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, 2023

or

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

For the transition period from    to

Commission File Number: 001-03789

Southwestern Public Service Company

(Exact Name of Registrant as Specified in its Charter)

New Mexico			75-0575400
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)
790 South Buchanan Street	Amarillo	Texas	79101
(Address of Principal Executive Offices)			(Zip Code)

(303)	571-7511
(Registrant’s Telephone Number, Including Area Code)

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

Title of each class	Trading Symbol(s)	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 of 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	Outstanding at July 27, 2023
Common Stock, $1.00 par value	100 shares

Southwestern Public Service Company meets the conditions set forth in General Instructions 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 1 —	Financial Statements (unaudited)	4
	Statements of Income	4
	Statements of Cash Flows	5
	Balance Sheets	6
	Statements of Common Stockholder’s Equity	7
	Notes to Financial Statements	8
Item 2 —	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 4 —	Controls and Procedures	16
PART II	OTHER INFORMATION
Item 1 —	Legal Proceedings	16
Item 1A —	Risk Factors	16
Item 5 —	Other Information	16
Item 6 —	Exhibits	17
SIGNATURES		18

This Form 10-Q is filed by SPS, a New Mexico corporation. 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.

Definitions of Abbreviations

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	United States Environmental Protection Agency
FERC	Federal Energy Regulatory Commission
NMPRC	New Mexico Public Regulation Commission
PUCT	Public Utility Commission of Texas
SEC	Securities and Exchange Commission
Other
ACE	Affordable Clean Energy
ALJ	Administrative Law Judge
BART	Best available retrofit technology
CEO	Chief executive officer
CERCLA	Comprehensive Environmental Response, Compensation, and Liability Act
CFO	Chief financial officer
ETR	Effective tax rate
FTR	Financial transmission right
GAAP	United States generally accepted accounting principles
IPP	Independent power producing entity
LP&L	Lubbock Power and Light
MGP	Manufactured Gas Plant
NOx	Nitrogen Oxides
O&M	Operating and maintenance
OATT	Open access transmission tariff
PFAS	Per- and Polyfluoroalkyl Substances
PPA	Power purchase agreement
PTC	Production tax credit
ROE	Return on equity
RTO	Regional Transmission Organization
SPP	Southwest Power Pool, Inc.
Measurements
MW	Megawatts

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, including those relating to future sales, future expenses, future tax rates, future operating performance, estimated base capital expenditures and financing plans, projected capital additions and forecasted annual revenue requirements with respect to rider filings, expected rate increases to customers, expectations and intentions regarding regulatory proceedings, and expected impact on our results of operations, financial condition and cash flows of resettlement calculations and credit losses relating to certain energy transactions, as well as assumptions and other statements are intended to be 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 in SPS’ Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2022, and subsequent filings with the SEC, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: operational safety; successful long-term operational planning; commodity risks associated with energy markets and production; rising energy prices and fuel costs; qualified employee work force and third-party contractor factors; violations of our Codes of Conduct; our ability to recover costs; changes in regulation; reductions in our credit ratings and the cost of maintaining certain contractual relationships; general economic conditions, including recessionary conditions, inflation rates, monetary fluctuations, supply chain constraints, and their impact on capital expenditures and/or 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; uncertainty regarding epidemics, the duration and magnitude of business restrictions including shutdowns (domestically and globally), the potential impact on the workforce, including shortages of employees or third-party contractors due to quarantine policies, vaccination requirements or government restrictions, impacts on the transportation of goods and the generalized impact on the economy; effects of geopolitical events, including war and acts of terrorism; cyber security threats and data security breaches; seasonal weather patterns; changes in environmental laws and regulations; climate change and other weather events; natural disaster and resource depletion, including compliance with any accompanying legislative and regulatory changes; costs of potential regulatory penalties and wildfire damages in excess of liability insurance coverage; regulatory changes and/or limitations related to the use of natural gas as an energy source; challenging labor market conditions and our ability to attract and retain a qualified workforce; and our ability to execute on our strategies or achieve expectations related to environmental, social and governance matters including as a result of evolving legal, regulatory and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs, the availability of requisite financing, and changes in carbon markets.

