10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019 or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

001-3034	75-0575400
(Commission File Number)	(I.R.S. Employer Identification No.)

(Registrant, State of Incorporation or Organization, Address of Principal Executive Officers and Telephone Number)

Southwestern Public Service Company

New Mexico

790 South Buchanan Street

Amarillo Texas 79101

303 571-7511

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
N/A	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  ☒Yes  ☐No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 and Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  ☒ Yes  ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-accelerated Filer	☒	Smaller Reporting Company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes   ☒ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Aug. 1, 2019
Common Stock, $1.00 par value	100 shares

Southwestern Public Service Company meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced disclosure format specified in General Instruction H(2) to such Form 10-Q.

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
Item l     —	Financial Statements (Unaudited)	5
	STATEMENTS OF INCOME	5
	STATEMENTS OF COMPREHENSIVE INCOME	6
	STATEMENTS OF CASH FLOWS	7
	BALANCE SHEETS	8
	STATEMENTS OF COMMON STOCKHOLDER’S EQUITY	9
	NOTES TO FINANCIAL STATEMENTS	11
Item 2    —	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 4    —	Controls and Procedures	21
PART II — OTHER INFORMATION
Item 1     —	Legal Proceedings	21
Item 1A  —	Risk Factors	21
Item 6    —	Exhibits	22
SIGNATURES		23
Certifications Pursuant to Section 302
Certifications Pursuant to Section 906

This Form 10-Q is filed by Southwestern Public Service Company, a New Mexico corporation (SPS). SPS is a wholly owned subsidiary of Xcel Energy Inc.  Additional information on Xcel Energy is available in various filings with the SEC. This report should be read in its entirety.

ABBREVIATIONS AND INDUSTRY TERMS

Xcel Energy Inc.’s Subsidiaries and Affiliates (current and former)
NSP-Minnesota	Northern States Power Company, a Minnesota corporation
NSP-Wisconsin	Northern States Power Company, a Wisconsin corporation
PSCo	Public Service Company of Colorado
SPS	Southwestern Public Service Company
Utility subsidiaries	NSP-Minnesota, NSP-Wisconsin, PSCo and SPS
Xcel Energy	Xcel Energy Inc. and its subsidiaries
Federal and State Regulatory Agencies
D.C. Circuit	United States Court of Appeals for the District of Columbia Circuit
EPA	Environmental Protection Agency
FERC	Federal Energy Regulatory Commission
IRS	Internal Revenue Service
NERC	North American Electric Reliability Corporation
NMPRC	New Mexico Public Regulation Commission
NMSC	New Mexico Supreme Court
PUCT	Public Utility Commission of Texas
SEC	Securities and Exchange Commission
Electric and Resource Adjustment Clauses
DSM	Demand side management
TCRF	Transmission cost recovery factor (recovers transmission infrastructure improvement costs and changes in wholesale transmission charges)
Other Terms and Abbreviations
ACE	Affordable Clean Energy
ADIT	Accumulated deferred income tax
AFUDC	Allowance for funds used during construction
ALJ	Administrative Law Judge
ASC	FASB Accounting Standards Codification
ASU	FASB Accounting Standards Update
ATRR	Annual transmission revenue requirement
C&I	Commercial and Industrial
ETR	Effective tax rate
FASB	Financial Accounting Standards Board
FTR	Financial transmission right
GAAP	Generally accepted accounting principles
IPP	Independent power producers
NAV	Net asset value
NOL	Net operating loss
O&M	Operating and maintenance
OATT	Open access transmission tariff
PPA	Purchased power agreement
PTC	Production tax credit

ROE	Return on equity
ROU	Right-of-use
RTO	Regional Transmission Organization
SPP	Southwest Power Pool, Inc.
TCJA	2017 federal tax reform enacted as Public Law No: 115-97, commonly referred to as the Tax Cuts and Jobs Act
VIE	Variable interest entity
Measurements
MW	Megawatts
MWh	Megawatt hours

Forward-Looking Statements

Except for the historical statements contained in this report, the matters discussed herein are forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements, assumptions and other statements identified in this document by the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “objective,” “outlook,” “plan,” “project,” “possible,” “potential,” “should,” “will,” “would” and similar expressions. Actual results may vary materially. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update any forward-looking information. The following factors, in addition to those discussed elsewhere in this Quarterly Report on Form 10-Q and in other securities filings (including SPS’ Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2018, and subsequent securities filings), could cause actual results to differ materially from management expectations as suggested by such forward-looking information: changes in environmental laws and regulations; climate change and other weather, natural disaster and resource depletion, including compliance with any accompanying legislative and regulatory changes; ability to recover costs from customers; reductions in our credit ratings and the costs of maintaining certain contractual relationships; general economic conditions, including inflation rates, monetary fluctuations and their impact on capital expenditures and the ability of SPS to obtain financing on favorable terms; availability or cost of capital; our customers’ and counterparties’ ability to pay their debts to us; assumptions and costs relating to funding our employee benefit plans and health care benefits; tax laws; operational safety; successful long-term operational planning; commodity risks associated with energy markets and production; rising energy prices; costs of potential regulatory penalties; effects of geopolitical events, including war and acts of terrorism; cyber security threats and data security breaches; fuel costs; and employee work force and third party contractor factors.

Non-GAAP Financial Measures

The following discussion includes financial information prepared in accordance with GAAP, as well as certain non-GAAP financial measures such as electric margin. Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are adjusted from the most directly comparable measure calculated and presented in accordance with GAAP.

SPS’ management uses non-GAAP measures internally for financial planning and analysis, for reporting of results to the Board of Directors, and when communicating its earnings outlook to analysts and investors. Non-GAAP financial measures are intended to supplement investors’ understanding of our operating performance and should not be considered alternatives for financial measures presented in accordance with GAAP. These measures are discussed in more detail below and may not be comparable to other companies’ similarly titled non-GAAP financial measures.

Electric Margins

Electric margin is presented as electric revenues less electric fuel and purchased power expenses. Expenses incurred for electric fuel and purchased power are generally recovered through various recovery mechanisms, and as a result, changes in these expenses are offset in operating revenues. Management believes electric margin provides the most meaningful basis for evaluating our operations because they exclude the revenue impact of fluctuations in these expenses.

These margins can be reconciled to operating income, a GAAP measure, by including operating and maintenance (O&M) expenses, demand side management (DSM) expenses, depreciation and amortization, and taxes (other than income taxes).

4

PART 1 — FINANCIAL INFORMATION

Item 1 — FINANCIAL STATEMENTS

SOUTHWESTERN PUBLIC SERVICE COMPANY

STATEMENTS OF INCOME (UNAUDITED)

(amounts in millions)

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Operating revenues	$	410.5		$	481.3		$	864.6		$	928.6
Operating expenses
Electric fuel and purchased power	179.9			257.6			410.8			511.6
Operating and maintenance expenses	70.1			66.1			142.5			132.2
Demand side management expenses	3.8			4.8			8.4			8.9
Depreciation and amortization	57.8			49.6			111.0			98.0
Taxes (other than income taxes)	17.0			15.6			35.5			33.3
Total operating expenses	328.6			393.7			708.2			784.0
Operating income	81.9			87.6			156.4			144.6
Other income (expense), net	0.5			(0.8		)	0.9			(1.5		)
Allowance for funds used during construction — equity	8.7			3.2			19.0			6.6
Interest charges and financing costs
Interest charges — includes other financing costs of $0.8, $0.7, $1.6 and $1.4 respectively	25.6			20.6			50.0			40.7
Allowance for funds used during construction — debt	(4.2		)	(1.5		)	(8.7		)	(3.3		)
Total interest charges and financing costs	21.4			19.1			41.3			37.4
Income before income taxes	69.7			70.9			135.0			112.3
Income taxes	10.9			12.4			22.1			20.7
Net income	$	58.8		$	58.5		$	112.9		$	91.6

See Notes to Financial Statements

5

SOUTHWESTERN PUBLIC SERVICE COMPANY

STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(amounts in millions)

	Three Months Ended June 30				Six Months Ended June 30
	2019		2018		2019		2018
Net income	$	58.8	$	58.5	$	112.9	$	91.6
Other comprehensive income
Derivative instruments:
Reclassification of losses to net income, net of tax of $0	0.1		—		0.1		—
Other comprehensive income	0.1		—		0.1		—
Comprehensive income	$	58.9	$	58.5	$	113.0	$	91.6

See Notes to Financial Statements

6

SOUTHWESTERN PUBLIC SERVICE COMPANY

STATEMENTS OF CASH FLOWS (UNAUDITED)

(amounts in millions)

	Six Months Ended June 30,
	2019			2018
Operating activities
Net income	$	112.9		$	91.6
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	112.1			98.1
Demand side management program amortization	—			0.8
Deferred income taxes	3.3			(2.3		)
Allowance for equity funds used during construction	(19.0		)	(6.6		)
Changes in operating assets and liabilities:
Accounts receivable	(1.3		)	(25.3		)
Accrued unbilled revenues	(11.3		)	2.3
Inventories	(9.9		)	7.9
Prepayments and other	5.2			0.7
Accounts payable	(24.5		)	0.6
Net regulatory assets and liabilities	37.0			46.2
Other current liabilities	1.1			13.9
Pension and other employee benefit obligations	(16.3		)	(7.9		)
Other, net	0.5			—
Change in other noncurrent assets	(0.3		)	4.4
Change in other noncurrent liabilities	0.5			(0.5		)
Net cash provided by operating activities	190.0			223.9
Investing activities
Utility capital/construction expenditures	(364.2		)	(471.7		)
Investments in utility money pool arrangement	(100.0		)	(46.0		)
Repayments from utility money pool arrangement	—			111.0
Net cash used in investing activities	(464.2		)	(406.7		)
Financing activities
Proceeds from (repayments of) short-term borrowings, net	(42.0		)	132.0
Proceeds from (repayments of) from issuance of long-term debt, net	292.8			—
Borrowings under utility money pool arrangement	283.0			180.0
Repayments under utility money pool arrangement	(283.0		)	(80.0		)
Capital contributions from parent	378.8			0.4
Dividends paid to parent	(137.7		)	(60.1		)
Net cash provided by (used in) financing activities	491.9			172.3
Net change in cash and cash equivalents	217.7			(10.5		)
Cash and cash equivalents at beginning of period	44.0			10.9
Cash and cash equivalents at end of period	$	261.7		$	0.4
Supplemental disclosure of cash flow information:
Cash paid for interest (net of amounts capitalized)	$	(39.9	)	$	(36.7	)
Cash paid for income taxes, net	—			(7.6		)
Supplemental disclosure of non-cash investing and financing transactions:
Property, plant and equipment additions in accounts payable	$	68.6		$	43.3
Inventory transfer additions in PPE	12.6			11.2
Operating lease right-of-use assets	548.3			—
Allowance for equity funds used during construction	19.0			6.6

See Notes to Financial Statements

7

SOUTHWESTERN PUBLIC SERVICE COMPANY

BALANCE SHEETS (UNAUDITED)

(amounts in millions, except share and per share data)

	June 30, 2019			Dec. 31, 2018
Assets
Current assets
Cash and cash equivalents	$	261.7		$	44.0
Accounts receivable, net	93.3			90.7
Accounts receivable from affiliates	5.3			10.5
Investments in utility money pool arrangement	100.0			—
Accrued unbilled revenues	125.7			114.5
Inventories	31.2			33.9
Regulatory assets	23.8			26.0
Derivative instruments	25.5			17.8
Prepaid taxes	—			14.2
Prepayments and other	19.8			10.7
Total current assets	686.3			362.3
Property, plant and equipment, net	6,228.5			5,946.4
Other assets
Regulatory assets	361.3			366.2
Derivative instruments	14.2			15.8
Operating lease right-of-use assets	535.5			—
Other	5.0			5.1
Total other assets	916.0			387.1
Total assets	$	7,830.8		$	6,695.8
Liabilities and Equity
Current liabilities
Short-term debt	$	—		$	42.0
Accounts payable	160.4			191.8
Accounts payable to affiliates	15.9			19.9
Regulatory liabilities	136.9			85.8
Taxes accrued	44.6			41.6
Accrued interest	25.8			25.8
Dividends payable to parent	48.3			45.2
Derivative instruments	3.8			3.6
Other	50.8			28.3
Total current liabilities	486.5			484.0
Deferred credits and other liabilities
Deferred income taxes	634.5			619.1
Regulatory liabilities	749.2			780.9
Asset retirement obligations	49.3			32.4
Derivative instruments	14.6			16.4
Pension and employee benefit obligations	76.2			92.4
Operating lease liabilities	509.0			—
Other	8.3			7.9
Total deferred credits and other liabilities	2,041.1			1,549.1
Commitments and contingencies
Capitalization
Long-term debt	2,419.5			2,126.1
Common stock — 200 shares authorized of $1.00 par value; 100 shares outstanding at June 30, 2019 and Dec. 31, 2018, respectively	—			—
Additional paid in capital	2,307.3			1,932.3
Retained earnings	577.7			605.7
Accumulated other comprehensive loss	(1.3		)	(1.4		)
Total common stockholder’s equity	2,883.7			2,536.6
Total liabilities and equity	$	7,830.8		$	6,695.8

See Notes to Financial Statements

8

SOUTHWESTERN PUBLIC SERVICE COMPANY STATEMENTS OF COMMON STOCKHOLDER’S EQUITY (UNAUDITED) (amounts in millions, except share data)
	Common Stock Issued							Retained Earnings				Accumulated Other Comprehensive Loss				Total Common Stockholders’ Equity
	Shares	Par Value			Additional Paid In Capital
Three Months Ended June 30, 2019 and 2018
Balance at March 31, 2018	100	$	—		$	1,590.2		$	541.4			$	(1.5	)		$	2,130.1
Net income								58.5								58.5
Dividends declared to parent								(30.7		)						(30.7		)
Contributions of capital by parent					1.2											1.2
Balance at June 30, 2018	100	$	—	—	$	1,591.4	—	$	569.2		—	$	(1.5	)	—	$	2,159.1
Balance at March 31, 2019	100	$	—	—	$	1,932.3		$	602.3			$	(1.4	)		$	2,533.2
Net income								58.8								58.8
Other comprehensive income												0.1				0.1
Dividends declared to parent								(83.4		)						(83.4		)
Contributions of capital by parent					375.0											375.0
Balance at June 30, 2019	100	$	—		$	2,307.3		$	577.7			$	(1.3	)		$	2,883.7
See Notes to Financial Statements

9

SOUTHWESTERN PUBLIC SERVICE COMPANY STATEMENTS OF COMMON STOCKHOLDER’S EQUITY (UNAUDITED) (amounts in millions, except share data)
	Common Stock Issued					Retained Earnings			Accumulated Other Comprehensive Loss			Total Common Stockholders’ Equity
	Shares	Par Value		Additional Paid In Capital
Six Months Ended June 30, 2019 and 2018
Balance at Dec. 31, 2017	100	$	—	$	1,590.2	$	541.6		$	(1.5	)	$	2,130.3
Net income						91.6						91.6
Dividends declared to parent						(64.0		)				(64.0		)
Contributions of capital by parent	—	—		1.2								1.2
Balance at June 30, 2018	100	$	—	$	1,591.4	$	569.2		$	(1.5	)	$	2,159.1
Balance at Dec. 31, 2018	100	$	—	$	1,932.3	$	605.7		$	(1.4	)	$	2,536.6
Net income						112.9						112.9
Other comprehensive income									0.1			0.1
Dividends declared to parent						(140.9		)				(140.9		)
Contributions of capital by parent				375.0								375.0
Balance at June 30, 2019	100	$	—	$	2,307.3	$	577.7		$	(1.3	)	$	2,883.7
See Notes to Financial Statements

10

SOUTHWESTERN PUBLIC SERVICE COMPANY

Notes to Financial Statements (UNAUDITED)

In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly, in accordance with accounting principles generally accepted in the United States of America (GAAP), the financial position of SPS as of June 30, 2019 and Dec. 31, 2018; the results of its operations, including the components of net income and comprehensive income, and change in stockholder’s equity for the three and six months ended June 30, 2019 and 2018; and its cash flows for the six months ended June 30, 2019 and 2018. All adjustments are of a normal, recurring nature, except as otherwise disclosed. Management has also evaluated the impact of events occurring after June 30, 2019 up to the date of issuance of these financial statements. These statements contain all necessary adjustments and disclosures resulting from that evaluation. The Dec. 31, 2018 balance sheet information has been derived from the audited 2018 financial statements included in the SPS Annual Report on Form 10-K for the year ended Dec. 31, 2018. These notes to the financial statements have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP on an annual basis have been condensed or omitted pursuant to such rules and regulations. For further information, refer to the financial statements and notes thereto, included in the SPS Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed with the SEC on Feb. 22, 2019. Due to the seasonality of SPS’ electric sales, interim results are not necessarily an appropriate base from which to project annual results.

1. Summary of Significant Accounting Policies

The significant accounting policies set forth in Note 1 to the financial statements in the SPS Annual Report on Form 10-K for the year ended Dec. 31, 2018, appropriately represent, in all material respects, the current status of accounting policies and are incorporated herein by reference.

2. Accounting Pronouncements

Recently Issued

Credit Losses — In 2016, the FASB issued Financial Instruments - Credit Losses, Topic 326 (ASC Topic 326), which changes how entities account for losses on receivables and certain other assets. The guidance requires use of a current expected credit loss model, which may result in earlier recognition of credit losses than under previous accounting standards. ASC Topic 326 is effective for interim and annual periods beginning on or after Dec. 15, 2019, and will be applied on a modified-retrospective approach through a cumulative-effect adjustment to retained earnings as of Jan. 1, 2020. SPS is currently evaluating the impact of adoption of the new standard on its financial statements.

