Benefit Plans and Other Postretirement Benefits (Tables)

12 Months Ended

Dec. 31, 2022

Benefit Plans and Other Postretirement Benefits [Abstract]

Target Asset Allocations and Plan Assets Measured at Fair Value

For each of the fair value hierarchy levels, SPS’ pension plan assets measured at fair value:

	Dec. 31, 2022 (a)										Dec. 31, 2021 (a)
(Millions of Dollars)	Level 1		Level 2		Level 3		Measured at NAV		Total		Level 1		Level 2		Level 3		Measured at NAV		Total
Cash equivalents	$	21	$	—	$	—	$	—	$	21	$	20	$	—	$	—	$	—	$	20
Commingled funds	144		—		—		129		273		202		—		—		169		371
Debt securities	—		115		—		—		115		—		148		1		—		149
Equity securities	7		—		—		—		7		10		—		—		—		10
Other	—		1		—		—		1		—		2		—		5		7
Total	$	172	$	116	$	—	$	129	$	417	$	232	$	150	$	1	$	174	$	557

(a)See Note 8 for further information on fair value measurement inputs and methods.

For each of the fair value hierarchy levels, SPS’ proportionate allocation of the total postretirement benefit plan assets that were measured at fair value:

	Dec. 31, 2022 (a)										Dec. 31, 2021 (a)
(Millions of Dollars)	Level 1		Level 2		Level 3		Measured at NAV		Total		Level 1		Level 2		Level 3		Measured at NAV		Total
Cash equivalents	$	3	$	—	$	—	$	—	$	3	$	3	$	—	$	—	$	—	$	3
Insurance contracts	—		4		—		—		4		—		5		—		—		5
Commingled funds	5		—		—		6		11		6		—		—		7		13
Debt securities	—		18		—		—		18		—		22		—		—		22
Total	$	8	$	22	$	—	$	6	$	36	$	9	$	27	$	—	$	7	$	43

(a)See Note 8 for further information on fair value measurement inputs and methods.

Target asset allocations:

	Pension Benefits				Postretirement Benefits
	2022		2021		2022		2021
Domestic and international equity securities	33	%	33	%	16	%	15	%
Long-duration fixed income securities	38		37		—		—
Short-to-intermediate fixed income securities	9		11		71		71
Alternative investments	18		17		12		8
Cash	2		2		1		6
Total	100	%	100	%	100	%	100	%

Funded Status of Plans

Funded Status — Benefit obligations for both pension and postretirement plans decreased from Dec. 31, 2021 to Dec. 31, 2022, due primarily to benefit payments and increases in discount rates used in actuarial valuations. Comparisons of the actuarially computed benefit obligation, changes in plan assets and funded status of the pension and postretirement health care plans for SPS are as follows:

	Pension Benefits				Postretirement Benefits
(Millions of Dollars)	2022		2021		2022		2021
Change in Benefit Obligation:
Obligation at Jan. 1	$	545	$	562	$	34	$	38
Service cost	10		11		1		1
Interest cost	16		15		1		1
Actuarial gain	(123)		(13)		(8)		(3)
Plan participants’ contributions	—		—		1		—
Benefit payments	(34)		(30)		(3)		(3)
Obligation at Dec. 31	$	414	$	545	$	26	$	34
Change in Fair Value of Plan Assets:
Fair value of plan assets at Jan. 1	$	557	$	527	$	43	$	44
Actual return on plan assets	(106)		46		(5)		1
Employer contributions	—		14		—		—
Plan participants’ contributions	—		—		1		1
Benefit payments	(34)		(30)		(3)		(3)
Fair value of plan assets at Dec. 31	$	417	$	557	$	36	$	43
Funded status of plans at Dec. 31	$	3	$	12	$	10	$	9
Amounts recognized in the Balance Sheet at Dec. 31:
Noncurrent assets	7		12		10		9
Noncurrent liabilities	(4)		—		—		—
Net amounts recognized	$	3	$	12	$	10	$	9