PART I — 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
	2023		2022		2023		2022
Operating revenues	$	496	$	658	$	1,004	$	1,135
Operating expenses
Electric fuel and purchased power	211		282		456		519
Operating and maintenance expenses	69		87		149		159
Demand side management expenses	4		6		10		11
Depreciation and amortization	92		132		183		210
Taxes (other than income taxes)	24		33		49		58
Total operating expenses	400		540		847		957
Operating income	96		118		157		178
Other income, net	1		1		1		1
Allowance for funds used during construction — equity	2		1		3		1
Interest charges and financing costs
Interest charges and other financing costs	37		46		71		75
Allowance for funds used during construction — debt	(2)		(1)		(3)		(1)
Total interest charges and financing costs	35		45		68		74
Income before income taxes	64		75		93		106
Income tax benefit	(17)		(18)		(42)		(39)
Net income	$	81	$	93	$	135	$	145
See Notes to Financial Statements

4

SOUTHWESTERN PUBLIC SERVICE COMPANY

STATEMENTS OF CASH FLOWS (UNAUDITED)

(amounts in millions)

	Six Months Ended June 30
	2023		2022
Operating activities
Net income	$	135	$	145
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	184		211
Deferred income taxes	(77)		(19)
Allowance for equity funds used during construction	(3)		(1)
Provision for bad debts	6		4
Changes in operating assets and liabilities:
Accounts receivable	3		(56)
Accrued unbilled revenues	(12)		(27)
Inventories	(23)		(15)
Prepayments and other	7		11
Accounts payable	(21)		35
Net regulatory assets and liabilities	194		(30)
Other current liabilities	(10)		8
Pension and other employee benefit obligations	—		1
Other, net	(4)		(2)
Net cash provided by operating activities	379		265
Investing activities
Utility capital/construction expenditures	(351)		(260)
Net cash used in investing activities	(351)		(260)
Financing activities
Proceeds from (repayments of) short-term borrowings, net	34		(137)
Proceeds from issuance of long-term debt, net	—		196
Borrowings under utility money pool arrangement	174		258
Repayments under utility money pool arrangement	(74)		(349)
Capital contributions from parent	—		209
Dividends paid to parent	(163)		(110)
Net cash (used in) provided by financing activities	(29)		67
Net change in cash, cash equivalents and restricted cash	(1)		72
Cash, cash equivalents and restricted cash at beginning of period	2		1
Cash, cash equivalents and restricted cash at end of period	$	1	$	73
Supplemental disclosure of cash flow information:
Cash paid for interest (net of amounts capitalized)	$	(65)	$	(71)
Cash (paid) received for income taxes, net	(35)		26
Supplemental disclosure of non-cash investing and financing transactions:
Accrued property, plant and equipment additions	$	41	$	36
Inventory transfers to property, plant and equipment	17		7
Allowance for equity funds used during construction	3		1

See Notes to Financial Statements

5

SOUTHWESTERN PUBLIC SERVICE COMPANY

BALANCE SHEETS (UNAUDITED)

