1

SPS Initial Public Advisory Meeting

July 15, 2014

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Agenda

� SPS System Overview

� 2014 RPS Filing Update

� Overview of 2012 IRP

� Discussion of SE NM Load Growth

� Questions / Next Meeting

3

Overview of Xcel Energy and SPSin New Mexico and Texas

Overview of Xcel Energy and SPSin New Mexico and Texas

Brian Fleming

Regulatory Consultant – Resource Planning

4

Overview of SPS

� Southwestern Public Service Company (SPS)

� Electric investor-owned electric utility operating in Texas & New Mexico

� SPS is a wholly-owned subsidiary of Xcel Energy Inc.

� SPS does business under the ‘Xcel Energy’ brand

5

Corporate Structure

NSPMinnesota

Electric & gas

PSCoColorado

Electric & gas

SPSNM & TXElectric

NSP-WWisconsin

Electric & gas

Xcel EnergyUtility holding company

6

Xcel Energy Operations

XCEL ENERGY

Electric Customers 3.4 million

Gas Customers 1.9 million

XCEL ENERGY

Electric Customers 3.4 million

Gas Customers 1.9 million

7

SPS Today

� Customers: 383,000

�267,000 in Texas

�116,000 in New Mexico

� Employees: 1,100

� Communities Served:

�82 in Texas

�11 in New Mexico

� Low Rates

� High Reliability

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More than a century of service

� Started in 1904 as Roswell Electric Light Co.

� Became Roswell Public Service Co. in 1921

� Moved into Texas Panhandle in 1925 and became Southwestern Public Service Company

� Integrated and connected to other towns in NM and TX over a number of years

� Merged with Public Service Co. of Colorado in 1997 to form New Century Energies

� New Century and Northern States Power Co. combined in 2000 to form Xcel Energy

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Customer Composition

� Customers Classes Served

�15.7% Residential

�53.8% Commercial & Industrial

�28.5% Wholesale

�2.0% Public Authorities, Street Lighting, & Area Lighting

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Jurisdictional Composition

� SPS operates its system as an integrated whole and allocates costs to all system customers

� SPS serves in three customer jurisdictions:

�Texas retail – 52.8% of sales

�Wholesale – 28.5%

�New Mexico retail – 18.7%

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Regulators

� New Mexico

� New Mexico Public Regulation Commission (NMPRC)

� Consists of five elected commissioners

� Texas

� Public Utility Commission of Texas (PUCT)

� Consists of three appointed commissioners

� Created in 1975

� Wholesale

� Federal Energy Regulatory Commission (FERC)

� Consist of five appointed commissioners

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Activities regulated

� Rates and tariffs

� Issuance of securities

� Affiliate transactions

� Construction of new facilities

�Power plants

�Transmission lines

� Service areas

13

Power Plants

14

SPS Transmission System

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Xcel Energy – A Renewable Leader

� No. 1 wind-purchasing utility in the nation

� 5,753 megawatts at end of 2013

� Approx. 1,150 megawatts of hydro power

� Approx. 300 megawatts of refuse-derived and biomass energy

� Approx. 310 megawatts of solar generation

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SPS Sources of Wind Power

� 80 MW Llano Estacado Wind Ranch – White Deer, TX

� 80 MW Caprock Wind Ranch - Tucumcari, NM

� 120 MW San Juan Mesa facility - Elida, NM

� 160 MW Wildorado Wind Ranch - Wildorado, TX

� 160 MW Spinning Spur Wind Ranch - Wildorado, TX

� Approximately 283 MW other smaller facilities

Total wind interconnected – ≈ 1800 megawatts

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SPS’s Environmental Commitment

� Nichols-Harrington complex near Amarillo began using treated municipal sewage effluent in 1961

� Jones Station near Lubbock, began using treated municipal sewage effluent in 1973

� Since 1960, we have saved more than 178 billion gallons of fresh water at these facilities

� In 2004, we signed a contract with Amarillo to purchase an additional, ongoing supply of effluent

� Lea Power Plant is dry cooled, reducing water usage

� Commitment to and long record of exceeding clean air standards

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Summary of SPS 2014 RPS Filing and 2012 IRP Filing

Summary of SPS 2014 RPS Filing and 2012 IRP Filing

Craig Berg

Sr. Resource Planning Analyst

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SPS 2014 RPS Filing Summary

� Filed July 1, 2014

� Currently meeting 2015-16 Total RPS Requirements

� Currently meeting 2015 Diversity Requirements for Wind, DG, and Discretionary resource categories

� Not meeting 2015 Solar & Other Diversity Requirements

� Reasonable Cost Threshold (3%) currently exceeded and would be negatively impacted by the addition of solar and/other renewable energy resources

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Forecasted RPS Need & Position2015 2016 2017 2018 2019 2020

