Fair Value of Financial Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2016

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, 2016 and 2015:



	Dec. 31, 2016
			Fair Value
(Thousands of Dollars)	Cost		Level 1		Level 2		Level 3		Investments Measured at NAV ^(b)		Total
Nuclear decommissioning fund ^(a)
Cash equivalents	$	20,379	$	20,379	$	—	$	—	$	—	$	20,379
Commingled funds:
Non U.S. equities	260,877		—		—		—		245,359		245,359
Emerging market debt funds	93,597		—		—		—		97,543		97,543
Commodity funds	106,571		—		—		—		92,091		92,091
Private equity investments	132,190		—		—		—		190,462		190,462
Real estate	128,630		—		—		—		187,647		187,647
Other commingled funds	151,048		—		—		—		159,489		159,489
Debt securities:
Government securities	32,764		—		31,965		—		—		31,965
U.S. corporate bonds	104,913		—		105,772		—		—		105,772
Non U.S. corporate bonds	21,751		—		21,672		—		—		21,672
Municipal bonds	13,609		—		13,786		—		—		13,786
Mortgage-backed securities	2,785		—		2,816		—		—		2,816
Equity securities:
U.S. equities	270,779		473,400		—		—		—		473,400
Non U.S. equities	189,100		218,381		—		—		—		218,381
Total	$	1,528,993	$	712,160	$	176,011	$	—	$	972,591	$	1,860,762


^(a)	Reported in nuclear decommissioning fund and other investments on the consolidated balance sheet, which also includes $132.8 million of equity investments in unconsolidated subsidiaries and $98.3 million of miscellaneous investments.


^(b)	Based on the requirements of ASU No. 2015-07, investments measured at fair value using a NAV methodology have not been classified in the fair value hierarchy. See Note 2 for further information on the adoption of ASU No. 2015-07.



	Dec. 31, 2015
			Fair Value
(Thousands of Dollars)	Cost		Level 1		Level 2		Level 3		Investments Measured at NAV ^(b)		Total
Nuclear decommissioning fund ^(a)
Cash equivalents	$	27,484	$	27,484	$	—	$	—	$	—	$	27,484
Commingled funds:
Non U.S. equities	259,114		—		—		—		231,122		231,122
Emerging market debt funds	88,987		—		—		—		88,467		88,467
Commodity funds	99,771		—		—		—		77,338		77,338
Private equity investments	105,965		—		—		—		157,528		157,528
Real estate	115,019		—		—		—		165,190		165,190
Other commingled funds	150,877		—		—		—		164,389		164,389
Debt securities:
Government securities	24,444		—		21,356		—		—		21,356
U.S. corporate bonds	73,061		—		65,276		—		—		65,276
Non U.S. 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:
U.S. equities	273,106		432,495		—		—		—		432,495
Non U.S. equities	200,509		214,664		—		—		—		214,664
Total	$	1,495,599	$	674,643	$	165,473	$	—	$	884,034	$	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.


^(b)	Based on the requirements of ASU No. 2015-07, investments measured at fair value using a NAV methodology have not been classified in the fair value hierarchy. See Note 2 for further information on the adoption of ASU No. 2015-07.

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, 2016:



	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	$	—	$	9,158	$	149	$	22,658	$	31,965
U.S. corporate bonds	608		28,375		67,475		9,314		105,772
Non U.S. corporate bonds	—		6,477		10,525		4,670		21,672
Municipal bonds	—		205		5,763		7,818		13,786
Mortgage-backed securities	—		—		—		2,816		2,816
Debt securities	$	608	$	44,215	$	83,912	$	47,276	$	176,011

Rabbi Trust Securities Amortized Cost and Fair Value Measured on Recurrring Basis [Table Text Block]

In June 2016, Xcel Energy established rabbi trusts to provide partial funding for future distributions of its supplemental executive retirement plan and deferred compensation plan. The following table presents the cost and fair value of the assets held in rabbi trusts at Dec. 31, 2016:



	Dec. 31, 2016
			Fair Value
(Thousands of Dollars)	Cost		Level 1		Level 2		Level 3		Total
Rabbi Trusts ^(a)
Cash equivalents	$	47,831	$	47,831	$	—	$	—	$	47,831
Mutual funds	1,663		1,901		—		—		1,901
Total	$	49,494	$	49,732	$	—	$	—	$	49,732


^(a)	Reported in nuclear decommissioning fund and other investments on the consolidated balance sheet.