Recently Adopted

Leases — In 2016, the FASB issued Leases, Topic 842 (ASC Topic 842), which provides new accounting and disclosure guidance for leasing activities, most significantly requiring that operating leases be recognized on the balance sheet. SPS adopted the guidance on Jan. 1, 2019 utilizing the package of transition practical expedients provided by the new standard, including carrying forward prior conclusions on whether agreements existing before the adoption date contain leases and whether existing leases are operating or finance leases; ASC Topic 842 refers to capital leases as finance leases.

Specifically for land easement contracts, SPS has elected the practical expedient provided by ASU No. 2018-01 Leases: Land Easement Practical Expedient for Transition to Topic 842, and as a result, only those easement contracts entered on or after Jan. 1, 2019 will be evaluated to determine if lease treatment is appropriate.

SPS also utilized the transition practical expedient offered by ASU No. 2018-11 Leases: Targeted Improvements to implement the standard on a prospective basis. As a result, reporting periods in the financial statements beginning Jan. 1, 2019 reflect the implementation of ASC Topic 842, while prior periods continue to be reported in accordance with Leases, Topic 840 (ASC Topic 840). Other than first-time recognition of operating leases on its balance sheet, the implementation of ASC Topic 842 did not have a significant impact on SPS’ financial statements. Adoption resulted in recognition of approximately $0.5 billion of operating lease ROU assets and current/noncurrent operating lease liabilities. See Note 9 for leasing disclosures.

3. Selected Balance Sheet Data

(Millions of Dollars)	June 30, 2019			Dec. 31, 2018
Accounts receivable, net
Accounts receivable	$	98.6		$	96.3
Less allowance for bad debts	(5.3		)	(5.6		)
	$	93.3		$	90.7

(Millions of Dollars)	June 30, 2019		Dec. 31, 2018
Inventories
Materials and supplies	$	24.3	$	25.7
Fuel	6.9		8.2
	$	31.2	$	33.9

(Millions of Dollars)	June 30, 2019			Dec. 31, 2018
Property, plant and equipment, net
Electric plant	$	8,241.0		$	7,227.7
Construction work in progress	207.4			847.3
Total property, plant and equipment	8,448.4			8,075.0
Less accumulated depreciation	(2,219.9		)	(2,128.6		)
Total	$	6,228.5		$	5,946.4

4. Borrowings and Other Financing Instruments

Short-Term Borrowings

SPS meets its short-term liquidity requirements primarily through the issuance of commercial paper and borrowings under its credit facility and the money pool.

Money Pool — Xcel Energy Inc. and its utility subsidiaries have established a money pool arrangement that allows for short-term investments in and borrowings between the utility subsidiaries. Xcel Energy Inc. may make investments in the utility subsidiaries at market-based interest rates; however, the money pool arrangement does not allow the utility subsidiaries to make investments in Xcel Energy Inc. Money pool borrowings for SPS were as follows:

11

(Amounts in Millions, Except Interest Rates)	Three Months Ended June 30, 2019			Year Ended Dec. 31, 2018
Borrowing limit	$	100		$	100
Amount outstanding at period end	—			—
Average amount outstanding	13			29
Maximum amount outstanding	89			100
Weighted average interest rate, computed on a daily basis	2.45		%	1.96		%
Weighted average interest rate at period end	N/A			N/A

Commercial Paper — Commercial paper outstanding for SPS was as follows:

(Amounts in Millions, Except Interest Rates)	Three Months Ended June 30, 2019			Year Ended Dec. 31, 2018
Borrowing limit	$	500		$	400
Amount outstanding at period end	—			42
Average amount outstanding	202			30
Maximum amount outstanding	316			144
Weighted average interest rate, computed on a daily basis	2.68		%	2.27		%
Weighted average interest rate at period end	N/A			2.80

Letters of Credit — SPS uses letters of credit, generally with terms of one year, to provide financial guarantees for certain operating obligations. At June 30, 2019 and Dec. 31, 2018, there were $2 million of letters of credit outstanding under the credit facility. The contract amounts of these letters of credit approximate their fair value and are subject to fees.

Credit Facility — In order to use its commercial paper program to fulfill short-term funding needs, SPS must have a revolving credit facility in place at least equal to the amount of its commercial paper borrowing limit and cannot issue commercial paper in an aggregate amount exceeding available capacity under this credit facility. The line of credit provides short-term financing in the form of notes payable to banks, letters of credit and back-up support for commercial paper borrowings.

As of June 30, 2019, SPS had the following committed credit facility available (in millions of dollars):

Credit Facility (a)		Outstanding (b)		Available
$	500	$	2	$	498

^(a)  This credit facility expires in June 2024.

^(b)  Includes outstanding letters of credit.

All credit facility bank borrowings, outstanding letters of credit and outstanding commercial paper reduce the available capacity under the credit facility. SPS had no direct advances on the credit facility outstanding as of June 30, 2019 and Dec. 31, 2018.

Long-Term Borrowings

During the six months ended June 30, 2019, SPS issued $300 million of 3.75% first mortgage bonds due June 15, 2049.

5. Revenues

Revenue is classified by the type of goods/services rendered and market/customer type. SPS’ operating revenues consists of the following:

	Three Months Ended
(Millions of Dollars)	June 30, 2019		June 30, 2018
Major revenue types
Revenue from contracts with customers:
Residential	$	70.4	$	85.1
C&I	191.4		200.8
Other	9.9		11.3
Total retail	271.7		297.2
Wholesale	72.0		115.6
Transmission	60.0		59.0
Other	0.4		2.9
Total revenue from contracts with customers	404.1		474.7
Alternative revenue and other	6.4		6.6
Total revenues	$	410.5	$	481.3

	Six Months Ended
(Millions of Dollars)	June 30, 2019		June 30, 2018
Major revenue types
Revenue from contracts with customers:
Residential	$	158.5	$	165.2
C&I	397.2		396.5
Other	19.5		21.0
Total retail	575.2		582.7
Wholesale	156.8		208.9
Transmission	117.4		114.6
Other	1.4		10.4
Total revenue from contracts with customers	850.8		916.6
Alternative revenue and other	13.8		12.0
Total revenues	$	864.6	$	928.6

6. Income Taxes

Except to the extent noted below, Note 7 to the financial statements included in SPS’ Annual Report on Form 10-K for the year ended Dec. 31, 2018 represents, in all material respects, the current status of other income tax matters, and are incorporated herein by reference.

The following table reconciles the difference between the statutory rate and the ETR:

	Six Months Ended June 30,
	2019		2018
Federal statutory rate	21.0	%	21.0	%
State tax (net of federal tax effect)	2.1		2.4
Increases (decreases) in tax from:
Plant regulatory differences (a)	(4.8	)	(4.4	)
Prior period adjustments	(0.7	)	(0.2	)
Other tax credits (net)	(0.6	)	(0.8	)
Wind PTCs	(0.2	)	—
Other (net)	(0.4	)	0.4
Effective income tax rate	16.4	%	18.4	%

^(a) Regulatory differences for income tax primarily relate to the flow back of excess deferred taxes to customers through the average rate assumption method and the impact of AFUDC - Equity. Year-to-date variations primarily relates to the deferral of the flow back of excess deferred taxes in 2018, as a result of pending regulatory decisions. Treatment of most tax reform items was established prior to the first quarter of 2019, resulting in a reduction in deferred amounts. Income tax benefits associated with the flow back of excess deferred credits are offset by corresponding revenue reductions.

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Federal Audits — SPS is a member of the Xcel Energy affiliated group that files a consolidated federal income tax return. Statute of limitations applicable to Xcel Energy’s federal income tax returns expire as follows:

Tax Year(s)	Expiration
2009 - 2013	June 2020
2014 - 2016	September 2020
2017	September 2021

In 2015, the IRS commenced an examination of tax years 2012 and 2013. In 2017, the IRS concluded the audit of tax years 2012 and 2013 and proposed an adjustment that would impact Xcel Energy’s NOL and ETR. Xcel Energy filed a protest with the IRS. As of June 30, 2019, the case has been forwarded to the Office of Appeals and Xcel Energy has recognized its best estimate of income tax expense that will result from a final resolution of this issue; however, the outcome and timing of a resolution is unknown.

In 2018, the IRS began an audit of tax years 2014 - 2016. As of June 30, 2019 no adjustments have been proposed.

State Audits — SPS is a member of the Xcel Energy affiliated group that files consolidated state income tax returns. As of June 30, 2019, SPS’ earliest open tax year that is subject to examination by state taxing authorities under applicable statutes of limitations is 2009. There are currently no state income tax audits in progress.

Unrecognized Benefits — Unrecognized tax benefit balance includes permanent tax positions, which if recognized would affect the annual ETR. In addition, the unrecognized tax benefit balance includes temporary tax positions for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility. A change in the period of deductibility would not affect the ETR but would accelerate the payment to the taxing authority to an earlier period.

Unrecognized tax benefits - permanent vs temporary:

(Millions of Dollars)	June 30, 2019		Dec. 31, 2018
Unrecognized tax benefit — Permanent tax positions	$	3.3	$	3.0
Unrecognized tax benefit — Temporary tax positions	1.5		1.5
Total unrecognized tax benefit	$	4.8	$	4.5

Unrecognized tax benefits were reduced by tax benefits associated with NOL and tax credit carryforwards:

(Millions of Dollars)	June 30, 2019			Dec. 31, 2018
NOL and tax credit carryforwards	$	(4.1	)	$	(3.8	)

Net deferred tax liability associated with the unrecognized tax benefit amounts and related NOLs and tax credits carryforwards were $1.1 million and $0.8 million at June 30, 2019 and Dec. 31, 2018, respectively.

As the IRS Appeals and federal audit progress, it is reasonably possible that the amount of unrecognized tax benefit could decrease up to approximately $3.6 million in the next 12 months.

Payables for interest related to unrecognized tax benefits were not material and no amounts were accrued for penalties related to unrecognized tax benefits as of June 30, 2019 or Dec. 31, 2018.

7. Fair Value of Financial Assets and Liabilities

Fair Value Measurements

The accounting guidance for fair value measurements and disclosures provides a single definition of fair value, hierarchical framework for measuring assets and liabilities and requires disclosure about assets and liabilities

measured at fair value.

Level 1 — Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices.

Level 2 — Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reporting date. The types of assets and liabilities included in Level 2 are typically either comparable to actively traded securities or contracts, or priced with models using highly observable inputs.

Level 3 — Significant inputs to pricing have little or no observability as of the reporting date. The types of assets and liabilities included in Level 3 are those valued with models requiring significant management judgment or estimation.

Specific valuation methods include:

Cash equivalents — The fair values of cash equivalents are generally based on cost plus accrued interest; money market funds are measured using quoted NAVs.

Interest rate derivatives — The fair values of interest rate derivatives are based on broker quotes that utilize current market interest rate forecasts.

Commodity derivatives — The methods used to measure the fair value of commodity derivative forwards and options generally utilize observable forward prices and volatilities, as well as observable pricing adjustments for specific delivery locations, and are generally assigned a Level 2 classification. When contractual settlements relate to delivery locations for which pricing is relatively unobservable, or extend to periods beyond those readily observable on active exchanges or quoted by brokers, the significance of the use of less observable inputs on a valuation is evaluated, and may result in Level 3 classification.

Electric commodity derivatives held by SPS include transmission congestion instruments, generally referred to as FTRs, purchased from SPP. FTRs purchased from an RTO are financial instruments that entitle or obligate the holder to monthly revenues or charges based on transmission congestion across a given transmission path. The value of an FTR is derived from, and designed to offset, the cost of transmission congestion. In addition to overall transmission load, congestion is also influenced by the operating schedules of power plants and the consumption of electricity pertinent to a given transmission path. Unplanned plant outages, scheduled plant maintenance, changes in the relative costs of fuels used in generation, weather and overall changes in demand for electricity can each impact the operating schedules of the power plants on the transmission grid and the value of an FTR.

If forecasted costs of electric transmission congestion increase or decrease for a given FTR path, the value of that particular FTR instrument will likewise increase or decrease. Given the limited observability of important inputs to the value of FTRs between auction processes, including expected plant operating schedules and retail and wholesale demand, fair value measurements for FTRs have been assigned a Level 3. Non-trading monthly FTR settlements are expected to be recovered through fuel and purchased energy cost recovery mechanisms, and therefore changes in the fair value of the yet to be settled portions of FTRs are deferred as a regulatory asset or liability. Given this regulatory treatment and the limited magnitude of FTRs relative to the electric utility operations of SPS, the numerous unobservable quantitative inputs pertinent to the value of FTRs are insignificant to the financial statements of SPS.

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Derivative Instruments Fair Value Measurements

SPS enters into derivative instruments, including forward contracts, for trading purposes and to manage risk in connection with changes in interest rates and electric utility commodity prices.

Interest Rate Derivatives — SPS may enter into various instruments that effectively fix the yield or price on a specified benchmark interest rate for an anticipated debt issuance for a specific period. These derivative instruments are generally designated as cash flow hedges for accounting purposes.

As of June 30, 2019, accumulated other comprehensive loss related to interest rate derivatives included $0.1 million net losses expected to be reclassified into earnings during the next 12 months as the related hedged interest rate transactions impact earnings, including forecasted amounts for unsettled hedges, as applicable.

Wholesale and Commodity Trading Risk — SPS conducts various wholesale and commodity trading activities, including the purchase and sale of electric capacity, energy and energy-related instruments, including derivatives. SPS is allowed to conduct these activities within guidelines and limitations as approved by its risk management committee, comprised of management personnel not directly involved in the activities governed by this policy.

Commodity Derivatives — SPS enters into derivative instruments to manage variability of future cash flows from changes in commodity prices in its electric utility operations. This could include the purchase or sale of energy or energy-related products and FTRs.

(Amounts in Millions) (a)	June 30, 2019	Dec. 31, 2018
Mwh of electricity	15.5	5.5

^(a)  Amounts are not reflective of net positions in the underlying commodities.

Consideration of Credit Risk and Concentrations — SPS continuously monitors the creditworthiness of counterparties to its interest rate derivatives and commodity derivative contracts prior to settlement, and assesses each counterparty’s ability to perform on the transactions set forth in the contracts. Impact of credit risk was immaterial to the fair value of unsettled commodity derivatives presented in the balance sheets. SPS’ most significant concentrations of credit risk with particular entities or industries are contracts with counterparties to its wholesale, trading and non-trading commodity activities.

At June 30, 2019, one of the seven most significant counterparties for these activities, comprising $10.1 million or 25% of this credit exposure, had investment grade ratings from S&P Global Ratings, Moody’s Investor Services or Fitch Ratings. Five of the seven most significant counterparties, comprising $7.9 million or 20% of this credit exposure, were not rated by external rating agencies, but based on SPS’ internal analysis, had credit quality consistent with investment grade. One of these significant counterparties, comprising $0.3 million or 1% of this credit exposure, had credit quality less than investment grade, based on external analysis. Six of these significant counterparties are municipal or cooperative electric entities, or other utilities.

Impact of Derivative Activities on Income and Accumulated Other Comprehensive Loss — Pre-tax losses related to interest rate derivatives reclassified from accumulated other comprehensive loss into earnings were immaterial for the three and six months ended June 30, 2019 and 2018.

Changes in the fair value of FTRs resulting in pre-tax net gains of $9.9 million and $4.6 million were recognized for the three and six months ended June 30, 2019 , respectively, were reclassified as regulatory assets and liabilities. There were $13.0 million and $13.4 million of net gains for the three and six months ended June 30, 2018, respectively. The classification as a regulatory asset or liability is based on expected recovery of FTR settlements through fuel and purchased energy cost recovery mechanisms.

FTR settlement losses of $0.2 million were recognized for both the three and six months ended June 30, 2019 and were recorded to electric fuel and purchased power. There were $3.9 million and $3.4 million of FTR settlement gains for the three and six months ended June 30, 2018, respectively. 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.

SPS had no derivative instruments designated as fair value hedges during the six months ended June 30, 2019 and 2018.

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Recurring Fair Value Measurements — SPS’ derivative assets and liabilities measured at fair value on a recurring basis:

	June 30, 2019													Dec. 31, 2018
	Fair Value													Fair Value
(Millions of Dollars)	Level 1		Level 2		Level 3		Fair Value Total		Netting (a)			Total		Level 1		Level 2		Level 3		Fair Value Total		Netting (a)			Total
Current derivative assets
Other derivative instruments:
Electric commodity	$	—	$	—	$	22.7	$	22.7	$	(0.3	)	$	22.4	$	—	$	—	$	14.9	$	14.9	$	(0.2	)	$	14.7
Total current derivative assets	$	—	$	—	$	22.7	$	22.7	$	(0.3	)	22.4		$	—	$	—	$	14.9	$	14.9	$	(0.2	)	14.7
PPAs (b)												3.1													3.1
Current derivative instruments												$	25.5												$	17.8
Noncurrent derivative assets
PPAs (b)												14.2													15.8
Noncurrent derivative instruments												$	14.2												$	15.8
Current derivative liabilities
Other derivative instruments:
Electric commodity	$	—	$	—	$	0.5	$	0.5	$	(0.3	)	$	0.2	$	—	$	—	$	0.2	$	0.2	$	(0.2	)	$	—
Total current derivative liabilities	$	—	$	—	$	0.5	$	0.5	$	(0.3	)	0.2		$	—	$	—	$	0.2	$	0.2	$	(0.2	)	—
PPAs (b)												3.6								.					3.6
Current derivative instruments												$	3.8												$	3.6
Noncurrent derivative liabilities
PPAs (b)												14.6													16.4
Noncurrent derivative instruments												$	14.6												$	16.4

^(a)  SPS nets derivative instruments and related collateral in its 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 June 30, 2019 and Dec. 31, 2018. At both June 30, 2019 and Dec. 31, 2018, derivative assets and liabilities include no obligations to return cash collateral or rights to reclaim cash collateral. The counterparty netting excludes settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements.