Projected NM Retail Sales (MWh) 5444310 6334718 7542925 8049766 8531423 9013790

Total RPS Requirement 623321 735874 876226 935103 991055 1330813

Requirements

Wind Diversity (30% of RPS) 186996 220762 262868 280531 297316 399244

Solar Diversity (20% of RPS) 124664 147175 175245 187021 198211 266163

DG Diversity (3% RPS) 18700 22076 26287 28053 29732 39924

"Other" Diversity (5% RPS) 31166 36794 43811 46755 49553 66541

Discretionary 261795 309067 368015 392743 416243 558941

Total 623321 735874 876226 935103 991055 1330813

Purchases

Wind/Discretionary 697070 698040 697070 697070 697070 698040

Solar 115930 115200 114070 113150 112250 111540

DG 13337 13337 13336 13335 13334 13333

Other 0 0 0 0 0 0

Shortfall/Surplus

Wind/Discretionary 248279 168211 66188 23796 (16489) (260145)

Solar (8734) (31975) (61175) (73871) (85961) (154623)

DG (5363) (8739) (12951) (14718) (16398) (26591)

Other (31166) (36794) (43811) (46755) (49553) (66541)

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SPS 2012 IRP Summary

� Filed July 16, 2012

� IRP Action Plan (2013-2016) included:

� Jones Unit 4 CT (Summer 2013)

� Spinning Spur Wind – 160 MW (January 2013)

� 100 MW PPA – GSEC (2013)

� 25 MW PPA – GSEC (2014)

� 200 MW PPA - Calpine 2 (June 2014 – May 2019)

� Deployment of DSM Programs

� Evaluate Moore County retirement

� Current plan – retire Fall 2013

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L&R Reflects 2012 Action Plan2013 2014 2015 2016 2017 2018

Existing Generation 4,365 4,365 4,365 4,365 4,365 4,365

Purchased Capacity:Lea Power Partners (Hobbs, NM) 533 533 533 533 533 533

Blackhawk Plant (Borger, TX) 219 219 219 219 219 219

Calpine 1 (Oneta) 200 200 200 200 200 200

City of Lubbock (Cooke ) 125 125 125 125 125 125

City of Lubbock (Brandon & Massengale) 96 96

Orion 15

Sid Richardson/Huber 9 9 9 9 9 9

GSEC 100 25

Total Thermal 1,297 1,207 1,086 1,086 1,086 1,086

Total Wind 33 33 33 33 33 33

Sun Edison Solar 5 5 5 5 5 5

SPS-PSCo Tieline 101 101 101 101 101 101 Total Purchased Capacity 1,436 1,346 1,225 1,225 1,225 1,225

Expansion Plan:Jones CT 171 171 171 171 171 171

Total Renewable 0.3 6.3 12.5 12.5 12.5 12.5

Total Retirements - (32) (32) (32) (32) (32) Calpine 2 (Oneta) - 200 200 200 200 200

Total Expansion Plan 171 345 352 352 352 352

Net Dependable Capacity 5,972 6,056 5,942 5,942 5,942 5,942

Full Requirements Load:Retail 3,460 3,538 3,622 3,701 3,772 3,845

Total Wholesale 1,321 1,209 1,223 1,240 1,181 1,198

DSM Impact (8) (13) (18) (24) (30) (36)

Interruptibles (32) (38) (45) (51) (57) (60)

Total SPS Firm Load 4,742 4,695 4,782 4,865 4,866 4,947

Total PR Contract Load Oblig 500 500 300 300 200 200

System Peak Responsibility 5,242 5,195 5,082 5,165 5,066 5,147Capacity Margin (%) 12.0% 12.0% 12.0% 12.0% 12.0% 12.0%

Target Capacity (MW) - 12% 715 708 693 704 691 702

Other Reserves-NM Coop 7 7 7 7 17 17

Total Required Reserves 722 715 700 711 708 719

Existing Excess Capacity 731 861 860 776 875 795

Planning Reserve Margin (%) 13.6% 13.6% 13.6% 13.6% 13.6% 13.6%

Capacity Position 2013 2014 2015 2016 2017 2018

Long (Short) 9 146 160 65 167 76

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Extension of Federal PTC (Dec 2015)

� Enabled SPS to acquire through PPAs 700 MW additional economic wind

� Three discrete wind contracts:

� Palo Duro Wind (250 MW) (Beaver County OK – border TX/OK)

� Roosevelt Wind (250 MW) (Roosevelt County NM)

� Mammoth Plains Wind (200 MW) (Blain & Dewey Counties OK)

� Agreements were not pursued for REC compliance purposes

� Each agreement currently exclude REC’s

� Permits purchase of RECS at future date for compliance purposes

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Meeting the Electricity Need in SE New Mexico

Bennie Weeks

Manager, Resource Planning

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Agenda

� Current Situation in SE NM

� Xcel Energy’s Ongoing Response

� Future Plans

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US Power Grids

Area of Interest

2727

Texas Annual Oil Production

300

400500

600700

800900

1,000

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

Year

Mil

lio

ns

of

Ba

rre

ls

Texas Annual Oil Production

New Mexico Annual Oil Production

40

50

60

70

80

90

100

1101981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

Year

Millio

ns o

f

Barr

els

NM Monthly Oil Productiion

Source: http://www.eia.gov

Annual Oil Production Charts for NM and TX

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New Load Diversity

� Projecting 200-700 MW within next 10 years

� Diverse New Loads

� Oil companies and related industries

� Natural gas processing and compression

� Potash mining and processing

� Uranium enrichment

� CO2 injection (oil recovery)

