Fair Value of Financial Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2017

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 March 31, 2017 and Dec. 31, 2016:



	March 31, 2017
			Fair Value
(Thousands of Dollars)	Cost		Level 1		Level 2		Level 3		Investments Measured at NAV ^(b)		Total
Nuclear decommissioning fund ^(a)
Cash equivalents	$	24,161	$	24,161	$	—	$	—	$	—	$	24,161
Commingled funds:
Non U.S. equities	272,437		178,990		—		—		98,876		277,866
Emerging market debt funds	94,772		—		—		—		101,269		101,269
Commodity funds	106,571		—		—		—		88,749		88,749
Private equity investments	137,176		—		—		—		194,912		194,912
Real estate	125,410		—		—		—		187,609		187,609
Other commingled funds	151,048		—		—		—		161,936		161,936
Debt securities:
Government securities	27,369		—		27,199		—		—		27,199
U.S. corporate bonds	127,841		—		128,799		—		—		128,799
Non U.S. corporate bonds	25,345		—		25,556		—		—		25,556
Municipal bonds	5		—		5		—		—		5
Equity securities:
U.S. equities	275,101		501,543		—		—		—		501,543
Non U.S. equities	188,763		232,851		—		—		—		232,851
Total	$	1,555,999	$	937,545	$	181,559	$	—	$	833,351	$	1,952,455


^(a)	Reported in nuclear decommissioning fund and other investments on the consolidated balance sheet, which also includes $131.9 million of equity investments in unconsolidated subsidiaries and $103.6 million of rabbi trust assets and miscellaneous investments.


^(b)	Due to limited availability of published pricing and a lack of immediate redeemability, certain fund investments measured at NAV are not required to be categorized within the fair value hierarchy.



	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		133,126		—		—		112,233		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	$	845,286	$	176,011	$	—	$	839,465	$	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 rabbi trust assets and miscellaneous investments.


^(b)	Due to limited availability of published pricing and a lack of immediate redeemability, certain fund investments measured at NAV are not required to be categorized within the fair value hierarchy.

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 March 31, 2017:



	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	$	—	$	1,100	$	3,017	$	23,082	$	27,199
U.S. corporate bonds	354		38,741		74,617		15,087		128,799
International corporate bonds	—		8,085		13,443		4,028		25,556
Municipal bonds	—		—		5		—		5
Debt securities	$	354	$	47,926	$	91,082	$	42,197	$	181,559

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 tables present the cost and fair value of the assets held in rabbi trusts at March 31, 2017 and Dec. 31, 2016:



	March 31, 2017
			Fair Value
(Thousands of Dollars)	Cost		Level 1		Level 2		Level 3		Total
Rabbi Trusts ^(a)
Cash equivalents	$	9,575	$	9,575	$	—	$	—	$	9,575
Mutual funds	39,965		40,264		—		—		40,264
Total	$	49,540	$	49,839	$	—	$	—	$	49,839



	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 March 31, 2017 and Dec. 31, 2016:


^(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.

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 three months ended March 31, 2017 and 2016, on accumulated other comprehensive loss, regulatory assets and liabilities, and income:



	Three Months Ended March 31, 2017
	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	$	—	$	—		$	1,359	^(a)	$	—			$	—
Total	$	—	$	—		$	1,359		$	—			$	—
Other derivative instruments
Commodity trading	$	—	$	—		$	—		$	—			$	1,001		^(c)
Electric commodity	—		794			—			(3,998		)	^(d)	—
Natural gas commodity	—		(6,161		)	—			1,075			^(e)	(4,070		)	^(e)
Total	$	—	$	(5,367	)	$	—		$	(2,923	)		$	(3,069	)



	Three Months Ended March 31, 2016
	Pre-Tax Fair Value Losses Recognized During the Period in:						Pre-Tax 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	$	—		$	—		$	1,485	^(a)	$	—		$	—
Vehicle fuel and other commodity	(6		)	—			57		^(b)	—			—
Total	$	(6	)	$	—		$	1,542		$	—		$	—
Other derivative instruments