^(b)  During 2006, SPS 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.

Changes in Level 3 commodity derivatives for the three and six months ended June 30, 2019 and 2018:

	Three Months Ended June 30,
(Millions of Dollars)	2019			2018
Balance at April 1	$	3.1		$	5.3
Purchases	17.1			18.7
Settlements	(13.1		)	(14.8		)
Net transactions recorded during the period:
Net gains recognized as regulatory assets and liabilities	15.1			26.2
Balance at June 30	$	22.2		$	35.4

	Six Months Ended June 30,
(Millions of Dollars)	2019			2018
Balance at Jan. 1	$	14.7		$	12.7
Purchases	21.0			19.3
Settlements	(19.7		)	(25.2		)
Net transactions recorded during the period:
Net gains recognized as regulatory assets and liabilities	6.2			28.6
Balance at June 30	$	22.2		$	35.4

SPS recognizes transfers between fair value hierarchy levels as of the beginning of each period. There were no transfers of amounts between levels for derivative instruments for the three and six months ended June 30, 2019 and 2018.

Fair Value of Long-Term Debt

Other financial instruments for which the carrying amount did not equal fair value:

	June 30, 2019				Dec. 31, 2018
(Millions of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion	$	2,419.5	$	2,617.1	$	2,126.1	$	2,139.8

Fair value of SPS’ long-term debt is estimated based on recent trades and observable spreads from benchmark interest rates for similar securities. Fair value estimates are based on information available to management as of June 30, 2019 and Dec. 31, 2018, and given the observability of the inputs, fair values presented for long-term debt were assigned as Level 2.

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8. Benefit Plans and Other Postretirement Benefits

Components of Net Periodic Benefit Cost (Credit)

	Three Months Ended June 30,
	2019			2018			2019			2018
(Millions of Dollars)	Pension Benefits						Postretirement Health Care Benefits
Service cost	$	2.2		$	2.4		$	0.2		$	0.3
Interest cost (a)	5.0			4.6			0.4			0.4
Expected return on plan assets (a)	(7.2		)	(7.1		)	(0.5		)	(0.6		)
Amortization of prior service credit (a)	—			—			(0.1		)	(0.1		)
Amortization of net loss (gain) (a)	2.9			3.5			(0.1		)	(0.1		)
Net periodic benefit cost (credit)	2.9			3.4			(0.1		)	(0.1		)
Credits not recognized due to the effects of regulation	0.4			0.8			—			—
Net benefit cost (credit) recognized for financial reporting	$	3.3		$	4.2		$	(0.1	)	$	(0.1	)

^(a) The components of net periodic cost other than the service cost component are included in the line item “other expense, net” in the income statement or capitalized on the balance sheet as a regulatory asset.

	Six Months Ended June 30,
	2019			2018			2019			2018
(Millions of Dollars)	Pension Benefits						Postretirement Health Care Benefits
Service cost	$	4.4		$	4.9		$	0.4		$	0.5
Interest cost (a)	10.1			9.2			0.9			0.8
Expected return on plan assets (a)	(14.3		)	(14.2		)	(1.0		)	(1.2		)
Amortization of prior service credit (a)	(0.1		)	—			(0.3		)	(0.2		)
Amortization of net loss (gain) (a)	5.7			7.0			(0.2		)	(0.2		)
Net periodic benefit cost (credit)	5.8			6.9			(0.2		)	(0.3		)
Credits not recognized due to the effects of regulation	0.8			1.7			—			—
Net benefit cost (credit) recognized for financial reporting	$	6.6		$	8.6		$	(0.2	)	$	(0.3	)

^(a) The components of net periodic cost other than the service cost component are included in the line item “other expense, net” in the income statement or capitalized on the balance sheet as a regulatory asset.

In January 2019, contributions of $150 million were made across four of Xcel Energy’s pension plans, of which $17 million was attributable to SPS. On July 1, 2019, Xcel Energy made a $4 million contribution to the Xcel Energy Inc. Non-Bargaining Pension Plan (South), of which $1 million was attributable to SPS, and does not expect any additional pension contributions during 2019.

9. Commitments and Contingencies

The following include commitments, contingencies and unresolved contingencies that are material to SPS’ financial position.

Legal

SPS is involved in various litigation matters in the ordinary course of business. The assessment of whether a loss is probable or is a reasonable possibility, and whether the loss or a range of loss is estimable, often involves a series of complex judgments about future events. Management maintains accruals for losses probable of being incurred and subject to reasonable estimation. Management is sometimes unable to estimate an amount or range of a reasonably possible loss in certain situations, including but not limited to, when (1) the damages sought are indeterminate, (2) the proceedings are in the early stages or (3) the matters involve novel or unsettled legal theories. In such cases, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss.

For current proceedings not specifically reported herein, management does not anticipate that the ultimate liabilities, if any, would have a material effect on SPS’ financial statements. Unless otherwise required by GAAP, legal fees are expensed as incurred.

Rate Matters

SPP OATT Upgrade Costs — Under the SPP OATT, costs of transmission upgrades may be recovered from other SPP customers whose transmission service depends on capacity enabled by the upgrade. SPP had not been charging its customers for these upgrades, even though the SPP OATT had allowed SPP to do so since 2008. In 2016, the FERC granted SPP’s request to recover these previously unbilled charges and SPP subsequently billed SPS approximately $13 million.

In July 2018, SPS’ appeal to the D.C. Circuit over the FERC rulings granting SPP the right to recover these previously unbilled charges was remanded to the FERC. In February 2019, the FERC reversed its 2016 decision and ordered SPP to refund the charges retroactively collected from its transmission customers, including SPS, related to periods before September 2015. In April 2019, several parties, including SPP, filed requests for rehearing. The timing of a FERC response to the rehearing requests is uncertain. Any refunds received by SPS are expected to be given back to SPS customers through future rates.

In October 2017, SPS filed a separate complaint against SPP asserting that SPP has assessed upgrade charges to SPS in violation of the SPP OATT. The FERC granted a rehearing for further consideration in May 2018. The timing of FERC action on the SPS rehearing is uncertain. If SPS’ complaint results in additional charges or refunds, SPS will seek to recover or refund the amounts through future SPS customer rates.

SPP Filing to Assign GridLiance Facilities to SPS Rate Zone — In August 2018, SPP filed a request with the FERC to amend its OATT to include the costs of the GridLiance High Plains, LLC. facilities in the SPS rate zone. In a previous filing, the FERC determined that some of these facilities did not qualify as transmission facilities under the SPP OATT. SPP’s proposed tariff changes could result in an increase in the ATRR of $9.5 million per year, with $6 million allocated to SPS’ retail customers.

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The remaining $3.5 million would be paid by other wholesale loads in the SPS rate zone. In September 2018, SPS protested the proposed SPP tariff charges, and asked the FERC to reject the SPP filing. On Oct. 31, 2018, the FERC issued an order accepting the proposed charges as of Nov. 1, 2018. Settlement procedures took place in the first half of 2019. In July 2019, the settlement ALJ declared the parties were at an impasse, and made a recommendation for contested case hearing procedures. The contested case hearing procedures started in July 2019 and are expected to take approximately 13 months with an initial decision expected from the ALJ on Oct. 21, 2020, which is not binding on the FERC.

SPS Filing to Modify Wholesale Transmission Rates — In 2018, SPS filed revisions to its wholesale transmission formula rate. The proposal includes an update to the depreciation rates for transmission plant. The new formula rate would provide flow-back of “excess” ADIT resulting from the TCJA and recover certain wholesale regulatory commission expenses.

The proposed changes would increase wholesale transmission revenues by approximately $9.4 million, with approximately $4.4 million of the total being recovered in SPP regional transmission rates. SPS proposed that the formula rate changes be effective Feb. 1, 2019.

In January 2019, the FERC issued an order accepting the proposed rate changes as of Feb. 1, 2019, subject to refund and settlement procedures. Settlement procedures started in February 2019, and are ongoing.

Environmental

MGP, Landfill or Disposal Sites — SPS is currently remediating the site of a former facility.

SPS has recognized its best estimate of costs/liabilities that will result from final resolution of these issues, however, the outcome and timing is unknown. In addition, there may be insurance recovery and/or recovery from other potentially responsible parties, offsetting a portion of the costs incurred.

Leases

SPS evaluates contracts that may contain leases, including PPAs and arrangements for the use of office space and other facilities, vehicles and equipment. Under ASC Topic 842, adopted by SPS on Jan. 1, 2019, a contract contains a lease if it conveys the exclusive right to control the use of a specific asset. A contract determined to contain a lease is evaluated further to determine if the arrangement is a finance lease.

ROU assets represent SPS’ rights to use leased assets. Starting in 2019, the present value of future operating lease payments are recognized in other current liabilities and noncurrent operating lease liabilities. These amounts, adjusted for any prepayments or incentives, are recognized as operating lease ROU assets.

Most of SPS’ leases do not contain a readily determinable discount rate. Therefore, the present value of future lease payments is calculated using the estimated incremental borrowing rate (weighted-average of 4.4%). SPS has elected the practical expedient under which non-lease components, such as asset maintenance costs included in payments, are not deducted from minimum lease payments for the purposes of lease accounting and disclosure. Leases with an initial term of 12 months or less are classified as short-term leases and are not recognized on the balance sheet.

Operating lease ROU assets:

(Millions of Dollars)	June 30, 2019
PPAs	$	500.3
Other	48.0
Gross operating lease ROU assets	548.3
Accumulated amortization	(12.8		)
Net operating lease ROU assets	$	535.5

Components of lease expense:

(Millions of Dollars)	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Operating leases
PPA capacity payments	$	12.6	$	25.4
Other operating leases (a)	1.3		2.5
Total operating lease expense (b)	$	13.9	$	27.9

^(a)  Includes short-term lease expense of $0.5 million for three months ended June 30, 2019 and $0.9 million for six months ended June 30, 2019.

^(b)  PPA capacity payments are included in electric fuel and purchased power on the statements of income. Expense for other operating leases is included in O&M expense.

Future commitments under operating leases as of June 30, 2019:

(Millions of Dollars)	PPA (a) (b) Operating Leases			Other Operating Leases			Total Operating Leases
2019	$	23.1		$	1.7		$	24.8
2020	46.2			3.4			49.6
2021	46.2			3.3			49.5
2022	46.2			3.4			49.6
2023	46.2			3.4			49.6
Thereafter	450.8			54.8			505.6
Total minimum obligation	658.7			70.0			728.7
Interest component of obligation	(170.6		)	(22.6		)	(193.2		)
Present value of minimum obligation	488.1			47.4			535.5
Less current portion							(26.5		)
Noncurrent operating lease liabilities							$	509.0
Weighted-average remaining lease term in years							14.5

^(a)  Amounts do not include PPAs accounted for as executory contracts and/or contingent payments, such as energy payments on renewable PPAs.

^(b)  PPA operating leases contractually expire at various dates through 2033.

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Future commitments under operating leases as of Dec. 31, 2018:

(Millions of Dollars)	PPA (a) (b) Operating Leases		Other Operating Leases		Total Operating Leases
2019	$	46.7	$	5.2	$	51.9
2020	46.2		5.2		51.4
2021	46.2		5.1		51.3
2022	46.2		5.1		51.3
2023	46.2		5.1		51.3
Thereafter	450.8		56.3		507.1

^(a)  Amounts do not include PPAs accounted for as executory contracts and/or contingent payments, such as energy payments on renewable PPAs.

^(b)  PPA operating leases contractually expire at various dates through 2033.

Variable Interest Entities

Under certain PPAs, SPS purchases power from IPPs and is required to reimburse the IPPs for fuel costs, or to participate in tolling arrangements under which SPS procures the natural gas required to produce the energy that it purchases. These specific PPAs create a variable interest in the associated IPP.

SPS had approximately 1,197 MW of capacity under long-term PPAs as of June 30, 2019 and Dec. 31, 2018, with entities that have been determined to be VIEs. SPS concluded that these entities are not required to be consolidated in its financial statements because it does not have the power to direct the activities that significantly impact the entities’ economic performance. These agreements have expiration dates through 2041.

Item 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Discussion of financial condition and liquidity for SPS is omitted per conditions set forth in general instructions H(1)(a) and (b) of Form 10-Q for wholly owned subsidiaries. It is replaced with management’s narrative analysis of the results of operations set forth in general instructions H(2)(a) of Form 10-Q for wholly owned subsidiaries (reduced disclosure format).

Non-GAAP Financial Measures

The following discussion includes financial information prepared in accordance with GAAP, as well as certain non-GAAP financial measures such as, electric margin and ongoing earnings. Generally, a non-GAAP financial measure is a measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are adjusted from measures calculated and presented in accordance with GAAP. SPS’s management uses non-GAAP measures for financial planning and analysis, for reporting of results to the Board of Directors, in determining performance-based compensation, and communicating its earnings outlook to analysts and investors. Non-GAAP financial measures are intended to supplement investors’ understanding of our performance and should not be considered alternatives for financial measures presented in accordance with GAAP. These measures are discussed in more detail below and may not be comparable to other companies’ similarly titled non-GAAP financial measures.

Electric Margins

Electric margin is presented as electric revenues less electric fuel and purchased power expenses. Expenses incurred for electric fuel and purchased power are generally recovered through various regulatory recovery mechanisms. As a result, changes in these expenses are generally offset in operating revenues. Management believes electric margins provide the most meaningful basis for evaluating our operations because they exclude the revenue impact of fluctuations in these expenses. These margins can be reconciled to operating income, a GAAP measure, by including other operating revenues, O&M expenses, DSM expenses, depreciation and amortization and taxes (other than income taxes).

Earnings Adjusted for Certain Items (Ongoing Earnings)

Ongoing earnings reflect adjustments to GAAP earnings (net income) for certain items. Management uses these non-GAAP financial measures to evaluate and provide details of SPS’ core earnings and underlying performance.

Results of Operations

SPS’ net income was approximately $112.9 million for 2019 year-to-date, compared with approximately $91.6 million for the same period in 2018. The increase reflects higher electric margin attributable to rate case outcomes, sales growth and lower purchased capacity costs, despite unfavorable weather. Higher electric margin and AFUDC associated with the Hale County wind project were partially offset by increased depreciation, O&M and interest expenses.

Electric Margin

Electric revenues and fuel and purchased power expenses tend to vary with changing retail and wholesale sales requirements and unit cost changes in fuel and purchased power.

Changes in fuel or purchased power costs can impact earnings as the fuel and purchased power cost recovery mechanisms of the Texas and New Mexico jurisdictions may not allow for complete recovery of all expenses.

Electric revenues and margin:

	Six Months Ended June 30
(Millions of Dollars)	2019			2018
Electric revenues	$	864.6		$	928.6
Electric fuel and purchased power	(410.8		)	(511.6		)
Electric margin	$	453.8		$	417.0

Changes in electric margin:

(Millions of Dollars)	2019 vs 2018
Purchased capacity costs	$	13.7
Demand revenue	13.2
Regulatory rate outcomes	11.8
Non-fuel riders	7.2
Wholesale transmission, net	6.8
Retail sales growth	4.1
Estimated impact of weather	(12.5		)
Firm wholesale	(5.5		)
Other, net	(2.0		)
Total increase in electric margin	$	36.8

18

Non-Fuel Operating Expense and Other Items

O&M Expenses — O&M expenses increased $10.3 million, or 7.8%, for 2019 year-to-date compared with the same period in 2018. Increase was primarily driven by plant generation, distribution and business system expenses. Plant generation expenses increased due to timing of planned maintenance and overhauls. Distribution expenses increased as a result of additional pole inspections. Business system costs increased due to additional consulting fees.

Depreciation and Amortization — Depreciation and amortization increased $13.0 million, or 13.3% for 2019 year-to-date compared with the same period in 2018. The increase was primarily due to increased capital investments as well as accelerated depreciation at Tolk for the Texas jurisdiction.

Income Taxes — Income tax expense increased $1.4 million for 2019 year‑to‑date compared with the same period in 2018. The increase was primarily driven by higher pretax income. This was partially offset by an increase in plant-related regulatory differences, non-plant accumulated deferred income tax amortization and an increase in prior period adjustments. ETR was 16.4% for the first six months of 2019 compared with 18.4% for the same period in 2018. The lower ETR in 2019 is primarily due to the items referenced above. See Note 6 to the financial statements.

AFUDC, Equity and Debt — AFUDC increased $17.8 million for 2019 year‑to-date compared with the same period in 2018. The increase was primarily due to an increase in wind construction projects, primarily the Hale Wind project.

Interest Charges — Interest charges increased $9.3 million, or 22.9%, for 2019 year-to-date compared with the same period in 2018. The increase was related to higher debt levels to fund capital investments, changes in short-term interest rates and implementation of lease accounting standard (offset in electric margin).

