SOUTHWESTERN PUBLIC SERVICE CO, 10-Q filed on 10/27/2017
Quarterly Report
v3.8.0.1
Document and Entity Information - shares
 9 Months Ended
Sep. 30, 2017
Oct. 27, 2017
Document and Entity Information [Abstract]    
Entity Registrant Name SOUTHWESTERN PUBLIC SERVICE CO  
Entity Central Index Key 0000092521  
Current Fiscal Year End Date --12-31  
Entity Well-known Seasoned Issuer No  
Entity Voluntary Filers No  
Entity Current Reporting Status Yes  
Entity Filer Category Non-accelerated Filer  
Document Type 10-Q  
Document Period End Date Sep. 30, 2017  
Document Fiscal Year Focus 2017  
Document Fiscal Period Focus Q3  
Amendment Flag false  
Entity Common Stock, Shares Outstanding   100
v3.8.0.1
STATEMENTS OF INCOME (UNAUDITED) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Income Statement [Abstract]        
Operating revenues $ 551,623 $ 554,926 $ 1,491,491 $ 1,386,210
Operating expenses        
Electric fuel and purchased power 294,400 297,587 816,027 757,537
Operating and maintenance expenses 66,289 71,699 213,348 202,410
Demand side management expenses 4,236 5,663 11,802 12,279
Depreciation and amortization 47,548 42,026 144,781 123,250
Taxes (other than income taxes) 16,743 15,589 50,222 46,417
Total operating expenses 429,216 432,564 1,236,180 1,141,893
Operating income 122,407 122,362 255,311 244,317
Other income, net 285 137 452 563
Allowance for funds used during construction — equity 2,453 2,632 6,457 7,348
Interest charges and financing costs        
Interest charges — includes other financing costs of $625, $828, $1,781, and $2,461, respectively 21,444 23,343 66,128 67,350
Allowance for funds used during construction — debt (1,349) (1,422) (3,816) (4,146)
Total interest charges and financing costs 20,095 21,921 62,312 63,204
Income before income taxes 105,050 103,210 199,908 189,024
Income taxes 37,269 34,864 71,710 65,944
Net income $ 67,781 $ 68,346 $ 128,198 $ 123,080
v3.8.0.1
STATEMENTS OF INCOME (UNAUDITED) (Parenthetical) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Interest charges and financing costs        
Other financing costs $ 625 $ 828 $ 1,781 $ 2,461
v3.8.0.1
STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Comprehensive income:        
Net income $ 67,781 $ 68,346 $ 128,198 $ 123,080
Pension and retiree medical benefits:        
Amortization of losses included in net periodic benefit cost, net of tax of $9, $6, $27 and $19, respectively 16 12 46 35
Derivative instruments:        
Reclassification of losses to net income, net of tax of $6, $25, $18 and $74, respectively 10 44 29 129
Other comprehensive income 26 56 75 164
Comprehensive income $ 67,807 $ 68,402 $ 128,273 $ 123,244
v3.8.0.1
STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Derivative instruments:        
Reclassification of losses to net income, tax $ 6 $ 25 $ 18 $ 74
Other Comprehensive (Income) Loss, Defined Benefit Plan, Prior Service Cost (Credit), Reclassification Adjustment from AOCI, Tax $ 9 $ 6 $ 27 $ 19
v3.8.0.1
STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Operating activities    
Net income $ 128,198 $ 123,080
Adjustments to reconcile net income to cash provided by operating activities:    
Depreciation and amortization 144,664 123,820
Demand side management program amortization 1,255 1,255
Deferred income taxes 101,388 99,882
Amortization of investment tax credits (99) (160)
Allowance for equity funds used during construction (6,457) (7,348)
Net derivative losses 47 203
Other Operating Activities, Cash Flow Statement 9 122
Changes in operating assets and liabilities:    
Accounts receivable (25,134) (22,160)
Accrued unbilled revenues (13,682) (18,307)
Inventories (2,845) (1,491)
Prepayments and other 19,361 24,172
Accounts payable 7,817 19,690
Net regulatory assets and liabilities 24,856 (18,480)
Other current liabilities 19,748 18,989
Pension and other employee benefit obligations (21,638) (15,606)
Change in other noncurrent assets (1,697) (537)
Change in other noncurrent liabilities (18,690) 3,916
Net cash provided by operating activities 357,101 331,040
Investing activities    
Utility capital/construction expenditures (400,957) (371,994)
Proceeds from Insurance Settlement, Investing Activities 0 987
Allowance for equity funds used during construction 6,457 7,348
Investments in utility money pool arrangement 0 75,000
Repayments from utility money pool arrangement 0 75,000
Payments for (Proceeds from) Other Investing Activities 493 1,174
Net cash used in investing activities (394,993) (364,833)
Financing activities    
Proceeds from short-term borrowings, net (50,000) (15,000)
Proceeds from issuance of long-term debt, net 442,651 296,152
Borrowings under utility money pool arrangement 323,000 505,000
Repayments under utility money pool arrangement (323,000) (505,000)
Capital contributions from parent 45,000 16,225
Repayment of long-term debt, including reacquisition premiums (271,613) 0
Dividends paid to parent (82,599) (57,570)
Net cash provided by financing activities 83,439 239,807
Net change in cash and cash equivalents 45,547 206,014
Cash and cash equivalents at beginning of period 844 834
Cash and cash equivalents at end of period 46,391 206,848
Supplemental disclosure of cash flow information:    
Cash paid for interest (net of amounts capitalized) (58,581) (47,787)
Cash received for income taxes, net 37,899 49,402
Supplemental disclosure of non-cash investing transactions:    
Property, plant and equipment additions in accounts payable $ 40,861 $ 25,445
v3.8.0.1
BALANCE SHEETS (UNAUDITED) - USD ($)
$ in Thousands
Sep. 30, 2017
Dec. 31, 2016
Current assets    
Cash and cash equivalents $ 46,391 $ 844
Accounts receivable, net 96,614 74,190
Accounts receivable from affiliates 3,737 949
Accrued unbilled revenues 133,100 119,418
Inventories 41,350 38,505
Regulatory assets 38,021 38,721
Derivative instruments 23,597 5,114
Prepaid taxes 3,233 21,779
Prepayments and other 7,040 7,855
Total current assets 393,083 307,375
Property, plant and equipment, net 4,947,114 4,695,819
Other assets    
Regulatory assets 343,685 346,683
Derivative instruments 19,743 22,113
Other 12,193 7,477
Total other assets 375,621 376,273
Total assets 5,715,818 5,379,467
Current liabilities    
Short-term debt 0 50,000
Accounts payable 183,437 176,157
Accounts payable to affiliates 11,935 14,414
Regulatory liabilities 70,355 41,577
Taxes accrued 56,386 39,742
Accrued interest 21,430 19,162
Dividends payable 26,166 30,870
Derivative instruments 3,565 3,565
Other 27,723 29,703
Total current liabilities 400,997 405,190
Deferred credits and other liabilities    
Deferred income taxes 1,090,921 989,137
Regulatory liabilities 222,956 233,454
Asset retirement obligations 29,808 28,663
Derivative instruments 20,840 23,513
Pension and employee benefit obligations 86,291 107,872
Other 8,307 24,084
Total deferred credits and other liabilities 1,459,123 1,406,723
Commitments and contingencies
Capitalization    
Long-term debt 1,829,965 1,635,858
Common stock — 200 shares authorized of $1.00 par value; 100 shares outstanding at Sept. 30, 2017 and Dec. 31, 2016, respectively 0 0
Additional paid in capital 1,489,882 1,446,223
Retained earnings 537,066 486,763
Accumulated other comprehensive loss (1,215) (1,290)
Total common stockholder’s equity 2,025,733 1,931,696
Total liabilities and equity $ 5,715,818 $ 5,379,467
v3.8.0.1
BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares
Sep. 30, 2017
Dec. 31, 2016
Capitalization, Long-term Debt and Equity [Abstract]    
Common stock, shares authorized (in shares) 200 200
Common stock, par value (in dollars per share) $ 1 $ 1
Common stock, shares outstanding (in shares) 100 100
v3.8.0.1
Management's Opinion
 9 Months Ended
Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Management's Opinion
In the opinion of management, the accompanying unaudited 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 SPS as of Sept. 30, 2017 and Dec. 31, 2016; the results of its operations, including the components of net income and comprehensive income, for the three and nine months ended Sept. 30, 2017 and 2016; and its cash flows for the nine months ended Sept. 30, 2017 and 2016. All adjustments are of a normal, recurring nature, except as otherwise disclosed. Management has also evaluated the impact of events occurring after Sept. 30, 2017 up to the date of issuance of these financial statements. These statements contain all necessary adjustments and disclosures resulting from that evaluation. The Dec. 31, 2016 balance sheet information has been derived from the audited 2016 financial statements included in the SPS Annual Report on Form 10-K for the year ended Dec. 31, 2016. These notes to the 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 financial statements and notes thereto, included in the SPS Annual Report on Form 10-K for the year ended Dec. 31, 2016, filed with the SEC on Feb. 24, 2017. Due to the seasonality of SPS’ electric sales, interim results are not necessarily an appropriate base from which to project annual results.
v3.8.0.1
Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2017
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

The significant accounting policies set forth in Note 1 to the financial statements in the SPS Annual Report on Form 10-K for the year ended Dec. 31, 2016, appropriately represent, in all material respects, the current status of accounting policies and are incorporated herein by reference.
v3.8.0.1
Accounting Pronouncements
 9 Months Ended
Sep. 30, 2017
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]  
Accounting Pronouncements
Accounting Pronouncements

Recently Issued

Revenue Recognition — In May 2014, the Financial Accounting Standards Board (FASB) issued Revenue from Contracts with Customers, Topic 606 (Accounting Standards Update (ASU) No. 2014-09), which provides a new framework for the recognition of revenue. SPS expects its adoption will primarily result in increased disclosures regarding revenue related to arrangements with customers, as well as separate presentation of alternative revenue programs. SPS currently expects to implement the standard on a modified retrospective basis, which requires application to contracts with customers effective Jan. 1, 2018, with the cumulative impact on contracts not yet completed as of Dec. 31, 2017 recognized as an adjustment to the opening balance of retained earnings.

Classification and Measurement of Financial Instruments — In January 2016, the FASB issued Recognition and Measurement of Financial Assets and Financial Liabilities, Subtopic 825-10 (ASU No. 2016-01), which eliminates the available-for-sale classification for marketable equity securities and also replaces the cost method of accounting for non-marketable equity securities with a model for recognizing impairments and observable price changes. Under the new standard, other than when the consolidation or equity method of accounting is utilized, changes in the fair value of equity securities are to be recognized in earnings. This guidance will be effective for interim and annual reporting periods beginning after Dec. 15, 2017. SPS expects that the overall impacts of the Jan. 1, 2018 adoption will not be material.

Leases — In February 2016, the FASB issued Leases, Topic 842 (ASU No. 2016-02), which for lessees requires balance sheet recognition of right-of-use assets and lease liabilities for most leases. This guidance will be effective for interim and annual reporting periods beginning after Dec. 15, 2018. SPS has not yet fully determined the impacts of implementation. However, adoption is expected to occur on Jan. 1, 2019 utilizing the practical expedients provided by the standard. As such, agreements entered prior to Jan. 1, 2017 that are currently considered leases are expected to be recognized on the balance sheet, including contracts for use of office space, equipment and natural gas storage assets, as well as certain purchased power agreements (PPAs) for natural gas-fueled generating facilities. SPS expects that similar agreements entered after Dec. 31, 2016 will generally qualify as leases under the new standard, but has not yet completed its evaluation of certain other contracts, including arrangements for the secondary use of assets, such as land easements.

Presentation of Net Periodic Benefit Cost — In March 2017, the FASB issued Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, Topic 715 (ASU No. 2017-07), which establishes that only the service cost element of pension cost may be presented as a component of operating income in the income statement. Also under the guidance, only the service cost component of pension cost is eligible for capitalization. SPS expects that as a result of application of accounting principles for rate regulated entities, a similar amount of pension cost, including non-service components, will be recognized consistent with the current ratemaking treatment and that the impacts of adoption will be limited to changes in classification of non-service costs in the statement of income. This guidance will be effective for interim and annual reporting periods beginning after Dec. 15, 2017.
v3.8.0.1
Selected Balance Sheet Data
 9 Months Ended
Sep. 30, 2017
Balance Sheet Related Disclosures [Abstract]  
Selected Balance Sheet Data
Selected Balance Sheet Data
(Thousands of Dollars)
 
Sept. 30, 2017
 
Dec. 31, 2016
Accounts receivable, net
 
 
 
 
Accounts receivable
 
$
103,704

 
$
80,569

Less allowance for bad debts
 
(7,090
)
 
(6,379
)
 
 
$
96,614

 
$
74,190


(Thousands of Dollars)
 
Sept. 30, 2017
 
Dec. 31, 2016
Inventories
 
 
 
 
Materials and supplies
 
$
26,877

 
$
25,453

Fuel
 
14,473

 
13,052

 
 
$
41,350

 
$
38,505


(Thousands of Dollars)
 
Sept. 30, 2017
 
Dec. 31, 2016
Property, plant and equipment, net
 
 
 
 
Electric plant
 
$
6,653,228

 
$
6,362,189

Construction work in progress
 
312,445

 
260,327

Total property, plant and equipment
 
6,965,673

 
6,622,516

Less accumulated depreciation
 
(2,018,559
)
 
(1,926,697
)
 
 
$
4,947,114

 
$
4,695,819
v3.8.0.1
Income Taxes
 9 Months Ended
Sep. 30, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes

Except to the extent noted below, Note 6 to the financial statements included in SPS’ Annual Report on Form 10-K for the year ended Dec. 31, 2016 appropriately represents, in all material respects, the current status of other income tax matters, and are incorporated herein by reference.

