Amount and Fair Value of Long-term Debt 
As of June 30, 2013 and Dec. 31, 2012, other financial instruments for which the carrying amount did not equal fair value were as follows:
 
 
June 30, 2013
 
Dec. 31, 2012
(Thousands of Dollars)
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Long-term debt, including current portion
 
$
468,597

 
$
531,979

 
$
468,563

 
$
576,353

Other Income (Expense), Net (Tables)
Other Income (Expense), Net
Other income (expense), net consisted of the following:
 
 
Three Months Ended June 30
 
Six Months Ended June 30
(Thousands of Dollars)
 
2013
 
2012
 
2013
 
2012
Interest income (expense)
 
$
197

 
$
(25
)
 
$
396

 
$
632

Other nonoperating income
 
29

 
46

 
70

 
39

Insurance policy expense
 
(69
)
 
(61
)
 
(191
)
 
(211
)
Other nonoperating expense
 
(2
)
 
—

 
(5
)
 
—

Other income (expense), net
 
$
155

 
$
(40
)
 
$
270

 
$
460

Segment Information (Tables)
Results from Continuing Operations by Reportable Segment
(Thousands of Dollars)
 
Regulated
Electric
 
Regulated
Natural Gas
 
All
Other
 
Reconciling
Eliminations
 
Consolidated
Total
Three Months Ended June 30, 2013
 
 
 
 
 
 
 
 
 
 
Operating revenues
 
$
185,374

 
$
24,555

 
$
246

 
$
—

 
$
210,175

Intersegment revenues
 
83

 
278

 
—

 
(361
)
 
—

Total revenues
 
$
185,457

 
$
24,833

 
$
246

 
$
(361
)
 
$
210,175

Net income
 
$
10,068

 
$
201

 
$
275

 
$
—

 
$
10,544

(Thousands of Dollars)
 
Regulated
Electric
 
Regulated
Natural Gas
 
All
Other
 
Reconciling
Eliminations
 
Consolidated
Total
Three Months Ended June 30, 2012
 
 
 
 

 
 
 
 
 
 
Operating revenues
 
$
179,105

 
$
14,830

 
$
238

 
$
—

 
$
194,173

Intersegment revenues
 
109

 
61

 
—

 
(170
)
 
—

Total revenues
 
$
179,214

 
$
14,891

 
$
238

 
$
(170
)
 
$
194,173

Net income (loss)
 
$
6,127

 
$
(947
)
 
$
562

 
$
—

 
$
5,742


(Thousands of Dollars)
 
Regulated
Electric
 
Regulated
Natural Gas
 
All
Other
 
Reconciling
Eliminations
 
Consolidated
Total
Six Months Ended June 30, 2013
 
 
 
 
 
 
 
 
 
 
Operating revenues
 
$
376,185

 
$
74,912

 
$
493

 
$
—

 
$
451,590

Intersegment revenues
 
161

 
586

 
—

 
(747
)
 
—

Total revenues
 
$
376,346

 
$
75,498

 
$
493

 
$
(747
)
 
$
451,590

Net income
 
$
23,671

 
$
5,825

 
$
733

 
$
—

 
$
30,229

(Thousands of Dollars)
 
Regulated
Electric
 
Regulated
Natural Gas
 
All
Other
 
Reconciling
Eliminations
 
Consolidated
Total
Six Months Ended June 30, 2012
 
 
 
 

 
 
 
 
 
 
Operating revenues
 
$
361,106

 
$
56,322

 
$
544

 
$
—

 
$
417,972

Intersegment revenues
 
196

 
264

 
—

 
(460
)
 
—

Total revenues
 
$
361,302

 
$
56,586

 
$
544

 
$
(460
)
 
$
417,972

Net income
 
$
17,375

 
$
2,453

 
$
792

 
$
—

 
$
20,620

Benefit Plans and Other Postretirement Benefits (Tables)
Components of Net Periodic Benefit Cost
Components of Net Periodic Benefit Cost
 
 
Three Months Ended June 30
 
 
2013
 
2012
 
2013
 
2012
(Thousands of Dollars)
 
Pension Benefits
 
Postretirement Health
Care Benefits
Service cost
 
$
1,420

 
$
1,150

 
$
6

 
$
5

Interest cost
 
1,731

 
1,925

 
190

 
274

Expected return on plan assets
 
(2,498
)
 
(2,634
)
 
(10
)
 