Public Utility Regulation

Except to the extent noted below, the circumstances set forth in Public Utility Regulation included in Item 1 of SPS’ Annual Report on Form 10‑K for the year ended Dec. 31, 2018 and in Item 2 of SPS’ Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019, appropriately represent, in all material respects, the current status of public utility regulation and are incorporated herein by reference.

FERC and State Regulation — The FERC has jurisdiction over rates for electric transmission service in interstate commerce and electricity sold at wholesale, asset transactions and mergers, accounting practices and certain other activities of SPS, including enforcement of NERC mandatory electric reliability standards. State and local agencies have jurisdiction over many of SPS’ activities, including regulation of retail rates and environmental matters.

Xcel Energy, which includes SPS, attempts to mitigate the risk of regulatory penalties through formal training on prohibited practices and a compliance function that reviews interaction with the markets under FERC and Commodity Futures Trading Commission jurisdictions.

Public campaigns are conducted to raise awareness of the public safety issues of interacting with our electric systems.

While programs to comply with regulatory requirements are in place, there is no guarantee the compliance programs or other measures will be sufficient to ensure against violations. Decisions by these regulators can significantly impact SPS’ results of operations.

19

Other Pending and Recently Concluded Regulatory Proceedings

Mechanism	Utility Service	Amount Requested (in millions)	Filing Date	Approval	Additional Information
SPS (PUCT)
Rate Case	Electric	$54	August 2017	Received	In November 2018, SPS filed an application with the PUCT requesting permission to recover $5.4 million in unbilled TCRF revenue from Jan. 23, 2018 through June 9, 2018. Application was approved in an order dated June 13, 2019.
SPS (NMPRC)
Rate Case	Electric	$43	October 2017	Received	In February 2019, SPS and the NMPRC settled SPS' appeal to the NMSC regarding NMPRC's previous rate case order, including a $10.2 million refund of retroactive TCJA benefits. As a result, the NMPRC issued revised orders eliminating the retroactive refund and SPS reversed its previously recorded regulatory liability. The order also increased the ROE from 9.1% to 9.56% and the equity ratio from 51% to 53.97%, resulting in a prospective annual base rate increase of $4.5 million (incremental to $8.1 million approved in the initial order). New rates were effective March 11, 2019.

2019 New Mexico Rate Case — In July 2019, SPS filed an electric rate case with the NMPRC seeking an increase in retail electric base rates of approximately $51 million. The rate request is based on a ROE of 10.35%, a 54.77% equity ratio, a rate base of approximately $1.3 billion and a historic test year with rate base additions through Aug. 31, 2019. SPS anticipates final rates will go into effect in the second or third quarter of 2020.

SPS' net revenue increase to New Mexico consumers is expected to be approximately $26 million, or 5.7%, due to fuel cost reductions and PTCs attributable to wind energy provided by the Hale Wind Project. PTCs are being credited to customers through the fuel clause.

The following table summarizes SPS’ base rate increase request:

Revenue Request (Millions of Dollars)
Hale Wind Farm	$	28
Other plant investment	22
Wholesale sales reduction	17
Allocator changes due to load growth	15
Depreciation rate change (including Tolk)	15
Base rate sales growth	(41		)
Other, net	(5		)
New revenue request	$	51

The procedural schedule is as follows:

• Intervention deadline — Sept. 16, 2019

• Filing of stipulation, if any — Nov. 15, 2019

• Staff and intervenor testimony or testimony in support of a stipulation — Nov. 22, 2019

• Testimony in opposition to a stipulation, if any — Dec. 6, 2019

• Rebuttal testimony — Dec. 20, 2019

• Public hearing begins — Jan. 7, 2020

• End of 9-month suspension — April 30, 2020

Wind Development — In 2018, the NMPRC and PUCT approved SPS’ proposal to add 1,230 MW of new wind generation, including construction and ownership of the 478 MW Hale and 522 MW Sagamore wind farms. The Hale wind project was placed into commercial operation in June 2019.

SPS is currently waiting to receive the transmission cost estimate from SPP for Sagamore, which is necessary to determine the final cost of the project before construction can start. Sagamore is expected to go into service in late 2020. SPS’ capital investment for Hale and Sagamore is expected to be approximately $1.6 billion.

Texas State Right of First Refusal (ROFR) Request for Declaratory Order — In 2017, SPS and SPP filed a joint petition with the PUCT for a declaratory order regarding SPS’ ROFR. SPS contended that Texas law grants an incumbent electric utility the ROFR to construct new transmission facilities located in the utility’s service area. The PUCT subsequently issued an order finding that SPS does not possess an exclusive right to construct and operate transmission facilities. SPS filed an appeal in the fourth quarter of 2018. Subsequent to that appeal, in May 2019, the Texas legislature passed and the Governor signed into law Senate Bill 1938, thus making SPS’ appeal moot. A motion is pending at the Court of Appeals to dismiss the appeal for mootness. Senate Bill 1938 grants incumbent utilities a ROFR to build transmission when the transmission directly interconnects to the utility’s existing facility. In June 2019, a complaint was filed in the United States District Court for the Western District of Texas claiming the new ROFR law set forth in Senate bill 1938 to be unconstitutional. SPS expects to intervene in this litigation in support of the PUCT and the Senate Bill 1938.

Texas Fuel Reconciliation — In December 2018, SPS filed an application to the PUCT for reconciliation of fuel costs for the period Jan. 1, 2016, through June 30, 2018, where it will be determined whether all fuel costs incurred during the period were eligible for recovery. Parties in the proceeding have asserted that certain Texas retail fuel costs, of up to approximately $4 million, should not be found to be reasonable or prudent, in particular regarding two purchase power agreements for solar power. The hearing was held in July 2019; we are unable to predict the outcome of this proceeding at this time.

Environmental Matters

In June 2019, the EPA issued the final ACE rule to replace the Obama-era Clean Power Plan. The final ACE rule may require implementation of heat rate improvement projects at some of our coal-fired power plants. It is not known what the costs associated with the final rule might be until state plans are developed to implement the final regulation. SPS believes, based on prior state commission practice, the cost of these initiatives or replacement generation would be recoverable through rates.

20

Item 4 — CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

SPS maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms.  In addition, the disclosure controls and procedures ensure that information required to be disclosed is accumulated and communicated to management, including the chief executive officer (CEO) and chief financial officer (CFO), allowing timely decisions regarding required disclosure.  As of June 30, 2019, based on an evaluation carried out under the supervision and with the participation of SPS’ management, including the CEO and CFO, of the effectiveness of its disclosure controls and the procedures, the CEO and CFO have concluded that SPS’ disclosure controls and procedures were effective.

Internal Control Over Financial Reporting

No changes in SPS’ internal control over financial reporting occurred during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, SPS’ internal control over financial reporting.

Part II — OTHER INFORMATION

Item 1 — Legal Proceedings

SPS is involved in various litigation matters that are being defended and handled in the ordinary course of business. Assessment of whether a loss is probable or is a reasonable possibility, and whether a loss or a range of loss is estimable, often involves a series of complex judgments regarding future events. Management maintains accruals for losses that are probable of being incurred and subject to reasonable estimation. Management may be unable to estimate an amount or range of a reasonably possible loss in certain situations, including but not limited to when (1) damages sought are indeterminate, (2) proceedings are in the early stages or (3) matters involve novel or unsettled legal theories. In such cases, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss.

See Note 9 to the financial statements and Part I Item 2 for further information.

Item 1A — RISK FACTORS

SPS’ risk factors are documented in Item 1A of Part I of its Annual Report on Form 10-K for the year ended Dec. 31, 2018, which is incorporated herein by reference. There have been no material changes from the risk factors previously disclosed in the Form 10-K.

21

Item 6 — EXHIBITS

* Indicates incorporation by reference

+ Executive Compensation Arrangements and Benefit Plans Covering Executive Officers and Directors

Exhibit Number	Description	Report or Registration Statement	SEC File or Registration Number	Exhibit Reference
3.01*	Amended and Restated Articles of Incorporation dated Sept. 30, 1997	SPS Form 10-Q for the quarter ended Sept. 30, 2017	001-03789	3.01
3.02*	By-Laws of SPS as Amended and Restated on Jan. 25, 2019	SPS Form 10-K for the year ended Dec. 31, 2018	001-03789	3.02
4.01*	Supplemental Indenture No. 7 dated as of June 1, 2019 between SPS and U.S. Bank National Association, as Trustee, creating 3.75% First Mortgage Bonds, Series No. 7 due 2049	SPS Form 8-K dated June 18, 2019	001-03789	4.01
10.01*	Third Amended and Restated Credit Agreement, dated as of June 7, 2019 among SPS, as Borrower, the several lenders from time to time parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A. and Barclays Bank Plc, as Syndication Agents, Wells Fargo Bank, National Association, MUFG Bank, Ltd., and Citibank, N.A., as Documentation Agents	Xcel Energy Inc. Form 8-K dated June 7, 2019	001-03034	99.04
31.01	Principal Executive Officer’s certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.02	Principal Financial Officer’s certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.01	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials from SPS’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 are formatted in XBRL (eXtensible Business Reporting Language):  (i) the Statements of Income, (ii) the Statements of Comprehensive Income (iii) the Statements of Cash Flows, (iv) the Balance Sheets, (v) Notes to Financial Statements, and (vi) document and entity information.

22

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Southwestern Public Service Company
Aug. 1, 2019	By:	/s/ JEFFREY S. SAVAGE
		Jeffrey S. Savage
		Senior Vice President, Controller
		(Principal Accounting Officer)
		/s/ ROBERT C. FRENZEL
		Robert C. Frenzel
		Executive Vice President, Chief Financial Officer and Director
		(Principal Financial Officer)

23

EX-31.01

Exhibit 31.01

CERTIFICATION

I, Ben Fowke, certify that:

1. I have reviewed this report on Form 10-Q of Southwestern Public Service Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: Aug. 1, 2019

/s/ BEN FOWKE

Ben Fowke

Chairman, Chief Executive Officer and Director

(Principal Executive Officer)

1

EX-31.02

Exhibit 31.02

CERTIFICATION

I, Robert C. Frenzel, certify that:

1. I have reviewed this report on Form 10-Q of Southwestern Public Service Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting

Date: Aug. 1, 2019

/s/ ROBERT C. FRENZEL

Robert C. Frenzel

Executive Vice President, Chief Financial Officer and Director

(Principal Financial Officer)

2

EX-32.01

Exhibit 32.01

OFFICER CERTIFICATION

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Southwestern Public Service Company (SPS) on Form 10-Q for the quarter ended June 30, 2019, as filed with the SEC on the date hereof (Form 10-Q), each of the undersigned officers of SPS certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

(1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of SPS as of the dates and for the periods expressed in the Form 10-Q.

Date: Aug. 1, 2019

/s/ BEN FOWKE

Ben Fowke

Chairman, Chief Executive Officer and Director

(Principal Executive Officer)

/s/ ROBERT C. FRENZEL

Robert C. Frenzel

Executive Vice President, Chief Financial Officer and Director

(Principal Financial Officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to SPS and will be retained by SPS and furnished to the SEC or its staff upon request.

1

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2019	Aug. 01, 2019
Cover page.
Entity Registrant Name	SOUTHWESTERN PUBLIC SERVICE CO
Entity Central Index Key	0000092521
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Amendment Flag	false
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2019
Document Transition Report	false
Entity File Number	001-3034
Entity Tax Identification Number	75-0575400
Entity Incorporation, State or Country Code	NM
Entity Address, Address Line One	790 South Buchanan Street
Entity Address, City or Town	Amarillo
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	79101
City Area Code	303
Local Phone Number	571-7511
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		100

XML

CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Millions	Total	Common Stock	Additional Paid In Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Beginning balance (in shares) at Dec. 31, 2017		100
Beginning balance at Dec. 31, 2017	$ 2,130.3	$ 0.0	$ 1,590.2	$ 541.6	$ (1.5)
Increase (Decrease) in Stockholders' Equity
Net income	91.6			91.6
Other comprehensive income	0.0
Dividends declared to parent	(64.0)			(64.0)
Contributions of capital by parent	1.2		1.2
Ending balance at Jun. 30, 2018	2,159.1	$ 0.0	1,591.4	569.2	(1.5)
Ending balance (in shares) at Jun. 30, 2018		100
Beginning balance (in shares) at Mar. 31, 2018		100
Beginning balance at Mar. 31, 2018	2,130.1	$ 0.0	1,590.2	541.4	(1.5)
Increase (Decrease) in Stockholders' Equity
Net income	58.5			58.5
Other comprehensive income	0.0
Dividends declared to parent	(30.7)			(30.7)
Contributions of capital by parent	1.2		1.2
Ending balance at Jun. 30, 2018	$ 2,159.1	$ 0.0	1,591.4	569.2	(1.5)
Ending balance (in shares) at Jun. 30, 2018		100
Beginning balance (in shares) at Dec. 31, 2018	100	100
Beginning balance at Dec. 31, 2018	$ 2,536.6	$ 0.0	1,932.3	605.7	(1.4)
Increase (Decrease) in Stockholders' Equity
Net income	112.9			112.9
Other comprehensive income	0.1				0.1
Dividends declared to parent	(140.9)			(140.9)
Contributions of capital by parent	375.0		375.0
Ending balance at Jun. 30, 2019	$ 2,883.7	$ 0.0	2,307.3	577.7	(1.3)
Ending balance (in shares) at Jun. 30, 2019	100	100
Beginning balance (in shares) at Mar. 31, 2019		100
Beginning balance at Mar. 31, 2019	$ 2,533.2	$ 0.0	1,932.3	602.3	(1.4)
Increase (Decrease) in Stockholders' Equity
Net income	58.8			58.8
Other comprehensive income	0.1				0.1
Dividends declared to parent	(83.4)			(83.4)
Contributions of capital by parent	375.0		375.0
Ending balance at Jun. 30, 2019	$ 2,883.7	$ 0.0	$ 2,307.3	$ 577.7	$ (1.3)
Ending balance (in shares) at Jun. 30, 2019	100	100

XML

STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenues [Abstract]
Operating revenues	$ 410.5	$ 481.3	$ 864.6	$ 928.6
Operating expenses
Electric fuel and purchased power	179.9	257.6	410.8	511.6
Operating and maintenance expenses	70.1	66.1	142.5	132.2
Demand side management expenses	3.8	4.8	8.4	8.9
Depreciation and amortization	57.8	49.6	111.0	98.0
Taxes (other than income taxes)	17.0	15.6	35.5	33.3
Total operating expenses	328.6	393.7	708.2	784.0
Operating income	81.9	87.6	156.4	144.6
Other income (expense), net	0.5	(0.8)	0.9	(1.5)
Allowance for funds used during construction — equity	8.7	3.2	19.0	6.6
Interest charges and financing costs
Interest charges — includes other financing costs of $0.8, $0.7, $1.6 and $1.4 respectively	25.6	20.6	50.0	40.7
Allowance for funds used during construction — debt	(4.2)	(1.5)	(8.7)	(3.3)
Total interest charges and financing costs	21.4	19.1	41.3	37.4
Income before income taxes	69.7	70.9	135.0	112.3
Income taxes	10.9	12.4	22.1	20.7
Net income	$ 58.8	$ 58.5	$ 112.9	$ 91.6

XML

STATEMENTS OF INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Interest charges and financing costs
Other financing costs	$ 0.8	$ 0.7	$ 1.6	$ 1.4

XML

STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Comprehensive income:
Net income	$ 58.8	$ 58.5	$ 112.9	$ 91.6
Derivative instruments:
Reclassification of losses to net income, net of tax of $0	0.1	0.0	0.1	0.0
Other comprehensive income	0.1	0.0	0.1	0.0
Comprehensive income	$ 58.9	$ 58.5	$ 113.0	$ 91.6

XML

STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Derivative instruments:
Reclassification of losses to net income, tax	$ 0.0	$ 0.0	$ 0.0	$ 0.0

XML

STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Operating activities
Net income	$ 112.9	$ 91.6
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	112.1	98.1
Demand side management program amortization	0.0	0.8
Deferred income taxes	3.3	(2.3)
Allowance for equity funds used during construction	(19.0)	(6.6)
Changes in operating assets and liabilities:
Accounts receivable	(1.3)	(25.3)
Accrued unbilled revenues	(11.3)	2.3
Inventories	(9.9)	7.9
Prepayments and other	5.2	0.7
Accounts payable	(24.5)	0.6
Net regulatory assets and liabilities	37.0	46.2
Other current liabilities	1.1	13.9
Pension and other employee benefit obligations	(16.3)	(7.9)
Other, net	0.5	0.0
Change in other noncurrent assets	(0.3)	4.4
Change in other noncurrent liabilities	0.5	(0.5)
Net cash provided by operating activities	190.0	223.9
Investing activities
Utility capital/construction expenditures	(364.2)	(471.7)
Investments in utility money pool arrangement	100.0	46.0
Repayments from utility money pool arrangement	0.0	111.0
Net cash used in investing activities	(464.2)	(406.7)
Financing activities
Proceeds from (repayments of) short-term borrowings, net	(42.0)	132.0
Proceeds from (repayments of) from issuance of long-term debt, net	292.8	0.0
Borrowings under utility money pool arrangement	283.0	180.0
Repayments under utility money pool arrangement	(283.0)	(80.0)
Capital contributions from parent	378.8	0.4
Dividends paid to parent	(137.7)	(60.1)
Net cash provided by (used in) financing activities	491.9	172.3
Net change in cash and cash equivalents	217.7	(10.5)
Cash and cash equivalents at beginning of period	44.0	10.9
Cash and cash equivalents at end of period	261.7	0.4
Supplemental disclosure of cash flow information:
Cash paid for interest (net of amounts capitalized)	(39.9)	(36.7)
Cash paid for income taxes, net	0.0	(7.6)
Supplemental disclosure of non-cash investing and financing transactions:
Property, plant and equipment additions in accounts payable	68.6	43.3
Inventory transfer additions in PPE	12.6	11.2
Operating lease right-of-use assets	548.3	0.0
Allowance for equity funds used during construction	$ 19.0	$ 6.6

