Fair Value of Financial Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2015

Cost and Fair Value of Nuclear Decommissioning Fund Investments

The following tables present the cost and fair value of Xcel Energy’s non-derivative instruments with recurring fair value measurements in the nuclear decommissioning fund at Dec. 31, 2015 and 2014:



	Dec. 31, 2015
			Fair Value
(Thousands of Dollars)	Cost		Level 1		Level 2		Level 3		Total
Nuclear decommissioning fund ^(a)
Cash equivalents	$	27,484	$	27,484	$	—	$	—	$	27,484
Commingled funds	392,838		—		410,634		—		410,634
International equity funds	259,114		—		231,122		—		231,122
Private equity investments	105,965		—		—		157,528		157,528
Real estate	61,816		—		—		84,750		84,750
Debt securities:
Government securities	24,444		—		21,356		—		21,356
U.S. corporate bonds	73,061		—		65,276		—		65,276
International corporate bonds	13,726		—		12,801		—		12,801
Municipal bonds	49,255		—		51,589		—		51,589
Asset-backed securities	2,837		—		2,830		—		2,830
Mortgage-backed securities	11,444		—		11,621		—		11,621
Equity securities:
Common stock	473,615		647,159		—		—		647,159
Total	$	1,495,599	$	674,643	$	807,229	$	242,278	$	1,724,150


^(a)	Reported in nuclear decommissioning fund and other investments on the consolidated balance sheet, which also includes $130.0 million of equity investments in unconsolidated subsidiaries and $48.9 million of miscellaneous investments.



	Dec. 31, 2014
			Fair Value
(Thousands of Dollars)	Cost		Level 1		Level 2		Level 3		Total
Nuclear decommissioning fund ^(a)
Cash equivalents	$	24,184	$	24,184	$	—	$	—	$	24,184
Commingled funds	470,013		—		465,615		—		465,615
International equity funds	80,454		—		78,721		—		78,721
Private equity investments	73,936		—		—		101,237		101,237
Real estate	43,859		—		—		64,249		64,249
Debt securities:
Government securities	30,674		—		28,808		—		28,808
U.S. corporate bonds	81,463		—		77,562		—		77,562
International corporate bonds	16,950		—		16,341		—		16,341
Municipal bonds	242,282		—		249,201		—		249,201
Asset-backed securities	9,131		—		9,250		—		9,250
Mortgage-backed securities	23,225		—		23,895		—		23,895
Equity securities:
Common stock	369,751		564,858		—		—		564,858
Total	$	1,465,922	$	589,042	$	949,393	$	165,486	$	1,703,921


^(a)	Reported in nuclear decommissioning fund and other investments on the consolidated balance sheet, which also includes $83.1 million of equity investments in unconsolidated subsidiaries and $45.6 million of miscellaneous investments.

Changes in Level 3 Nuclear Decommissioning Fund Investments

The following tables present the changes in Level 3 nuclear decommissioning fund investments:



(Thousands of Dollars)	Jan. 1, 2015		Purchases		Settlements			Gains Recognized as Regulatory Assets ^(a)		Transfers Out of Level 3		Dec. 31, 2015
Private equity investments	$	101,237	$	32,029	$	—		$	24,262	$	—	$	157,528
Real estate	64,249		27,568		(9,611		)	2,544		—		84,750
Total	$	165,486	$	59,597	$	(9,611	)	$	26,806	$	—	$	242,278



(Thousands of Dollars)	Jan. 1, 2014		Purchases		Settlements			Gains Recognized as Regulatory Assets ^(a)		Transfers Out of Level 3		Dec. 31, 2014
Private equity investments	$	62,696	$	22,078	$	(286	)	$	16,749	$	—	$	101,237
Real estate	57,368		8,088		(9,794		)	8,587		—		64,249
Total	$	120,064	$	30,166	$	(10,080	)	$	25,336	$	—	$	165,486



(Thousands of Dollars)	Jan. 1, 2013		Purchases		Settlements			Gains Recognized as Regulatory Assets ^(a)		Transfers Out of Level 3 ^(b)			Dec. 31, 2013
Private equity investments	$	33,250	$	24,201	$	—		$	5,245	$	—		$	62,696
Real estate	39,074		31,626		(18,622		)	5,290		—			57,368
Asset-backed securities	2,067		—		—			—		(2,067		)	—
Mortgage-backed securities	30,209		—		—			—		(30,209		)	—
Total	$	104,600	$	55,827	$	(18,622	)	$	10,535	$	(32,276	)	$	120,064


^(a)	Gains and losses are deferred as a component of the regulatory asset for nuclear decommissioning.


^(b)	Transfers out of Level 3 into Level 2 were principally due to diminished use of unobservable inputs that were previously significant to these fair value measurements and were subsequently sold during 2013.

