Borrowings and Other Financing Instruments

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Borrowings and Other Financing Instruments

ort-Term Borrowings

NSP-Minnesota meets its short-term liquidity requirements primarily through the issuance of commercial paper and borrowings under its credit facility and the money pool.

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 NSP-Minnesota were as follows:

(Millions of Dollars, Except Interest Rates)	Three Months Ended Dec. 31, 2019			Year Ended Dec. 31
				2019			2018			2017
Borrowing limit	$	250		$	250		$	250		$	250
Amount outstanding at period end	—			—			—			85
Average amount outstanding	34			32			17			25
Maximum amount outstanding	119			250			143			142
Weighted average interest rate, computed on a daily basis	1.67		%	2.05		%	1.96		%	1.14		%
Weighted average interest rate at period end	N/A			N/A			N/A			1.18

Commercial Paper — Commercial paper outstanding for NSP-Minnesota was as follows:

(Millions of Dollars, Except Interest Rates)	Three Months Ended Dec. 31, 2019			Year Ended Dec. 31
				2019			2018			2017
Borrowing limit	$	500		$	500		$	500		$	500
Amount outstanding at period end	30			30			150			20
Average amount outstanding	2			71			38			62
Maximum amount outstanding	30			317			198			237
Weighted average interest rate, computed on a daily basis	2.05		%	2.59		%	2.08		%	1.10		%
Weighted average interest rate at end of period	2.05			2.05			2.97			1.93

Letters of Credit — NSP-Minnesota uses letters of credit, typically with terms of one year, to provide financial guarantees for certain operating obligations. At Dec. 31, 2019 and 2018, there were $10 million and $37 million of letters of credit outstanding, respectively, 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, NSP-Minnesota 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 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.

Amended Credit Agreement — In June 2019, NSP-Minnesota entered into an amended five-year credit agreement with a syndicate of banks. The amended credit agreements have substantially the same terms and conditions as the prior credit agreements with the exception of the maturity, which was extended from June 2021 to June 2024.

Features of NSP-Minnesota’s credit facility:

Debt-to-Total Capitalization Ratio (a)				Amount Facility May Be Increased (millions)		Additional Periods for Which a One-Year Extension May Be Requested (b)
2019		2018
48	%	48	%	$	100	2

^(a)  The credit facility has a financial covenant requiring that the debt-to-total capitalization ratio be less than or equal to 65%.

^(b)  All extension requests are subject to majority bank group approval.

The credit facility has a cross-default provision that NSP-Minnesota will be in default on its borrowings under the facility if it or any of its subsidiaries whose total assets exceed 15% of NSP-Minnesota’s consolidated total assets, default on indebtedness in an aggregate principal amount exceeding $75 million.

If NSP-Minnesota does not comply with the covenant, an event of default may be declared, and if not remedied, any outstanding amounts due under the facility can be declared due by the lender. As of Dec. 31, 2019, NSP-Minnesota was in compliance with all financial covenants on its debt agreements.

NSP-Minnesota had the following committed credit facilities available as of Dec. 31, 2019 (in millions):

Credit Facility (a)		Drawn (b)		Available
$	500	$	40	$	460

^(a)  This credit facility matures in June 2024 .

^(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. NSP-Minnesota had no direct advances on the facility outstanding at Dec. 31, 2019 and 2018.

Bilateral Credit Agreement

In March 2019, NSP-Minnesota entered into a one-year uncommitted bilateral credit agreement. This facility is limited in use to support letters of credit.

As of Dec. 31, 2019, NSP-Minnesota’s outstanding letters of credit under the Bilateral Credit Agreement were as follows (in millions):

Limit		Amount Used		Available
$	75	$	22	$	53

Long-Term Borrowings and Other Financing Instruments

Generally, all property of NSP-Minnesota is subject to the lien of its first mortgage indenture. Debt premiums, discounts and expenses are amortized over the life of the related debt. The premiums, discounts and expenses for refinanced debt are deferred and amortized over the life of the new issuance.

Long term debt obligations for NSP-Minnesota as of Dec. 31 (millions of dollars):

Financing Instrument	Interest Rate		Maturity Date	2019			2018
First mortgage bonds	2.20	%	Aug. 15, 2020	$	300		$	300
First mortgage bonds	2.15	%	Aug. 15, 2022	300			300
First mortgage bonds	2.60	%	May 15, 2023	400			400
First mortgage bonds	7.13	%	July 1, 2025	250			250
First mortgage bonds	6.50	%	March 1, 2028	150			150
First mortgage bonds	5.25	%	July 15, 2035	250			250
First mortgage bonds	6.25	%	June 1, 2036	400			400
First mortgage bonds	6.20	%	July 1, 2037	350			350
First mortgage bonds	5.35	%	Nov. 1, 2039	300			300
First mortgage bonds	4.85	%	Aug. 15, 2040	250			250
First mortgage bonds	3.40	%	Aug. 15, 2042	500			500
First mortgage bonds	4.13	%	May 15, 2044	300			300
First mortgage bonds	4.00	%	Aug. 15, 2045	300			300
First mortgage bonds	3.60	%	May 15, 2046	350			350
First mortgage bonds	3.60	%	Sept. 15, 2047	600			600
First mortgage bonds (a)	2.90	%	March 1, 2050	600			—
Unamortized discount				(31		)	(21		)
Unamortized debt issuance cost				(48		)	(42		)
Current maturities				(300		)	—
Total long-term debt				$	5,221		$	4,937

^(a)  2019 financing

Maturities of long-term debt are as follows:

(Millions of Dollars)
2020	$	300
2021	—
2022	300
2023	400
2024	—

Deferred Financing Costs — Deferred financing costs of approximately $48 million and $42 million, net of amortization, are presented as a deduction from the carrying amount of long-term debt at Dec. 31, 2019 and 2018, respectively.

Dividend Restrictions — NSP-Minnesota’s dividends are subject to the FERC’s jurisdiction, which prohibits the payment of dividends out of capital accounts. Dividend payments are solely to be paid from retained earnings.

NSP-Minnesota’s state regulatory commissions additionally impose dividend limitations, which are more restrictive than those imposed by the FERC.

Requirements and actuals as of Dec. 31, 2019:

Equity to Total Capitalization Ratio - Required Range				Equity to Total Capitalization Ratio - Actual
Low		High		2019
47.1	%	57.5	%	52.3	%

Unrestricted Retained Earnings			Total Capitalization			Limit on Total Capitalization
$	1.1	billion	$	11.6	billion	$	12.7	billion