Fair Value of Financial Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2018

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 as of March 31, 2018 and Dec. 31, 2017:



	March 31, 2018
			Fair Value
(Millions of Dollars)	Cost		Level 1		Level 2		Level 3		Investments Measured at NAV ^(b)		Total
Nuclear decommissioning fund ^(a)
Cash equivalents	$	41	$	41	$	—	$	—	$	—	$	41
Commingled funds:
Non U.S. equities	270		226		—		—		90		316
Emerging market debt funds	157		—		—		—		164		164
Private equity investments	142		—		—		—		198		198
Real estate	118		—		—		—		186		186
Other commingled funds	4		1		—		—		3		4
Debt securities:
Government securities	78		—		77		—		—		77
U.S. corporate bonds	325		—		321		—		—		321
Non U.S. corporate bonds	55		—		53		—		—		53
Equity securities:
U.S. equities	278		557		—		—		—		557
Non U.S. equities	153		229		—		—		—		229
Total	$	1,621	$	1,054	$	451	$	—	$	641	$	2,146


^(a)	Reported in nuclear decommissioning fund and other investments on the consolidated balance sheet, which also includes $141 million of equity investments in unconsolidated subsidiaries and $117 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, 2017
			Fair Value
(Millions of Dollars)	Cost		Level 1		Level 2		Level 3		Investments Measured at NAV ^(b)		Total
Nuclear decommissioning fund ^(a)
Cash equivalents	$	29	$	29	$	—	$	—	$	—	$	29
Commingled funds:
Non U.S. equities	264		217		—		—		90		307
Emerging market debt funds	156		—		—		—		166		166
Private equity investments	141		—		—		—		198		198
Real estate	131		—		—		—		202		202
Other commingled funds	9		6		—		—		3		9
Debt securities:
Government securities	68		—		69		—		—		69
U.S. corporate bonds	320		—		322		—		—		322
Non U.S. corporate bonds	50		—		50		—		—		50
Equity securities:
U.S. equities	271		557		—		—		—		557
Non U.S. equities	152		234		—		—		—		234
Total	$	1,591	$	1,043	$	441	$	—	$	659	$	2,143


^(a)	Reported in nuclear decommissioning fund and other investments on the consolidated balance sheet, which also includes $140 million of equity investments in unconsolidated subsidiaries and $114 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, as of March 31, 2018:



	Final Contractual Maturity
(Millions 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	$	2	$	66	$	77
U.S. corporate bonds	3		87		174		57		321
Non U.S. corporate bonds	—		16		33		4		53
Debt securities	$	3	$	112	$	209	$	127	$	451

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

In 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 as of March 31, 2018 and Dec. 31, 2017:



	March 31, 2018
			Fair Value
(Millions of Dollars)	Cost		Level 1		Level 2		Level 3		Total
Rabbi Trusts ^(a)
Cash equivalents	$	11	$	11	$	—	$	—	$	11
Mutual funds	48		50		—		—		50
Total	$	59	$	61	$	—	$	—	$	61



	Dec. 31, 2017
			Fair Value
(Millions of Dollars)	Cost		Level 1		Level 2		Level 3		Total
Rabbi Trusts ^(a)
Cash equivalents	$	12	$	12	$	—	$	—	$	12
Mutual funds	47		50		—		—		50
Total	$	59	$	62	$	—	$	—	$	62


^(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 as of March 31, 2018 and Dec. 31, 2017:


^(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, 2018 and 2017 on accumulated other comprehensive loss, regulatory assets and liabilities, and income:



	Three Months Ended March 31, 2018
	Pre-Tax Fair Value Gains (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
(Millions of Dollars)	Accumulated Other Comprehensive Loss		Regulatory (Assets) and Liabilities			Accumulated Other Comprehensive Loss		Regulatory Assets and (Liabilities)
Other derivative instruments
Commodity trading	$	—	$	—		$	—	$	—		$	3		^(b)
Electric commodity	—		(4		)	—		3		^(c)	—
Natural gas commodity	—		1			—		2		^(d)	(2		)	^(d)
Total	$	—	$	(3	)	$	—	$	5		$	1



	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
(Millions 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	^(a)	$	—			$	—
Total	$	—	$	—		$	1		$	—			$	—
Other derivative instruments
Commodity trading	$	—	$	—		$	—		$	—			$	1		^(b)
Electric commodity	—		1			—			(4		)	^(c)	—
Natural gas commodity	—		(6		)	—			1			^(d)	(4		)	^(d)
Total	$	—	$	(5	)	$	—		$	(3	)		$	(3	)


^(a)	Amounts are recorded to interest charges.


^(b)	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.


^(c)	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.

^(d)

Certain derivatives are utilized to mitigate natural gas price risk for electric generation and are recorded to electric fuel and purchased power, subject to cost-recovery mechanisms and reclassified to a regulatory asset, as appropriate. Amounts for the three months ended March 31, 2018 and 2017 included $1 million of settlement losses and $0.9 million of settlement gains, respectively. The remaining derivative settlement gains and losses for the three months ended March 31, 2018 and 2017 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 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

2017.

