Nuclear Obligations (Tables)

12 Months Ended

Dec. 31, 2016

Funded Status of Nuclear Decommissioning Obligation

As of Dec. 31, 2016, NSP-Minnesota has accumulated $1.9 billion of assets held in external decommissioning trusts. The following table summarizes the funded status of NSP-Minnesota’s decommissioning obligation based on parameters established in the most recently approved decommissioning study. Xcel Energy believes future decommissioning costs, if necessary, will continue to be recovered in customer rates. The amounts presented below were prepared on a regulatory basis, and are not recorded in the financial statements for the ARO.



	Regulatory Basis
(Thousands of Dollars)	2016			2015
Estimated decommissioning cost obligation from most recently approved study (in 2014 dollars)	$	3,012,342		$	3,012,342
Effect of escalating costs (to 2016 and 2015 dollars, respectively, at 4.36/3.36 percent)	258,278			126,464
Estimated decommissioning cost obligation (in current dollars)	3,270,620			3,138,806
Effect of escalating costs to payment date (4.36/3.36 percent)	7,934,874			8,066,688
Estimated future decommissioning costs (undiscounted)	11,205,494			11,205,494
Effect of discounting obligation (using average risk-free interest rate of 3.25 percent and 3.01 percent for 2016 and 2015, respectively)	(7,068,362		)	(6,891,392		)
Discounted decommissioning cost obligation	$	4,137,132		$	4,314,102

Assets held in external decommissioning trust	$	1,860,762		$	1,724,150
Underfunding of external decommissioning fund compared to the discounted decommissioning obligation	2,276,370			2,589,952

Reconciliation of Decommissioning Cost Obligation - Regulatory to GAAP

Calculations and data used by the regulator in approving NSP-Minnesota’s rates are useful in assessing future cash flows. The regulatory basis information is a means to reconcile amounts previously provided to the MPUC and utilized for regulatory purposes to amounts used for financial reporting. The following table provides a reconciliation of the discounted decommissioning cost obligation - regulated basis to the ARO recorded in accordance with GAAP:



(Thousands of Dollars)	2016			2015
Discounted decommissioning cost obligation - regulated basis	$	4,137,132		$	4,314,102
Differences in discount rate and market risk premium	(1,043,655		)	(1,275,438		)
O&M costs not included for GAAP	(844,155		)	(897,640		)
Nuclear production decommissioning ARO - GAAP	$	2,249,322		$	2,141,024

Nuclear Decommissioning Expenses Recognized as Result of Regulation

Decommissioning expenses recognized as a result of regulation for the years ending Dec. 31 were:



(Thousands of Dollars)	2016		2015		2014
Annual decommissioning recorded as depreciation expense: ^{(a) (b)}	$	20,372	$	6,862	$	7,138


^(a)	Decommissioning expense does not include depreciation of the capitalized nuclear asset retirement costs.


^(b)	Decommissioning expense in 2016 includes Minnesota’s retail jurisdiction annual funding requirement of approximately $14 million. The 2014 and 2015 expense was offset by the DOE settlement refund.