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

	June 30, 2023		Dec. 31, 2022
Assets
Current assets
Cash and cash equivalents	$	1	$	2
Accounts receivable, net	156		167
Accounts receivable from affiliates	24		15
Accrued unbilled revenues	152		140
Inventories	67		61
Regulatory assets	78		217
Derivative instruments	86		122
Prepaid taxes	5		5
Prepayments and other	61		68
Total current assets	630		797
Property, plant and equipment, net	8,313		8,129
Other assets
Regulatory assets	337		359
Derivative instruments	2		3
Operating lease right-of-use assets	419		434
Other	30		26
Total other assets	788		822
Total assets	$	9,731	$	9,748
Liabilities and Equity
Current liabilities
Current portion of long-term debt	$	350	$	—
Short-term debt	68		34
Borrowings under utility money pool arrangement	100		—
Accounts payable	169		209
Accounts payable to affiliates	24		23
Regulatory liabilities	134		148
Taxes accrued	52		61
Accrued interest	31		31
Dividends payable to parent	67		61
Derivative instruments	4		4
Operating lease liabilities	32		31
Other	56		58
Total current liabilities	1,087		660
Deferred credits and other liabilities
Deferred income taxes	669		739
Regulatory liabilities	731		715
Asset retirement obligations	150		147
Derivative instruments	—		2
Pension and employee benefit obligations	12		12
Operating lease liabilities	387		403
Other	8		9
Total deferred credits and other liabilities	1,957		2,027
Commitments and contingencies
Capitalization
Long-term debt	2,862		3,211
Common stock — 200 shares authorized of $1.00 par value; 100 shares outstanding at June 30, 2023 and Dec. 31, 2022, respectively	—		—
Additional paid in capital	3,319		3,311
Retained earnings	507		540
Accumulated other comprehensive loss	(1)		(1)
Total common stockholder's equity	3,825		3,850
Total liabilities and equity	$	9,731	$	9,748

See Notes to Financial Statements

6

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 Stockholder's Equity
	Shares	Par Value		Additional Paid In Capital
Three Months Ended June 30, 2023 and 2022
Balance at March 31, 2022	100	$	—	$	3,099	$	512	$	(1)	$	3,610
Net income						93				93
Common dividends declared to parent						(58)				(58)
Contributions of capital by parent				202						202
Balance at June 30, 2022	100	$	—	$	3,301	$	547	$	(1)	$	3,847
Balance at March 31, 2023	100	$	—	$	3,311	$	528	$	(1)	$	3,838
Net income						81				81
Common dividends declared to parent						(102)				(102)
Contributions of capital by parent				8						8
Balance at June 30, 2023	100	$	—	$	3,319	$	507	$	(1)	$	3,825
	Common Stock Issued					Retained Earnings		Accumulated Other Comprehensive Loss		Total Common Stockholder's Equity
	Shares	Par Value		Additional Paid In Capital
Six Months Ended June 30, 2023 and 2022
Balance at Dec. 31, 2021	100	$	—	$	3,091	$	513	$	(1)	$	3,603
Net income						145				145
Dividends declared to parent						(111)				(111)
Contributions of capital by parent				210						210
Balance at June 30, 2022	100	$	—	$	3,301	$	547	$	(1)	$	3,847
Balance at Dec. 31, 2022	100	$	—	$	3,311	$	540	$	(1)	$	3,850
Net income						135				135
Dividends declared to parent						(168)				(168)
Contributions of capital by parent				8						8
Balance at June 30, 2023	100	$	—	$	3,319	$	507	$	(1)	$	3,825
See Notes to Financial Statements

7

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 GAAP, the financial position of SPS as of June 30, 2023 and Dec. 31, 2022; the results of SPS’ operations, including the components of net income and changes in stockholder’s equity for the three and six months ended June 30, 2023 and 2022; and SPS’ cash flows for the six months ended June 30, 2023 and 2022.

All adjustments are of a normal, recurring nature, except as otherwise disclosed. Management has also evaluated the impact of events occurring after June 30, 2023 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, 2022 balance sheet information has been derived from the audited 2022 financial statements included in the SPS Annual Report on Form 10-K for the year ended Dec. 31, 2022.

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, 2022, filed with the SEC on Feb. 23, 2023.

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, 2022 appropriately represent, in all material respects, the current status of accounting policies and are incorporated herein by reference.

2. Accounting Pronouncements

As of June 30, 2023, there was no material impact from the recent adoption of new accounting pronouncements, nor expected material impact from recently issued accounting pronouncements yet to be adopted, on SPS’ financial statements.