(12
)
Amortization of transition obligation
 
—

 
—

 
—

 
43

Amortization of prior service cost (credit)
 
104

 
443

 
(88
)
 
(3
)
Amortization of net loss
 
1,981

 
1,487

 
241

 
128

Net benefit cost recognized for financial reporting
 
$
2,738

 
$
2,371

 
$
339

 
$
435


 
 
Six Months Ended June 30
 
 
2013
 
2012
 
2013
 
2012
(Thousands of Dollars)
 
Pension Benefits
 
Postretirement Health
Care Benefits
Service cost
 
$
2,841

 
$
2,284

 
$
12

 
$
10

Interest cost
 
3,462

 
3,835

 
380

 
538

Expected return on plan assets
 
(4,997
)
 
(5,245
)
 
(21
)
 
(25
)
Amortization of transition obligation
 
—

 
—

 
—

 
86

Amortization of prior service cost (credit)
 
208

 
886

 
(176
)
 
(7
)
Amortization of net loss
 
3,962

 
2,922

 
482

 
242

Net benefit cost recognized for financial reporting
 
$
5,476

 
$
4,682

 
$
677

 
$
844

Other Comprehensive Income (Tables)
Changes in Accumulated Other Comprehensive Loss, Net of Tax 
Changes in accumulated other comprehensive loss, net of tax, for the three and six months ended June 30, 2013 were as follows:
(Thousands of Dollars)
 
Gains and
Losses on Cash
Flow Hedges
Accumulated other comprehensive loss at April 1
 
$
(418
)
Losses reclassified from net accumulated other comprehensive loss
 
18

Net current period other comprehensive income
 
18

Accumulated other comprehensive loss at June 30
 
$
(400
)

(Thousands of Dollars)
 
Gains and
Losses on Cash
Flow Hedges
Accumulated other comprehensive loss at Jan. 1
 
$
(437
)
Losses reclassified from net accumulated other comprehensive loss
 
37

Net current period other comprehensive income
 
37

Accumulated other comprehensive loss at June 30
 
$
(400
)
Reclassification out of Accumulated Other Comprehensive Loss 
Reclassifications from accumulated other comprehensive loss for the three and six months ended June 30, 2013 were as follows:
 
 
Amounts Reclassified from
Accumulated Other
Comprehensive Loss
 
(Thousands of Dollars)
 
Three Months Ended June 30, 2013
 
Six Months Ended June 30, 2013
 
Losses on cash flow hedges:
 
 

 
 
 
Interest rate derivatives
 
$
32

(a) 
$
63

(a) 
Total, pre-tax
 
32

 
63

 
Tax benefit
 
(14
)
 
(26
)

Total amounts reclassified, net of tax
 
$
18

 
$
37

 

(a) 
Included in interest charges.
Selected Balance Sheet Data, Accounts Receivable (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Accounts Receivable, Net
 
 
Accounts receivable
$ 53,700 
$ 55,039 
Less allowance for bad debts
(4,116)
(4,333)
Accounts receivable, net
$ 49,584 
$ 50,706 
Selected Balance Sheet Data, Inventory (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Public Utilities, Inventory [Line Items]
 
 
Inventories
$ 17,773 
$ 19,685 
Materials and supplies
 
 
Public Utilities, Inventory [Line Items]
 
 
Inventories
6,541 
6,172 
Fuel
 
 
Public Utilities, Inventory [Line Items]
 
 
Inventories
7,268 
6,664 
Natural gas
 
 
Public Utilities, Inventory [Line Items]
 
 
Inventories
$ 3,964 
$ 6,849 
Selected Balance Sheet Data, Property, Plant and Equipment (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Public Utility, Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
$ 2,265,280 
$ 2,193,812 
Less accumulated depreciation
(921,567)
(895,576)
Property, plant and equipment, net
1,343,713 
1,298,236 
Electric plant
 
 
Public Utility, Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
1,848,303 
1,795,239 
Natural gas plant
 
 
Public Utility, Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
227,790 
224,625 
Common and other property
 
 
Public Utility, Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
112,043 
111,319 
Construction work in progress
 
 
Public Utility, Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
$ 77,144 
$ 62,629 
Income Taxes (Details) (USD $)
3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2013
Dec. 31, 2012
Sep. 30, 2012
Internal Revenue Service (IRS)
Jun. 30, 2013
Internal Revenue Service (IRS)
Mar. 31, 2013
State Jurisdiction (Wisconsin)
Jun. 30, 2013
State Jurisdiction (Wisconsin)
Tax Audits [Abstract]
 