Final Contractual Maturity Dates of Debt Securities in the Nuclear Decommissioning Fund by Asset Class

The following table summarizes the final contractual maturity dates of the debt securities in the nuclear decommissioning fund, by asset class, at Dec. 31, 2015:



	Final Contractual Maturity
(Thousands of Dollars)	Due in 1 Year or Less		Due in 1 to 5 Years		Due in 5 to 10 Years		Due after 10 Years			Total
Government securities	$	—	$	—	$	—	$	21,356		$	21,356
U.S. corporate bonds	—		16,005		51,384		(2,113		)	65,276
International corporate bonds	—		2,787		9,382		632			12,801
Municipal bonds	153		264		17,814		33,358			51,589
Asset-backed securities	—		—		2,830		—			2,830
Mortgage-backed securities	—		—		—		11,621			11,621
Debt securities	$	153	$	19,056	$	81,410	$	64,854		$	165,473

Gross Notional Amounts of Commodity Forwards, Options, and FTRs

The following table details the gross notional amounts of commodity forwards, options and FTRs at Dec. 31:


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


^(b)	Notional amounts for options are included on a gross basis, but are weighted for the probability of exercise.

Financial Impact of Qualifying Cash Flow Hedges on Accumulated Other Comprehensive Loss

Financial Impact of Qualifying Cash Flow Hedges — The impact of qualifying interest rate and vehicle fuel cash flow hedges on Xcel Energy’s accumulated other comprehensive loss, included in the consolidated statements of common stockholders’ equity and in the consolidated statements of comprehensive income, is detailed in the following table:



(Thousands of Dollars)	2015			2014			2013
Accumulated other comprehensive loss related to cash flow hedges at Jan. 1	$	(57,628	)	$	(59,753	)	$	(61,241	)
After-tax net unrealized (losses) gains related to derivatives accounted for as hedges	(70		)	(163		)	12
After-tax net realized losses on derivative transactions reclassified into earnings	2,836			2,288			1,476
Accumulated other comprehensive loss related to cash flow hedges at Dec. 31	$	(54,862	)	$	(57,628	)	$	(59,753	)

Impact of Derivative Activity on Accumulated Other Comprehensive Loss, Regulatory Assets and Liabilities, and Income

The following tables detail the impact of derivative activity during the years ended Dec. 31, 2015, 2014 and 2013, on accumulated other comprehensive loss, regulatory assets and liabilities, and income:



	Year Ended Dec. 31, 2015
	Pre-Tax Fair Value Losses Recognized During the Period in:						Pre-Tax Losses Reclassified into Income During the Period from:						Pre-Tax Losses Recognized During the Period in Income
(Thousands of Dollars)	Accumulated Other Comprehensive Loss			Regulatory (Assets) and Liabilities			Accumulated Other Comprehensive Loss			Regulatory Assets and (Liabilities)			Pre-Tax Losses Recognized During the Period in Income
Derivatives designated as cash flow hedges
Interest rate	$	—		$	—		$	4,515	^(a)	$	—		$	—
Vehicle fuel and other commodity	(116		)	—			131		^(b)	—			—
Total	$	(116	)	$	—		$	4,646		$	—		$	—
Other derivative instruments
Commodity trading	$	—		$	—		$	—		$	—		$	(7,286	)	^(c)
Electric commodity	—			(18,543		)	—			16,338		^(d)	—
Natural gas commodity	—			(16,163		)	—			15,694		^(e)	(11,840		)	^(e)
Total	$	—		$	(34,706	)	$	—		$	32,032		$	(19,126	)



	Year Ended Dec. 31, 2014
	Pre-Tax Fair Value Gains (Losses) Recognized During the Period in:						Pre-Tax (Gains) Losses Reclassified into Income During the Period from:								Pre-Tax Gains (Losses) Recognized During the Period in Income
(Thousands of Dollars)	Accumulated Other Comprehensive Loss			Regulatory (Assets) and Liabilities			Accumulated Other Comprehensive Loss				Regulatory Assets and (Liabilities)
Derivatives designated as cash flow hedges
Interest rate	$	—		$	—		$	3,836		^(a)	$	—			$	—
Vehicle fuel and other commodity	(266		)	—			(55		)	^(b)	—				—
Total	$	(266	)	$	—		$	3,781			$	—			$	—
Other derivative instruments
Commodity trading	$	—		$	—		$	—			$	—			$	881		^(c)
Electric commodity	—			(8,306		)	—				(9,036		)	^(d)	—
Natural gas commodity	—			5,166			—				(13,997		)	^(e)	(13,220		)	^(e)
Other commodity	—			—			—				—				643			^(c)
Total	$	—		$	(3,140	)	$	—			$	(23,033	)		$	(11,696	)