XML

BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 261,700	$ 44,000
Accounts receivable, net	93,300	90,700
Accounts receivable from affiliates	5,300	10,500
Investments in utility money pool arrangement	100,000	0
Accrued unbilled revenues	125,700	114,500
Inventories	31,200	33,900
Regulatory assets	23,800	26,000
Derivative instruments	25,500	17,800
Prepaid taxes	0	14,200
Prepayments and other	19,800	10,700
Total current assets	686,300	362,300
Property, plant and equipment, net	6,228,500	5,946,400
Other assets
Regulatory assets	361,300	366,200
Derivative instruments	14,200	15,800
Operating lease right-of-use assets	535,500	0
Other	5,000	5,100
Total other assets	916,000	387,100
Total assets	7,830,800	6,695,800
Current liabilities
Short-term debt	0	42,000
Accounts payable	160,400	191,800
Accounts payable to affiliates	15,900	19,900
Regulatory liabilities	136,900	85,800
Taxes accrued	44,600	41,600
Accrued interest	25,800	25,800
Dividends payable to parent	48,300	45,200
Derivative instruments	3,800	3,600
Other	50,800	28,300
Total current liabilities	486,500	484,000
Deferred credits and other liabilities
Deferred income taxes	634,500	619,100
Regulatory liabilities	749,200	780,900
Asset retirement obligations	49,300	32,400
Derivative instruments	14,600	16,400
Pension and employee benefit obligations	76,200	92,400
Operating lease liabilities	509,000	0
Other	8,300	7,900
Total deferred credits and other liabilities	2,041,100	1,549,100
Capitalization
Long-term debt	2,419,500	2,126,100
Common stock — 200 shares authorized of $1.00 par value; 100 shares outstanding at June 30, 2019 and Dec. 31, 2018, respectively	0	0
Additional paid in capital	2,307,300	1,932,300
Retained earnings	577,700	605,700
Accumulated other comprehensive loss	(1,300)	(1,400)
Total common stockholder’s equity	2,883,700	2,536,600
Total liabilities and equity	$ 7,830,800	$ 6,695,800

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BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Capitalization, Long-term Debt and Equity [Abstract]
Common stock, shares authorized (in shares)	200	200
Common stock, par value (in dollars per share)	$ 1.00	$ 1.00
Common stock, shares outstanding (in shares)	100	100

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Management's Opinion

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Management's Opinion

In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly, in accordance with accounting principles generally accepted in the United States of America (GAAP), the financial position of SPS as of June 30, 2019 and Dec. 31, 2018; the results of its operations, including the components of net income and comprehensive income, and change in stockholder’s equity for the three and six months ended June 30, 2019 and 2018; and its cash flows for the six months ended June 30, 2019 and 2018. All adjustments are of a normal, recurring nature, except as otherwise disclosed. Management has also evaluated the impact of events occurring after June 30, 2019 up to the date of issuance of these financial statements. These statements contain all necessary adjustments and disclosures resulting from that evaluation. The Dec. 31, 2018 balance sheet information has been derived from the audited 2018 financial statements included in the SPS Annual Report on Form 10-K for the year ended Dec. 31, 2018. These notes to the financial statements have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP on an annual basis have been condensed or omitted pursuant to such rules and regulations. For further information, refer to the financial statements and notes thereto, included in the SPS Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed with the SEC on Feb. 22, 2019. Due to the seasonality of SPS’ electric sales, interim results are not necessarily an appropriate base from which to project annual results.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

The significant accounting policies set forth in Note 1 to the financial statements in the SPS Annual Report on Form 10-K for the year ended Dec. 31, 2018, appropriately represent, in all material respects, the current status of accounting policies and are incorporated herein by reference.

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Accounting Pronouncements

6 Months Ended

Jun. 30, 2019

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Accounting Pronouncements

Accounting Pronouncements

Recently Issued

Credit Losses — In 2016, the FASB issued Financial Instruments - Credit Losses, Topic 326 (ASC Topic 326), which changes how entities account for losses on receivables and certain other assets. The guidance requires use of a current expected credit loss model, which may result in earlier recognition of credit losses than under previous accounting standards. ASC Topic 326 is effective for interim and annual periods beginning on or after Dec. 15, 2019, and will be applied on a modified-retrospective approach through a cumulative-effect adjustment to retained earnings as of Jan. 1, 2020. SPS is currently evaluating the impact of adoption of the new standard on its financial statements.

Recently Adopted

Leases — In 2016, the FASB issued Leases, Topic 842 (ASC Topic 842), which provides new accounting and disclosure guidance for leasing activities, most significantly requiring that operating leases be recognized on the balance sheet. SPS adopted the guidance on Jan. 1, 2019 utilizing the package of transition practical expedients provided by the new standard, including carrying forward prior conclusions on whether agreements existing before the adoption date contain leases and whether existing leases are operating or finance leases; ASC Topic 842 refers to capital leases as finance leases.

Specifically for land easement contracts, SPS has elected the practical expedient provided by ASU No. 2018-01 Leases: Land Easement Practical Expedient for Transition to Topic 842, and as a result, only those easement contracts entered on or after Jan. 1, 2019 will be evaluated to determine if lease treatment is appropriate.

SPS also utilized the transition practical expedient offered by ASU No. 2018-11 Leases: Targeted Improvements to implement the standard on a prospective basis. As a result, reporting periods in the financial statements beginning Jan. 1, 2019 reflect the implementation of ASC Topic 842, while prior periods continue to be reported in accordance with Leases, Topic 840 (ASC Topic 840). Other than first-time recognition of operating leases on its balance sheet, the implementation of ASC Topic 842 did not have a significant impact on SPS’ financial statements. Adoption resulted in recognition of approximately $0.5 billion of operating lease ROU assets and current/noncurrent operating lease liabilities. See Note 9 for leasing disclosures.

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Selected Balance Sheet Data

6 Months Ended

Jun. 30, 2019

Balance Sheet Related Disclosures [Abstract]

Selected Balance Sheet Data

Selected Balance Sheet Data

(Millions of Dollars)	June 30, 2019			Dec. 31, 2018
Accounts receivable, net
Accounts receivable	$	98.6		$	96.3
Less allowance for bad debts	(5.3		)	(5.6		)
	$	93.3		$	90.7

(Millions of Dollars)	June 30, 2019		Dec. 31, 2018
Inventories
Materials and supplies	$	24.3	$	25.7
Fuel	6.9		8.2
	$	31.2	$	33.9

(Millions of Dollars)	June 30, 2019			Dec. 31, 2018
Property, plant and equipment, net
Electric plant	$	8,241.0		$	7,227.7
Construction work in progress	207.4			847.3
Total property, plant and equipment	8,448.4			8,075.0
Less accumulated depreciation	(2,219.9		)	(2,128.6		)
Total	$	6,228.5		$	5,946.4

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Borrowings and Other Financing Instruments

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Borrowings and Other Financing Instruments

Borrowings and Other Financing Instruments

Short-Term Borrowings

SPS meets its short-term liquidity requirements primarily through the issuance of commercial paper and borrowings under its credit facility and the money pool.

Money Pool — Xcel Energy Inc. and its utility subsidiaries have established a money pool arrangement that allows for short-term investments in and borrowings between the utility subsidiaries. Xcel Energy Inc. may make investments in the utility subsidiaries at market-based interest rates; however, the money pool arrangement does not allow the utility subsidiaries to make investments in Xcel Energy Inc. Money pool borrowings for SPS were as follows:

(Amounts in Millions, Except Interest Rates)	Three Months Ended June 30, 2019			Year Ended Dec. 31, 2018
Borrowing limit	$	100		$	100
Amount outstanding at period end	—			—
Average amount outstanding	13			29
Maximum amount outstanding	89			100
Weighted average interest rate, computed on a daily basis	2.45		%	1.96		%
Weighted average interest rate at period end	N/A			N/A

Commercial Paper — Commercial paper outstanding for SPS was as follows:

(Amounts in Millions, Except Interest Rates)	Three Months Ended June 30, 2019			Year Ended Dec. 31, 2018
Borrowing limit	$	500		$	400
Amount outstanding at period end	—			42
Average amount outstanding	202			30
Maximum amount outstanding	316			144
Weighted average interest rate, computed on a daily basis	2.68		%	2.27		%
Weighted average interest rate at period end	N/A			2.80

Letters of Credit — SPS uses letters of credit, generally with terms of one year, to provide financial guarantees for certain operating obligations. At June 30, 2019 and Dec. 31, 2018, there were $2 million of letters of credit outstanding under the credit facility. The contract amounts of these letters of credit approximate their fair value and are subject to fees.

Credit Facility — In order to use its commercial paper program to fulfill short-term funding needs, SPS must have a revolving credit facility in place at least equal to the amount of its commercial paper borrowing limit and cannot issue commercial paper in an aggregate amount exceeding available capacity under this credit facility. The line of credit provides short-term financing in the form of notes payable to banks, letters of credit and back-up support for commercial paper borrowings.

As of June 30, 2019, SPS had the following committed credit facility available (in millions of dollars):

Credit Facility (a)		Outstanding (b)		Available
$	500	$	2	$	498

^(a)  This credit facility expires in June 2024.

^(b)  Includes outstanding letters of credit.

All credit facility bank borrowings, outstanding letters of credit and outstanding commercial paper reduce the available capacity under the credit facility. SPS had no direct advances on the credit facility outstanding as of June 30, 2019 and Dec. 31, 2018.

Long-Term Borrowings

During the six months ended June 30, 2019, SPS issued $300 million of 3.75% first mortgage bonds due June 15, 2049.

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Revenues

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue

Revenues

Revenue is classified by the type of goods/services rendered and market/customer type. SPS’ operating revenues consists of the following:

	Three Months Ended
(Millions of Dollars)	June 30, 2019		June 30, 2018
Major revenue types
Revenue from contracts with customers:
Residential	$	70.4	$	85.1
C&I	191.4		200.8
Other	9.9		11.3
Total retail	271.7		297.2
Wholesale	72.0		115.6
Transmission	60.0		59.0
Other	0.4		2.9
Total revenue from contracts with customers	404.1		474.7
Alternative revenue and other	6.4		6.6
Total revenues	$	410.5	$	481.3

	Six Months Ended
(Millions of Dollars)	June 30, 2019		June 30, 2018
Major revenue types
Revenue from contracts with customers:
Residential	$	158.5	$	165.2
C&I	397.2		396.5
Other	19.5		21.0
Total retail	575.2		582.7
Wholesale	156.8		208.9
Transmission	117.4		114.6
Other	1.4		10.4
Total revenue from contracts with customers	850.8		916.6
Alternative revenue and other	13.8		12.0
Total revenues	$	864.6	$	928.6

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Income Taxes

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Except to the extent noted below, Note 7 to the financial statements included in SPS’ Annual Report on Form 10-K for the year ended Dec. 31, 2018 represents, in all material respects, the current status of other income tax matters, and are incorporated herein by reference.

The following table reconciles the difference between the statutory rate and the ETR:

	Six Months Ended June 30,
	2019		2018
Federal statutory rate	21.0	%	21.0	%
State tax (net of federal tax effect)	2.1		2.4
Increases (decreases) in tax from:
Plant regulatory differences (a)	(4.8	)	(4.4	)
Prior period adjustments	(0.7	)	(0.2	)
Other tax credits (net)	(0.6	)	(0.8	)
Wind PTCs	(0.2	)	—
Other (net)	(0.4	)	0.4
Effective income tax rate	16.4	%	18.4	%

^(a) Regulatory differences for income tax primarily relate to the flow back of excess deferred taxes to customers through the average rate assumption method and the impact of AFUDC - Equity. Year-to-date variations primarily relates to the deferral of the flow back of excess deferred taxes in 2018, as a result of pending regulatory decisions. Treatment of most tax reform items was established prior to the first quarter of 2019, resulting in a reduction in deferred amounts. Income tax benefits associated with the flow back of excess deferred credits are offset by corresponding revenue reductions.

Federal Audits — SPS is a member of the Xcel Energy affiliated group that files a consolidated federal income tax return. Statute of limitations applicable to Xcel Energy’s federal income tax returns expire as follows:

Tax Year(s)	Expiration
2009 - 2013	June 2020
2014 - 2016	September 2020
2017	September 2021

In 2015, the IRS commenced an examination of tax years 2012 and 2013. In 2017, the IRS concluded the audit of tax years 2012 and 2013 and proposed an adjustment that would impact Xcel Energy’s NOL and ETR. Xcel Energy filed a protest with the IRS. As of June 30, 2019, the case has been forwarded to the Office of Appeals and Xcel Energy has recognized its best estimate of income tax expense that will result from a final resolution of this issue; however, the outcome and timing of a resolution is unknown.

In 2018, the IRS began an audit of tax years 2014 - 2016. As of June 30, 2019 no adjustments have been proposed.

State Audits — SPS is a member of the Xcel Energy affiliated group that files consolidated state income tax returns. As of June 30, 2019, SPS’ earliest open tax year that is subject to examination by state taxing authorities under applicable statutes of limitations is 2009. There are currently no state income tax audits in progress.

Unrecognized Benefits — Unrecognized tax benefit balance includes permanent tax positions, which if recognized would affect the annual ETR. In addition, the unrecognized tax benefit balance includes temporary tax positions for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility. A change in the period of deductibility would not affect the ETR but would accelerate the payment to the taxing authority to an earlier period.

Unrecognized tax benefits - permanent vs temporary:

(Millions of Dollars)	June 30, 2019		Dec. 31, 2018
Unrecognized tax benefit — Permanent tax positions	$	3.3	$	3.0
Unrecognized tax benefit — Temporary tax positions	1.5		1.5
Total unrecognized tax benefit	$	4.8	$	4.5

Unrecognized tax benefits were reduced by tax benefits associated with NOL and tax credit carryforwards:

(Millions of Dollars)	June 30, 2019			Dec. 31, 2018
NOL and tax credit carryforwards	$	(4.1	)	$	(3.8	)

Net deferred tax liability associated with the unrecognized tax benefit amounts and related NOLs and tax credits carryforwards were $1.1 million and $0.8 million at June 30, 2019 and Dec. 31, 2018, respectively.

As the IRS Appeals and federal audit progress, it is reasonably possible that the amount of unrecognized tax benefit could decrease up to approximately $3.6 million in the next 12 months.

Payables for interest related to unrecognized tax benefits were not material and no amounts were accrued for penalties related to unrecognized tax benefits as of June 30, 2019 or Dec. 31, 2018.

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Fair Value of Financial Assets and Liabilities

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Assets and Liabilities

Fair Value of Financial Assets and Liabilities

Fair Value Measurements

The accounting guidance for fair value measurements and disclosures provides a single definition of fair value, hierarchical framework for measuring assets and liabilities and requires disclosure about assets and liabilities

measured at fair value.

Level 1 — Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices.

Level 2 — Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reporting date. The types of assets and liabilities included in Level 2 are typically either comparable to actively traded securities or contracts, or priced with models using highly observable inputs.

Level 3 — Significant inputs to pricing have little or no observability as of the reporting date. The types of assets and liabilities included in Level 3 are those valued with models requiring significant management judgment or estimation.

Specific valuation methods include:

Cash equivalents — The fair values of cash equivalents are generally based on cost plus accrued interest; money market funds are measured using quoted NAVs.

Interest rate derivatives — The fair values of interest rate derivatives are based on broker quotes that utilize current market interest rate forecasts.

Commodity derivatives — The methods used to measure the fair value of commodity derivative forwards and options generally utilize observable forward prices and volatilities, as well as observable pricing adjustments for specific delivery locations, and are generally assigned a Level 2 classification. When contractual settlements relate to delivery locations for which pricing is relatively unobservable, or extend to periods beyond those readily observable on active exchanges or quoted by brokers, the significance of the use of less observable inputs on a valuation is evaluated, and may result in Level 3 classification.

Electric commodity derivatives held by SPS include transmission congestion instruments, generally referred to as FTRs, purchased from SPP. FTRs purchased from an RTO are financial instruments that entitle or obligate the holder to monthly revenues or charges based on transmission congestion across a given transmission path. The value of an FTR is derived from, and designed to offset, the cost of transmission congestion. In addition to overall transmission load, congestion is also influenced by the operating schedules of power plants and the consumption of electricity pertinent to a given transmission path. Unplanned plant outages, scheduled plant maintenance, changes in the relative costs of fuels used in generation, weather and overall changes in demand for electricity can each impact the operating schedules of the power plants on the transmission grid and the value of an FTR.

If forecasted costs of electric transmission congestion increase or decrease for a given FTR path, the value of that particular FTR instrument will likewise increase or decrease. Given the limited observability of important inputs to the value of FTRs between auction processes, including expected plant operating schedules and retail and wholesale demand, fair value measurements for FTRs have been assigned a Level 3. Non-trading monthly FTR settlements are expected to be recovered through fuel and purchased energy cost recovery mechanisms, and therefore changes in the fair value of the yet to be settled portions of FTRs are deferred as a regulatory asset or liability. Given this regulatory treatment and the limited magnitude of FTRs relative to the electric utility operations of SPS, the numerous unobservable quantitative inputs pertinent to the value of FTRs are insignificant to the financial statements of SPS.