3. Selected Balance Sheet Data

(Millions of Dollars)	June 30, 2023		Dec. 31, 2022
Accounts receivable, net
Accounts receivable	$	170	$	180
Less allowance for bad debts	(14)		(13)
Accounts receivable, net	$	156	$	167

(Millions of Dollars)	June 30, 2023		Dec. 31, 2022
Inventories
Materials and supplies	$	51	$	42
Fuel	16		19
Total inventories	$	67	$	61

(Millions of Dollars)	June 30, 2023		Dec. 31, 2022
Property, plant and equipment, net
Electric plant	$	10,451	$	10,182
Plant to be retired (a)	254		266
CWIP	215		167
Total property, plant and equipment	10,920		10,615
Less accumulated depreciation	(2,607)		(2,486)
Property, plant and equipment, net	$	8,313	$	8,129

(a)Amounts include Tolk and coal generation assets at Harrington pending facility gas conversion. Amounts are reported net of accumulated depreciation.

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 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 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.

Money pool borrowings:

(Amounts in Millions, Except Interest Rates)	Three Months Ended June 30, 2023			Year Ended Dec. 31, 2022
Borrowing limit	$	100		$	100
Amount outstanding at period end	100			—
Average amount outstanding	96			35
Maximum amount outstanding	100			100
Weighted average interest rate, computed on a daily basis	4.88		%	0.44		%
Weighted average interest rate at period end	5.01			N/A

Commercial Paper — Commercial paper outstanding:

(Amounts in Millions, Except Interest Rates)	Three Months Ended June 30, 2023			Year Ended Dec. 31, 2022
Borrowing limit	$	500		$	500
Amount outstanding at period end	68			34
Average amount outstanding	47			100
Maximum amount outstanding	78			324
Weighted average interest rate, computed on a daily basis	5.23		%	0.79		%
Weighted average interest rate at period end	5.26			4.55

Letters of Credit — SPS uses letters of credit, generally with terms of one year, to provide financial guarantees for certain obligations. At both June 30, 2023 and Dec. 31, 2022, there were $2 million of letters of credit outstanding under the credit facility. Amounts approximate their fair value and are subject to fees.

Revolving Credit Facility — In order to issue its commercial paper, SPS must have a revolving credit facility equal to or greater than the commercial paper borrowing limit and cannot issue commercial paper exceeding available capacity under this credit facility. The credit facility provides short-term financing in the form of notes payable to banks, letters of credit and back-up support for commercial paper borrowings.

8

SPS has the right to request an extension of the revolving credit facility termination date for two additional one-year periods. All extension requests are subject to majority bank group approval.

As of June 30, 2023, SPS had the following committed revolving credit facility available (in millions of dollars):

Credit Facility (a)		Drawn (b)		Available
$	500	$	70	$	430

(a)Expires in September 2027.

(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, 2023 and Dec. 31, 2022.

5. Revenues

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

	Three Months Ended June 30
(Millions of Dollars)	2023		2022
Major revenue types
Revenue from contracts with customers:
Residential	$	91	$	100
Commercial and Industrial	257		264
Other	14		13
Total retail	362		377
Wholesale	51		109
Transmission	72		74
Other	2		3
Total revenue from contracts with customers	487		563
Alternative revenue and other	9		95
Total revenues	$	496	$	658
	Six Months Ended June 30
(Millions of Dollars)	2023		2022
Major revenue types
Revenue from contracts with customers:
Residential	$	192	$	197
Commercial and Industrial	524		486
Other	26		21
Total retail	742		704
Wholesale	96		178
Transmission	146		146
Other	2		6
Total revenue from contracts with customers	986		1,034
Alternative revenue and other	18		101
Total revenues	$	1,004	$	1,135

6. Income Taxes

Reconciliation between the statutory rate and ETR:

	Six Months Ended June 30
	2023		2022
Federal statutory rate	21.0	%	21.0	%
State tax (net of federal tax effect)	2.2		2.5
(Decreases) increases:
Wind PTCs (a)	(65.2)		(55.8)
Plant regulatory differences (b)	(3.5)		(4.0)
Amortization of excess nonplant deferred taxes	0.3		(1.1)
Other (net)	—		0.6
Effective income tax rate	(45.2)	%	(36.8)	%

(a)Wind PTCs are credited to customers (reduction to revenue) and do not materially impact net income.