Federal Audits — SPS 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 2009 through 2011 and 2012 through 2013 federal income tax returns, following extensions, expires in June 2018 and October 2018, respectively.

In 2012, the Internal Revenue Service (IRS) commenced an examination of tax years 2010 and 2011, including the 2009 carryback claim. The IRS proposed an adjustment to the federal tax loss carryback claims that would have resulted in $14 million of income tax expense for the 2009 through 2011 claims, and the 2013 through 2015 claims. In the fourth quarter of 2015, the IRS forwarded the issue to the Office of Appeals (Appeals). In the third quarter of 2017, Xcel Energy and Appeals reached an agreement and the benefit related to the agreed upon portions was recognized. SPS did not accrue any income tax benefit related to this adjustment.

In the third quarter of 2015, the IRS commenced an examination of tax years 2012 and 2013. In the third quarter of 2017, the IRS concluded the audit of tax years 2012 and 2013 and proposed an adjustment that would impact Xcel Energy’s net operating loss (NOL) and effective tax rate (ETR). After evaluating the proposed adjustment Xcel Energy filed a protest with the IRS. Xcel Energy anticipates the issue will be forwarded to Appeals. As of Sept. 30, 2017, Xcel Energy has recognized its best estimate of income tax expense that will result from a final resolution of this issue; however, the outcome and timing of a resolution is unknown.

State Audits — SPS is a member of the Xcel Energy affiliated group that files consolidated state income tax returns. As of June 30, 2017, SPS’ earliest open tax year that is subject to examination by state taxing authorities under applicable statutes of limitations is 2009. In 2016, Texas began an audit of years 2009 and 2010, and in September 2017, began an audit of 2011. As of Sept. 30, 2017, Texas had not proposed any material adjustments and there were no other state income tax audits in progress.

Unrecognized Benefits — The unrecognized tax benefit balance includes permanent tax positions, which if recognized would affect the annual 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)
 
Sept. 30, 2017
 
Dec. 31, 2016
Unrecognized tax benefit — Permanent tax positions
 
$
5.2

 
$
4.5

Unrecognized tax benefit — Temporary tax positions
 
5.1

 
24.2

Total unrecognized tax benefit
 
$
10.3

 
$
28.7



The unrecognized tax benefit amounts were reduced by the tax benefits associated with NOL and tax credit carryforwards. The amounts of tax benefits associated with NOL and tax credit carryforwards are as follows:
(Millions of Dollars)
 
Sept. 30, 2017
 
Dec. 31, 2016
NOL and tax credit carryforwards
 
$
(5.8
)
 
$
(5.9
)


It is reasonably possible that SPS’ amount of unrecognized tax benefits could significantly change in the next 12 months as the IRS Appeals progresses and audits resume, the Texas audit progresses, and other state audits resume. As the IRS Appeals and Texas audit progress, it is reasonably possible that the amount of unrecognized tax benefit could decrease up to approximately $7 million.

The payable for interest related to unrecognized tax benefits is partially offset by the interest benefit associated with NOL and tax credit carryforwards. A reconciliation of the beginning and ending amount of the payable for interest related to unrecognized tax benefits are as follows:

(Millions of Dollars)
 
Sept. 30, 2017
 
Dec. 31, 2016
Payable for interest related to unrecognized tax benefits at beginning of period
 
$
(0.9
)
 
$
—

Interest expense related to unrecognized tax benefits recorded during the period
 
—

 
(0.9
)
Payable for interest related to unrecognized tax benefits at end of period
 
$
(0.9
)
 
$
(0.9
)


No amounts were accrued for penalties related to unrecognized tax benefits as of Sept. 30, 2017 or Dec. 31, 2016.
v3.8.0.1
Rate Matters
 9 Months Ended
Sep. 30, 2017
Public Utilities, General Disclosures [Abstract]  
Rate Matters
Rate Matters

Except to the extent noted below, the circumstances set forth in Note 10 to the financial statements included in SPS’ Annual Report on Form 10-K for the year ended Dec. 31, 2016 and in Note 5 to SPS’ Quarterly Report on Form 10-Q for the quarterly periods ended March 31, 2017 and June 30, 2017, appropriately represent, in all material respects, the current status of other rate matters, and are incorporated herein by reference.

Pending Regulatory Proceedings — Public Utility Commission of Texas (PUCT)

Appeal of the Texas 2015 Electric Rate Case Decision — In 2014, SPS had requested an overall retail electric revenue rate increase of $42.1 million. In 2015, the PUCT approved an overall rate decrease of approximately $4.0 million, net of rate case expenses. In April 2016, SPS filed an appeal, with the Texas State District Court, of the PUCT’s order that had denied SPS’ request for rehearing on certain items in SPS’ Texas 2015 electric rate case related to capital structure, incentive compensation and wholesale load reductions. In March 2017, the Travis County District Court denied SPS’ appeal.  In April 2017, SPS appealed the District Court’s decision to the Court of Appeals.

Texas 2017 Electric Rate Case — In August 2017, SPS filed a $66.4 million, or 7.1 percent, retail electric, non-fuel base rate increase case in Texas with each of its Texas municipalities and the PUCT. The request was based on the 12-month period ended June 30, 2017, with the final three months based on estimates, a requested return on equity (ROE) of 10.25 percent, a Texas retail electric rate base of approximately $1.9 billion and an equity ratio of 53.97 percent.

In October 2017, SPS revised its request to $54.6 million, or 5.8 percent, which reflects updated actual results. In addition, approximately $4.4 million of rate case expenses was bifurcated into a separate docket.

The following table summarizes SPS’ revised rate increase request:
Revenue Request (Millions of Dollars)
 
 
Incremental revenue request
 
$
69.2

Transmission Cost Recovery Factor (TCRF) revenue conversion to base rates (a)
 
(14.6
)
  Net revenue increase request
 
$
54.6


(a)
The roll-in of the TCRF rider revenue into base rates will not have an impact on customer bills or total revenue as these costs are already being recovered through the rider. SPS can request another TCRF rider after the conclusion of this rate case to recover transmission investments subsequent to June 30, 2017.

Key dates in the procedural schedule are as follows:
•
Intervenors’ direct testimony — Feb. 22, 2018;
•
PUCT Staff direct testimony — March 1, 2018;
•
PUCT Staff and intervenors’ cross-rebuttal testimony — March 22, 2018;
•
SPS’ rebuttal testimony — March 23, 2018;
•
Hearings — April 10 - 20, 2018; and
•
Statutory deadline — Aug. 31, 2018.

The final rates are expected to be effective retroactive to Jan. 23, 2018 through a customer surcharge. A PUCT decision is expected in the third quarter of 2018.

Pending Regulatory Proceeding — New Mexico Public Regulation Commission (NMPRC)

New Mexico 2016 Electric Rate Case — In November 2016, SPS filed an electric rate case with the NMPRC seeking an increase in base rates of approximately $41.4 million, representing a total revenue increase of approximately 10.9 percent. The rate filing was based on a requested ROE of 10.1 percent, an equity ratio of 53.97 percent, an electric rate base of approximately $832 million and a future test year ending June 30, 2018.

In April 2017, the NMPRC dismissed SPS’ rate case. In May 2017, SPS filed a notice of appeal to the New Mexico Supreme Court. A decision from the New Mexico Supreme Court is not expected until the second or third quarter of 2018.

SPS plans to file another base rate case by November 2017 utilizing a historic test year ending June 2017.

Pending Regulatory Proceeding — Federal Energy Regulatory Commission (FERC)

Southwest Power Pool, Inc. (SPP) Open Access Transmission Tariff (OATT) Upgrade Costs — Under the SPP OATT, costs of participant-funded, or “sponsored,” transmission upgrades may be recovered from other SPP customers whose transmission service depends on capacity enabled by the upgrade.  The SPP OATT has allowed SPP to charge for these upgrades since 2008, but SPP had not been charging its customers for these upgrades.  In July 2016, the FERC granted SPP’s request for a waiver to allow SPP to recover the charges not billed since 2008.  In November 2016, SPP billed SPS a net amount, for the period from 2008 through August 2016, of $12.8 million for these charges, to be paid over a five-year period commencing November 2016. SPP is also billing SPS ongoing charges of approximately $0.5 million per month. On the retail level, in October 2016, SPS filed applications for deferred accounting and future recovery of related costs in New Mexico and Texas.  In December 2016, SPS’ New Mexico application was consolidated with its base rate case, but the NMPRC dismissed that rate case in April 2017. SPS will seek recovery of these SPP charges in its next New Mexico base rate case by November 2017. In March 2017, SPS withdrew its Texas application and is now seeking to recover these SPP charges in its pending rate case filed in August 2017.

In October 2017, SPS filed a complaint against SPP regarding the amounts billed on and after November 2016 asserting that SPP has assessed upgrade charges to SPS even where SPS’ transmission service was not dependent upon the upgrade as required by the SPP OATT.  If SPS’ complaint results in additional charges or refunds, SPS will seek to recover or refund the differential in future rate proceedings. Also in October 2017, SPP made adjustments to its previous calculations of upgrade charges to SPP customers, and the impact was immaterial to SPS.
v3.8.0.1
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2017
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Commitments and Contingencies

Except to the extent noted below and in Note 5 above, the circumstances set forth in Notes 10 and 11 to the financial statements included in SPS’ Annual Report on Form 10-K for the year ended Dec. 31, 2016, and in Notes 5 and 6 to the financial statements included in SPS’ Quarterly Report on Form 10-Q for the quarterly periods ended March 31, 2017 and June 30, 2017, 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 SPS’ financial position.

PPAs

Under certain PPAs, SPS purchases power from independent power producing entities that own natural gas fueled power plants for which SPS is required to reimburse natural gas fuel costs, or to participate in tolling arrangements under which SPS procures the natural gas required to produce the energy that it purchases. These specific PPAs create a variable interest in the associated independent power producing entity.

SPS had approximately 897 megawatts (MW) of capacity under long-term PPAs as of Sept. 30, 2017 and Dec. 31, 2016, with entities that have been determined to be variable interest entities. SPS has concluded that these entities are not required to be consolidated in its financial statements because it does not have the power to direct the activities that most significantly impact the entities’ economic performance. These agreements have expiration dates through 2041.

Environmental Contingencies

Environmental Requirements

Water and Waste
Federal Clean Water Act (CWA) Waters of the United States Rule — In 2015, the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) published a final rule that significantly expanded the types of water bodies regulated under the CWA and broadened the scope of waters subject to federal jurisdiction. In October 2015, the U.S. Court of Appeals for the Sixth Circuit issued a nationwide stay of the final rule and subsequently ruled that it, rather than the federal district courts, had jurisdiction over challenges to the rule.  In January 2017, the U.S. Supreme Court agreed to resolve the dispute as to which court should hear challenges to the rule. A ruling is expected in the first quarter of 2018.

In February 2017, President Trump issued an executive order requiring the EPA and the Corps to review and revise the final rule. On June 27, 2017, the agencies issued a proposed rule that rescinds the 2015 final rule and reinstates the prior 1986 definition of “Water of the U.S.” The agencies are also undertaking a rulemaking to develop a new definition of “Waters of the U.S.”

Federal CWA Effluent Limitations Guidelines (ELG) — In 2015, the EPA issued a final 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. In September 2017, the EPA delayed the compliance date for flue gas desulfurization wastewater and bottom ash transport water until November 2020 while the agency conducts a rulemaking process to potentially revise the effluent limitations and pretreatment standards for these waste streams.

Air
Greenhouse Gas (GHG) Emission Standard for Existing Sources (Clean Power Plan or CPP) — In 2015, the EPA issued its final rule for existing power plants.  Among other things, the rule requires that state plans include enforceable measures to ensure emissions from existing power plants achieve the EPA’s state-specific interim (2022-2029) and final (2030 and thereafter) emission performance targets. 

