RETIREMENT PLAN AND POST-RETIREMENT BENEFITS

6 Months Ended

Jun. 30, 2012

Compensation and Retirement Disclosure [Abstract]

RETIREMENT PLAN AND POST-RETIREMENT BENEFITS

NOTE 6.       RETIREMENT PLAN AND POST-RETIREMENT BENEFITS

NVE has a single employer defined benefit pension plan covering substantially all employees of NVE and the Utilities. NVE allocates the unfunded liability and the net periodic benefit costs for its pension benefit and other postretirement benefit plans to NPC and SPPC based upon the current, or in the case of the retirees, previous, employment location. Certain grandfathered and union employees are covered under a benefit formula based on years of service and the employee's highest compensation for a period prior to retirement, while most employees are covered under a cash balance formula with vesting after three years of service. NVE also has other postretirement plans, including a defined contribution plan which provides medical and life insurance benefits for certain retired employees. A summary of the components of net periodic pension and other postretirement costs for the three and six months ended June 30 follows. This summary is based on a December 31, measurement date (dollars in thousands):

NVE
	Pension Benefits					Other Postretirement Benefits
		For the Three Months Ended June 30,				For the Three Months Ended June 30,
		2012		2011		2012		2011
Service cost	$	4,406	$	4,607	$	595	$	653
Interest cost		10,228		10,169		1,905		2,090
Expected return on plan assets		(12,447)		(12,192)		(1,563)		(1,596)
Amortization of prior service cost		(724)		(738)		(987)		(987)
Amortization of net loss		3,473		4,155		731		1,083
Net periodic benefit cost	$	4,936	$	6,001	$	681	$	1,243
	Pension Benefits				Other Postretirement Benefits
	For the Six Months Ended June 30,				For the Six Months Ended June 30,
		2012		2011		2012		2011
Service cost	$	8,813	$	9,213	$	1,191	$	1,306
Interest cost		20,456		20,338		3,810		4,180
Expected return on plan assets		(24,894)		(24,383)		(3,126)		(3,193)
Amortization of prior service cost		(1,448)		(1,476)		(1,974)		(1,973)
Amortization of net loss		6,945		8,310		1,462		2,166
Net periodic benefit cost	$	9,872	$	12,002	$	1,363	$	2,486
The average percentage of NVE net periodic costs capitalized during 2012 and 2011 was 34.6% and 32.8%, respectively.

NPC
	Pension Benefits				Other Postretirement Benefits
		For the Three Months Ended June 30,				For the Three Months Ended June 30,
		2012		2011		2012		2011
Service cost	$	2,358	$	2,445	$	350	$	363
Interest cost		4,881		4,880		602		615
Expected return on plan assets		(6,237)		(6,169)		(592)		(590)
Amortization of prior service cost		(456)		(470)		229		229
Amortization of net loss		1,363		1,690		221		302
Net periodic benefit cost	$	1,909	$	2,376	$	810	$	919
	Pension Benefits				Other Postretirement Benefits
		For the Six Months Ended June 30,				For the Six Months Ended June 30,
		2012		2011		2012		2011
Service cost	$	4,715	$	4,891	$	700	$	727
Interest cost		9,762		9,760		1,205		1,230
Expected return on plan assets		(12,474)		(12,339)		(1,183)		(1,180)
Amortization of prior service cost		(912)		(939)		458		458
Amortization of net loss		2,726		3,379		441		604
Net periodic benefit cost	$	3,817	$	4,752	$	1,621	$	1,839
The average percentage of NPC net periodic costs capitalized during 2012 and 2011 was 36.6% and 37.3%, respectively.

SPPC
	Pension Benefits				Other Postretirement Benefits
	For the Three Months Ended June 30,				For the Three Months Ended June 30,
	2012		2011		2012		2011
Service cost	$	1,695	$	1,840	$	227	$	271
Interest cost		5,043		5,013		1,283		1,457
Expected return on plan assets		(5,937)		(5,741)		(941)		(976)
Amortization of prior service cost		(277)		(277)		(1,220)		(1,219)
Amortization of net loss		2,026		2,412		504		773
Net periodic benefit cost	$	2,550	$	3,247	$	(147)	$	306
	Pension Benefits				Other Postretirement Benefits
	For the Six Months Ended June 30,				For the Six Months Ended June 30,
	2012		2011		2012		2011
Service cost	$	3,391	$	3,680	$	455	$	543
Interest cost		10,086		10,025		2,566		2,915
Expected return on plan assets		(11,875)		(11,482)		(1,882)		(1,952)
Amortization of prior service cost		(554)		(554)		(2,439)		(2,439)
Amortization of net loss		4,052		4,824		1,007		1,546
Net periodic benefit cost	$	5,100	$	6,493	$	(293)	$	613
The average percentage of SPPC net periodic costs capitalized during 2012 and 2011 was 34.5% and 30.2%, respectively.

During the six months ended June 30, 2012, the company made no contributions to the pension plan and made $1.5 million in contributions to the other postretirement benefits plan. At the present time, it is not anticipated that additional funding will be required for either plan in 2012 in order to meet the minimum funding level requirements defined by the Pension Protection Act of 2006. However, NVE and the Utilities have included in their 2012 assumptions funding levels similar to the 2011 funding. The amounts to be contributed in 2012 may change subject to market conditions.