(b)Plant regulatory differences primarily relate to the credit of excess deferred taxes to customers through the average rate assumption method. Income tax benefits associated with the credit are offset by corresponding revenue reductions.

7. Fair Value of Financial Assets and Liabilities

Fair Value Measurements

Accounting guidance for fair value measurements and disclosures provides a hierarchical framework for disclosing the observability of the inputs utilized in measuring assets and liabilities 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 actively traded instruments with observable actual trading prices.

•Level 2 — Pricing inputs are other than actual trading 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 include those valued with models requiring significant judgment or estimation.

Specific valuation methods include:

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

Commodity derivatives — Methods used to measure the fair value of commodity derivative forwards and options utilize forward prices and volatilities, as well as pricing adjustments for specific delivery locations, and are generally assigned a Level 2 classification. When contracts relate to inactive delivery locations or extend to periods beyond those readily observable on active exchanges, 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. 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.

9

The values of these instruments are derived from, and designed to offset, the costs 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 these instruments.

FTRs are recognized at fair value and adjusted each period prior to settlement. Given the limited observability of certain variables underlying the reported auction, values of FTRs, these fair value measurements have been assigned a Level 3 classification.

Net congestion costs, including the impact of FTR settlements, are shared through fuel and purchased energy cost recovery mechanisms. As such, the fair value of the unsettled instruments (i.e., derivative asset or liability) is offset/deferred as a regulatory asset or liability.

Derivative Activities and 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 utility commodity prices.

Interest Rate Derivatives — SPS enters into contracts that effectively fix the interest rate on a specified principal amount of a hypothetical future debt issuance. These financial swaps net settle based on changes in a specified benchmark interest rate, acting as a hedge of changes in market interest rates that will impact specified anticipated debt issuances. These derivative instruments are designated as cash flow hedges for accounting purposes, with changes in fair value prior to occurrence of the hedged transactions recorded as other comprehensive income.

As of June 30, 2023, accumulated other comprehensive loss related to interest rate derivatives included immaterial net losses expected to be reclassified into earnings during the next 12 months as the hedged transactions impact earnings. As of June 30, 2023, SPS had no unsettled interest rate derivatives.

Wholesale and Commodity Trading — 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.

Results of derivative instrument transactions entered into for trading purposes are presented in the statements of income as electric revenues, net of any sharing with customers. These activities are not intended to mitigate commodity price risk associated with regulated electric operations. Sharing of these margins is determined through state regulatory proceedings as well as the operation of the FERC-approved joint operating agreement.

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.

The most significant derivative positions outstanding at June 30, 2023 for this purpose relate to FTR instruments administered by SPP. These instruments are intended to offset the impacts of transmission system congestion. Higher congestion costs in recent years have led to an increase in the fair value of FTRs. Settlements of FTRs are shared with electric customers through fuel and purchased energy cost-recovery mechanisms.

When SPS enters into derivative instruments that mitigate commodity price risk on behalf of electric customers, the instruments are not typically designated as qualifying hedging transactions. The classification of unrealized losses or gains on these instruments as a regulatory asset or liability, if applicable, is based on approved regulatory recovery mechanisms.

Gross notional amounts of FTRs:

Amounts in Millions (a)	June 30, 2023	Dec. 31, 2022
Megawatt hours of electricity	17	8

(a)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 on 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.

As of June 30, 2023, four of the ten most significant counterparties for these activities, comprising $12 million, or 34%, of this credit exposure, had investment grade credit ratings from S&P Global Ratings, Moody’s Investor Services or Fitch Ratings.