The CPP was challenged by multiple parties in the D.C. Circuit Court.  In February 2016, the U.S. Supreme Court issued an order staying the final CPP rule. In September 2016, the D.C. Circuit Court heard oral arguments in the consolidated challenges to the CPP. The stay will remain in effect until the D.C. Circuit Court reaches its decision and the U.S. Supreme Court either declines to review the lower court’s decision or reaches a decision of its own.

In March 2017, President Trump signed an executive order requiring the EPA Administrator to review the CPP rule and if appropriate, publish proposed rules suspending, revising or rescinding it. Accordingly, the EPA has requested that the D.C. Circuit Court hold the litigation in abeyance until the EPA completes its work under the executive order. The D.C. Circuit granted the EPA’s request and is holding the litigation in abeyance while considering briefs by the parties on whether the court should remand the challenges to the EPA rather than holding them in abeyance, determining whether and how the court continues or ends the stay that currently applies to the CPP.

In October 2017, the EPA published a proposed rule to repeal the CPP, based on an analysis that the CPP exceeds the EPA’s statutory authority under the Clean Air Act (CAA). The EPA will take public comment on the proposal for 60 days. The EPA stated it has not yet determined whether it will promulgate a new rule to regulate GHG emissions from existing electric generating units.

Regional Haze Rules — The regional haze program is designed to address widespread haze that results from emissions from a multitude of sources. The Best Available Retrofit Technology (BART) requirements of the EPA’s regional haze rules require the installation and operation of emission controls for industrial facilities emitting air pollutants that reduce visibility in national parks and wilderness areas. Under BART, regional haze plans identify facilities that will have to reduce Sulfur Dioxide (SO2), Nitrogen Oxide (NOx) and particulate matter emissions and set emission limits for those facilities. BART requirements can also be met through participation in interstate emission trading programs such as the Clean Air Interstate Rule (CAIR) and its successor, Cross-State Air Pollution Rule (CSAPR). Texas’ first regional haze plan has undergone federal review as described below.

BART Determinations for Texas: Texas developed a State Implementation Plan (SIP) that found the CAIR equal to BART for electric generating units. As a result, no additional controls beyond CAIR compliance would have been required. In 2014, the EPA proposed to approve the BART portion of the SIP, with substitution of CSAPR compliance for Texas’ reliance on CAIR. In January 2016, the EPA adopted a final rule that deferred its approval of CSAPR compliance as BART until the EPA considered further adjustments to CSAPR emission budgets under the D.C. Circuit Court’s remand of the Texas SO2 emission budgets. The EPA then published a proposed rule in January 2017 that could have had the effect of requiring installation of dry scrubbers to reduce SO2 emissions from Harrington Units 1 and 2. Investment costs associated with dry scrubbers for Harrington Units 1 and 2 could have been approximately $400 million. In September 2017, the EPA issued a final rule adopting a Texas only SO2 trading program as a BART Alternative. The program allocated SO2 allowances to electric generating units in Texas, including all three Harrington units and both Tolk units, consistent with their allocation under CSAPR, resulting in an emissions budget for Texas that is consistent with the EPA’s 2012 rule. SPS expects the allowance allocations to be sufficient for SO2 emissions from Harrington and Tolk units in 2019 and future years. The anticipated costs of compliance are not expected to have a material impact on the results of operations, financial position or cash flows; and SPS believes that compliance costs would be recoverable through regulatory mechanisms.
 
Reasonable Progress Rule: In January 2016, the EPA adopted a final rule establishing a federal implementation plan for the state of Texas, which imposed SO2 emission limitations that reflect the installation of dry scrubbers on Tolk Units 1 and 2, with compliance required by February 2021. Investment costs associated with dry scrubbers could be approximately $600 million. SPS appealed the EPA’s decision and requested a stay of the final rule. The United States Court of Appeals for the Fifth Circuit (Fifth Circuit) granted the stay. In March 2017, the Fifth Circuit remanded the rule to the EPA for reconsideration, while leaving the stay in effect. The Fifth Circuit is now holding the case in abeyance until the EPA completes its reconsideration of the rule. In the final BART rule that affects Tolk and Harrington described above, the EPA noted that it will address the remanded rule in a future action. Such a rule will address whether further SO2 emission reductions are needed at Tolk to address the “reasonable progress” requirements of the regional haze program. The risk of these controls being imposed along with the risk of investments to provide additional cooling water to Tolk have caused SPS to seek to decrease the remaining depreciable life of the Tolk units.

Legal Contingencies

SPS 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 SPS’ financial statements. Unless otherwise required by GAAP, legal fees are expensed as incurred.
v3.8.0.1
Borrowings and Other Financing Instruments
 9 Months Ended
Sep. 30, 2017
Debt Disclosure [Abstract]  
Borrowings and Other Financing Instruments
Borrowings and Other Financing Instruments

Short-Term Borrowings

Money Pool — Xcel Energy Inc. and its utility subsidiaries have established a money pool arrangement that allows for short-term investments in and borrowings between the utility subsidiaries. Xcel Energy Inc. may make investments in the utility subsidiaries at market-based interest rates; however, the money pool arrangement does not allow the utility subsidiaries to make investments in Xcel Energy Inc. Money pool borrowings for SPS were as follows:
(Amounts in Millions, Except Interest Rates)
 
Three Months Ended Sept. 30, 2017
 
Year Ended Dec. 31, 2016
Borrowing limit
 
$
100

 
$
100

Amount outstanding at period end
 
—

 
—

Average amount outstanding
 
37

 
28

Maximum amount outstanding
 
100

 
100

Weighted average interest rate, computed on a daily basis
 
1.10
%
 
0.67
%
Weighted average interest rate at period end
 
N/A

 
N/A



Commercial Paper — SPS meets its short-term liquidity requirements primarily through the issuance of commercial paper and borrowings under its credit facility and the money pool. Commercial paper outstanding for SPS was as follows:
(Amounts in Millions, Except Interest Rates)
 
Three Months Ended Sept. 30, 2017
 
Year Ended Dec. 31, 2016
Borrowing limit
 
$
400

 
$
400

Amount outstanding at period end
 
—

 
50

Average amount outstanding
 
36

 
43

Maximum amount outstanding
 
106

 
140

Weighted average interest rate, computed on a daily basis
 
1.37
%
 
0.67
%
Weighted average interest rate at period end
 
N/A

 
0.95



Letters of Credit — SPS uses letters of credit, generally with terms of one year, to provide financial guarantees for certain operating obligations. As of Sept. 30, 2017 and Dec. 31, 2016, there were $2 million and $5 million, respectively, of letters of credit outstanding under the credit facility. The contract amounts of these letters of credit approximate their fair value and are subject to fees.

Credit Facility — In order to use its commercial paper program to fulfill short-term funding needs, SPS 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.

As of Sept. 30, 2017, SPS had the following committed credit facility available (in millions of dollars):

Credit Facility (a)
 
Drawn (b)
 
Available
$
400

 
$
3

 
$
397


(a) 
This credit facility expires in June 2021.
(b) 
Includes outstanding commercial paper and letters of credit.

All credit facility bank borrowings, outstanding letters of credit and outstanding commercial paper reduce the available capacity under the credit facility. SPS had no direct advances on the credit facility outstanding as of Sept. 30, 2017 and Dec. 31, 2016.

Long-Term Borrowings

In August 2017, SPS issued $450 million of 3.70 percent first mortgage bonds due Aug. 15, 2047.

Debt Redemption

On Aug. 30, 2017, SPS reacquired $250 million of debt with a coupon rate of 8.75 percent and an original maturity date of Dec. 1, 2018. The redemption resulted in payment of an early redemption premium of $21.6 million which was deferred as a regulatory asset.
v3.8.0.1
Fair Value of Financial Assets and Liabilities
 9 Months Ended
Sep. 30, 2017
Fair Value Disclosures [Abstract]  
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 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 value (NAV).

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 classification. 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.

Electric commodity derivatives held by SPS include transmission congestion instruments, generally referred to as financial transmission rights (FTRs), purchased from Southwest Power Pool Inc. (SPP). FTRs purchased from a regional transmission organization (RTO) are financial instruments that entitle or obligate the holder to monthly revenues or charges based on transmission congestion across a given transmission path. The value of an FTR is derived from, and designed to offset, the cost of transmission congestion. In addition to overall transmission load, congestion is also influenced by the operating schedules of power plants and the consumption of electricity pertinent to a given transmission path. Unplanned plant outages, scheduled plant maintenance, changes in the relative costs of fuels used in generation, weather and overall changes in demand for electricity can each impact the operating schedules of the power plants on the transmission grid and the value of an FTR. The valuation process for FTRs utilizes the cleared prices for each FTR for the most recent auction.

If forecasted costs of electric transmission congestion increase or decrease for a given FTR path, the value of that particular FTR instrument will likewise increase or decrease. Given the limited transparency in the auction process, fair value measurements for FTRs have been assigned a Level 3. Non-trading monthly FTR settlements are expected to be recovered through fuel and purchased energy cost recovery mechanisms, and therefore changes in the fair value of the yet to be settled portions of FTRs are deferred as a regulatory asset or liability. Given this regulatory treatment and the limited magnitude of FTRs, the limited transparency associated with the valuation of FTRs are insignificant to the financial statements of SPS.

Derivative Instruments Fair Value Measurements

SPS enters into derivative instruments, including forward contracts, for trading purposes and to manage risk in connection with changes in interest rates and electric utility commodity prices.

Interest Rate Derivatives — SPS may enter 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.

As of Sept. 30, 2017, accumulated other comprehensive losses related to interest rate derivatives included an immaterial amount of net losses expected to be reclassified into earnings during the next 12 months as the related hedged interest rate transactions impact earnings, including forecasted amounts for unsettled hedges, as applicable.

Wholesale and Commodity Trading Risk — SPS conducts various wholesale and commodity trading activities, including the purchase and sale of electric capacity, energy and energy-related instruments, including derivatives. SPS’ risk management policy allows management to conduct these activities within guidelines and limitations as approved by its risk management committee, which is made up of management personnel not directly involved in the activities governed by this policy.

Commodity Derivatives — SPS enters into derivative instruments to manage variability of future cash flows from changes in commodity prices in its electric utility operations. This could include the purchase or sale of energy or energy-related products and FTRs.

The following table details the gross notional amounts of commodity FTRs as of Sept. 30, 2017 and Dec. 31, 2016:
(Amounts in Thousands) (a) 
 
Sept. 30, 2017
 
Dec. 31, 2016
Megawatt hours of electricity
 
6,183

 
2,685



(a) 
Amounts are not reflective of net positions in the underlying commodities.

Impact of Derivative Activities on Income and Accumulated Other Comprehensive Loss — Pre-tax losses related to interest rate derivatives reclassified from accumulated other comprehensive loss into earnings were immaterial for the three and nine months ended Sept. 30, 2017 and $0.1 million and $0.2 million for the three and nine months ended Sept. 30, 2016.

During the three and nine months ended Sept. 30, 2017, changes in the fair value of FTRs resulted in pre-tax net losses of $2.5 million and $0.2 million, respectively, and were recognized as regulatory assets and liabilities. For the three and nine months ended Sept. 30, 2016, changes in the fair value of FTRs resulted in pre-tax net gains of $0.2 million and $2.0 million, respectively, and were recognized as regulatory assets and liabilities. The classification as a regulatory asset or liability is based on expected recovery of FTR settlements through fuel and purchased energy cost recovery mechanisms.

FTR settlement losses of $2.2 million and gains of $0.1 million were recognized for the three and nine months ended Sept. 30, 2017, recorded to electric fuel and purchased power. For the three and nine months ended Sept. 30, 2016, FTR settlement losses of $0.4 million and $3.7 million, respectively, were recognized and recorded to electric fuel and purchased power. These derivative settlement gains and losses are shared with electric customers through fuel and purchased energy cost-recovery mechanisms, and reclassified out of income as regulatory assets or liabilities, as appropriate.

SPS had no derivative instruments designated as fair value hedges during the three and nine months ended Sept. 30, 2017 and 2016. Therefore, no gains or losses from fair value hedges or related hedged transactions were recognized for these periods.

Consideration of Credit Risk and Concentrations — SPS continuously monitors the creditworthiness of the counterparties to its interest rate derivatives 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 SPS’ own credit risk when determining the fair value of derivative liabilities, the impact of credit risk was immaterial to the fair value of unsettled commodity derivatives presented in the balance sheets.

SPS 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.

SPS’ most significant concentrations of credit risk with particular entities or industries are contracts with counterparties to its wholesale, trading and non-trading commodity activities. As of Sept. 30, 2017, two of SPS’ most significant counterparties for these activities, comprising $15.3 million or 33 percent of this credit exposure, had investment grade credit ratings from Standard & Poor’s, Moody’s or Fitch Ratings. Five of the most significant counterparties, comprising $9.2 million or 20 percent of this credit exposure, were not rated by Standard & Poor’s, Moody’s or Fitch Ratings, but based on SPS’ internal analysis, had credit quality consistent with investment grade. The one remaining significant counterparty, comprising $0.2 million or less than 1 percent of this credit exposure, had credit quality less than investment grade, based on SPS’ internal analysis. All eight of these significant counterparties are municipal or cooperative electric entities or other utilities.