 
 
 
 
 
Year(s) no longer subject to audit as statute of limitations has expired
 
 
 
2008 
 
 
Earliest year subject to examination
 
 
 
2009 
 
2008 
Year(s) under examination
 
 
2010 and 2011 
 
2009 through 2011 
 
Unrecognized Tax Benefits [Abstract]
 
 
 
 
 
 
Unrecognized tax benefit — Permanent tax positions
$ 100,000 
$ 100,000 
 
 
 
 
Unrecognized tax benefit — Temporary tax positions
1,300,000 
1,200,000 
 
 
 
 
Total unrecognized tax benefit
1,400,000 
1,300,000 
 
 
 
 
NOL and tax credit carryforwards
(900,000)
(900,000)
 
 
 
 
Upper bound of decrease in unrecognized tax benefit that is reasonably possible
(1,000,000)
 
 
 
 
 
Amounts accrued for penalties related to unrecognized tax benefits
$ 0 
$ 0 
 
 
 
 
Rate Matters (Details) (Public Service Commission of Wisconsin (PSCW) [Member], NSP-Wisconsin [Member], USD $)
In Millions, unless otherwise specified
1 Months Ended
May 31, 2013
Electric and Gas Rate Case 2014, Electric Rates [Member]
 
Public Utilities, General Disclosures [Line Items]
 
Public Utilities, Requested Rate Increase (Decrease), Amount
$ 40.0 
Public Utilities, Requested Rate Increase (Decrease), Percentage
6.50% 
Electric and Gas Rate Case 2014, Gas Rates [Member]
 
Public Utilities, General Disclosures [Line Items]
 
Public Utilities, Requested Rate Increase (Decrease), Amount
4.7 
Public Utilities, Requested Rate Increase (Decrease), Percentage
3.80% 
Electric and Gas Rate Case 2014 [Member]
 
Public Utilities, General Disclosures [Line Items]
 
Public Utilities, Requested Return on Equity, Percentage
10.40% 
Public Utilities, Requested Equity Capital Structure, Percentage
52.50% 
Forecasted Average Net Investment Rate Base, Electric Utility
895.3 
Forecasted Average Net Investment Rate Base, Natural Gas Utility
$ 89.8 
Commitments and Contingencies, Guarantees and Indemnifications (Details) (Payment or Performance Guarantee, Customer Loans for Farm Rewiring Program, USD $)
In Millions, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Payment or Performance Guarantee |
Customer Loans for Farm Rewiring Program
 
 
Guarantees [Abstract]
 
 
Guarantee issued and outstanding
$ 1.0 
$ 1.0 
Current exposure under the guarantee
$ 0.4 
$ 0.4 
Commitments and Contingencies, Environmental Contingencies - Site Contingencies (Details) (USD $)
6 Months Ended
Jun. 30, 2013
Site
Dec. 31, 2012
Ashland Manufactured Gas Plant (MGP) Site [Abstract]
 
 
Liability for estimated cost of remediating sites, current
$ 17,561,000 
$ 23,427,000 
Ashland MGP Site
 
 
Ashland Manufactured Gas Plant (MGP) Site [Abstract]
 
 
Number of properties included in superfund site which NSP-Wisconsin does not own
2 
 
Liability for estimated cost of remediating sites
101,300,000 
103,700,000 
Liability for estimated cost of remediating sites, current
14,300,000 
20,100,000 
Amortization period for recovery of remediation costs in natural gas rates, low end of range (in years)
4 years 
 
Amortization period for recovery of remediation costs in natural gas rates, high end of range (in years)
6 years 
 
Ashland MGP Site - Phase I Project Area
 
 
Ashland Manufactured Gas Plant (MGP) Site [Abstract]
 
 
Liability for estimated cost of remediating sites
40,000,000 
 
Number of acres of land conveyed to the State of Wisconsin and tribal trustees (in acres)
1,390 
 
Approved amortization period for recovery of remediation costs in natural gas rates (in years)
10 years 
 
Carrying cost percentage to be applied to the unamortized regulatory asset for MGP remediation (in hundredths)
3.00% 
 
Ashland MGP Site - Sediments
 
 
Ashland Manufactured Gas Plant (MGP) Site [Abstract]
 