	Year Ended Dec. 31, 2013
	Pre-Tax Fair Value Gains (Losses) Recognized During the Period in:					Pre-Tax (Gains) Losses Reclassified into Income During the Period from:								Pre-Tax Gains (Losses) Recognized During the Period in Income
(Thousands of Dollars)	Accumulated Other Comprehensive Loss		Regulatory (Assets) and Liabilities			Accumulated Other Comprehensive Loss				Regulatory Assets and(Liabilities)
Derivatives designated as cash flow hedges
Interest rate	$	—	$	—		$	4,107		^(a)	$	—			$	—
Vehicle fuel and other commodity	29		—			(90		)	^(b)	—				—
Total	$	29	$	—		$	4,017			$	—			$	—
Other derivative instruments
Commodity trading	$	—	$	—		$	—			$	—			$	11,221		^(c)
Electric commodity	—		75,817			—				(52,796		)	^(d)	—
Natural gas commodity	—		(3,088		)	—				5,019			^(e)	(6,589		)	^(d)
Total	$	—	$	72,729		$	—			$	(47,777	)		$	4,632


^(a)	Amounts are recorded to interest charges.


^(b)	Amounts are recorded to O&M expenses.


^(c)	Amounts are recorded to electric operating revenues. Portions of these gains and losses are subject to sharing with electric customers through margin-sharing mechanisms and deducted from gross revenue, as appropriate.


^(d)	Amounts are 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.

^(e)

Amounts for the year ended Dec. 31, 2015 included $1.1 million of settlement losses on derivatives entered to mitigate natural gas price risk for electric generation, recorded to electric fuel and purchased power, subject to cost-recovery mechanisms and reclassified to a regulatory asset, as appropriate. Such losses for the years ended Dec. 31, 2014 and 2013 were immaterial. The remaining settlement losses for the years ended Dec. 31, 2015, 2014 and 2013 relate to natural gas operations and are recorded to cost of natural gas sold and transported. These losses are subject to cost-recovery mechanisms and reclassified out of income to a regulatory asset, as appropriate.

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, Xcel Energy’s derivative assets and liabilities measured at fair value on a recurring basis at Dec. 31, 2015:



	Dec. 31, 2015
	Fair Value						Fair Value Total		Counterparty Netting ^(b)
(Thousands of Dollars)	Level 1		Level 2		Level 3		Fair Value Total		Counterparty Netting ^(b)			Total
Current derivative assets
Other derivative instruments:
Commodity trading	$	225	$	10,620	$	1,250	$	12,095	$	(5,865	)	$	6,230
Electric commodity	—		—		21,421		21,421		(4,088		)	17,333
Natural gas commodity	—		496		—		496		(303		)	193
Total current derivative assets	$	225	$	11,116	$	22,671	$	34,012	$	(10,256	)	23,756
PPAs ^(a)												10,086
Current derivative instruments												$	33,842
Noncurrent derivative assets
Other derivative instruments:
Commodity trading	$	—	$	27,416	$	—	$	27,416	$	(6,555	)	$	20,861
Total noncurrent derivative assets	$	—	$	27,416	$	—	$	27,416	$	(6,555	)	20,861
PPAs ^(a)												30,222
Noncurrent derivative instruments												$	51,083



	Dec. 31, 2015
	Fair Value						Fair Value Total		Counterparty Netting ^(b)
(Thousands of Dollars)	Level 1		Level 2		Level 3		Fair Value Total		Counterparty Netting ^(b)			Total
Current derivative liabilities
Derivatives designated as cash flow hedges:
Vehicle fuel and other commodity	$	—	$	205	$	—	$	205	$	—		$	205
Other derivative instruments:
Commodity trading	152		7,866		555		8,573		(6,904		)	1,669
Electric commodity	—		—		4,088		4,088		(4,088		)	—
Natural gas commodity	—		5,407		—		5,407		(303		)	5,104
Total current derivative liabilities	$	152	$	13,478	$	4,643	$	18,273	$	(11,295	)	6,978
PPAs ^(a)												22,861
Current derivative instruments												$	29,839
Noncurrent derivative liabilities
Derivatives designated as cash flow hedges:
Commodity trading	$	—	$	19,898	$	—	$	19,898	$	(9,780	)	$	10,118
Total noncurrent derivative liabilities	$	—	$	19,898	$	—	$	19,898	$	(9,780	)	10,118
PPAs ^(a)												158,193
Noncurrent derivative instruments												$	168,311

^(a)