Recurring Fair Value Measurements — The following table presents for each of the fair value hierarchy levels, SPS’ derivative assets and liabilities measured at fair value on a recurring basis as of Sept. 30, 2017:
 
 
Sept. 30, 2017
 
 
Fair Value
 
Fair Value Total
 
Counterparty Netting (b)
 
 
(Thousands of Dollars)
 
Level 1
 
Level 2
 
Level 3
 
 
 
Total
Current derivative assets
 
 
 
 
 
 
 
 
 
 
 
 
Other derivative instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Electric commodity
 
$
—

 
$
—

 
$
23,018

 
$
23,018

 
$
(2,580
)
 
$
20,438

Total current derivative assets
 
$
—

 
$
—

 
$
23,018

 
$
23,018

 
$
(2,580
)
 
20,438

PPAs (a)
 
 
 
 
 
 
 
 
 
 
 
3,159

Current derivative instruments
 
 
 
 
 
 
 
 
 
 
 
$
23,597

Noncurrent derivative assets
 
 
 
 
 
 
 
 
 
 
 
 
PPAs (a)
 
 
 
 
 
 
 
 
 
 
 
$
19,743

Noncurrent derivative instruments
 
 
 
 
 
 
 
 
 
 
 
$
19,743

Current derivative liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Other derivative instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Electric commodity
 
$
—

 
$
—

 
$
2,580

 
$
2,580

 
$
(2,580
)
 
$
—

Total current derivative liabilities
 
$
—

 
$
—

 
$
2,580

 
$
2,580

 
$
(2,580
)
 
—

PPAs (a)
 
 
 
 
 
 
 
 
 
 
 
3,565

Current derivative instruments
 
 
 
 
 
 
 
 
 
 
 
$
3,565

Noncurrent derivative liabilities
 
 
 
 
 
 
 
 
 
 
 
 
PPAs (a)
 
 
 
 
 
 
 
 
 
 
 
$
20,840

Noncurrent derivative instruments
 
 
 
 
 
 
 
 
 
 
 
$
20,840


(a)
During 2006, SPS qualified these contracts under the normal purchase exception. Based on this qualification, the contracts are no longer adjusted to fair value and the previous carrying value of these contracts will be amortized over the remaining contract lives along with the offsetting regulatory assets and liabilities.
(b) 
SPS nets derivative instruments and related collateral in its balance sheet when supported by a legally enforceable master netting agreement, and all derivative instruments and related collateral amounts were subject to master netting agreements at Sept. 30, 2017. At Sept. 30, 2017, derivative assets and liabilities include no obligations to return cash collateral or rights to reclaim cash collateral. The counterparty netting amounts presented exclude settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements.

The following table presents for each of the fair value hierarchy levels, SPS’ derivative assets and liabilities measured at fair value on a recurring basis as of Dec. 31, 2016:
 
 
Dec. 31, 2016
 
 
Fair Value
 
Fair Value Total
 
Counterparty Netting (b)
 
 
(Thousands of Dollars)
 
Level 1
 
Level 2
 
Level 3
 
 
 
Total
Current derivative assets
 
 
 
 
 
 
 
 
 
 
 
 
Other derivative instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Electric commodity
 
$
—

 
$
—

 
$
3,254

 
$
3,254

 
$
(1,299
)
 
$
1,955

Total current derivative assets
 
$
—

 
$
—

 
$
3,254

 
$
3,254

 
$
(1,299
)
 
1,955

PPAs (a)
 
 
 
 
 
 
 
 
 
 
 
3,159

Current derivative instruments
 
 
 
 
 
 
 
 
 
 
 
$
5,114

Noncurrent derivative assets
 
 
 
 
 
 
 
 
 
 
 
 
PPAs (a)
 
 
 
 
 
 
 
 
 
 
 
$
22,113

Noncurrent derivative instruments
 
 
 
 
 
 
 
 
 
 
 
$
22,113

Current derivative liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Other derivative instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Electric commodity
 
$
—

 
$
—

 
$
1,299

 
$
1,299

 
$
(1,299
)
 
$
—

Total current derivative liabilities
 
$
—

 
$
—

 
$
1,299

 
$
1,299

 
$
(1,299
)
 
—

PPAs (a)
 
 
 
 
 
 
 
 
 
 
 
3,565

Current derivative instruments
 
 
 
 
 
 
 
 
 
 
 
$
3,565

Noncurrent derivative liabilities
 
 
 
 
 
 
 
 
 
 
 
 
PPAs (a)
 
 
 
 
 
 
 
 
 
 
 
$
23,513

Noncurrent derivative instruments
 
 
 
 
 
 
 
 
 
 
 
$
23,513


(a) 
During 2006, SPS qualified these contracts under the normal purchase exception. Based on this qualification, the contracts are no longer adjusted to fair value and the previous carrying value of these contracts will be amortized over the remaining contract lives along with the offsetting regulatory assets and liabilities.
(b) 
SPS nets derivative instruments and related collateral in its balance sheet when supported by a legally enforceable master netting agreement, and all derivative instruments and related collateral amounts were subject to master netting agreements at Dec. 31, 2016. At Dec. 31, 2016, derivative assets and liabilities include no obligations to return cash collateral or rights to reclaim cash collateral. The counterparty netting amounts presented exclude settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements.

The following table presents the changes in Level 3 commodity derivatives for the three and nine months ended Sept. 30, 2017 and 2016:
 
 
 
 
 
 
 
Three Months Ended Sept. 30
(Thousands of Dollars)
 
2017
 
2016
Balance at July 1
 
$
28,665

 
$
1,070

Purchases
 
43

 
274

Settlements
 
(9,939
)
 
(7,822
)
Net transactions recorded during the period:
 
 
 
 
Net gains recognized as regulatory assets and liabilities
 
1,669

 
6,614

Balance at Sept. 30
 
$
20,438

 
$
136

 
 
 
 
 
 
 
Nine Months Ended Sept. 30
(Thousands of Dollars)
 
2017
 
2016
Balance at Jan. 1
 
$
1,955

 
$
5,060

Purchases
 
39,376

 
5,426

Settlements
 
(40,437
)
 
(22,438
)
Net transactions recorded during the period:
 
 
 
 
Net gains recognized as regulatory assets and liabilities
 
19,544

 
12,088

Balance at Sept. 30
 
$
20,438

 
$
136



SPS recognizes transfers between levels as of the beginning of each period. There were no transfers of amounts between levels for derivative instruments for the three and nine months ended Sept. 30, 2017 and 2016.

Fair Value of Long-Term Debt

As of Sept. 30, 2017 and Dec. 31, 2016, other financial instruments for which the carrying amount did not equal fair value were as follows:
 
 
Sept. 30, 2017
 
Dec. 31, 2016
(Thousands of Dollars)
 
Carrying
Amount
 
Fair Value
 
Carrying
Amount
 
Fair Value
Long-term debt, including current portion
 
$
1,829,965

 
$
1,954,618

 
$
1,635,858

 
$
1,741,502



The fair value of SPS’ 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 Sept. 30, 2017 and Dec. 31, 2016, and given the observability of the inputs to these estimates, the fair values presented for long-term debt have been assigned a Level 2.
v3.8.0.1
Other Income, Net
 9 Months Ended
Sep. 30, 2017
Other Income and Expenses [Abstract]  
Other Income, Net
Other Income, Net

Other income, net consisted of the following:
 
Three Months Ended Sept. 30
 
Nine Months Ended Sept. 30
(Thousands of Dollars)
2017
 
2016
 
2017
 
2016
Interest income
$
296

 
$
400

 
$
488

 
$
579

Other nonoperating income
1

 
—

 
—

 
16

Insurance policy expense
(12
)
 
(32
)
 
(36
)
 
(32
)
Other nonoperating expense
—

 
(231
)
 
—

 
—

Other income, net
$
285

 
$
137

 
$
452

 
$
563
v3.8.0.1
Benefit Plans and Other Postretirement Benefits
 9 Months Ended
Sep. 30, 2017
Retirement Benefits [Abstract]  
Benefit Plans and Other Postretirement Benefits
Benefit Plans and Other Postretirement Benefits

Components of Net Periodic Benefit Cost (Credit)
 
 
Three Months Ended Sept. 30
 
 
2017
 
2016
 
2017
 
2016
(Thousands of Dollars)
 
Pension Benefits
 
Postretirement Health
Care Benefits
Service cost
 
$
2,439

 
$
2,440

 
$
219

 
$
194

Interest cost
 
4,928

 
5,315

 
415

 
455

Expected return on plan assets
 
(6,971
)
 
(6,901
)
 
(589
)
 
(594
)
Amortization of prior service credit
 
—

 
—

 
(100
)
 
(100
)
Amortization of net loss (gain)
 
3,245

 
2,997

 
(155
)
 
(146
)
Net periodic benefit cost (credit)
 
3,641

 
3,851

 
(210
)
 
(191
)
Credits not recognized due to the effects of regulation
 
553

 
637

 
—

 
—

Net benefit cost (credit) recognized for financial reporting
 
$
4,194

 
$
4,488

 
$
(210
)
 
$
(191
)

 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended Sept. 30
 
 
2017
 
2016
 
2017
 
2016
(Thousands of Dollars)
 
Pension Benefits
 
Postretirement Health
Care Benefits
Service cost
 
$
7,319

 
$
7,320

 
$
657

 
$
582

Interest cost
 
14,783

 
15,945

 
1,245

 
1,365

Expected return on plan assets
 
(20,913
)
 
(20,703
)
 
(1,767
)
 
(1,782
)
Amortization of prior service credit
 
—

 
—

 
(300
)
 
(300
)
Amortization of net loss (gain)
 
9,735

 
8,991

 
(465
)
 
(438
)
Net periodic benefit cost (credit)
 
10,924

 
11,553

 
(630
)
 
(573
)
Credits not recognized due to the effects of regulation
 
1,275

 
1,353

 
—

 
—

Net benefit cost (credit) recognized for financial reporting
 
$
12,199

 
$
12,906

 
$
(630
)
 
$
(573
)


In January 2017, contributions of $150.0 million were made across four of Xcel Energy’s pension plans, of which $23.0 million was attributable to SPS. Xcel Energy does not expect additional pension contributions during 2017.
v3.8.0.1
Other Comprehensive Income
 9 Months Ended
Sep. 30, 2017
Stockholders' Equity Note [Abstract]  
Other Comprehensive Income
Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive loss, net of tax, for the three and nine months ended Sept. 30, 2017 and 2016 were as follows:
 
 
Three Months Ended Sept. 30, 2017
(Thousands of Dollars)
 
Gains and Losses on Cash Flow Hedges
 
Defined Benefit and Postretirement Items
 
Total
Accumulated other comprehensive loss at July 1
 
$
(659
)
 
$
(582
)
 
$
(1,241
)
Losses reclassified from net accumulated other comprehensive loss
 
10

 
16

 
26

Net current period other comprehensive income
 
10

 
16

 
26

Accumulated other comprehensive loss at Sept. 30
 
$
(649
)
 
$
(566
)
 
$
(1,215
)


 
 
Three Months Ended Sept. 30, 2016
(Thousands of Dollars)
 
Gains and Losses on Cash Flow Hedges
 
Defined Benefit and Postretirement Items
 
Total
Accumulated other comprehensive loss at July 1
 
$
(732
)
 
$
(441
)
 
$
(1,173
)
Other comprehensive income before reclassifications
 
—

 
12

 
12

Losses reclassified from net accumulated other comprehensive loss
 
44

 
—

 
44

Net current period other comprehensive income
 
44

 
12

 
56

Accumulated other comprehensive loss at Sept. 30
 
$
(688
)
 
$
(429
)
 
$
(1,117
)

 
 
Nine Months Ended Sept. 30, 2017
(Thousands of Dollars)
 
Gains and Losses on Cash Flow Hedges
 
Defined Benefit and Postretirement Items
 
Total
Accumulated other comprehensive loss at Jan. 1
 
$
(678
)
 
$
(612
)
 
$
(1,290
)
Losses reclassified from net accumulated other comprehensive loss
 
29

 
46

 
75

Net current period other comprehensive income
 
29

 
46

 
75

Accumulated other comprehensive loss at Sept. 30
 
$
(649
)
 
$
(566
)
 
$
(1,215
)

 
 
Nine Months Ended Sept. 30, 2016
(Thousands of Dollars)
 
Gains and Losses on Cash Flow Hedges
 
Defined Benefit and Postretirement Items
 
Total
Accumulated other comprehensive loss at Jan. 1
 
$
(817
)
 
$
(464
)
 