 
Estimated cost of remediating site, low end of range
63,000,000 
 
Estimated cost of remediating site, high end of range
$ 77,000,000 
 
Potential percent of increase to the high end of the range of estimated site remediation costs (in hundredths)
50.00% 
 
Potential percent of decrease to the low end of the range of estimated site remediation costs (in hundredths)
30.00% 
 
Commitments and Contingencies Commitments and Contingencies, Environmental Contingencies - Unrecorded Unconditional Purchase Obligation (Details) (Federal Clean Water Act)
Jun. 30, 2013
Regulation
Federal Clean Water Act
 
Environmental Requirements [Abstract]
 
Number of potential regulatory options under the proposed Effluent Limitations Guidelines rule
4 
Commitments and Contingencies, Legal Contingencies (Details) (USD $)
Jun. 30, 2013
Native Village of Kivalina vs. Xcel Energy Inc. et al. [Member]
Feb. 29, 2008
Native Village of Kivalina vs. Xcel Energy Inc. et al. [Member]
Counterparty
Jun. 30, 2013
Comer vs. Xcel Energy Inc. et al. [Member]
May 31, 2011
Comer vs. Xcel Energy Inc. et al. [Member]
Counterparty
Legal Contingencies [Abstract]
 
 
 
 
Number of other entities against which the native village of Kivalina has filed a lawsuit
 
23 
 
 
Accrual for legal contingency
$ 0 
 
$ 0 
 
Minimum number of utility, oil, chemical and coal companies against which a lawsuit was filed in U.S. District Court in Mississippi
 
 
 
85 
Borrowings and Other Financing Instruments, Commercial Paper (Details) (USD $)
3 Months Ended 12 Months Ended
Jun. 30, 2013
Dec. 31, 2012
Short-term Debt [Line Items]
 
 
Amount outstanding at period end
$ 2,000,000 
$ 39,000,000 
Commercial Paper
 
 
Short-term Debt [Line Items]
 
 
Borrowing limit
150,000,000 
150,000,000 
Amount outstanding at period end
2,000,000 
39,000,000 
Average amount outstanding
11,000,000 
61,000,000 
Maximum amount outstanding
$ 27,000,000 
$ 116,000,000 
Weighted average interest rate, computed on a daily basis (in hundredths)
0.27% 
0.39% 
Weighted average interest rate at end of period (in hundredths)
0.22% 
0.40% 
Borrowings and Other Financing Instruments, Letters of Credit (Details) (USD $)
6 Months Ended
Jun. 30, 2013
Dec. 31, 2012
Letters of Credit [Abstract]
 
 
Terms of letters of credit (in years)
1 year 
 
Letters of credit outstanding under credit facilities
$ 0 
$ 0 
Borrowings and Other Financing Instruments, Credit Facility (Details) (USD $)
Jun. 30, 2013
Dec. 31, 2012
Credit Facility [Abstract]
 
 
Credit facility
$ 150,000,000 1
 
Drawn
2,000,000 2
 
Available
148,000,000 
 
Credit facility bank borrowings outstanding
$ 0 
$ 0 
Borrowings and Other Financing Instruments, Intercompany Borrowing Arrangement and Other Short-Term Borrowings (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Short-term Debt [Line Items]
 
 
Notes payable to affiliates
$ 470 
$ 550 
Intercompany Borrowing Arrangement
 
 
Short-term Debt [Line Items]
 
 
Notes payable to affiliates
$ 500 
$ 600 
Weighted average interest rate at end of period (in hundredths)
0.27% 
0.33% 
Fair Value of Financial Assets and Liabilities, Derivative Instruments (Details) (Interest Rate Swap [Member], USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Interest Rate Swap [Member]
 
 
Interest Rate Derivatives [Abstract]
 
 
Amount of accumulated other comprehensive gains (losses) related to interest rate derivatives expected to be reclassified into earnings within the next twelve months
$ 0.1 
 
Amount of accumulated other comprehensive losses related to interest rate derivatives expected to be reclassified into earnings
$ 0.1 
$ 0.1 
Fair Value of Financial Assets and Liabilities, Impact of Derivative Activity (Details) (Other Derivative Instruments [Member], Natural Gas Commodity Contract [Member])
Jun. 30, 2013
MMBTU
Dec. 31, 2012
MMBTU
Other Derivative Instruments [Member] |
Natural Gas Commodity Contract [Member]
 