Derivative Instruments Fair Value Measurements

SPS enters into derivative instruments, including forward contracts, for trading purposes and to manage risk in connection with changes in interest rates and electric utility commodity prices.

Interest Rate Derivatives — SPS may enter into various instruments that effectively fix the yield or price on a specified benchmark interest rate for an anticipated debt issuance for a specific period. These derivative instruments are generally designated as cash flow hedges for accounting purposes.

As of June 30, 2019, accumulated other comprehensive loss related to interest rate derivatives included $0.1 million net losses expected to be reclassified into earnings during the next 12 months as the related hedged interest rate transactions impact earnings, including forecasted amounts for unsettled hedges, as applicable.

Wholesale and Commodity Trading Risk — SPS conducts various wholesale and commodity trading activities, including the purchase and sale of electric capacity, energy and energy-related instruments, including derivatives. SPS is allowed to conduct these activities within guidelines and limitations as approved by its risk management committee, comprised of management personnel not directly involved in the activities governed by this policy.

Commodity Derivatives — SPS enters into derivative instruments to manage variability of future cash flows from changes in commodity prices in its electric utility operations. This could include the purchase or sale of energy or energy-related products and FTRs.

(Amounts in Millions) (a)	June 30, 2019	Dec. 31, 2018
Mwh of electricity	15.5	5.5

^(a)  Amounts are not reflective of net positions in the underlying commodities.

Consideration of Credit Risk and Concentrations — SPS continuously monitors the creditworthiness of counterparties to its interest rate derivatives and commodity derivative contracts prior to settlement, and assesses each counterparty’s ability to perform on the transactions set forth in the contracts. Impact of credit risk was immaterial to the fair value of unsettled commodity derivatives presented in the balance sheets. SPS’ most significant concentrations of credit risk with particular entities or industries are contracts with counterparties to its wholesale, trading and non-trading commodity activities.

At June 30, 2019, one of the seven most significant counterparties for these activities, comprising $10.1 million or 25% of this credit exposure, had investment grade ratings from S&P Global Ratings, Moody’s Investor Services or Fitch Ratings. Five of the seven most significant counterparties, comprising $7.9 million or 20% of this credit exposure, were not rated by external rating agencies, but based on SPS’ internal analysis, had credit quality consistent with investment grade. One of these significant counterparties, comprising $0.3 million or 1% of this credit exposure, had credit quality less than investment grade, based on external analysis. Six of these significant counterparties are municipal or cooperative electric entities, or other utilities.

Impact of Derivative Activities on Income and Accumulated Other Comprehensive Loss — Pre-tax losses related to interest rate derivatives reclassified from accumulated other comprehensive loss into earnings were immaterial for the three and six months ended June 30, 2019 and 2018.

Changes in the fair value of FTRs resulting in pre-tax net gains of $9.9 million and $4.6 million were recognized for the three and six months ended June 30, 2019 , respectively, were reclassified as regulatory assets and liabilities. There were $13.0 million and $13.4 million of net gains for the three and six months ended June 30, 2018, respectively. The classification as a regulatory asset or liability is based on expected recovery of FTR settlements through fuel and purchased energy cost recovery mechanisms.

FTR settlement losses of $0.2 million were recognized for both the three and six months ended June 30, 2019 and were recorded to electric fuel and purchased power. There were $3.9 million and $3.4 million of FTR settlement gains for the three and six months ended June 30, 2018, respectively. 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.

SPS had no derivative instruments designated as fair value hedges during the six months ended June 30, 2019 and 2018.

Recurring Fair Value Measurements — SPS’ derivative assets and liabilities measured at fair value on a recurring basis:

	June 30, 2019													Dec. 31, 2018
	Fair Value													Fair Value
(Millions of Dollars)	Level 1		Level 2		Level 3		Fair Value Total		Netting (a)			Total		Level 1		Level 2		Level 3		Fair Value Total		Netting (a)			Total
Current derivative assets
Other derivative instruments:
Electric commodity	$	—	$	—	$	22.7	$	22.7	$	(0.3	)	$	22.4	$	—	$	—	$	14.9	$	14.9	$	(0.2	)	$	14.7
Total current derivative assets	$	—	$	—	$	22.7	$	22.7	$	(0.3	)	22.4		$	—	$	—	$	14.9	$	14.9	$	(0.2	)	14.7
PPAs (b)												3.1													3.1
Current derivative instruments												$	25.5												$	17.8
Noncurrent derivative assets
PPAs (b)												14.2													15.8
Noncurrent derivative instruments												$	14.2												$	15.8
Current derivative liabilities
Other derivative instruments:
Electric commodity	$	—	$	—	$	0.5	$	0.5	$	(0.3	)	$	0.2	$	—	$	—	$	0.2	$	0.2	$	(0.2	)	$	—
Total current derivative liabilities	$	—	$	—	$	0.5	$	0.5	$	(0.3	)	0.2		$	—	$	—	$	0.2	$	0.2	$	(0.2	)	—
PPAs (b)												3.6								.					3.6
Current derivative instruments												$	3.8												$	3.6
Noncurrent derivative liabilities
PPAs (b)												14.6													16.4
Noncurrent derivative instruments												$	14.6												$	16.4

^(a)  SPS nets derivative instruments and related collateral in its 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 June 30, 2019 and Dec. 31, 2018. At both June 30, 2019 and Dec. 31, 2018, derivative assets and liabilities include no obligations to return cash collateral or rights to reclaim cash collateral. The counterparty netting excludes settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements.

^(b)  During 2006, SPS 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.

Changes in Level 3 commodity derivatives for the three and six months ended June 30, 2019 and 2018:

	Three Months Ended June 30,
(Millions of Dollars)	2019			2018
Balance at April 1	$	3.1		$	5.3
Purchases	17.1			18.7
Settlements	(13.1		)	(14.8		)
Net transactions recorded during the period:
Net gains recognized as regulatory assets and liabilities	15.1			26.2
Balance at June 30	$	22.2		$	35.4

	Six Months Ended June 30,
(Millions of Dollars)	2019			2018
Balance at Jan. 1	$	14.7		$	12.7
Purchases	21.0			19.3
Settlements	(19.7		)	(25.2		)
Net transactions recorded during the period:
Net gains recognized as regulatory assets and liabilities	6.2			28.6
Balance at June 30	$	22.2		$	35.4

SPS recognizes transfers between fair value hierarchy levels as of the beginning of each period. There were no transfers of amounts between levels for derivative instruments for the three and six months ended June 30, 2019 and 2018.

Fair Value of Long-Term Debt

Other financial instruments for which the carrying amount did not equal fair value:

	June 30, 2019				Dec. 31, 2018
(Millions of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion	$	2,419.5	$	2,617.1	$	2,126.1	$	2,139.8

Fair value of SPS’ long-term debt is estimated based on recent trades and observable spreads from benchmark interest rates for similar securities. Fair value estimates are based on information available to management as of June 30, 2019 and Dec. 31, 2018, and given the observability of the inputs, fair values presented for long-term debt were assigned as Level 2.

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Benefit Plans and Other Postretirement Benefits

6 Months Ended

Jun. 30, 2019

Retirement Benefits [Abstract]

Benefit Plans and Other Postretirement Benefits

Benefit Plans and Other Postretirement Benefits

Components of Net Periodic Benefit Cost (Credit)

	Three Months Ended June 30,
	2019			2018			2019			2018
(Millions of Dollars)	Pension Benefits						Postretirement Health Care Benefits
Service cost	$	2.2		$	2.4		$	0.2		$	0.3
Interest cost (a)	5.0			4.6			0.4			0.4
Expected return on plan assets (a)	(7.2		)	(7.1		)	(0.5		)	(0.6		)
Amortization of prior service credit (a)	—			—			(0.1		)	(0.1		)
Amortization of net loss (gain) (a)	2.9			3.5			(0.1		)	(0.1		)
Net periodic benefit cost (credit)	2.9			3.4			(0.1		)	(0.1		)
Credits not recognized due to the effects of regulation	0.4			0.8			—			—
Net benefit cost (credit) recognized for financial reporting	$	3.3		$	4.2		$	(0.1	)	$	(0.1	)

^(a) The components of net periodic cost other than the service cost component are included in the line item “other expense, net” in the income statement or capitalized on the balance sheet as a regulatory asset.

	Six Months Ended June 30,
	2019			2018			2019			2018
(Millions of Dollars)	Pension Benefits						Postretirement Health Care Benefits
Service cost	$	4.4		$	4.9		$	0.4		$	0.5
Interest cost (a)	10.1			9.2			0.9			0.8
Expected return on plan assets (a)	(14.3		)	(14.2		)	(1.0		)	(1.2		)
Amortization of prior service credit (a)	(0.1		)	—			(0.3		)	(0.2		)
Amortization of net loss (gain) (a)	5.7			7.0			(0.2		)	(0.2		)
Net periodic benefit cost (credit)	5.8			6.9			(0.2		)	(0.3		)
Credits not recognized due to the effects of regulation	0.8			1.7			—			—
Net benefit cost (credit) recognized for financial reporting	$	6.6		$	8.6		$	(0.2	)	$	(0.3	)

^(a) The components of net periodic cost other than the service cost component are included in the line item “other expense, net” in the income statement or capitalized on the balance sheet as a regulatory asset.

In January 2019, contributions of $150 million were made across four of Xcel Energy’s pension plans, of which $17 million was attributable to SPS. On July 1, 2019, Xcel Energy made a $4 million contribution to the Xcel Energy Inc. Non-Bargaining Pension Plan (South), of which $1 million was attributable to SPS, and does not expect any additional pension contributions during 2019.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The following include commitments, contingencies and unresolved contingencies that are material to SPS’ financial position.

Legal

SPS is involved in various litigation matters in the ordinary course of business. The assessment of whether a loss is probable or is a reasonable possibility, and whether the loss or a range of loss is estimable, often involves a series of complex judgments about future events. Management maintains accruals for losses probable of being incurred and subject to reasonable estimation. Management is sometimes unable to estimate an amount or range of a reasonably possible loss in certain situations, including but not limited to, when (1) the damages sought are indeterminate, (2) the proceedings are in the early stages or (3) the matters involve novel or unsettled legal theories. In such cases, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss.

For current proceedings not specifically reported herein, management does not anticipate that the ultimate liabilities, if any, would have a material effect on SPS’ financial statements. Unless otherwise required by GAAP, legal fees are expensed as incurred.

Rate Matters

SPP OATT Upgrade Costs — Under the SPP OATT, costs of transmission upgrades may be recovered from other SPP customers whose transmission service depends on capacity enabled by the upgrade. SPP had not been charging its customers for these upgrades, even though the SPP OATT had allowed SPP to do so since 2008. In 2016, the FERC granted SPP’s request to recover these previously unbilled charges and SPP subsequently billed SPS approximately $13 million.

In July 2018, SPS’ appeal to the D.C. Circuit over the FERC rulings granting SPP the right to recover these previously unbilled charges was remanded to the FERC. In February 2019, the FERC reversed its 2016 decision and ordered SPP to refund the charges retroactively collected from its transmission customers, including SPS, related to periods before September 2015. In April 2019, several parties, including SPP, filed requests for rehearing. The timing of a FERC response to the rehearing requests is uncertain. Any refunds received by SPS are expected to be given back to SPS customers through future rates.

In October 2017, SPS filed a separate complaint against SPP asserting that SPP has assessed upgrade charges to SPS in violation of the SPP OATT. The FERC granted a rehearing for further consideration in May 2018. The timing of FERC action on the SPS rehearing is uncertain. If SPS’ complaint results in additional charges or refunds, SPS will seek to recover or refund the amounts through future SPS customer rates.

SPP Filing to Assign GridLiance Facilities to SPS Rate Zone — In August 2018, SPP filed a request with the FERC to amend its OATT to include the costs of the GridLiance High Plains, LLC. facilities in the SPS rate zone. In a previous filing, the FERC determined that some of these facilities did not qualify as transmission facilities under the SPP OATT. SPP’s proposed tariff changes could result in an increase in the ATRR of $9.5 million per year, with $6 million allocated to SPS’ retail customers.

The remaining $3.5 million would be paid by other wholesale loads in the SPS rate zone. In September 2018, SPS protested the proposed SPP tariff charges, and asked the FERC to reject the SPP filing. On Oct. 31, 2018, the FERC issued an order accepting the proposed charges as of Nov. 1, 2018. Settlement procedures took place in the first half of 2019. In July 2019, the settlement ALJ declared the parties were at an impasse, and made a recommendation for contested case hearing procedures. The contested case hearing procedures started in July 2019 and are expected to take approximately 13 months with an initial decision expected from the ALJ on Oct. 21, 2020, which is not binding on the FERC.

SPS Filing to Modify Wholesale Transmission Rates — In 2018, SPS filed revisions to its wholesale transmission formula rate. The proposal includes an update to the depreciation rates for transmission plant. The new formula rate would provide flow-back of “excess” ADIT resulting from the TCJA and recover certain wholesale regulatory commission expenses.

The proposed changes would increase wholesale transmission revenues by approximately $9.4 million, with approximately $4.4 million of the total being recovered in SPP regional transmission rates. SPS proposed that the formula rate changes be effective Feb. 1, 2019.

In January 2019, the FERC issued an order accepting the proposed rate changes as of Feb. 1, 2019, subject to refund and settlement procedures. Settlement procedures started in February 2019, and are ongoing.

Environmental

MGP, Landfill or Disposal Sites — SPS is currently remediating the site of a former facility.

SPS has recognized its best estimate of costs/liabilities that will result from final resolution of these issues, however, the outcome and timing is unknown. In addition, there may be insurance recovery and/or recovery from other potentially responsible parties, offsetting a portion of the costs incurred.

Leases

SPS evaluates contracts that may contain leases, including PPAs and arrangements for the use of office space and other facilities, vehicles and equipment. Under ASC Topic 842, adopted by SPS on Jan. 1, 2019, a contract contains a lease if it conveys the exclusive right to control the use of a specific asset. A contract determined to contain a lease is evaluated further to determine if the arrangement is a finance lease.

ROU assets represent SPS’ rights to use leased assets. Starting in 2019, the present value of future operating lease payments are recognized in other current liabilities and noncurrent operating lease liabilities. These amounts, adjusted for any prepayments or incentives, are recognized as operating lease ROU assets.

Most of SPS’ leases do not contain a readily determinable discount rate. Therefore, the present value of future lease payments is calculated using the estimated incremental borrowing rate (weighted-average of 4.4%). SPS has elected the practical expedient under which non-lease components, such as asset maintenance costs included in payments, are not deducted from minimum lease payments for the purposes of lease accounting and disclosure. Leases with an initial term of 12 months or less are classified as short-term leases and are not recognized on the balance sheet.

Operating lease ROU assets:

(Millions of Dollars)	June 30, 2019
PPAs	$	500.3
Other	48.0
Gross operating lease ROU assets	548.3
Accumulated amortization	(12.8		)
Net operating lease ROU assets	$	535.5

Components of lease expense:

(Millions of Dollars)	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Operating leases
PPA capacity payments	$	12.6	$	25.4
Other operating leases (a)	1.3		2.5
Total operating lease expense (b)	$	13.9	$	27.9

^(a)  Includes short-term lease expense of $0.5 million for three months ended June 30, 2019 and $0.9 million for six months ended June 30, 2019.

^(b)  PPA capacity payments are included in electric fuel and purchased power on the statements of income. Expense for other operating leases is included in O&M expense.

Future commitments under operating leases as of June 30, 2019:

(Millions of Dollars)	PPA (a) (b) Operating Leases			Other Operating Leases			Total Operating Leases
2019	$	23.1		$	1.7		$	24.8
2020	46.2			3.4			49.6
2021	46.2			3.3			49.5
2022	46.2			3.4			49.6
2023	46.2			3.4			49.6
Thereafter	450.8			54.8			505.6
Total minimum obligation	658.7			70.0			728.7
Interest component of obligation	(170.6		)	(22.6		)	(193.2		)
Present value of minimum obligation	488.1			47.4			535.5
Less current portion							(26.5		)
Noncurrent operating lease liabilities							$	509.0
Weighted-average remaining lease term in years							14.5

^(a)  Amounts do not include PPAs accounted for as executory contracts and/or contingent payments, such as energy payments on renewable PPAs.

^(b)  PPA operating leases contractually expire at various dates through 2033.

Future commitments under operating leases as of Dec. 31, 2018:

(Millions of Dollars)	PPA (a) (b) Operating Leases		Other Operating Leases		Total Operating Leases
2019	$	46.7	$	5.2	$	51.9
2020	46.2		5.2		51.4
2021	46.2		5.1		51.3
2022	46.2		5.1		51.3
2023	46.2		5.1		51.3
Thereafter	450.8		56.3		507.1

^(a)  Amounts do not include PPAs accounted for as executory contracts and/or contingent payments, such as energy payments on renewable PPAs.

^(b) 

PPA operating leases contractually expire at various dates through 2033.

Variable Interest Entities

Under certain PPAs, SPS purchases power from IPPs and is required to reimburse the IPPs for fuel costs, or to participate in tolling arrangements under which SPS procures the natural gas required to produce the energy that it purchases. These specific PPAs create a variable interest in the associated IPP.