$
(1,281
)
Other comprehensive income before reclassifications
 
—

 
35

 
35

Losses reclassified from net accumulated other comprehensive loss
 
129

 
—

 
129

Net current period other comprehensive income
 
129

 
35

 
164

Accumulated other comprehensive loss at Sept. 30
 
$
(688
)
 
$
(429
)
 
$
(1,117
)


Reclassifications from accumulated other comprehensive loss for the three and nine months ended Sept. 30, 2017 and 2016 were as follows:
 
 
 
 
 
 
 
 
Amounts Reclassified from
Accumulated Other
Comprehensive Loss
 
(Thousands of Dollars)
 
Three Months Ended Sept. 30, 2017
 
Three Months Ended Sept. 30, 2016
 
Losses on cash flow hedges:
 
 

 
 

 
Interest rate derivatives
 
$
16

(a) 
$
69

(a) 
Total, pre-tax
 
16

 
69

 
Tax benefit
 
(6
)
 
(25
)
 
Total, net of tax
 
10

 
44

 
Defined benefit pension and postretirement losses:
 
 
 
 
 
Amortization of net loss
 
24

(b) 
—

(b) 
Total, pre-tax
 
24

 
—

 
Tax benefit
 
(8
)
 
—

 
Total, net of tax
 
16

 
—

 
Total amounts reclassified, net of tax
 
$
26

 
$
44

 
 
 
Amounts Reclassified from
Accumulated Other
Comprehensive Loss
 
(Thousands of Dollars)
 
Nine Months Ended Sept. 30, 2017
 
Nine Months Ended Sept. 30, 2016
 
Losses on cash flow hedges:
 
 

 
 

 
Interest rate derivatives
 
$
47

(a) 
$
203

(a) 
Total, pre-tax
 
47

 
203

 
Tax benefit
 
(18
)
 
(74
)
 
Total, net of tax
 
29

 
129

 
Defined benefit pension and postretirement losses:
 
 
 
 
 
Amortization of net loss
 
72

(b) 
—

(b) 
Total, pre-tax
 
72

 
—

 
Tax benefit
 
(26
)
 
—

 
Total, net of tax
 
46

 
—

 
Total amounts reclassified, net of tax
 
$
75

 
$
129

 


(a) 
Included in interest charges.
(b) 
Included in the computation of net periodic pension and postretirement benefit costs. See Note 10 for details regarding these benefit plans.
v3.8.0.1
Selected Balance Sheet Data (Tables)
 9 Months Ended
Sep. 30, 2017
Balance Sheet Related Disclosures [Abstract]  
Accounts Receivable, Net
(Thousands of Dollars)
 
Sept. 30, 2017
 
Dec. 31, 2016
Accounts receivable, net
 
 
 
 
Accounts receivable
 
$
103,704

 
$
80,569

Less allowance for bad debts
 
(7,090
)
 
(6,379
)
 
 
$
96,614

 
$
74,190
Inventories
(Thousands of Dollars)
 
Sept. 30, 2017
 
Dec. 31, 2016
Inventories
 
 
 
 
Materials and supplies
 
$
26,877

 
$
25,453

Fuel
 
14,473

 
13,052

 
 
$
41,350

 
$
38,505
Property, Plant and Equipment, Net
(Thousands of Dollars)
 
Sept. 30, 2017
 
Dec. 31, 2016
Property, plant and equipment, net
 
 
 
 
Electric plant
 
$
6,653,228

 
$
6,362,189

Construction work in progress
 
312,445

 
260,327

Total property, plant and equipment
 
6,965,673

 
6,622,516

Less accumulated depreciation
 
(2,018,559
)
 
(1,926,697
)
 
 
$
4,947,114

 
$
4,695,819
v3.8.0.1
Income Taxes (Tables)
 9 Months Ended
Sep. 30, 2017
Income Tax Disclosure [Abstract]  
Reconciliation of Unrecognized Tax Benefits
A reconciliation of the amount of unrecognized tax benefit is as follows:
(Millions of Dollars)
 
Sept. 30, 2017
 
Dec. 31, 2016
Unrecognized tax benefit — Permanent tax positions
 
$
5.2

 
$
4.5

Unrecognized tax benefit — Temporary tax positions
 
5.1

 
24.2

Total unrecognized tax benefit
 
$
10.3

 
$
28.7
Tax Benefits Associated with NOL and Tax Credit Carryforwards
The unrecognized tax benefit amounts were reduced by the tax benefits associated with NOL and tax credit carryforwards. The amounts of tax benefits associated with NOL and tax credit carryforwards are as follows:
(Millions of Dollars)
 
Sept. 30, 2017
 
Dec. 31, 2016
NOL and tax credit carryforwards
 
$
(5.8
)
 
$
(5.9
)
Interest Payable related to Unrecognized Tax Benefits [Table Text Block]
The payable for interest related to unrecognized tax benefits is partially offset by the interest benefit associated with NOL and tax credit carryforwards. A reconciliation of the beginning and ending amount of the payable for interest related to unrecognized tax benefits are as follows:

(Millions of Dollars)
 
Sept. 30, 2017
 
Dec. 31, 2016
Payable for interest related to unrecognized tax benefits at beginning of period
 
$
(0.9
)
 
$
—

Interest expense related to unrecognized tax benefits recorded during the period
 
—

 
(0.9
)
Payable for interest related to unrecognized tax benefits at end of period
 
$
(0.9
)
 
$
(0.9
)
v3.8.0.1
Rate Matters Rate Matters (Tables)
 9 Months Ended
Sep. 30, 2017
Public Utilities, General Disclosure [Abstract]  
Texas 2017 Rate Case [Table Text Block]
The following table summarizes SPS’ revised rate increase request:
Revenue Request (Millions of Dollars)
 
 
Incremental revenue request
 
$
69.2

Transmission Cost Recovery Factor (TCRF) revenue conversion to base rates (a)
 
(14.6
)
  Net revenue increase request
 
$
54.6


(a)
The roll-in of the TCRF rider revenue into base rates will not have an impact on customer bills or total revenue as these costs are already being recovered through the rider. SPS can request another TCRF rider after the conclusion of this rate case to recover transmission investments subsequent to June 30, 2017.
v3.8.0.1
Borrowings and Other Financing Instruments (Tables)
 9 Months Ended
Sep. 30, 2017
Borrowings and Other Financing Instruments [Abstract]  
Credit Facilities
As of Sept. 30, 2017, SPS had the following committed credit facility available (in millions of dollars):

Credit Facility (a)
 
Drawn (b)
 
Available
$
400

 
$
3

 
$
397


(a) 
This credit facility expires in June 2021.
(b) 
Includes outstanding commercial paper and letters of credit.
Money Pool  
Borrowings and Other Financing Instruments [Abstract]  
Short-Term Borrowings
Money pool borrowings for SPS were as follows:
(Amounts in Millions, Except Interest Rates)
 
Three Months Ended Sept. 30, 2017
 
Year Ended Dec. 31, 2016
Borrowing limit
 
$
100

 
$
100

Amount outstanding at period end
 
—

 
—

Average amount outstanding
 
37

 
28

Maximum amount outstanding
 
100

 
100

Weighted average interest rate, computed on a daily basis
 
1.10
%
 
0.67
%
Weighted average interest rate at period end
 
N/A

 
N/A
Commercial Paper  
Borrowings and Other Financing Instruments [Abstract]  
Short-Term Borrowings
Commercial paper outstanding for SPS was as follows:
(Amounts in Millions, Except Interest Rates)
 
Three Months Ended Sept. 30, 2017
 
Year Ended Dec. 31, 2016
Borrowing limit
 
$
400

 
$
400

Amount outstanding at period end
 
—

 
50

Average amount outstanding
 
36

 
43

Maximum amount outstanding
 
106

 
140

Weighted average interest rate, computed on a daily basis
 
1.37
%
 
0.67
%
Weighted average interest rate at period end
 
N/A

 
0.95
v3.8.0.1
Fair Value of Financial Assets and Liabilities (Tables)
 9 Months Ended
Sep. 30, 2017
Fair Value Disclosures [Abstract]  
Gross Notional Amounts of Commodity FTRs
The following table details the gross notional amounts of commodity FTRs as of Sept. 30, 2017 and Dec. 31, 2016:
(Amounts in Thousands) (a) 
 
Sept. 30, 2017
 
Dec. 31, 2016
Megawatt hours of electricity
 
6,183

 
2,685



(a) 
Amounts are not reflective of net positions in the underlying commodities.
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, SPS’ derivative assets and liabilities measured at fair value on a recurring basis as of Sept. 30, 2017:
 
 
Sept. 30, 2017
 
 
Fair Value
 
Fair Value Total
 
Counterparty Netting (b)
 
 
(Thousands of Dollars)
 
Level 1
 
Level 2
 
Level 3
 
 
 
Total
Current derivative assets
 
 
 
 
 
 
 
 
 
 
 
 
Other derivative instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Electric commodity
 
$
—

 
$
—

 
$
23,018

 
$
23,018

 
$
(2,580
)
 
$
20,438

Total current derivative assets
 
$
—

 
$
—

 
$
23,018

 
$
23,018

 
$
(2,580
)
 
20,438

PPAs (a)
 
 
 
 
 
 
 
 
 
 
 
3,159

Current derivative instruments
 
 
 
 
 
 
 
 
 
 
 
$
23,597

Noncurrent derivative assets
 
 
 
 
 
 
 
 
 
 
 
 
PPAs (a)
 
 
 
 
 
 
 
 
 
 
 
$
19,743

Noncurrent derivative instruments
 
 
 
 
 
 
 
 
 
 
 
$
19,743

Current derivative liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Other derivative instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Electric commodity
 
$
—

 
$
—

 
$
2,580

 
$
2,580

 
$
(2,580
)
 
$
—

Total current derivative liabilities
 
$
—

 
$
—

 
$
2,580

 
$
2,580

 
$
(2,580
)
 
—

PPAs (a)
 
 
 
 
 
 
 
 
 
 
 
3,565

Current derivative instruments
 
 
 
 
 
 
 
 
 
 
 
$
3,565

Noncurrent derivative liabilities
 
 
 
 
 
 
 
 
 
 
 
 
PPAs (a)
 
 
 
 
 
 
 
 
 
 
 
$
20,840

Noncurrent derivative instruments
 
 
 
 
 
 
 
 
 
 
 
$
20,840


(a)
During 2006, SPS qualified these contracts under the normal purchase exception. Based on this qualification, the contracts are no longer adjusted to fair value and the previous carrying value of these contracts will be amortized over the remaining contract lives along with the offsetting regulatory assets and liabilities.
(b) 
SPS nets derivative instruments and related collateral in its balance sheet when supported by a legally enforceable master netting agreement, and all derivative instruments and related collateral amounts were subject to master netting agreements at Sept. 30, 2017. At Sept. 30, 2017, derivative assets and liabilities include no obligations to return cash collateral or rights to reclaim cash collateral. The counterparty netting amounts presented exclude settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements.

The following table presents for each of the fair value hierarchy levels, SPS’ derivative assets and liabilities measured at fair value on a recurring basis as of Dec. 31, 2016:
 
 
Dec. 31, 2016
 
 
Fair Value
 
Fair Value Total
 
Counterparty Netting (b)
 
 
(Thousands of Dollars)
 
Level 1
 
Level 2
 
Level 3
 
 
 
Total
Current derivative assets
 
 
 
 
 
 
 
 
 
 
 
 
Other derivative instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Electric commodity
 
$
—

 
$
—

 
$
3,254

 
$
3,254

 
$
(1,299
)
 
$
1,955

Total current derivative assets
 
$
—

 
$
—

 
$
3,254

 
$
3,254

 
$
(1,299
)
 
1,955

PPAs (a)
 
 
 
 
 
 
 
 
 
 
 
3,159

Current derivative instruments
 
 
 
 
 
 
 
 
 
 
 
$
5,114

Noncurrent derivative assets
 
 
 
 
 
 
 
 
 
 
 
 
PPAs (a)
 
 
 
 
 
 
 
 
 
 
 
$
22,113

Noncurrent derivative instruments
 
 
 
 
 
 
 
 
 
 
 
$
22,113

Current derivative liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Other derivative instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Electric commodity
 
$
—

 
$
—

 
$
1,299

 
$
1,299

 
$
(1,299
)
 
$
—

Total current derivative liabilities
 
$
—

 
$
—

 
$
1,299

 
$
1,299

 
$
(1,299
)
 
—

PPAs (a)
 
 
 
 
 
 
 
 
 
 
 
3,565

Current derivative instruments
 
 
 
 
 
 
 
 
 
 
 
$
3,565

Noncurrent derivative liabilities
 
 
 
 
 
 
 
 
 
 
 
 
PPAs (a)
 
 
 
 
 
 
 
 
 
 
 
$
23,513

Noncurrent derivative instruments
 
 
 
 
 
 
 
 
 
 
 