 
Gross Notional Amounts of Commodity Forwards and Options [Abstract]
 
 
Notional amount
377,000 1 2
53,000 1 2
Fair Value of Financial Assets and Liabilities, Financial Impact of Qualifying Cash Flow Hedges (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Financial Impact of Qualifying Cash Flow Hedges on Accumulated Other Comprehensive Income (Loss) [Roll Forward]
 
 
 
 
Accumulated other comprehensive loss related to cash flow hedges at beginning of period
$ (418,000)
$ (495,000)
$ (437,000)
$ (514,000)
After-tax net realized losses on derivative transactions reclassified into earnings
18,000 
19,000 
37,000 
38,000 
Accumulated other comprehensive loss related to cash flow hedges at end of period
(400,000)
(476,000)
(400,000)
(476,000)
Pre-tax (gains) losses reclassified into income during the period from regulatory assets and (liabilities)
 
 
 
2,900,000 
Natural Gas Commodity Contract [Member] |
Cash Flow Hedging Other [Member]
 
 
 
 
Financial Impact of Qualifying Cash Flow Hedges on Accumulated Other Comprehensive Income (Loss) [Roll Forward]
 
 
 
 
Pre-tax fair value gains (losses) recognized during the period in regulatory (assets) and liabilities
$ 200,000 
 
$ 200,000 
$ 400,000 
Fair Value of Financial Assets and Liabilities, Derivative Assets and Liabilities at Fair Value (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Current derivative liabilities [Abstract]
 
 
Prepayments and other
$ 2,251 
$ 4,394 
Other current liabilities
11,577 
11,794 
Fair Value Measured on a Recurring Basis [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Natural gas commodity
191 1
 
Current derivative liabilities [Abstract]
 
 
Natural gas commodity
0 
11 2
Fair Value Measured on a Recurring Basis [Member] |
Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Natural gas commodity
0 
 
Current derivative liabilities [Abstract]
 
 
Natural gas commodity
0 
0 
Fair Value Measured on a Recurring Basis [Member] |
Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Natural gas commodity
191 
 
Current derivative liabilities [Abstract]
 
 
Natural gas commodity
0 
11 
Fair Value Measured on a Recurring Basis [Member] |
Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Natural gas commodity
0 
 
Current derivative liabilities [Abstract]
 
 
Natural gas commodity
0 
0 
Fair Value Measured on a Recurring Basis [Member] |
Fair Value Total [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Natural gas commodity
191 
 
Current derivative liabilities [Abstract]
 
 
Natural gas commodity
0 
11 
Prepayments and other
2,300 
 
Other current liabilities
 
11,800 
Fair Value Measured on a Recurring Basis [Member] |
Counterparty Netting [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Natural gas commodity
0 
 
Current derivative liabilities [Abstract]
 
 
Natural gas commodity
$ 0 
$ 0 3
Fair Value of Financial Assets and Liabilities, Fair Value of Long-Term Debt (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Carrying Amount
 
 
Financial Liabilities, Balance Sheet Groupings [Abstract]
 
 
Long-term debt, including current portion
$ 468,597 
$ 468,563 
Fair Value
 
 
Financial Liabilities, Balance Sheet Groupings [Abstract]
 
 
Long-term debt, including current portion
$ 531,979 
$ 576,353 
Other Income (Expense), Net (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Other Income and Expenses [Abstract]
 
 
 
 
Interest income (expense)
$ 197 
$ (25)
$ 396 
$ 632 
Other nonoperating income
29 
46 
70 
39 
Insurance policy expense
(69)
(61)
(191)
(211)
Other nonoperating expense
(2)
0 
(5)
0 
Other income (expense), net
$ 155 
$ (40)
$ 270 
$ 460 
Segment Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Segment Reporting Information [Line Items]
 
 
 