Five of the ten most significant counterparties, comprising $23 million, or 66%, of this credit exposure, were not rated by external ratings agencies, but based on SPS’ internal analysis, had credit quality consistent with investment grade.

One of these counterparties, comprising an immaterial amount or less than 1% of this credit exposure, had credit quality less than investment grade, based on internal analysis. Nine of these counterparties are municipal or cooperative electric entities, RTOs or other utilities.

10

Recurring Derivative Fair Value Measurements

Impact of derivative activity:

Pre-Tax Fair Value Gains (Losses) Recognized During the Period in:
(Millions of Dollars)	Regulatory Assets and Liabilities
Three Months Ended June 30, 2023
Other derivative instruments
Electric commodity	$	(8)
Total	$	(8)
Six Months Ended June 30, 2023
Other derivative instruments
Electric commodity	$	(83)
Total	$	(83)
Three Months Ended June 30, 2022
Other derivative instruments
Electric commodity	$	92
Total	$	92
Six Months Ended June 30, 2022
Other derivative instruments
Electric commodity	$	93
Total	$	93

Pre-Tax Losses Reclassified into Income During the Period from:
(Millions of Dollars)	Regulatory Assets and Liabilities
Three Months Ended June 30, 2023
Other derivative instruments
Electric commodity	4		(a)
Total	$	4
Six Months Ended June 30, 2023
Other derivative instruments
Electric commodity	72		(a)
Total	$	72
Three Months Ended June 30, 2022
Other derivative instruments
Electric commodity	24		(a)
Total	$	24
Six Months Ended June 30, 2022
Other derivative instruments
Electric commodity	34		(a)
Total	$	34

(a)Recorded to electric fuel and purchased power. These derivative settlement gains and losses are shared with electric customers through fuel and purchased energy cost-recovery mechanisms, and reclassified out of income as regulatory assets or liabilities, as appropriate. FTR settlements are shared with customers and do not have a material impact on net income. Presented amounts reflect changes in fair value between auction and settlement dates, but exclude the original auction fair value.

SPS had no derivative instruments designated as fair value hedges during the six months ended June 30, 2023 and immaterial derivative instruments designated as fair value hedges during the six months ended June 30, 2022.

Derivative assets and liabilities measured at fair value on a recurring basis were as follows:

	June 30, 2023												Dec. 31, 2022
	Fair Value						Fair Value Total		Netting (a)		Total		Fair Value						Fair Value Total		Netting (a)		Total
(Millions of Dollars)	Level 1		Level 2		Level 3								Level 1		Level 2		Level 3
Current derivative assets
Other derivative instruments:
Electric commodity	$	—	$	—	$	83	$	83	$	—	$	83	$	—	$	—	$	119	$	119	$	—	$	119
Total current derivative assets	$	—	$	—	$	83	$	83	$	—	83		$	—	$	—	$	119	$	119	$	—	119
PPAs (b)											3												3
Current derivative instruments											$	86											$	122
Noncurrent derivative assets
PPAs (b)											2												3
Noncurrent derivative instruments											$	2											$	3
Current derivative liabilities
PPAs (b)											4												4
Current derivative instruments											$	4											$	4
Noncurrent derivative liabilities
PPAs (b)											—												2
Noncurrent derivative instruments											$	—											$	2

(a)SPS nets derivative instruments and related collateral on its balance sheet when supported by a legally enforceable master netting agreement. At June 30, 2023 and Dec. 31, 2022, derivative assets and liabilities include no obligations to return cash collateral or rights to reclaim cash collateral.

(b)SPS currently applies the normal purchase exception to qualifying PPAs. Balance relates to specific contracts that were previously recognized at fair value prior to applying the normal purchase exception, and are being amortized over the remaining contract lives along with the offsetting regulatory assets and liabilities.