	Pension Benefits				Postretirement Benefits
Significant Assumptions Used to Measure Benefit Obligations:	2022		2021		2022		2021
Discount rate for year-end valuation	5.80	%	3.08	%	5.80	%	3.09	%
Expected average long-term increase in compensation level	4.25	%	3.75	%	N/A		N/A
Mortality table	Pri-2012		Pri-2012		Pri-2012		Pri-2012
Health care costs trend rate — initial: Pre-65	N/A		N/A		6.50	%	5.30	%
Health care costs trend rate — initial: Post-65	N/A		N/A		5.50	%	4.90	%
Ultimate trend assumption — initial: Pre-65	N/A		N/A		4.50	%	4.50	%
Ultimate trend assumption — initial: Post-65	N/A		N/A		4.50	%	4.50	%
Years until ultimate trend is reached	N/A		N/A		7		4

Accumulated benefit obligation for the pension plan was $386 million and $506 million as of Dec. 31, 2022 and 2021, respectively.

Net Periodic Benefit Cost (Credit) — Net periodic benefit cost (credit), other than the service cost component, is included in other income (expense) in the statements of income.

Components of net periodic benefit cost (credit) and amounts recognized in other comprehensive income and regulatory assets and liabilities:

Components of Net Periodic Benefit Costs

	Pension Benefits									Postretirement Benefits
(Millions of Dollars)	2022			2021			2020			2022			2021			2020
Service cost	$	10		$	11		$	10		$	1		$	1		$	1
Interest cost	16			15			18			1			1			1
Expected return on plan assets	(31)			(30)			(29)			(2)			(2)			(2)
Amortization of net loss (gain)	10			14			12			(1)			(1)			—
Settlement charge (a)	2			—			—			—			—			—
Net periodic pension cost	7			10			11			(1)			(1)			—
Effects of regulation	(1)			—			2			—			—			—
Net benefit cost recognized for financial reporting	$	6		$	10		$	13		$	(1)		$	(1)		$	—
Significant Assumptions Used to Measure Costs:
Discount rate	3.08		%	2.71		%	3.49		%	3.09		%	2.65		%	3.47		%
Expected average long-term increase in compensation level	3.75			3.75			3.75			—			—			—
Expected average long-term rate of return on assets	6.39			6.39			6.78			4.10			4.10			4.50

(a)A settlement charge is required when the amount of all lump-sum distributions during the year is greater than the sum of the service and interest cost components of the annual net periodic pension cost. In 2022, as a result of lump-sum distributions during each plan year, SPS recorded a total pension settlement charge of $2 million. An immaterial amount was recorded in the income statement in 2022. There were no settlement charges recorded to the qualified pension plans in 2021 or 2020.

Projected Benefit Payments for the Pension and Postretirement Benefit Plans

Projected Benefit Payments

SPS’ projected benefit payments:

(Millions of Dollars)	Projected Pension Benefit Payments		Net Projected Postretirement Health Care Benefit Payments (a)
2023	$	33	$	2
2024	31		2
2025	32		2
2026	31		2
2027	32		2
2028-2032	157		11

(a)Amount is reported net of expected Medicare Part D subsidies, which are immaterial.

Other Postretirement Benefits Plan [Member]

Benefit Plans and Other Postretirement Benefits [Abstract]

Amounts Not Yet Recognized as Components of Net Periodic Benefit Cost

	Pension Benefits				Postretirement Benefits
(Millions of Dollars)	2022		2021		2022		2021
Amounts Not Yet Recognized as Components of Net Periodic Benefit Cost:
Net loss (gain)	$	145	$	143	$	(21)	$	(19)
Prior service credit	(1)		(1)		—		(1)
Total	$	144	$	142	$	(21)	$	(20)
Amounts Not Yet Recognized as Components of Net Periodic Benefit Cost Have Been Recorded as Follows Based Upon Expected Recovery in Rates:
Current regulatory assets	$	2	$	11	$	—	$	—
Noncurrent regulatory assets	142		131		—		—
Current regulatory liabilities	—		—		(1)		(1)
Noncurrent regulatory liabilities	—		—		(20)		(19)
Total	$	144	$	142	$	(21)	$	(20)

Measurement date Dec. 31, 2022 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2021