$
23,513


(a) 
During 2006, SPS qualified these contracts under the normal purchase exception. Based on this qualification, the contracts are no longer adjusted to fair value and the previous carrying value of these contracts will be amortized over the remaining contract lives along with the offsetting regulatory assets and liabilities.
(b) 
SPS nets derivative instruments and related collateral in its balance sheet when supported by a legally enforceable master netting agreement, and all derivative instruments and related collateral amounts were subject to master netting agreements at Dec. 31, 2016. At Dec. 31, 2016, derivative assets and liabilities include no obligations to return cash collateral or rights to reclaim cash collateral. The counterparty netting amounts presented exclude settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements.
Changes in Level 3 Commodity Derivatives
The following table presents the changes in Level 3 commodity derivatives for the three and nine months ended Sept. 30, 2017 and 2016:
 
 
 
 
 
 
 
Three Months Ended Sept. 30
(Thousands of Dollars)
 
2017
 
2016
Balance at July 1
 
$
28,665

 
$
1,070

Purchases
 
43

 
274

Settlements
 
(9,939
)
 
(7,822
)
Net transactions recorded during the period:
 
 
 
 
Net gains recognized as regulatory assets and liabilities
 
1,669

 
6,614

Balance at Sept. 30
 
$
20,438

 
$
136

 
 
 
 
 
 
 
Nine Months Ended Sept. 30
(Thousands of Dollars)
 
2017
 
2016
Balance at Jan. 1
 
$
1,955

 
$
5,060

Purchases
 
39,376

 
5,426

Settlements
 
(40,437
)
 
(22,438
)
Net transactions recorded during the period:
 
 
 
 
Net gains recognized as regulatory assets and liabilities
 
19,544

 
12,088

Balance at Sept. 30
 
$
20,438

 
$
136
Carrying Amount and Fair Value of Long-term Debt
As of Sept. 30, 2017 and Dec. 31, 2016, other financial instruments for which the carrying amount did not equal fair value were as follows:
 
 
Sept. 30, 2017
 
Dec. 31, 2016
(Thousands of Dollars)
 
Carrying
Amount
 
Fair Value
 
Carrying
Amount
 
Fair Value
Long-term debt, including current portion
 
$
1,829,965

 
$
1,954,618

 
$
1,635,858

 
$
1,741,502
v3.8.0.1
Other Income, Net (Tables)
 9 Months Ended
Sep. 30, 2017
Other Income and Expenses [Abstract]  
Other Income, Net
Other income, net consisted of the following:
 
Three Months Ended Sept. 30
 
Nine Months Ended Sept. 30
(Thousands of Dollars)
2017
 
2016
 
2017
 
2016
Interest income
$
296

 
$
400

 
$
488

 
$
579

Other nonoperating income
1

 
—

 
—

 
16

Insurance policy expense
(12
)
 
(32
)
 
(36
)
 
(32
)
Other nonoperating expense
—

 
(231
)
 
—

 
—

Other income, net
$
285

 
$
137

 
$
452

 
$
563
v3.8.0.1
Benefit Plans and Other Postretirement Benefits (Tables)
 9 Months Ended
Sep. 30, 2017
Retirement Benefits [Abstract]  
Components of Net Periodic Benefit Cost (Credit)
Components of Net Periodic Benefit Cost (Credit)
 
 
Three Months Ended Sept. 30
 
 
2017
 
2016
 
2017
 
2016
(Thousands of Dollars)
 
Pension Benefits
 
Postretirement Health
Care Benefits
Service cost
 
$
2,439

 
$
2,440

 
$
219

 
$
194

Interest cost
 
4,928

 
5,315

 
415

 
455

Expected return on plan assets
 
(6,971
)
 
(6,901
)
 
(589
)
 
(594
)
Amortization of prior service credit
 
—

 
—

 
(100
)
 
(100
)
Amortization of net loss (gain)
 
3,245

 
2,997

 
(155
)
 
(146
)
Net periodic benefit cost (credit)
 
3,641

 
3,851

 
(210
)
 
(191
)
Credits not recognized due to the effects of regulation
 
553

 
637

 
—

 
—

Net benefit cost (credit) recognized for financial reporting
 
$
4,194

 
$
4,488

 
$
(210
)
 
$
(191
)

 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended Sept. 30
 
 
2017
 
2016
 
2017
 
2016
(Thousands of Dollars)
 
Pension Benefits
 
Postretirement Health
Care Benefits
Service cost
 
$
7,319

 
$
7,320

 
$
657

 
$
582

Interest cost
 
14,783

 
15,945

 
1,245

 
1,365

Expected return on plan assets
 
(20,913
)
 
(20,703
)
 
(1,767
)
 
(1,782
)
Amortization of prior service credit
 
—

 
—

 
(300
)
 
(300
)
Amortization of net loss (gain)
 
9,735

 
8,991

 
(465
)
 
(438
)
Net periodic benefit cost (credit)
 
10,924

 
11,553

 
(630
)
 
(573
)
Credits not recognized due to the effects of regulation
 
1,275

 
1,353

 
—

 
—

Net benefit cost (credit) recognized for financial reporting
 
$
12,199

 
$
12,906

 
$
(630
)
 
$
(573
)
v3.8.0.1
Other Comprehensive Income (Tables)
 9 Months Ended
Sep. 30, 2017
Stockholders' Equity Note [Abstract]  
Changes in Accumulated Other Comprehensive Loss, Net of Tax

Changes in accumulated other comprehensive loss, net of tax, for the three and nine months ended Sept. 30, 2017 and 2016 were as follows:
 
 
Three Months Ended Sept. 30, 2017
(Thousands of Dollars)
 
Gains and Losses on Cash Flow Hedges
 
Defined Benefit and Postretirement Items
 
Total
Accumulated other comprehensive loss at July 1
 
$
(659
)
 
$
(582
)
 
$
(1,241
)
Losses reclassified from net accumulated other comprehensive loss
 
10

 
16

 
26

Net current period other comprehensive income
 
10

 
16

 
26

Accumulated other comprehensive loss at Sept. 30
 
$
(649
)
 
$
(566
)
 
$
(1,215
)


 
 
Three Months Ended Sept. 30, 2016
(Thousands of Dollars)
 
Gains and Losses on Cash Flow Hedges
 
Defined Benefit and Postretirement Items
 
Total
Accumulated other comprehensive loss at July 1
 
$
(732
)
 
$
(441
)
 
$
(1,173
)
Other comprehensive income before reclassifications
 
—

 
12

 
12

Losses reclassified from net accumulated other comprehensive loss
 
44

 
—

 
44

Net current period other comprehensive income
 
44

 
12

 
56

Accumulated other comprehensive loss at Sept. 30
 
$
(688
)
 
$
(429
)
 
$
(1,117
)

 
 
Nine Months Ended Sept. 30, 2017
(Thousands of Dollars)
 
Gains and Losses on Cash Flow Hedges
 
Defined Benefit and Postretirement Items
 
Total
Accumulated other comprehensive loss at Jan. 1
 
$
(678
)
 
$
(612
)
 
$
(1,290
)
Losses reclassified from net accumulated other comprehensive loss
 
29

 
46

 
75

Net current period other comprehensive income
 
29

 
46

 
75

Accumulated other comprehensive loss at Sept. 30
 
$
(649
)
 
$
(566
)
 
$
(1,215
)

 
 
Nine Months Ended Sept. 30, 2016
(Thousands of Dollars)
 
Gains and Losses on Cash Flow Hedges
 
Defined Benefit and Postretirement Items
 
Total
Accumulated other comprehensive loss at Jan. 1
 
$
(817
)
 
$
(464
)
 
$
(1,281
)
Other comprehensive income before reclassifications
 
—

 
35

 
35

Losses reclassified from net accumulated other comprehensive loss
 
129

 
—

 
129

Net current period other comprehensive income
 
129

 
35

 
164

Accumulated other comprehensive loss at Sept. 30
 
$
(688
)
 
$
(429
)
 
$
(1,117
)
Reclassifications out of Accumulated Other Comprehensive Loss
Reclassifications from accumulated other comprehensive loss for the three and nine months ended Sept. 30, 2017 and 2016 were as follows:
 
 
 
 
 
 
 
 
Amounts Reclassified from
Accumulated Other
Comprehensive Loss
 
(Thousands of Dollars)
 
Three Months Ended Sept. 30, 2017
 
Three Months Ended Sept. 30, 2016
 
Losses on cash flow hedges:
 
 

 
 

 
Interest rate derivatives
 
$
16

(a) 
$
69

(a) 
Total, pre-tax
 
16

 
69

 
Tax benefit
 
(6
)
 
(25
)
 
Total, net of tax
 
10

 
44

 
Defined benefit pension and postretirement losses:
 
 
 
 
 
Amortization of net loss
 
24

(b) 
—

(b) 
Total, pre-tax
 
24

 
—

 
Tax benefit
 
(8
)
 
—

 
Total, net of tax
 
16

 
—

 
Total amounts reclassified, net of tax
 
$
26

 
$
44

 
 
 
Amounts Reclassified from
Accumulated Other
Comprehensive Loss
 
(Thousands of Dollars)
 
Nine Months Ended Sept. 30, 2017
 
Nine Months Ended Sept. 30, 2016
 
Losses on cash flow hedges:
 
 

 
 

 
Interest rate derivatives
 
$
47

(a) 
$
203

(a) 
Total, pre-tax
 
47

 
203

 
Tax benefit
 
(18
)
 
(74
)
 
Total, net of tax
 
29

 
129

 
Defined benefit pension and postretirement losses:
 
 
 
 
 
Amortization of net loss
 
72

(b) 
—

(b) 
Total, pre-tax
 
72

 
—

 
Tax benefit
 
(26
)
 
—

 
Total, net of tax
 
46

 
—

 
Total amounts reclassified, net of tax
 
$
75

 
$
129

 