SPS had approximately 1,197 MW of capacity under long-term PPAs as of June 30, 2019 and Dec. 31, 2018, with entities that have been determined to be VIEs. SPS concluded that these entities are not required to be consolidated in its financial statements because it does not have the power to direct the activities that significantly impact the entities’ economic performance. These agreements have expiration dates through 2041.

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Selected Balance Sheet Data (Tables)

6 Months Ended

Jun. 30, 2019

Balance Sheet Related Disclosures [Abstract]

Accounts Receivable, Net

(Millions of Dollars)	June 30, 2019			Dec. 31, 2018
Accounts receivable, net
Accounts receivable	$	98.6		$	96.3
Less allowance for bad debts	(5.3		)	(5.6		)
	$	93.3		$	90.7

Inventories

(Millions of Dollars)	June 30, 2019		Dec. 31, 2018
Inventories
Materials and supplies	$	24.3	$	25.7
Fuel	6.9		8.2
	$	31.2	$	33.9

Property, Plant and Equipment, Net

(Millions of Dollars)	June 30, 2019			Dec. 31, 2018
Property, plant and equipment, net
Electric plant	$	8,241.0		$	7,227.7
Construction work in progress	207.4			847.3
Total property, plant and equipment	8,448.4			8,075.0
Less accumulated depreciation	(2,219.9		)	(2,128.6		)
Total	$	6,228.5		$	5,946.4

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Borrowings and Other Financing Instruments (Tables)

6 Months Ended

Jun. 30, 2019

Borrowings and Other Financing Instruments [Abstract]

Credit Facilities

As of June 30, 2019, SPS had the following committed credit facility available (in millions of dollars):

Credit Facility (a)		Outstanding (b)		Available
$	500	$	2	$	498

^(a)  This credit facility expires in June 2024.

^(b) 

Includes outstanding letters of credit.

Money Pool

Borrowings and Other Financing Instruments [Abstract]

Short-Term Borrowings

Money pool borrowings for SPS were as follows:

(Amounts in Millions, Except Interest Rates)	Three Months Ended June 30, 2019			Year Ended Dec. 31, 2018
Borrowing limit	$	100		$	100
Amount outstanding at period end	—			—
Average amount outstanding	13			29
Maximum amount outstanding	89			100
Weighted average interest rate, computed on a daily basis	2.45		%	1.96		%
Weighted average interest rate at period end	N/A			N/A

Commercial Paper

Borrowings and Other Financing Instruments [Abstract]

Short-Term Borrowings

Commercial paper outstanding for SPS was as follows:

(Amounts in Millions, Except Interest Rates)	Three Months Ended June 30, 2019			Year Ended Dec. 31, 2018
Borrowing limit	$	500		$	400
Amount outstanding at period end	—			42
Average amount outstanding	202			30
Maximum amount outstanding	316			144
Weighted average interest rate, computed on a daily basis	2.68		%	2.27		%
Weighted average interest rate at period end	N/A			2.80

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Revenues (Tables)

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

SPS’ operating revenues consists of the following:

	Three Months Ended
(Millions of Dollars)	June 30, 2019		June 30, 2018
Major revenue types
Revenue from contracts with customers:
Residential	$	70.4	$	85.1
C&I	191.4		200.8
Other	9.9		11.3
Total retail	271.7		297.2
Wholesale	72.0		115.6
Transmission	60.0		59.0
Other	0.4		2.9
Total revenue from contracts with customers	404.1		474.7
Alternative revenue and other	6.4		6.6
Total revenues	$	410.5	$	481.3

	Six Months Ended
(Millions of Dollars)	June 30, 2019		June 30, 2018
Major revenue types
Revenue from contracts with customers:
Residential	$	158.5	$	165.2
C&I	397.2		396.5
Other	19.5		21.0
Total retail	575.2		582.7
Wholesale	156.8		208.9
Transmission	117.4		114.6
Other	1.4		10.4
Total revenue from contracts with customers	850.8		916.6
Alternative revenue and other	13.8		12.0
Total revenues	$	864.6	$	928.6

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

The following table reconciles the difference between the statutory rate and the ETR:

	Six Months Ended June 30,
	2019		2018
Federal statutory rate	21.0	%	21.0	%
State tax (net of federal tax effect)	2.1		2.4
Increases (decreases) in tax from:
Plant regulatory differences (a)	(4.8	)	(4.4	)
Prior period adjustments	(0.7	)	(0.2	)
Other tax credits (net)	(0.6	)	(0.8	)
Wind PTCs	(0.2	)	—
Other (net)	(0.4	)	0.4
Effective income tax rate	16.4	%	18.4	%

^(a)

Regulatory differences for income tax primarily relate to the flow back of excess deferred taxes to customers through the average rate assumption method and the impact of AFUDC - Equity. Year-to-date variations primarily relates to the deferral of the flow back of excess deferred taxes in 2018, as a result of pending regulatory decisions. Treatment of most tax reform items was established prior to the first quarter of 2019, resulting in a reduction in deferred amounts. Income tax benefits associated with the flow back of excess deferred credits are offset by corresponding revenue reductions.

Summary of Statute of Limitations Applicable to Open Tax Years [Table Text Block]

Federal Audits — SPS is a member of the Xcel Energy affiliated group that files a consolidated federal income tax return. Statute of limitations applicable to Xcel Energy’s federal income tax returns expire as follows:

Tax Year(s)	Expiration
2009 - 2013	June 2020
2014 - 2016	September 2020
2017	September 2021

Reconciliation of Unrecognized Tax Benefits

Unrecognized tax benefits - permanent vs temporary:

(Millions of Dollars)	June 30, 2019		Dec. 31, 2018
Unrecognized tax benefit — Permanent tax positions	$	3.3	$	3.0
Unrecognized tax benefit — Temporary tax positions	1.5		1.5
Total unrecognized tax benefit	$	4.8	$	4.5

Tax Benefits Associated with NOL and Tax Credit Carryforwards

Unrecognized tax benefits were reduced by tax benefits associated with NOL and tax credit carryforwards:

(Millions of Dollars)	June 30, 2019			Dec. 31, 2018
NOL and tax credit carryforwards	$	(4.1	)	$	(3.8	)

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Fair Value of Financial Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Gross Notional Amounts of Commodity FTRs

Commodity Derivatives — SPS enters into derivative instruments to manage variability of future cash flows from changes in commodity prices in its electric utility operations. This could include the purchase or sale of energy or energy-related products and FTRs.

(Amounts in Millions) (a)	June 30, 2019	Dec. 31, 2018
Mwh of electricity	15.5	5.5

^(a) 

Amounts are not reflective of net positions in the underlying commodities.

Derivative Assets and Liabilities Measured at Fair Value on a Recurring Basis by Hierarchy Level

Recurring Fair Value Measurements — SPS’ derivative assets and liabilities measured at fair value on a recurring basis:

	June 30, 2019													Dec. 31, 2018
	Fair Value													Fair Value
(Millions of Dollars)	Level 1		Level 2		Level 3		Fair Value Total		Netting (a)			Total		Level 1		Level 2		Level 3		Fair Value Total		Netting (a)			Total
Current derivative assets
Other derivative instruments:
Electric commodity	$	—	$	—	$	22.7	$	22.7	$	(0.3	)	$	22.4	$	—	$	—	$	14.9	$	14.9	$	(0.2	)	$	14.7
Total current derivative assets	$	—	$	—	$	22.7	$	22.7	$	(0.3	)	22.4		$	—	$	—	$	14.9	$	14.9	$	(0.2	)	14.7
PPAs (b)												3.1													3.1
Current derivative instruments												$	25.5												$	17.8
Noncurrent derivative assets
PPAs (b)												14.2													15.8
Noncurrent derivative instruments												$	14.2												$	15.8
Current derivative liabilities
Other derivative instruments:
Electric commodity	$	—	$	—	$	0.5	$	0.5	$	(0.3	)	$	0.2	$	—	$	—	$	0.2	$	0.2	$	(0.2	)	$	—
Total current derivative liabilities	$	—	$	—	$	0.5	$	0.5	$	(0.3	)	0.2		$	—	$	—	$	0.2	$	0.2	$	(0.2	)	—
PPAs (b)												3.6								.					3.6
Current derivative instruments												$	3.8												$	3.6
Noncurrent derivative liabilities
PPAs (b)												14.6													16.4
Noncurrent derivative instruments												$	14.6												$	16.4

^(a)  SPS nets derivative instruments and related collateral in its 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 June 30, 2019 and Dec. 31, 2018. At both June 30, 2019 and Dec. 31, 2018, derivative assets and liabilities include no obligations to return cash collateral or rights to reclaim cash collateral. The counterparty netting excludes settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements.

^(b) 

During 2006, SPS 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.

Changes in Level 3 Commodity Derivatives

Changes in Level 3 commodity derivatives for the three and six months ended June 30, 2019 and 2018:

	Three Months Ended June 30,
(Millions of Dollars)	2019			2018
Balance at April 1	$	3.1		$	5.3
Purchases	17.1			18.7
Settlements	(13.1		)	(14.8		)
Net transactions recorded during the period:
Net gains recognized as regulatory assets and liabilities	15.1			26.2
Balance at June 30	$	22.2		$	35.4

	Six Months Ended June 30,
(Millions of Dollars)	2019			2018
Balance at Jan. 1	$	14.7		$	12.7
Purchases	21.0			19.3
Settlements	(19.7		)	(25.2		)
Net transactions recorded during the period:
Net gains recognized as regulatory assets and liabilities	6.2			28.6
Balance at June 30	$	22.2		$	35.4

Carrying Amount and Fair Value of Long-term Debt

Other financial instruments for which the carrying amount did not equal fair value:

	June 30, 2019				Dec. 31, 2018
(Millions of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion	$	2,419.5	$	2,617.1	$	2,126.1	$	2,139.8

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Benefit Plans and Other Postretirement Benefits (Tables)

6 Months Ended

Jun. 30, 2019

Retirement Benefits [Abstract]

Components of Net Periodic Benefit Cost (Credit)

Components of Net Periodic Benefit Cost (Credit)

	Three Months Ended June 30,
	2019			2018			2019			2018
(Millions of Dollars)	Pension Benefits						Postretirement Health Care Benefits
Service cost	$	2.2		$	2.4		$	0.2		$	0.3
Interest cost (a)	5.0			4.6			0.4			0.4
Expected return on plan assets (a)	(7.2		)	(7.1		)	(0.5		)	(0.6		)
Amortization of prior service credit (a)	—			—			(0.1		)	(0.1		)
Amortization of net loss (gain) (a)	2.9			3.5			(0.1		)	(0.1		)
Net periodic benefit cost (credit)	2.9			3.4			(0.1		)	(0.1		)
Credits not recognized due to the effects of regulation	0.4			0.8			—			—
Net benefit cost (credit) recognized for financial reporting	$	3.3		$	4.2		$	(0.1	)	$	(0.1	)

^(a) The components of net periodic cost other than the service cost component are included in the line item “other expense, net” in the income statement or capitalized on the balance sheet as a regulatory asset.

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Commitments and Contingencies Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Schedule of Operating Lease Right-of-Use Assets

Operating lease ROU assets:

(Millions of Dollars)	June 30, 2019
PPAs	$	500.3
Other	48.0
Gross operating lease ROU assets	548.3
Accumulated amortization	(12.8		)
Net operating lease ROU assets	$	535.5

Schedule of Components of Lease Expense

Components of lease expense:

(Millions of Dollars)	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Operating leases
PPA capacity payments	$	12.6	$	25.4
Other operating leases (a)	1.3		2.5
Total operating lease expense (b)	$	13.9	$	27.9

^(a)  Includes short-term lease expense of $0.5 million for three months ended June 30, 2019 and $0.9 million for six months ended June 30, 2019.

^(b) 

PPA capacity payments are included in electric fuel and purchased power on the statements of income. Expense for other operating leases is included in O&M expense.

Schedule of Future Commitments under Operating Leases

Future commitments under operating leases as of June 30, 2019:

(Millions of Dollars)	PPA (a) (b) Operating Leases			Other Operating Leases			Total Operating Leases
2019	$	23.1		$	1.7		$	24.8
2020	46.2			3.4			49.6
2021	46.2			3.3			49.5
2022	46.2			3.4			49.6
2023	46.2			3.4			49.6
Thereafter	450.8			54.8			505.6
Total minimum obligation	658.7			70.0			728.7
Interest component of obligation	(170.6		)	(22.6		)	(193.2		)
Present value of minimum obligation	488.1			47.4			535.5
Less current portion							(26.5		)
Noncurrent operating lease liabilities							$	509.0
Weighted-average remaining lease term in years							14.5

^(a)  Amounts do not include PPAs accounted for as executory contracts and/or contingent payments, such as energy payments on renewable PPAs.

^(b)  PPA operating leases contractually expire at various dates through 2033.

Future commitments under operating leases as of Dec. 31, 2018:

(Millions of Dollars)	PPA (a) (b) Operating Leases		Other Operating Leases		Total Operating Leases
2019	$	46.7	$	5.2	$	51.9
2020	46.2		5.2		51.4
2021	46.2		5.1		51.3
2022	46.2		5.1		51.3
2023	46.2		5.1		51.3
Thereafter	450.8		56.3		507.1

^(a)  Amounts do not include PPAs accounted for as executory contracts and/or contingent payments, such as energy payments on renewable PPAs.

^(b) 

PPA operating leases contractually expire at various dates through 2033.

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Accounting Pronouncements (Details) - USD ($) $ in Millions	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets	$ 535.5		$ 0.0
Operating Lease, Liability	$ 535.5
Accounting Standards Update 2016-02 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets		$ 500.0
Operating Lease, Liability		$ 500.0

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Selected Balance Sheet Data Accounts Receivable, Net (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Accounts receivable, net
Accounts receivable	$ 98.6	$ 96.3
Less allowance for bad debts	(5.3)	(5.6)
Accounts receivable, net	$ 93.3	$ 90.7

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Selected Balance Sheet Data Selected Balance Sheet Data Inventories (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Inventories	$ 31.2	$ 33.9
Supplies [Member]
Inventories	24.3	25.7
Public Utilities, Inventory, Fuel [Member]
Inventories	$ 6.9	$ 8.2

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Selected Balance Sheet Data Balance Sheet Related Disclosures, Property, Plant and Equipment, Net (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Public Utility, Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 8,448.4	$ 8,075.0
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	2,219.9	2,128.6
Property, Plant and Equipment, Net	6,228.5	5,946.4
Electric Generation Equipment [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	8,241.0	7,227.7
Construction in Progress [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 207.4	$ 847.3

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Borrowings and Other Financing Instruments, Short-Term Borrowings (Details) - USD ($)	3 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Short-term Debt [Line Items]
Amount outstanding at period end	$ 0	$ 42,000,000.0
Money Pool
Short-term Debt [Line Items]
Borrowing limit	100,000,000	100,000,000
Amount outstanding at period end	0	0
Average amount outstanding	13,000,000	29,000,000
Maximum amount outstanding	$ 89,000,000	$ 100,000,000
Weighted average interest rate, computed on a daily basis	2.45%	1.96%
Commercial Paper
Short-term Debt [Line Items]
Borrowing limit	$ 500,000,000	$ 400,000,000
Amount outstanding at period end	0	42,000,000
Average amount outstanding	202,000,000	30,000,000
Maximum amount outstanding	$ 316,000,000	$ 144,000,000
Weighted average interest rate, computed on a daily basis	2.68%	2.27%
Weighted average interest rate at period end		2.80%

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Borrowings and Other Financing Instruments, Letters of Credit (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Line of Credit Facility [Line Items]
Amount outstanding at period end	$ 0.0	$ 42.0
Letter of Credit
Line of Credit Facility [Line Items]
Letters of Credit, Term	1 year
Amount outstanding at period end	$ 2.0	$ 2.0

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Borrowings and Other Financing Instruments, Credit Facility (Details) - Credit Facility - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Line of Credit Facility [Line Items]
Credit Facility	$ 500,000,000
Outstanding	2,000,000
Available	498,000,000
Direct advances on the credit facility outstanding	$ 0	$ 0

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Borrowings and Other Financing Instruments Borrowings and Other Financing Instruments, Long-Term Borrowings (Details) - Bonds [Member] - Series Due June 15, 2049 [Domain] $ in Millions	Jun. 30, 2019 USD ($)
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 300
Debt Instrument, Interest Rate, Stated Percentage	3.75%

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Revenues (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation of Revenue [Line Items]
Operating revenues	$ 410.5	$ 481.3	$ 864.6	$ 928.6
Regulated Electric [Member] | Total revenue from contracts with customers
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	404.1	474.7	850.8	916.6
Regulated Electric [Member] | Retail
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	271.7	297.2	575.2	582.7
Regulated Electric [Member] | Retail | Residential
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	70.4	85.1	158.5	165.2
Regulated Electric [Member] | Retail | Commercial and industrial (C&I)
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	191.4	200.8	397.2	396.5
Regulated Electric [Member] | Retail | Other
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	9.9	11.3	19.5	21.0
Regulated Electric [Member] | Wholesale
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	72.0	115.6	156.8	208.9
Regulated Electric [Member] | Transmission
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	60.0	59.0	117.4	114.6
Regulated Electric [Member] | Other
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	0.4	2.9	1.4	10.4
Regulated Electric [Member] | Alternative and Other [Member]
Disaggregation of Revenue [Line Items]
Operating revenues	6.4	6.6	13.8	12.0
Total revenues | Regulated Electric [Member]
Disaggregation of Revenue [Line Items]
Operating revenues	$ 410.5	$ 481.3	$ 864.6	$ 928.6