In 2003, as a result of implementing new guidance on the normal purchase exception for derivative accounting, Xcel Energy began recording several long-term PPAs at fair value due to accounting requirements related to underlying price adjustments. As these purchases are recovered through normal regulatory recovery mechanisms in the respective jurisdictions, the changes in fair value for these contracts were offset by regulatory assets and liabilities. During 2006, Xcel Energy 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)

Xcel Energy nets derivative instruments and related collateral in its consolidated balance sheet when supported by a legally enforceable master netting agreement, and all derivative instruments and related collateral amounts were subject to master netting agreements at Dec. 31, 2015. At Dec. 31, 2015, derivative assets and liabilities include no obligations to return cash collateral and rights to reclaim cash collateral of $4.3 million. 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, Xcel Energy’s derivative assets and liabilities measured at fair value on a recurring basis at Dec. 31, 2014:



	Dec. 31, 2014
	Fair Value						Fair Value Total		Counterparty Netting ^(b)
(Thousands of Dollars)	Level 1		Level 2		Level 3		Fair Value Total		Counterparty Netting ^(b)			Total
Current derivative assets
Other derivative instruments:
Commodity trading	$	—	$	14,326	$	4,732	$	19,058	$	(3,240	)	$	15,818
Electric commodity	—		—		62,825		62,825		(11,402		)	51,423
Natural gas commodity	—		381		—		381		(22		)	359
Total current derivative assets	$	—	$	14,707	$	67,557	$	82,264	$	(14,664	)	67,600
PPAs ^(a)												18,123
Current derivative instruments												$	85,723
Noncurrent derivative assets
Other derivative instruments:
Commodity trading	$	—	$	17,617	$	—	$	17,617	$	(4,151	)	$	13,466
Total noncurrent derivative assets	$	—	$	17,617	$	—	$	17,617	$	(4,151	)	13,466
PPAs ^(a)												40,309
Noncurrent derivative instruments												$	53,775



	Dec. 31, 2014
	Fair Value						Fair Value Total		Counterparty Netting ^(b)
(Thousands of Dollars)	Level 1		Level 2		Level 3		Fair Value Total		Counterparty Netting ^(b)			Total
Current derivative liabilities
Derivatives designated as cash flow hedges:
Vehicle fuel and other commodity	$	—	$	118	$	—	$	118	$	—		$	118
Other derivative instruments:
Commodity trading	—		7,974		—		7,974		(7,974		)	—
Electric commodity	—		—		11,402		11,402		(11,402		)	—
Natural gas commodity	—		548		—		548		(21		)	527
Total current derivative liabilities	$	—	$	8,640	$	11,402	$	20,042	$	(19,397	)	645
PPAs ^(a)												20,987
Current derivative instruments												$	21,632
Noncurrent derivative liabilities
Derivatives designated as cash flow hedges:
Vehicle fuel and other commodity	$	—	$	102	$	—	$	102	$	—		$	102
Other derivative instruments:
Commodity trading	—		6,890		—		6,890		(6,033		)	857
Natural gas commodity	—		35		—		35		—			35
Total noncurrent derivative liabilities	$	—	$	7,027	$	—	$	7,027	$	(6,033	)	994
PPAs ^(a)												182,942
Noncurrent derivative instruments												$	183,936

^(a)

^(b)

Xcel Energy nets derivative instruments and related collateral in its consolidated balance sheet when supported by a legally enforceable master netting agreement, and all derivative instruments and related collateral amounts were subject to master netting agreements at Dec. 31, 2014. At Dec. 31, 2014, derivative assets and liabilities include no obligations to return cash collateral and rights to reclaim cash collateral of $6.6 million. 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 years ended Dec. 31, 2015, 2014 and 2013:



	Year Ended Dec. 31
(Thousands of Dollars)	2015			2014			2013
Balance at Jan. 1	$	56,155		$	41,660		$	16,649
Purchases	63,712			135,008			61,474
Settlements	(69,754		)	(145,974		)	(45,199		)
Transfers out of Level 3	—			(1,093		)	—
Net transactions recorded during the period:
Gains recognized in earnings ^(a)	1,533			10,692			3,947
(Losses) gains recognized as regulatory assets and liabilities	(33,618		)	15,862			4,789
Balance at Dec. 31	$	18,028		$	56,155		$	41,660


^(a)	These amounts relate to commodity derivatives held at the end of the period.

Carrying Amount and Fair Value of Long-term Debt

As of Dec. 31, 2015 and 2014, other financial instruments for which the carrying amount did not equal fair value were as follows:



	2015				2014
(Thousands of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion	$	13,147,740	$	14,094,744	$	11,757,360	$	13,360,236

(Amounts in Thousands) ^(a)(b)

MWh of electricity

MMBtu of natural gas

Gallons of vehicle fuel