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 as of March 31, 2018:



	March 31, 2018
	Fair Value						Fair Value Total		Counterparty Netting ^(b)			Total
(Millions of Dollars)	Level 1		Level 2		Level 3		Fair Value Total		Counterparty Netting ^(b)			Total
Current derivative assets
Other derivative instruments:
Commodity trading	$	1	$	22	$	—	$	23	$	(12	)	$	11
Electric commodity	—		—		13		13		(2		)	11
Total current derivative assets	$	1	$	22	$	13	$	36	$	(14	)	22
PPAs ^(a)												6
Current derivative instruments												$	28
Noncurrent derivative assets
Other derivative instruments:
Commodity trading	$	1	$	37	$	8	$	46	$	(15	)	$	31
Total noncurrent derivative assets	$	1	$	37	$	8	$	46	$	(15	)	31
PPAs ^(a)												18
Noncurrent derivative instruments												$	49



	March 31, 2018
	Fair Value						Fair Value Total		Counterparty Netting ^(b)			Total
(Millions of Dollars)	Level 1		Level 2		Level 3		Fair Value Total		Counterparty Netting ^(b)			Total
Current derivative liabilities
Other derivative instruments:
Commodity trading	$	1	$	19	$	—	$	20	$	(13	)	$	7
Electric commodity	—		—		2		2		(1		)	1
Total current derivative liabilities	$	1	$	19	$	2	$	22	$	(14	)	8
PPAs ^(a)												22
Current derivative instruments												$	30
Noncurrent derivative liabilities
Other derivative instruments:
Commodity trading	$	2	$	30	$	—	$	32	$	(19	)	$	13
Total noncurrent derivative liabilities	$	2	$	30	$	—	$	32	$	(19	)	13
PPAs ^(a)												107
Noncurrent derivative instruments												$	120


^(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, 2018. At March 31, 2018, derivative assets and liabilities include no obligations to return cash collateral and the rights to reclaim cash collateral of $4 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 as of Dec. 31, 2017:



	Dec. 31, 2017
	Fair Value						Fair Value Total		Counterparty Netting ^(b)			Total
(Millions of Dollars)	Level 1		Level 2		Level 3		Fair Value Total		Counterparty Netting ^(b)			Total
Current derivative assets
Other derivative instruments:
Commodity trading	$	2	$	22	$	—	$	24	$	(15	)	$	9
Electric commodity	—		—		32		32		(2		)	30
Total current derivative assets	$	2	$	22	$	32	$	56	$	(17	)	39
PPAs ^(a)												5
Current derivative instruments												$	44
Noncurrent derivative assets
Other derivative instruments:
Commodity trading	$	—	$	31	$	5	$	36	$	(7	)	$	29
Total noncurrent derivative assets	$	—	$	31	$	5	$	36	$	(7	)	29
PPAs ^(a)												19
Noncurrent derivative instruments												$	48



	Dec. 31, 2017
	Fair Value						Fair Value Total		Counterparty Netting ^(b)			Total
(Millions of Dollars)	Level 1		Level 2		Level 3		Fair Value Total		Counterparty Netting ^(b)			Total
Current derivative liabilities
Other derivative instruments:
Commodity trading	$	2	$	18	$	—	$	20	$	(15	)	$	5
Electric commodity	—		—		2		2		(2		)	—
Natural gas commodity	—		1		—		1		—			1
Total current derivative liabilities	$	2	$	19	$	2	$	23	$	(17	)	6
PPAs ^(a)												23
Current derivative instruments												$	29
Noncurrent derivative liabilities
Other derivative instruments:
Commodity trading	$	—	$	24	$	—	$	24	$	(10	)	$	14
Total noncurrent derivative liabilities	$	—	$	24	$	—	$	24	$	(10	)	14
PPAs ^(a)												112
Noncurrent derivative instruments												$	126


^(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, 2017. At Dec. 31, 2017, derivative assets and liabilities include no obligations to return cash collateral and rights to reclaim cash collateral of $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

ments.

The following table presents the changes in Level 3 commodity derivatives for the three months ended March 31, 2018 and 2017:




	Three Months Ended March 31
(Millions of Dollars)	2018			2017
Balance at Jan. 1	$	35		$	17
Purchases	1			4
Settlements	(12		)	(20		)
Net transactions recorded during the period:
Gains recognized in earnings ^(a)	2			—
Net (losses) gains recognized as regulatory assets and liabilities	(7		)	5
Balance at March 31	$	19		$	6


^(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, 2018 and Dec. 31, 2017, other financial instruments for which the carrying amount did not equal fair value were as follows:



	March 31, 2018				Dec. 31, 2017
(Millions of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion	$	14,979	$	15,877	$	14,976	$	16,531

(Amounts in Millions) ^(a)(b)

March 31, 2018

Dec. 31, 2017

Megawatt hours of electricity

Million British thermal units of natural gas