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Income Taxes (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Tax Audits [Abstract]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	21.00%
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent	2.10%	2.40%
Effective Income Tax Rate Reconciliation, Other Regulatory Items, Percent	(4.80%)	(4.40%)
Effective Income Tax Rate Reconciliation, Prior Year Income Taxes, Percent	(0.70%)	(0.20%)
Regulatory differences - reversal of prior quarters' ARAM deferral (b)	(0.60%)	(0.80%)
Effective Income Tax Rate Reconciliation, Tax Credit, Amount	(0.20%)	0.00%
Effective Income Tax Rate Reconciliation, Other Adjustments, Percent	(0.40%)	0.40%
Effective Income Tax Rate Reconciliation, Percent	16.40%	18.40%
Unrecognized Tax Benefits [Abstract]
Unrecognized tax benefit - Permanent tax positions	$ 3,300,000		$ 3,000,000.0
Unrecognized tax benefit - Temporary tax positions	1,500,000		1,500,000
Total unrecognized tax benefit	4,800,000		4,500,000
NOL and tax credit carryforwards	(4,100,000)		(3,800,000)
Net Deferred Tax Liability associated with the Unrecognized Tax Benefit Amounts and Related NOLs and Tax Credit Carryforwards	(1,100,000)		(800,000)
Upper bound of decrease in unrecognized tax benefit that is reasonably possible	3,600,000
Amounts accrued for penalties related to unrecognized tax benefits	0		$ 0
Internal Revenue Service (IRS)
Tax Audits [Abstract]
Potential Tax Adjustments	$ 0

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Fair Value of Financial Assets and Liabilities, Derivative Instruments (Details) MWh in Millions, $ in Millions		Jun. 30, 2019 USD ($) MWh Counterparty	Dec. 31, 2018 MWh
Credit Concentration Risk
Consideration of Credit Risk and Concentrations [Abstract]
Number of most significant counterparties for wholesale, trading and non-trading commodity activities with credit exposure		7
Credit Concentration Risk | Municipal or Cooperative Entities or Other Utilities [Member]
Consideration of Credit Risk and Concentrations [Abstract]
Number of most significant counterparties for wholesale, trading and non-trading commodity activities with credit exposure		6
Credit Concentration Risk | External Credit Rating, Investment Grade [Member]
Consideration of Credit Risk and Concentrations [Abstract]
Number of most significant counterparties for wholesale, trading and non-trading commodity activities with credit exposure		1
Wholesale, trading and non-trading commodity credit exposure for the most significant counterparties | $		$ 10.1
Percentage of wholesale, trading and non-trading commodity credit exposure for the most significant counterparties (in hundredths)		25.00%
Credit Concentration Risk | Internal Investment Grade [Member]
Consideration of Credit Risk and Concentrations [Abstract]
Number of most significant counterparties for wholesale, trading and non-trading commodity activities with credit exposure		5
Wholesale, trading and non-trading commodity credit exposure for the most significant counterparties | $		$ 7.9
Percentage of wholesale, trading and non-trading commodity credit exposure for the most significant counterparties (in hundredths)		20.00%
Credit Concentration Risk | External Credit Rating, Non Investment Grade [Member]
Consideration of Credit Risk and Concentrations [Abstract]
Number of most significant counterparties for wholesale, trading and non-trading commodity activities with credit exposure		1
Wholesale, trading and non-trading commodity credit exposure for the most significant counterparties | $		$ 0.3
Percentage of wholesale, trading and non-trading commodity credit exposure for the most significant counterparties (in hundredths)		1.00%
Interest Rate Swap [Member]
Derivative [Line Items]
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net | $		$ (0.1)
Electric Commodity (in megawatt hours)
Gross Notional Amounts of Commodity FTRs [Abstract]
Derivative, Nonmonetary Notional amount | MWh	[1]	15.5	5.5

[1] Amounts are not reflective of net positions in the underlying commodities

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Fair Value of Financial Assets and Liabilities, Impact of Derivative Activity (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Financial Impact of Qualifying Fair Value Hedges on Earnings [Abstract]
Derivative instruments designated as fair value hedges	$ 0.0	$ 0.0	$ 0.0	$ 0.0
Other Derivative Instruments | Electric Commodity
Impact of Derivative Activity on Accumulated Other Comprehensive Loss, Regulatory Assets and Liabilities, and Income [Abstract]
Pre-tax fair value gains (losses) recognized during the period in regulatory (assets) and liabilities	9.9	13.0	4.6	13.4
Pre-tax gains (losses) reclassified into income during the period from regulatory assets and (liabilities)	$ (0.2)	$ 3.9	$ (0.2)	$ 3.4

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Fair Value of Financial Assets and Liabilities, Fair Value Measurements (Details) - USD ($) $ in Millions		Jun. 30, 2019	Dec. 31, 2018
Derivatives, Fair Value [Line Items]
Derivative Asset, Collateral, Obligation to Return Cash, Offset		$ 0.0	$ 0.0
Derivative Liability, Collateral, Right to Reclaim Cash, Offset		0.0	0.0
Other Current Assets
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset		25.5	17.8
Other Noncurrent Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset		14.2	15.8
Other Current Liabilities
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability		3.8	3.6
Other Noncurrent Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability		14.6	16.4
Fair Value Measured on a Recurring Basis | Other Current Assets
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset		22.4	14.7
Derivative Asset, Fair Value, Gross Liability and Obligation to Return Cash, Offset	[1]	(0.3)	(0.2)
Fair Value Measured on a Recurring Basis | Other Current Assets | Other Derivative Instruments | Electric Commodity
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset		22.4	14.7
Derivative Asset, Fair Value, Gross Liability and Obligation to Return Cash, Offset	[1]	(0.3)	(0.2)
Fair Value Measured on a Recurring Basis | Other Current Liabilities
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Asset and Right to Reclaim Cash, Offset	[1]	(0.3)	(0.2)
Derivative Liability, Fair Value, Gross Liability		0.2	0.0
Fair Value Measured on a Recurring Basis | Other Current Liabilities | Other Derivative Instruments | Electric Commodity
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Asset and Right to Reclaim Cash, Offset	[1]	(0.3)	(0.2)
Derivative Liability, Fair Value, Gross Liability		0.2	0.0
Fair Value Measured on a Recurring Basis | Level 1 | Other Current Assets
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset		0.0	0.0
Fair Value Measured on a Recurring Basis | Level 1 | Other Current Assets | Other Derivative Instruments | Electric Commodity
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset		0.0	0.0
Fair Value Measured on a Recurring Basis | Level 1 | Other Current Liabilities
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability		0.0	0.0
Fair Value Measured on a Recurring Basis | Level 1 | Other Current Liabilities | Other Derivative Instruments | Electric Commodity
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability		0.0	0.0
Fair Value Measured on a Recurring Basis | Level 2 | Other Current Assets
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset		0.0	0.0
Fair Value Measured on a Recurring Basis | Level 2 | Other Current Assets | Other Derivative Instruments | Electric Commodity
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset		0.0	0.0
Fair Value Measured on a Recurring Basis | Level 2 | Other Current Liabilities
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability		0.0	0.0
Fair Value Measured on a Recurring Basis | Level 2 | Other Current Liabilities | Other Derivative Instruments | Electric Commodity
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability		0.0	0.0
Fair Value Measured on a Recurring Basis | Level 3 | Other Current Assets
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset		22.7	14.9
Fair Value Measured on a Recurring Basis | Level 3 | Other Current Assets | Other Derivative Instruments | Electric Commodity
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset		22.7	14.9
Fair Value Measured on a Recurring Basis | Level 3 | Other Current Liabilities
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability		0.5	0.2
Fair Value Measured on a Recurring Basis | Level 3 | Other Current Liabilities | Other Derivative Instruments | Electric Commodity
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability		0.5	0.2
Fair Value, Measurements, Nonrecurring | Other Current Assets | PPAs
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	[2]	3.1	3.1
Fair Value, Measurements, Nonrecurring | Other Noncurrent Assets [Member] | PPAs
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	[2]	14.2	15.8
Fair Value, Measurements, Nonrecurring | Other Current Liabilities | PPAs
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability	[2]	3.6	3.6
Fair Value, Measurements, Nonrecurring | Other Noncurrent Liabilities [Member] | PPAs
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability	[2]	14.6	16.4
Estimate of Fair Value Measurement [Member] | Fair Value Measured on a Recurring Basis | Other Current Assets
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset		22.7	14.9
Estimate of Fair Value Measurement [Member] | Fair Value Measured on a Recurring Basis | Other Current Assets | Other Derivative Instruments | Electric Commodity
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset		22.7	14.9
Estimate of Fair Value Measurement [Member] | Fair Value Measured on a Recurring Basis | Other Current Liabilities
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability		0.5	0.2
Estimate of Fair Value Measurement [Member] | Fair Value Measured on a Recurring Basis | Other Current Liabilities | Other Derivative Instruments | Electric Commodity
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value, Gross Liability		$ 0.5	$ 0.2

[1] SPS nets derivative instruments and related collateral in its 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 June 30, 2019 and Dec. 31, 2018. At both June 30, 2019 and Dec. 31, 2018, derivative assets and liabilities include no obligations to return cash collateral or rights to reclaim cash collateral. The counterparty netting excludes settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements.

[2] During 2006, SPS 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.

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Fair Value of Financial Assets and Liabilities Fair Value of Financial Assets and Liabilities, Changes in Level 3 Commodity Derivatives (Details) - Commodity Contract - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Balance at beginning of period	$ 3.1	$ 5.3	$ 14.7	$ 12.7
Purchases	17.1	18.7	21.0	19.3
Settlements	(13.1)	(14.8)	(19.7)	(25.2)
Net gains recognized as regulatory assets and liabilities	15.1	26.2	6.2	28.6
Balance at end of period	22.2	35.4	22.2	35.4
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Transfers out of Level 3	0.0	0.0	0.0	0.0
Transfers into Level 3	$ 0.0	$ 0.0	$ 0.0	$ 0.0

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Fair Value of Financial Assets and Liabilities, Fair Value of Long-Term Debt (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Carrying Amount
Financial Liabilities, Balance Sheet Groupings [Abstract]
Long-term debt, including current portion	$ 2,419.5	$ 2,126.1
Fair Value
Financial Liabilities, Balance Sheet Groupings [Abstract]
Long-term debt, including current portion	$ 2,617.1	$ 2,139.8

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Benefit Plans and Other Postretirement Benefits (Details) $ in Millions		1 Months Ended	3 Months Ended		6 Months Ended
	Jul. 01, 2019 USD ($)	Jan. 31, 2019 USD ($) Plan	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)
Pension Plan [Member]
Components of Net Periodic Benefit Cost (Credit) [Abstract]
Service cost			$ 2.2	$ 2.4	$ 4.4	$ 4.9
Interest cost			5.0	4.6	10.1	9.2
Expected return on plan assets			(7.2)	(7.1)	(14.3)	(14.2)
Amortization of prior service cost (credit)			0.0	0.0	(0.1)	0.0
Amortization of net loss (gain)			2.9	3.5	5.7	7.0
Net periodic benefit cost (credit)			2.9	3.4	5.8	6.9
Defined Benefit Plan Credits Not Recognized Due To Effects of Regulation			0.4	0.8	0.8	1.7
Net benefit cost (credit) recognized for financial reporting			3.3	4.2	6.6	8.6
Total contributions to the pension plans during the period	$ 1.0	$ 17.0
Pension Plan [Member] | Xcel Energy Inc.
Components of Net Periodic Benefit Cost (Credit) [Abstract]
Total contributions to the pension plans during the period	$ 4.0	$ 150.0
Number of Xcel Energy's pension plans to which contributions were made | Plan		4
Other Postretirement Benefits Plan [Member]
Components of Net Periodic Benefit Cost (Credit) [Abstract]
Service cost			0.2	0.3	0.4	0.5
Interest cost			0.4	0.4	0.9	0.8
Expected return on plan assets			(0.5)	(0.6)	(1.0)	(1.2)
Amortization of prior service cost (credit)			(0.1)	(0.1)	(0.3)	(0.2)
Amortization of net loss (gain)			(0.1)	(0.1)	(0.2)	(0.2)
Net periodic benefit cost (credit)			(0.1)	(0.1)	(0.2)	(0.3)
Defined Benefit Plan Credits Not Recognized Due To Effects of Regulation			0.0	0.0	0.0	0.0
Net benefit cost (credit) recognized for financial reporting			$ (0.1)	$ (0.1)	$ (0.2)	$ (0.3)

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Commitments and Contingencies, Purchased Power Agreements (Details) - Independent Power Producing Entities - MW	12 Months Ended
	Dec. 31, 2018	Jun. 30, 2019
Purchased Power Agreements [Abstract]
Generating capacity (in MW)	1,197	1,197
Purchase Power Agreement Expiration	2041

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Commitments and Contingencies Commitments and Contingencies, Environmental Contingencies - Site Contingencies (Details)	Jun. 30, 2019
Other MGP, Landfill, or Disposal Sites [Domain]
Site Contingency [Line Items]
Number of identified MGP, landfill, or disposal sites under current investigation and/or remediation	1

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Commitments and Contingencies, Rate Matters, SPS (Details) - USD ($) $ in Millions	1 Months Ended	6 Months Ended	12 Months Ended
	Aug. 31, 2018	Jun. 30, 2019	Dec. 31, 2018	Dec. 31, 2016
Public Utilities, General Disclosures [Line Items]
Public Utilities, Amount proposed changes would increase wholesale transmission revenues			$ 9.4
Public Utilities, Amount of proposed changes would be recoverable			$ 4.4
Southwest Power Pool (SPP) | SPP Open Access Transmission Tariff Upgrade Costs
Public Utilities, General Disclosures [Line Items]
Public Utilities, Annual Transmission Revenue Requirement Increase	$ 9.5
Public Utilities, Annual Transmission Revenue Requirement Increase (SPS)	6.0
Public Utilities, Annual Transmission Revenue Requirement (Other Utilities)	$ 3.5
FERC [Member] | SPP Open Access Transmission Tariff Upgrade Costs
Public Utilities, General Disclosures [Line Items]
Hearing Procedures Duration		13 months
SPS | Southwest Power Pool (SPP) | SPP Open Access Transmission Tariff Upgrade Costs
Public Utilities, General Disclosures [Line Items]
Public Utilities, Billed Charges For Transmission Service Upgrades				$ 13.0

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Commitments and Contingencies Commitments and Contingencies, Leases - Right-of-Use Assets (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Lessee, Lease, Description [Line Items]
Maximum lease term for short-term lease classification	12 months
Operating Lease, Right-of-Use Asset, Gross	$ 548.3
Operating Lease, Right-of-Use Asset, Accumulated Depreciation	(12.8)
Operating Lease, Right-of-Use Asset	535.5	$ 0.0
PPAs
Lessee, Lease, Description [Line Items]
Operating Lease, Right-of-Use Asset, Gross	500.3
Other
Lessee, Lease, Description [Line Items]
Operating Lease, Right-of-Use Asset, Gross	$ 48.0

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Commitments and Contingencies Commitments and Contingencies, Leases - Components of Lease Expense (Details) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)
Lessee, Lease, Description [Line Items]
Operating Lease, Weighted Average Discount Rate, Percent	4.40%	4.40%
Operating Lease, Cost	$ 13.9	$ 27.9
Short-term Lease, Cost	0.5	0.9
PPAs
Lessee, Lease, Description [Line Items]
Operating Lease, Cost	12.6	25.4
Other
Lessee, Lease, Description [Line Items]
Operating Lease, Cost	$ 1.3	$ 2.5

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Commitments and Contingencies Commitments and Contingencies, Leases - Future Commitments (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Operating Leases after Adoption of ASC Topic 842
2019	$ 24.8
2020	49.6
2021	49.5
2022	49.6
2023	49.6
Thereafter	505.6
Total minimum obligation	728.7
Interest component of obligation	(193.2)
Present value of minimum obligation	535.5
Less current portion	(26.5)
Noncurrent operating lease liabilities	$ 509.0	$ 0.0
Weighted-average remaining lease term in years	14 years 6 months
Operating Leases before Adoption of ASC 842
2019		51.9
2020		51.4
2021		51.3
2022		51.3
2023		51.3
Thereafter		507.1
PPAs
Operating Leases after Adoption of ASC Topic 842
2019	$ 23.1
2020	46.2
2021	46.2
2022	46.2
2023	46.2
Thereafter	450.8
Total minimum obligation	658.7
Interest component of obligation	(170.6)
Present value of minimum obligation	488.1
Operating Leases before Adoption of ASC 842
2019		46.7
2020		46.2
2021		46.2
2022		46.2
2023		46.2
Thereafter		450.8
Other
Operating Leases after Adoption of ASC Topic 842
2019	1.7
2020	3.4
2021	3.3
2022	3.4
2023	3.4
Thereafter	54.8
Total minimum obligation	70.0
Interest component of obligation	(22.6)
Present value of minimum obligation	$ 47.4
Operating Leases before Adoption of ASC 842
2019		5.2
2020		5.2
2021		5.1
2022		5.1
2023		5.1
Thereafter		$ 56.3

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Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Accumulated Other Comprehensive Income (Loss) [Line Items]
Income Tax Expense (Benefit)	$ 10.9	$ 12.4	$ 22.1	$ 20.7
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive loss at beginning of period			2,536.6
Accumulated other comprehensive loss at end of period	$ 2,883.7		$ 2,883.7