(a) 
Included in interest charges.
(b) 
Included in the computation of net periodic pension and postretirement benefit costs. See Note 10 for details regarding these benefit plans.
v3.8.0.1
Selected Balance Sheet Data (Details) - USD ($)
$ in Thousands
Sep. 30, 2017
Dec. 31, 2016
Accounts receivable, net    
Accounts receivable $ 103,704 $ 80,569
Less allowance for bad debts (7,090) (6,379)
Accounts receivable, net $ 96,614 $ 74,190
v3.8.0.1
Selected Balance Sheet Data Balance Sheet Related Disclosures, Inventories (Details) - USD ($)
$ in Thousands
Sep. 30, 2017
Dec. 31, 2016
Public Utilities, Inventory [Line Items]    
Inventories $ 41,350 $ 38,505
Materials and supplies    
Public Utilities, Inventory [Line Items]    
Inventories 26,877 25,453
Fuel    
Public Utilities, Inventory [Line Items]    
Inventories $ 14,473 $ 13,052
v3.8.0.1
Selected Balance Sheet Data Balance Sheet Related Disclosures, Property, Plant and Equipment (Details) - USD ($)
$ in Thousands
Sep. 30, 2017
Dec. 31, 2016
Public Utility, Property, Plant and Equipment [Line Items]    
Property, plant and equipment, gross $ 6,965,673 $ 6,622,516
Less accumulated depreciation (2,018,559) (1,926,697)
Property, plant and equipment, net 4,947,114 4,695,819
Electric plant    
Public Utility, Property, Plant and Equipment [Line Items]    
Property, plant and equipment, gross 6,653,228 6,362,189
Construction work in progress    
Public Utility, Property, Plant and Equipment [Line Items]    
Property, plant and equipment, gross $ 312,445 $ 260,327
v3.8.0.1
Income Taxes (Details) - USD ($)
 9 Months Ended 12 Months Ended
Sep. 30, 2017
Sep. 30, 2015
Dec. 31, 2016
Dec. 31, 2012
Dec. 31, 2015
Income Tax Examination [Line Items]          
Unrecognized Tax Benefits, Interest on Income Taxes Accrued $ (900,000)   $ (900,000)   $ 0
Interest Expense related to unrecognized tax benefits 0   (900,000)    
Unrecognized Tax Benefits [Abstract]          
Unrecognized tax benefit - Permanent tax positions 5,200,000   4,500,000    
Unrecognized tax benefit - Temporary tax positions 5,100,000   24,200,000    
Total unrecognized tax benefit 10,300,000   28,700,000    
NOL and tax credit carryforwards (5,800,000)   (5,900,000)    
Upper bound of decrease in unrecognized tax benefit that is reasonably possible 7,000,000        
Amounts accrued for penalties related to unrecognized tax benefits 0   $ 0    
Internal Revenue Service (IRS)          
Tax Audits [Abstract]          
Year(s) under examination   2012 and 2013   2010 and 2011  
Year of carryback claim under examination       2009  
Potential Tax Adjustments $ 14,000,000        
Earliest year subject to examination 2009        
State Jurisdiction (Texas)          
Tax Audits [Abstract]          
Year(s) under examination     2009 and 2010    
Earliest year subject to examination 2009        
v3.8.0.1
Rate Matters (Details) - USD ($)
$ in Millions
 1 Months Ended 9 Months Ended 12 Months Ended
Oct. 31, 2017
Aug. 31, 2017
Nov. 30, 2016
Sep. 30, 2017
Dec. 31, 2015
Dec. 31, 2014
PUCT Proceeding - Appeal of the Texas 2015 Electric Rate Case Decision            
Public Utilities, General Disclosures [Line Items]            
Public Utilities, Requested Rate Increase (Decrease), Amount           $ 42.1
PUCT Proceeding - Texas 2017 Electric Rate Case            
Public Utilities, General Disclosures [Line Items]            
Public Utilities, Requested Rate Increase (Decrease), Amount   $ 66.4        
Public Utilities, Requested Rate Increase (Decrease), Percentage   7.10%        
Public Utilities, Number of Months in Test Year   12 months        
Public Utilities, Number of Months in Test Year which are Estimated   3 months        
Public Utilities, Requested Return on Equity, Percentage   10.25%        
Public Utilities, Requested Rate Base, Amount   $ 1,900.0        
Public Utilities, Requested Equity Capital Structure, Percentage   53.97%        
NMPRC Proceeding - New Mexico 2016 Electric Rate Case            
Public Utilities, General Disclosures [Line Items]            
Public Utilities, Requested Rate Increase (Decrease), Amount     $ 41.4      
Public Utilities, Requested Rate Increase (Decrease), Percentage     10.90%      
Public Utilities, Requested Return on Equity, Percentage     10.10%      
Public Utilities, Requested Rate Base, Amount     $ 832.0      
Public Utilities, Requested Equity Capital Structure, Percentage     53.97%      
Public Utility Commission of Texas (PUCT) | PUCT Proceeding - Appeal of the Texas 2015 Electric Rate Case Decision            
Public Utilities, General Disclosures [Line Items]            
Public Utilities, Approved Rate Decrease, Net of Rate Case Expenses         $ 4.0  
Subsequent Event | PUCT Proceeding - Texas 2017 Electric Rate Case            
Public Utilities, General Disclosures [Line Items]            
Public Utilities, Revised Requested Rate Increase $ 54.6          
Public Utilities, Revised Requested Rate Increase, Percentage 5.80%          
Public Utilities, Rate Case Expenses Addressed in Separate Proceeding $ 4.4          
Public Utilities, Revised Incremental revenue request 69.2          
Transmission Cost Recovery Factory (TCRF) Rider | Subsequent Event | PUCT Proceeding - Texas 2017 Electric Rate Case            
Public Utilities, General Disclosures [Line Items]            
Public Utilities, Rider Conversion to Base Rates [1] $ 14.6          
SPS | Southwest Power Pool (SPP) | SPP Open Access Transmission Tariff Upgrade Costs            
Public Utilities, General Disclosures [Line Items]            
Public Utilities, Billed Charges For Transmission Service Upgrades     $ 12.8      
Public Utilities, Length of Payment Period Requested, In Years       5 years    
Public Utilities, Monthly Billed Charges For Transmission Service Upgrades       $ 0.5    
[1] (a) The roll-in of the TCRF rider revenue into base rates will not have an impact on customer bills or total revenue as these costs are already being recovered through the rider. SPS can request another TCRF rider after the conclusion of this rate case to recover transmission investments subsequent to June 30, 2017.
v3.8.0.1
Commitments and Contingencies, Purchased Power Agreements (Details) - Independent Power Producing Entities - MW
 9 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Purchased Power Agreements [Abstract]    
Generating capacity (in MW) 897 897
Purchase Power Agreement Expiration (year) 2041  
v3.8.0.1
Commitments and Contingencies, Environmental Contingencies - Unrecorded Unconditional Purchase Obligation (Details)
$ in Millions
 9 Months Ended
Sep. 30, 2017
USD ($)
Clean Power Plan [Member]  
Unrecorded Unconditional Purchase Obligation [Line Items]  
Length of Public Comment Period 60 days
Regional Haze Rules  
Environmental Requirements [Abstract]  
Number of units receiving allocated allowances under program 3
Harrington Units 1 and 2 [Member] | Capital Addition Purchase Commitments | Regional Haze Rules  
Environmental Requirements [Abstract]  
Liability for estimated cost to comply with regulation $ 400
Tolk Units 1 and 2 [Member] | Capital Addition Purchase Commitments | Regional Haze Rules  
Environmental Requirements [Abstract]  
Liability for estimated cost to comply with regulation $ 600
v3.8.0.1
Borrowings and Other Financing Instruments, Short-Term Borrowings (Details) - USD ($)
 3 Months Ended 12 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Short-term Debt [Line Items]    
Amount outstanding at period end $ 0 $ 50,000,000
Money Pool    
Short-term Debt [Line Items]    
Borrowing limit 100,000,000 100,000,000
Amount outstanding at period end 0 0
Average amount outstanding 37,000,000 28,000,000
Maximum amount outstanding $ 100,000,000 $ 100,000,000
Weighted average interest rate, computed on a daily basis (percentage) 1.10% 0.67%
Commercial Paper    
Short-term Debt [Line Items]    
Borrowing limit $ 400,000,000 $ 400,000,000
Amount outstanding at period end 0 50,000,000
Average amount outstanding 36,000,000 43,000,000
Maximum amount outstanding $ 106,000,000 $ 140,000,000
Weighted average interest rate, computed on a daily basis (percentage) 1.37% 0.67%
Weighted average interest rate at period end (percentage)   0.95%
v3.8.0.1
Borrowings and Other Financing Instruments, Letters of Credit (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Line of Credit Facility [Line Items]    
Amount outstanding at period end $ 0 $ 50,000
Letter of Credit    
Line of Credit Facility [Line Items]    
Amount outstanding at period end $ 2,000 $ 5,000
Letter of Credit | Letter of Credit    
Line of Credit Facility [Line Items]    
Term of letters of credit (in years) 1 year  
v3.8.0.1
Borrowings and Other Financing Instruments, Credit Facility (Details) - Credit Facility - USD ($)
 9 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Line of Credit Facility [Line Items]    
Credit Facility [1] $ 400,000,000  
Drawn [2] 3,000,000  
Available $ 397,000,000  
Maturity Date Jun. 30, 2021  
Direct advances on the credit facility outstanding $ 0 $ 0
[1] This credit facility expires in June 2021.
[2] Includes outstanding commercial paper and letters of credit.
v3.8.0.1
Borrowings and Other Financing Instruments Borrowings and Other Financing Instruments, Long-Term Borrowings (Details) - SPS - USD ($)
 1 Months Ended
Aug. 30, 2017
Aug. 31, 2017
Series Due Dec. 1, 2018 | Bonds    
Debt Instrument [Line Items]    
Debt Instrument, Interest Rate, Stated Percentage 8.75%  
Debt Instrument, Maturity Date Dec. 01, 2018  
Debt Repayment, Amount $ 250,000,000  
Redemption Premium $ 21,600,000  
Bonds | Series Due August 15, 2047    
Debt Instrument [Line Items]    
Debt Instrument, Face Amount   $ 450,000,000
Debt Instrument, Interest Rate, Stated Percentage   3.70%
Debt Instrument, Maturity Date   Aug. 15, 2047
v3.8.0.1
Fair Value of Financial Assets and Liabilities, Derivative Instruments (Details)
MWh in Thousands, $ in Millions
Sep. 30, 2017
USD ($)
MWh
Dec. 31, 2016
MWh
Credit Concentration Risk | Municipal or Cooperative Entities or Other Utilities [Member]    
Consideration of Credit Risk and Concentrations [Abstract]    
Number of most significant counterparties for wholesale, trading and non-trading commodity activities with credit exposure 8  
Credit Concentration Risk | No Investment Grade Ratings from External Credit Rating Agencies [Member]    
Consideration of Credit Risk and Concentrations [Abstract]    
Number of most significant counterparties for wholesale, trading and non-trading commodity activities with credit exposure 5  
Wholesale, trading and non-trading commodity credit exposure for the most significant counterparties $ 9.2  
Percentage of wholesale, trading and non-trading commodity credit exposure for the most significant counterparties (in hundredths) 20.00%  
Credit Concentration Risk | Internal Noninvestment Grade [Member]    
Consideration of Credit Risk and Concentrations [Abstract]    
Number of most significant counterparties for wholesale, trading and non-trading commodity activities with credit exposure 1  
Credit Concentration Risk | Credit Quality Less Than Investment Grade [Member]    
Consideration of Credit Risk and Concentrations [Abstract]    
Wholesale, trading and non-trading commodity credit exposure for the most significant counterparties $ 0.2  
Percentage of wholesale, trading and non-trading commodity credit exposure for the most significant counterparties (in hundredths) 1.00%  
Credit Concentration Risk | External Credit Rating, Investment Grade [Member]    
Consideration of Credit Risk and Concentrations [Abstract]    
Number of most significant counterparties for wholesale, trading and non-trading commodity activities with credit exposure 2  
Wholesale, trading and non-trading commodity credit exposure for the most significant counterparties $ 15.3  
Percentage of wholesale, trading and non-trading commodity credit exposure for the most significant counterparties (in hundredths) 33.00%  
Electric Commodity (in megawatt hours)    
Gross Notional Amounts of Commodity FTRs [Abstract]    
Derivative, Nonmonetary Notional amount | MWh [1] 6,183 2,685
[1] (a) Amounts are not reflective of net positions in the underlying commodities.
v3.8.0.1
Fair Value of Financial Assets and Liabilities, Impact of Derivative Activity (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Financial Impact of Qualifying Fair Value Hedges on Earnings [Abstract]        
Derivative instruments designated as fair value hedges $ 0 $ 0 $ 0 $ 0
Recognized gains (losses) from fair value hedges or related hedged transactions 0 0 0 0
Designated as Hedging Instrument | Cash Flow Hedges | Interest Rate        
Impact of Derivative Activity on Accumulated Other Comprehensive Loss, Regulatory Assets and Liabilities, and Income [Abstract]        
Interest Rate Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net   (100,000)   (200,000)
Other Derivative Instruments | Electric Commodity        
Impact of Derivative Activity on Accumulated Other Comprehensive Loss, Regulatory Assets and Liabilities, and Income [Abstract]        
Pre-tax fair value gains (losses) recognized during the period in regulatory (assets) and liabilities (2,500,000) 200,000 (200,000) 2,000,000
Pre-tax (gains) losses reclassified into income during the period from regulatory assets and (liabilities) $ 2,200,000 $ 400,000 $ (100,000) $ 3,700,000
v3.8.0.1
Fair Value of Financial Assets and Liabilities, Fair Value Measurements (Details) - USD ($)
Sep. 30, 2017
Dec. 31, 2016
Derivatives, Fair Value [Line Items]    
Derivative Asset, Collateral, Obligation to Return Cash, Offset $ 0 $ 0
Derivative Liability, Collateral, Right to Reclaim Cash, Offset 0 0
Other Current Assets    
Derivatives, Fair Value [Line Items]    
Derivative Asset, Fair Value, Gross Asset 23,597,000 5,114,000
Other Noncurrent Assets    
Derivatives, Fair Value [Line Items]    
Derivative Asset, Fair Value, Gross Asset 19,743,000 22,113,000
Other Current Liabilities    
Derivatives, Fair Value [Line Items]    
Derivative Liability, Fair Value, Gross Liability 3,565,000 3,565,000