Commodity trading	$	—		$	—		$	—		$	—		$	1,009		^(c)
Electric commodity	—			(265		)	—			8,631		^(d)	—
Natural gas commodity	—			(2,702		)	—			11,666		^(e)	(5,024		)	^(e)
Total	$	—		$	(2,967	)	$	—		$	20,297		$	(4,015	)


^(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 gain and loss amounts 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 three months ended March 31, 2017 included $0.9 million of settlement gains and an immaterial amount of settlement losses for the three months ended March 31, 2016 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. The remaining derivative settlement gains and losses for the three months ended March 31, 2017 and 2016 relate to natural gas operations and are recorded to cost of natural gas sold and transported. These gains and losses are subject to cost-recovery mechanisms and reclassified out of income to a regulatory asset or liability, 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 March 31, 2017:



	March 31, 2017
	Fair Value						Fair Value Total		Counterparty Netting ^(b)			Total
(Thousands of Dollars)	Level 1		Level 2		Level 3		Fair Value Total		Counterparty Netting ^(b)			Total
Current derivative assets
Other derivative instruments:
Commodity trading	$	4,706	$	14,850	$	—	$	19,556	$	(12,126	)	$	7,430
Electric commodity	—		—		8,443		8,443		(1,814		)	6,629
Natural gas commodity	—		1,334		—		1,334		—			1,334
Total current derivative assets	$	4,706	$	16,184	$	8,443	$	29,333	$	(13,940	)	15,393
PPAs ^(a)												5,492
Current derivative instruments												$	20,885
Noncurrent derivative assets
Other derivative instruments:
Commodity trading	$	198	$	32,272	$	—	$	32,470	$	(7,295	)	$	25,175
Total noncurrent derivative assets	$	198	$	32,272	$	—	$	32,470	$	(7,295	)	25,175
PPAs ^(a)												23,506
Noncurrent derivative instruments												$	48,681



	March 31, 2017
	Fair Value						Fair Value Total		Counterparty Netting ^(b)			Total
(Thousands of Dollars)	Level 1		Level 2		Level 3		Fair Value Total		Counterparty Netting ^(b)			Total
Current derivative liabilities
Other derivative instruments:
Commodity trading	$	5,224	$	12,064	$	—	$	17,288	$	(13,416	)	$	3,872
Electric commodity	—		—		1,814		1,814		(1,814		)	—
Total current derivative liabilities	$	5,224	$	12,064	$	1,814	$	19,102	$	(15,230	)	3,872
PPAs ^(a)												22,834
Current derivative instruments												$	26,706
Noncurrent derivative liabilities
Other derivative instruments:
Commodity trading	$	204	$	23,435	$	793	$	24,432	$	(10,463	)	$	13,969
Total noncurrent derivative liabilities	$	204	$	23,435	$	793	$	24,432	$	(10,463	)	13,969
PPAs ^(a)												129,715
Noncurrent derivative instruments												$	143,684


^(a)	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 March 31, 2017. At March 31, 2017, derivative assets and liabilities include no obligations to return cash collateral and the rights to reclaim cash collateral of $4.5 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, 2016:



	Dec. 31, 2016
	Fair Value						Fair Value Total		Counterparty Netting ^(b)			Total
(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)			Total
(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)	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.

Changes in Level 3 Commodity Derivatives

The following table presents the changes in Level 3 commodity derivatives for the three months ended March 31, 2017 and 2016:



	Three Months Ended March 31
(Thousands of Dollars)	2017			2016
Balance at Jan. 1	$	17,253		$	18,028
Purchases	3,792			1,843
Settlements	(19,802		)	(18,256		)
Net transactions recorded during the period:
Losses recognized in earnings ^(a)	(794		)	(24		)
Net gains recognized as regulatory assets and liabilities	5,387			5,263
Balance at March 31	$	5,836		$	6,854


^(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 March 31, 2017 and Dec. 31, 2016, other financial instruments for which the carrying amount did not equal fair value were as follows:



	March 31, 2017				Dec. 31, 2016
(Thousands of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion	$	14,451,909	$	15,492,978	$	14,450,247	$	15,513,209

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

March 31, 2017

Dec. 31, 2016

Megawatt hours of electricity

Million British thermal units of natural gas