 
Operating revenues
$ 210,175 
$ 194,173 
$ 451,590 
$ 417,972 
Net income
10,544 
5,742 
30,229 
20,620 
Regulated Electric
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Operating revenues
185,374 
179,105 
376,185 
361,106 
Net income
10,068 
6,127 
23,671 
17,375 
Regulated Natural Gas
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Operating revenues
24,555 
14,830 
74,912 
56,322 
Net income
201 
(947)
5,825 
2,453 
All Other
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Operating revenues
246 
238 
493 
544 
Net income
275 
562 
733 
792 
Operating Segments
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Operating revenues
210,175 
194,173 
451,590 
417,972 
Operating Segments |
Regulated Electric
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Operating revenues
185,457 
179,214 
376,346 
361,302 
Operating Segments |
Regulated Natural Gas
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Operating revenues
24,833 
14,891 
75,498 
56,586 
Operating Segments |
All Other
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Operating revenues
246 
238 
493 
544 
Intersegment Eliminations
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Operating revenues
(361)
(170)
(747)
(460)
Intersegment Eliminations |
Regulated Electric
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Operating revenues
83 
109 
161 
196 
Intersegment Eliminations |
Regulated Natural Gas
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Operating revenues
278 
61 
586 
264 
Intersegment Eliminations |
All Other
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Operating revenues
$ 0 
$ 0 
$ 0 
$ 0 
Benefit Plans and Other Postretirement Benefits (Details) (USD $)
1 Months Ended 3 Months Ended 6 Months Ended
Jan. 31, 2013
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Pension Benefits
 
 
 
 
 
Components of Net Periodic Benefit Cost [Abstract]
 
 
 
 
 
Service cost
 
$ 1,420,000 
$ 1,150,000 
$ 2,841,000 
$ 2,284,000 
Interest cost
 
1,731,000 
1,925,000 
3,462,000 
3,835,000 
Expected return on plan assets
 
(2,498,000)
(2,634,000)
(4,997,000)
(5,245,000)
Amortization of transition obligation
 
0 
0 
0 
0 
Amortization of prior service cost (credit)
 
104,000 
443,000 
208,000 
886,000 
Amortization of net loss
 
1,981,000 
1,487,000 
3,962,000 
2,922,000 
Net benefit cost recognized for financial reporting
 
2,738,000 
2,371,000 
5,476,000 
4,682,000 
Total contributions to Xcel Energy's pension plans during the period
11,300,000 
 
 
 
 
Postretirement Health Care Benefits
 
 
 
 
 
Components of Net Periodic Benefit Cost [Abstract]
 
 
 
 
 
Service cost
 
6,000 
5,000 
12,000 
10,000 
Interest cost
 
190,000 
274,000 
380,000 
538,000 
Expected return on plan assets
 
(10,000)
(12,000)
(21,000)
(25,000)
Amortization of transition obligation
 
0 
43,000 
0 
86,000 
Amortization of prior service cost (credit)
 
(88,000)
(3,000)
(176,000)
(7,000)
Amortization of net loss
 
241,000 
128,000 
482,000 
242,000 
Net benefit cost recognized for financial reporting
 
339,000 
435,000 
677,000 
844,000 
Xcel Energy Inc. |
Pension Benefits
 
 
 
 
 
Components of Net Periodic Benefit Cost [Abstract]
 
 
 
 
 
Total contributions to Xcel Energy's pension plans during the period
$ 191,500,000 
 
 
 
 
Number of Xcel Energy's pension plans to which contributions were made
4 
 
 
 
 
Other Comprehensive Income (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Accumulated Other Comprehensive Income [Roll Forward]
 
 
 
 
Accumulated other comprehensive loss at beginning of period
 
 
$ (437)
 
Accumulated other comprehensive loss at end of period
(400)
 
(400)
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Interest charges
6,814 
6,044 
13,669 
12,059 
Total, pre-tax
(16,987)
(9,168)
(49,003)
(33,652)
Tax benefit
6,443 
3,426 
18,774 
13,032 
Gains and Losses on Cash Flow Hedges [Member]
 
 
 
 
Accumulated Other Comprehensive Income [Roll Forward]
 
 
 
 
Accumulated other comprehensive loss at beginning of period
(418)
 
(437)
 
(Gains) losses reclassified from net accumulated other comprehensive loss
18 
 
37 
 
Net current period other comprehensive income (loss)
18 
 
37 
 
Accumulated other comprehensive loss at end of period
(400)
 
(400)
 
Gains and Losses on Cash Flow Hedges [Member] |
Amounts Reclassified from Accumulated Other Comprehensive Loss [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Total, pre-tax
32 
 
63 
 
Tax benefit
(14)
 
(26)
 
Total, net of tax
18 
 
37 
 
Gains and Losses on Cash Flow Hedges [Member] |
Interest Rate Derivatives [Member] |
Amounts Reclassified from Accumulated Other Comprehensive Loss [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Interest charges
$ 32 1
 
$ 63 1