Other Noncurrent Liabilities    
Derivatives, Fair Value [Line Items]    
Derivative Liability, Fair Value, Gross Liability 20,840,000 23,513,000
Fair Value Measured on a Recurring Basis | Other Current Assets    
Derivatives, Fair Value [Line Items]    
Derivative Asset, Fair Value, Gross Asset 20,438,000 1,955,000
Derivative Asset, Fair Value, Gross Liability and Obligation to Return Cash, Offset (2,580,000) [1] (1,299,000) [2]
Fair Value Measured on a Recurring Basis | Other Current Assets | Other Derivative Instruments | Electric Commodity    
Derivatives, Fair Value [Line Items]    
Derivative Asset, Fair Value, Gross Asset 20,438,000 1,955,000
Derivative Asset, Fair Value, Gross Liability and Obligation to Return Cash, Offset (2,580,000) [1] (1,299,000) [2]
Fair Value Measured on a Recurring Basis | Other Current Liabilities    
Derivatives, Fair Value [Line Items]    
Derivative Liability, Fair Value, Gross Liability 0 0
Derivative Liability, Fair Value, Gross Asset and Right to Reclaim Cash, Offset (2,580,000) [1] (1,299,000) [2]
Fair Value Measured on a Recurring Basis | Other Current Liabilities | Other Derivative Instruments | Electric Commodity    
Derivatives, Fair Value [Line Items]    
Derivative Liability, Fair Value, Gross Liability 0 0
Derivative Liability, Fair Value, Gross Asset and Right to Reclaim Cash, Offset (2,580,000) [1] (1,299,000) [2]
Fair Value Measured on a Recurring Basis | Level 1 | Other Current Assets    
Derivatives, Fair Value [Line Items]    
Derivative Asset, Fair Value, Gross Asset 0 0
Fair Value Measured on a Recurring Basis | Level 1 | Other Current Assets | Other Derivative Instruments | Electric Commodity    
Derivatives, Fair Value [Line Items]    
Derivative Asset, Fair Value, Gross Asset 0 0
Fair Value Measured on a Recurring Basis | Level 1 | Other Current Liabilities    
Derivatives, Fair Value [Line Items]    
Derivative Liability, Fair Value, Gross Liability 0 0
Fair Value Measured on a Recurring Basis | Level 1 | Other Current Liabilities | Other Derivative Instruments | Electric Commodity    
Derivatives, Fair Value [Line Items]    
Derivative Liability, Fair Value, Gross Liability 0 0
Fair Value Measured on a Recurring Basis | Level 2 | Other Current Assets    
Derivatives, Fair Value [Line Items]    
Derivative Asset, Fair Value, Gross Asset 0 0
Fair Value Measured on a Recurring Basis | Level 2 | Other Current Assets | Other Derivative Instruments | Electric Commodity    
Derivatives, Fair Value [Line Items]    
Derivative Asset, Fair Value, Gross Asset 0 0
Fair Value Measured on a Recurring Basis | Level 2 | Other Current Liabilities    
Derivatives, Fair Value [Line Items]    
Derivative Liability, Fair Value, Gross Liability 0 0
Fair Value Measured on a Recurring Basis | Level 2 | Other Current Liabilities | Other Derivative Instruments | Electric Commodity    
Derivatives, Fair Value [Line Items]    
Derivative Liability, Fair Value, Gross Liability 0 0
Fair Value Measured on a Recurring Basis | Level 3 | Other Current Assets    
Derivatives, Fair Value [Line Items]    
Derivative Asset, Fair Value, Gross Asset 23,018,000 3,254,000
Fair Value Measured on a Recurring Basis | Level 3 | Other Current Assets | Other Derivative Instruments | Electric Commodity    
Derivatives, Fair Value [Line Items]    
Derivative Asset, Fair Value, Gross Asset 23,018,000 3,254,000
Fair Value Measured on a Recurring Basis | Level 3 | Other Current Liabilities    
Derivatives, Fair Value [Line Items]    
Derivative Liability, Fair Value, Gross Liability 2,580,000 1,299,000
Fair Value Measured on a Recurring Basis | Level 3 | Other Current Liabilities | Other Derivative Instruments | Electric Commodity    
Derivatives, Fair Value [Line Items]    
Derivative Liability, Fair Value, Gross Liability 2,580,000 1,299,000
Fair Value, Measurements, Nonrecurring | Other Current Assets | Purchased Power Agreements    
Derivatives, Fair Value [Line Items]    
Derivative Asset, Fair Value, Gross Asset 3,159,000 [3] 3,159,000 [4]
Fair Value, Measurements, Nonrecurring | Other Noncurrent Assets | Purchased Power Agreements    
Derivatives, Fair Value [Line Items]    
Derivative Asset, Fair Value, Gross Asset 19,743,000 [3] 22,113,000 [4]
Fair Value, Measurements, Nonrecurring | Other Current Liabilities | Purchased Power Agreements    
Derivatives, Fair Value [Line Items]    
Derivative Liability, Fair Value, Gross Liability 3,565,000 [3] 3,565,000 [4]
Fair Value, Measurements, Nonrecurring | Other Noncurrent Liabilities | Purchased Power Agreements    
Derivatives, Fair Value [Line Items]    
Derivative Liability, Fair Value, Gross Liability 20,840,000 [3] 23,513,000 [4]
Estimate of Fair Value Measurement [Member] | Fair Value Measured on a Recurring Basis | Other Current Assets    
Derivatives, Fair Value [Line Items]    
Derivative Asset, Fair Value, Gross Asset 23,018,000 3,254,000
Estimate of Fair Value Measurement [Member] | Fair Value Measured on a Recurring Basis | Other Current Assets | Other Derivative Instruments | Electric Commodity    
Derivatives, Fair Value [Line Items]    
Derivative Asset, Fair Value, Gross Asset 23,018,000 3,254,000
Estimate of Fair Value Measurement [Member] | Fair Value Measured on a Recurring Basis | Other Current Liabilities    
Derivatives, Fair Value [Line Items]    
Derivative Liability, Fair Value, Gross Liability 2,580,000 1,299,000
Estimate of Fair Value Measurement [Member] | Fair Value Measured on a Recurring Basis | Other Current Liabilities | Other Derivative Instruments | Electric Commodity    
Derivatives, Fair Value [Line Items]    
Derivative Liability, Fair Value, Gross Liability $ 2,580,000 $ 1,299,000
[1] SPS nets derivative instruments and related collateral in its balance sheet when supported by a legally enforceable master netting agreement, and all derivative instruments and related collateral amounts were subject to master netting agreements at Sept. 30, 2017. At Sept. 30, 2017, derivative assets and liabilities include no obligations to return cash collateral or rights to reclaim cash collateral. The counterparty netting amounts presented exclude settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements.
[2] SPS nets derivative instruments and related collateral in its balance sheet when supported by a legally enforceable master netting agreement, and all derivative instruments and related collateral amounts were subject to master netting agreements at Dec. 31, 2016. At Dec. 31, 2016, derivative assets and liabilities include no obligations to return cash collateral or rights to reclaim cash collateral. The counterparty netting amounts presented exclude settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements.
[3] During 2006, SPS qualified these contracts under the normal purchase exception. Based on this qualification, the contracts are no longer adjusted to fair value and the previous carrying value of these contracts will be amortized over the remaining contract lives along with the offsetting regulatory assets and liabilities.
[4] During 2006, SPS qualified these contracts under the normal purchase exception. Based on this qualification, the contracts are no longer adjusted to fair value and the previous carrying value of these contracts will be amortized over the remaining contract lives along with the offsetting regulatory assets and liabilities.
v3.8.0.1
Fair Value of Financial Assets and Liabilities Fair Value of Financial Assets and Liabilities, Changes in Level 3 Commodity Derivatives (Details) - Commodity Contract - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]        
Balance at beginning of period $ 28,665,000 $ 1,070,000 $ 1,955,000 $ 5,060,000
Purchases 43,000 274,000 39,376,000 5,426,000
Settlements (9,939,000) (7,822,000) (40,437,000) (22,438,000)
Net gains recognized as regulatory assets and liabilities 1,669,000 6,614,000 19,544,000 12,088,000
Balance at end of period 20,438,000 136,000 20,438,000 136,000
Transfers into Level 3 0 0 0 0
Transfers out of Level 3 $ 0 $ 0 $ 0 $ 0
v3.8.0.1
Fair Value of Financial Assets and Liabilities, Fair Value of Long-Term Debt (Details) - USD ($)
$ in Thousands
Sep. 30, 2017
Dec. 31, 2016
Carrying Amount    
Financial Liabilities, Balance Sheet Groupings [Abstract]    
Long-term debt, including current portion $ 1,829,965 $ 1,635,858
Fair Value    
Financial Liabilities, Balance Sheet Groupings [Abstract]    
Long-term debt, including current portion $ 1,954,618 $ 1,741,502
v3.8.0.1
Other Income, Net (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Other Income and Expenses [Abstract]        
Interest income $ 296 $ 400 $ 488 $ 579
Other Nonoperating Income 1 0 0 16
Insurance policy expense (12) (32) (36) (32)
Other nonoperating expense 0 (231) 0 0
Other income, net $ 285 $ 137 $ 452 $ 563
v3.8.0.1
Benefit Plans and Other Postretirement Benefits (Details)
$ in Thousands
 1 Months Ended 3 Months Ended 9 Months Ended
Jan. 31, 2017
USD ($)
Plan
Sep. 30, 2017
USD ($)
Sep. 30, 2016
USD ($)
Sep. 30, 2017
USD ($)
Sep. 30, 2016
USD ($)
Pension Plan [Member]          
Components of Net Periodic Benefit Cost (Credit) [Abstract]          
Service cost   $ 2,439 $ 2,440 $ 7,319 $ 7,320
Interest cost   4,928 5,315 14,783 15,945
Expected return on plan assets   (6,971) (6,901) (20,913) (20,703)
Amortization of prior service cost (credit)   0 0 0 0
Amortization of net loss (gain)   3,245 2,997 9,735 8,991
Net periodic benefit cost (credit)   3,641 3,851 10,924 11,553
Defined Benefit Plan Credits Not Recognized Due To Effects of Regulation   553 637 1,275 1,353
Net benefit cost (credit) recognized for financial reporting   4,194 4,488 12,199 12,906
Total contributions to the pension plans during the period $ 23,000        
Pension Plan [Member] | Xcel Energy Inc.          
Components of Net Periodic Benefit Cost (Credit) [Abstract]          
Total contributions to the pension plans during the period $ 150,000        
Number of Xcel Energy's pension plans to which contributions were made | Plan 4        
Other Postretirement Benefits Plan [Member]          
Components of Net Periodic Benefit Cost (Credit) [Abstract]          
Service cost   219 194 657 582
Interest cost   415 455 1,245 1,365
Expected return on plan assets   (589) (594) (1,767) (1,782)
Amortization of prior service cost (credit)   (100) (100) (300) (300)
Amortization of net loss (gain)   (155) (146) (465) (438)
Net periodic benefit cost (credit)   (210) (191) (630) (573)
Defined Benefit Plan Credits Not Recognized Due To Effects of Regulation   0 0 0 0
Net benefit cost (credit) recognized for financial reporting   $ (210) $ (191) $ (630) $ (573)
v3.8.0.1
Other Comprehensive Income (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]        
Accumulated other comprehensive loss at beginning of period     $ 1,931,696  
Losses reclassified from net accumulated other comprehensive loss $ 26 $ 44 75 $ 129
Accumulated other comprehensive loss at end of period 2,025,733   2,025,733  
Gains and Losses on Cash Flow Hedges        
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]        
Accumulated other comprehensive loss at beginning of period (659) (732) (678) (817)
Other comprehensive income (loss) before reclassifications   0   0
Losses reclassified from net accumulated other comprehensive loss 10 44 29 129
Net current period other comprehensive income 10 44 29 129
Accumulated other comprehensive loss at end of period (649) (688) (649) (688)
Defined Benefit Pension and Postretirement Items        
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]        
Accumulated other comprehensive loss at beginning of period (582) (441) (612) (464)
Other comprehensive income (loss) before reclassifications   12   35
Losses reclassified from net accumulated other comprehensive loss 16 0 46 0
Net current period other comprehensive income 16 12 46 35
Accumulated other comprehensive loss at end of period (566) (429) (566) (429)
Total        
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]        
Accumulated other comprehensive loss at beginning of period (1,241) (1,173) (1,290) (1,281)
Other comprehensive income (loss) before reclassifications   12   35
Losses reclassified from net accumulated other comprehensive loss 26 44 75 129
Net current period other comprehensive income 26 56 75 164
Accumulated other comprehensive loss at end of period $ (1,215) $ (1,117) $ (1,215) $ (1,117)
v3.8.0.1
Other Comprehensive Income (Reclassifications from AOCI) (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Total, pre-tax $ (105,050) $ (103,210) $ (199,908) $ (189,024)
Tax benefit 37,269 34,864 71,710 65,944
Total amounts reclassified, net of tax 26 44 75 129
Gains and Losses on Cash Flow Hedges        
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Total amounts reclassified, net of tax 10 44 29 129
Gains and Losses on Cash Flow Hedges | Amounts Reclassified from Accumulated Other Comprehensive Loss        
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Total, pre-tax 16 69 47 203
Tax benefit (6) (25) (18) (74)
Total, net of tax 10 44 29 129
Gains and Losses on Cash Flow Hedges | Interest Rate Derivatives | Amounts Reclassified from Accumulated Other Comprehensive Loss        
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Interest charges [1] 16 69 47 203
Amortization of net loss | Amounts Reclassified from Accumulated Other Comprehensive Loss        
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Total, pre-tax [2] 24 0 72 0
Defined Benefit Pension and Postretirement Items        
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Total amounts reclassified, net of tax 16 0 46 0
Defined Benefit Pension and Postretirement Items | Amounts Reclassified from Accumulated Other Comprehensive Loss        
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Total, pre-tax 24 0 72 0
Tax benefit (8) 0 (26) 0
Total amounts reclassified, net of tax $ 16 $ 0 $ 46 $ 0
[1] Included in interest charges.
[2] Included in the computation of net periodic pension and postretirement benefit costs. See Note 10 for details regarding these benefit plans.