15. Regulatory Assets and Liabilities

Xcel Energy Inc. and subsidiaries prepare their consolidated financial statements in accordance with the applicable accounting guidance, as discussed in Note 1. Under this guidance, regulatory assets and liabilities are created for amounts that regulators may allow to be collected, or may require to be paid back to customers in future electric and natural gas rates. Any portion of Xcel Energy's business that is not regulated cannot establish regulatory assets and liabilities. If changes in the utility industry or the business of Xcel Energy no longer allow for the application of regulatory accounting guidance under GAAP, Xcel Energy would be required to recognize the write-off of regulatory assets and liabilities in net income or OCI.

The components of regulatory assets and liabilities shown on the consolidated balance sheets at Dec. 31, 2011 and Dec. 31, 2010 are:

	See		Remaining
(Thousands of Dollars)	Note(s)		Amortization Period	Dec. 31, 2011				Dec. 31, 2010
Regulatory Assets				Current		Noncurrent		Current		Noncurrent

Pension and retiree medical obligations (a)		9	Various	$	130,764	$	1,299,399	$	115,218	$	1,209,879
Recoverable deferred taxes on AFUDC recorded in plant (b)		1	Plant lives		-		294,549		-		276,861
Contract valuation adjustments (c)		1, 11	Term of related contract		73,608		142,210		45,155		134,027
Net AROs (d)		1, 13, 14	Plant lives		-		209,626		-		150,913
Conservation programs (e)		1	One to seven years		46,769		80,981		57,679		74,236
Environmental remediation costs		1, 13	Various		2,309		109,720		3,561		98,725
Renewable resources and environmental initiatives (b)		13	One to four years		51,622		25,378		75,372		20,487
Depreciation differences (b)		1	One to seven years		4,150		54,892		5,859		12,379
Purchased power contract costs		13	Term of related contract		-		54,471		-		44,464
Losses on reacquired debt		4	Term of related debt		5,554		43,729		6,319		49,001
Nuclear refueling outage costs		1	One to two years		40,365		8,810		33,819		7,169
Gas pipeline inspection and remediation costs		12	Pending rate case		13,779		27,511		2,000		29,358
Recoverable purchased natural gas and electric energy costs		1	One to two years		17,031		9,867		27,770		9,907
State commission adjustments (b)		1	Plant lives		311		9,399		-		9,235
Other			Various		15,973		18,466		15,789		24,819
Total regulatory assets				$	402,235	$	2,389,008	$	388,541	$	2,151,460

Regulatory Liabilities

Plant removal costs		1, 13	Plant lives	$	-	$	945,377	$	-	$	979,666
Deferred electric, gas and steam production costs		1	Less than one year		108,057		-		107,674		-
DOE settlement		14	Less than one year		94,734		-		-		-
Investment tax credit deferrals		1, 6	Various		-		61,710		-		65,856
Deferred income tax adjustment		1, 6	Various		-		46,835		-		42,863
Conservation programs (e)		1, 12	Less than one year		15,898		-		-		-
Contract valuation adjustments (c)		1, 11	Term of related contract		25,268		15,450		6,684		19,743
Gain from asset sales		18	One to three years		5,780		18,696		4,281		25,492
Renewable resources and environmental initiatives (b)		12, 13	Various		4,358		8,525		14,752		-
Low income discount program			One to two years		8,696		347		7,062		4,032
Nuclear refueling outage costs		1	One year		3,441		-		3,441		3,441
REC margin sharing (f)		1, 12			-		-		-		26,104
Other			Various		8,863		4,594		12,144		12,568
Total regulatory liabilities				$	275,095	$	1,101,534	$	156,038	$	1,179,765

(a)

Includes $365.3 million and $400.2 million for the regulatory recognition of the NSP-Minnesota pension expense at Dec. 31, 2011 and Dec. 31, 2010, respectively. These amounts are offset by $3.9 million and $7.8 million for PSCo unamortized prior service costs at Dec. 31, 2011 and Dec. 31, 2010, respectively. Also included are $27.2 million and $20.4 million of regulatory assets related to the non-qualified pension plan of which $12.1 million and $2.2 million is included in the current asset at Dec. 31, 2011 and Dec. 31, 2010, respectively.

(b)	Earns a return on investment in the ratemaking process. These amounts are amortized consistent with recovery in rates.

(c)	Includes the fair value of certain long-term PPAs used to meet energy capacity requirements and valuation adjustments on natural gas commodity purchases.

(d)	Includes amounts recorded for future recovery of AROs, less amounts recovered through nuclear decommissioning accruals and gains from decommissioning investments.

(e)	Includes over- or under-recovered costs for DSM and conservation programs as well as incentives allowed in certain jurisdictions.

(f)	As described in Note 12, in 2011 the CPUC determined that the customers' share of REC margins will be netted against the RESA regulatory asset balance. This is reflected in the Dec. 31, 2011 regulatory asset balance.