� Related growth in surrounding cities

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Projected Oil and IndustrialLoad Growth

Cumulative SE New Mexico Growth, Mid - Case

691

642593

544494

445

324275

225

96

0

100

200

300

400

500

600

700

800

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Year

Cu

mu

lative L

oad

Gro

wth

, M

W

Oil Loads in MW Non-Oil Loads in MW

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Existing Transmission System in SE New Mexico

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2013 Filed “Intentions to Drill”

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Large Service Requests in SE NM

213631502014*

5722852872013

3241851392012

TotalCarlsbadHobbs

* 3 months

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Distribution Line Construction

Miles constructed --

2011: 20 miles

2012: 45 miles

2013: 120 miles

2014: 230 miles (projected)

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Requests for Service (HP)

8,52820,047

56,550

82,581

17,4160

0

0

39,199

24,425

0

0

11,185

26,310

8,470

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

2010 2011 2012 2013 1Q 2014

Year

Ne

w L

oad

Re

qu

es

ted

, in

HP

Delayed Service

Pending Study

Approved

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� Multidisciplinary Team

� Dramatic Increase in Field Personnel

� Joint Planning

� Aim – “right line at the right time”

Responding to Unprecedented Growth

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Approved Initial Transmission Infrastructure

2018

2018

2018

2018

2015

2016

2015

2015

2018

2017

2020

XPR12

37

Recently New and Substations Being Upgraded in 2014

38

New Substations in 2015

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Expected Final Transmission System 2023+

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L&R – April 2014 Load Forecast2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Existing Generation 4,513 4,513 4,513 4,513 4,513 4,513 4,513 4,513 4,513 4,513 4,513

Total Purchased Power 1,278 1,278 1,278 1,278 761 761 753 753 753 532 532

Total Renewable 33 33 33 33 33 68 68 68 68 68 68

SPS-PSCo Tieline 101 101 101 101 101 101 101 101 101 101 101

Total Purchased Capacity 1,412 1,412 1,412 1,412 895 930 922 922 922 701 701

Total Renewable 0.0 3.0 3.3 3.3 4.3 4.6 5.7 5.7 5.7 5.7 5.7

Total Retirements - - - - (131) (131) (131) (202) (202) (202) (370)

Total Contract Extensions - - - - - - - - - 220 220

Total Expansion Plan - 3 3 3 (127) (126) (125) (196) (196) 24 (144)

Net Dependable Capacity 5,925 5,928 5,928 5,928 5,281 5,317 5,310 5,239 5,239 5,238 5,070

Full Requirements Load:Retail 3,578 3,744 3,945 4,083 4,202 4,322 4,440 4,630 4,750 4,874 4,998

Total Wholesale 1,161 1,196 1,142 1,157 483 494 505 - - - -

DSM Impact (6) (11) (15) (20) (25) (31) (36) (41) (47) (53) (59)

Interruptibles (33) (36) (38) (40) (41) (43) (44) (45) (47) (48) (47)

Total SPS Firm Load 4,699 4,893 5,033 5,180 4,618 4,743 4,865 4,543 4,656 4,773 4,892

Total Partial Requirements Oblig 300 300 200 200 170 172 174 326 328 280 283

System Peak Responsibility 4,999 5,193 5,233 5,380 4,788 4,915 5,040 4,869 4,985 5,054 5,174 Capacity Margin Required by SPP (%) 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0%

Target Capacity (MW) - 12% 682 708 714 734 653 670 687 664 680 689 706

Other Reserves = NM Coops 7 7 13 13 13 13 13 - - - -

Total Required Reserves 689 715 727 747 666 683 700 664 680 689 706

Actual Existing Excess Capacity 926 735 695 549 493 401 270 370 254 184 (105)

Planning Reserve Margin (%) 13.6% 13.6% 13.6% 13.6% 13.6% 13.6% 13.6% 13.6% 13.6% 13.6% 13.6%

Capacity Position 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Long (Short) 237 19 (31) (198) (172) (282) (430) (294) (426) (505) (810)

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Information

www.PowerForThePlains.com

For more information on the overall transmission plan and individual projects:

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Questions and Discussion

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ConclusionConclusion

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IRP Information

� Web Page

�http://www.xcelenergy.com/About_Us/Rates_&_Regulations/Resource_Plans

� Brian Fleming – Xcel Energy/SPS Contact

�Address - 600 S. Tyler, Suite 2900, Amarillo TX 79101

�Phone - (806) 378-2460

�Email – brian.fleming@xcelenergy.com

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Next Meeting

� Date:

� Thursday, September 25, 2014

� Time:

� 10:00am to 12:00pm (Mountain Time)

� Location:

� Webinar meeting

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