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)	2016			2015			2014
Accumulated other comprehensive loss related to cash flow hedges at Jan. 1	$	(54,862	)	$	(57,628	)	$	(59,753	)
After-tax net unrealized gains (losses) related to derivatives accounted for as hedges	3			(70		)	(163		)
After-tax net realized losses on derivative transactions reclassified into earnings	3,708			2,836			2,288
Accumulated other comprehensive loss related to cash flow hedges at Dec. 31	$	(51,151	)	$	(54,862	)	$	(57,628	)

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, 2016, 2015 and 2014, on accumulated other comprehensive loss, regulatory assets and liabilities, and income:



	Year Ended Dec. 31, 2016
	Pre-Tax Fair Value Gains 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	$	—	$	—	$	5,859	^(a)	$	—			$	—
Vehicle fuel and other commodity	5		—		191		^(b)	—				—
Total	$	5	$	—	$	6,050		$	—			$	—
Other derivative instruments
Commodity trading	$	—	$	—	$	—		$	—			$	2,568		^(c)
Electric commodity	—		17,437		—			(8,147		)	^(d)	—
Natural gas commodity	—		621		—			14,879			^(e)	(8,252		)	^(e)
Total	$	—	$	18,058	$	—		$	6,732			$	(5,684	)



	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	)


^(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 years ended Dec. 31, 2016 and Dec. 31, 2015 included $0.2 million and $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 were immaterial. The remaining settlement losses for the years ended Dec. 31, 2016, 2015 and 2014 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, 2016:



	Dec. 31, 2016
	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	$	13,179	$	14,105	$	—	$	27,284	$	(20,637	)	$	6,647
Electric commodity	—		—		19,251		19,251		(1,976		)	17,275
Natural gas commodity	—		8,839		—		8,839		—			8,839
Total current derivative assets	$	13,179	$	22,944	$	19,251	$	55,374	$	(22,613	)	32,761
PPAs ^(a)												5,463
Current derivative instruments												$	38,224
Noncurrent derivative assets
Other derivative instruments:
Commodity trading	$	100	$	31,029	$	—	$	31,129	$	(7,323	)	$	23,806
Natural gas commodity	—		1,652		—		1,652		—			1,652
Total noncurrent derivative assets	$	100	$	32,681	$	—	$	32,781	$	(7,323	)	25,458
PPAs ^(a)												24,731
Noncurrent derivative instruments												$	50,189



	Dec. 31, 2016
	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
Other derivative instruments:
Commodity trading	$	13,787	$	11,320	$	22	$	25,129	$	(20,974	)	$	4,155
Electric commodity	—		—		1,976		1,976		(1,976		)	—
Total current derivative liabilities	$	13,787	$	11,320	$	1,998	$	27,105	$	(22,950	)	4,155
PPAs ^(a)												22,804
Current derivative instruments												$	26,959
Noncurrent derivative liabilities
Other derivative instruments:
Commodity trading	$	89	$	23,424	$	—	$	23,513	$	(10,727	)	$	12,786
Total noncurrent derivative liabilities	$	89	$	23,424	$	—	$	23,513	$	(10,727	)	12,786
PPAs ^(a)												135,360
Noncurrent derivative instruments												$	148,146

^(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, 2016. At Dec. 31, 2016, derivative assets and liabilities include no obligations to return cash collateral and rights to reclaim cash collateral of $3.7 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, 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
Other derivative instruments:
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)

^(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.

Changes in Level 3 Commodity Derivatives

The following table presents the changes in Level 3 commodity derivatives for the years ended Dec. 31, 2016, 2015 and 2014:



	Year Ended Dec. 31
(Thousands of Dollars)	2016			2015			2014
Balance at Jan. 1	$	18,028		$	56,155		$	41,660
Purchases	35,593			63,712			135,008
Settlements	(89,085		)	(69,754		)	(145,974		)
Transfers out of Level 3	—			—			(1,093		)
Net transactions recorded during the period:
(Losses) gains recognized in earnings ^(a)	(54		)	1,533			10,692
Gains (losses) recognized as regulatory assets and liabilities	52,771			(33,618		)	15,862
Balance at Dec. 31	$	17,253		$	18,028		$	56,155


^(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, 2016 and 2015, other financial instruments for which the carrying amount did not equal fair value were as follows:



	2016				2015
(Thousands of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion^(a)	$	14,450,247	$	15,513,209	$	13,055,901	$	14,094,744

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

MWh of electricity

MMBtu of natural gas

Gallons of vehicle fuel