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Changes in Level 3 commodity derivatives:

	Three Months Ended June 30
(Millions of Dollars)	2023		2022
Balance at April 1	$	23	$	32
Purchases (a)	68		232
Settlements (a)	(32)		(85)
Net transactions recorded during the period:
Net gains recognized as regulatory assets and liabilities (a)	24		105
Balance at June 30	$	83	$	284
	Six Months Ended June 30
(Millions of Dollars)	2023		2022
Balance at Jan. 1	$	119	$	27
Purchases (a)	74		237
Settlements (a)	(48)		(94)
Net transactions recorded during the period:
Net (losses) gains recognized as regulatory assets and liabilities (a)	(62)		114
Balance at June 30	$	83	$	284

(a)Relates primarily to FTR instruments administered by SPP.

Fair Value of Long-Term Debt

As of June 30, 2023, other financial instruments for which the carrying amount did not equal fair value:

	June 30, 2023				Dec. 31, 2022
(Millions of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion	$	3,212	$	2,678	$	3,211	$	2,674

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, 2023 and Dec. 31, 2022, and given the observability of the inputs, fair values presented for long-term debt were assigned as Level 2.

8. Benefit Plans and Other Postretirement Benefits

Components of Net Periodic Benefit Cost

	Three Months Ended June 30
	2023		2022		2023		2022
(Millions of Dollars)	Pension Benefits				Postretirement Health Care Benefits
Service cost	$	2	$	3	$	—	$	—
Interest cost (a)	6		4		—		1
Expected return on plan assets (a)	(8)		(7)		—		(1)
Amortization of net loss (a)	—		2		—		—
Net periodic benefit cost	$	—	$	2	$	—	$	—
Effects of regulation	1		(1)		—		—
Net benefit cost recognized for financial reporting	$	1	$	1	$	—	$	—

	Six Months Ended June 30
	2023		2022		2023		2022
(Millions of Dollars)	Pension Benefits				Postretirement Health Care Benefits
Service cost	$	3	$	5	$	—	$	—
Interest cost (a)	12		8		1		1
Expected return on plan assets (a)	(16)		(15)		(1)		(1)
Amortization of net loss (a)	1		5		—		—
Net periodic benefit (credit) cost	$	—	$	3	$	—	$	—
Effects of regulation	2		—		—		—
Net benefit cost recognized for financial reporting	$	2	$	3	$	—	$	—

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

In January 2023, contributions totaling $50 million were made across Xcel Energy’s pension plans, none of which was attributable to SPS. Xcel Energy does not expect additional pension contributions during 2023.

9. Commitments and Contingencies

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, 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. Legal fees are generally expensed as incurred.

Other Litigation — In 2019, SPS and Xcel Energy Services, Inc. were served with a lawsuit related to a traffic accident that resulted in two fatalities in New Mexico. In July 2022, a confidential settlement was reached of approximately $50 million. No impact to earnings occurred, as the amounts will be reimbursed by SPS’ insurers. An asset has been recorded to reflect the reimbursement within Prepayments and other current assets.

Rate Matters and Other

SPS is involved in various regulatory proceedings arising in the ordinary course of business. Until resolution, typically in the form of a rate order, uncertainties may exist regarding the ultimate rate treatment for certain activities and transactions. Amounts have been recognized for probable and reasonably estimable losses that may result. Unless otherwise disclosed, any reasonably possible range of loss in excess of any recognized amount is not expected to have a material effect on the financial statements.

12

SPP OATT Upgrade Costs — Costs of transmission upgrades may be recovered from other SPP customers whose transmission service depends on capacity enabled by the upgrade under the SPP OATT. 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 2018, SPS’ appeal to the D.C. Circuit over the FERC rulings granting SPP the right to recover previously unbilled charges was remanded to the FERC. In 2019, the FERC reversed its 2016 decision and ordered SPP to refund charges retroactively collected from its transmission customers, including SPS, related to periods before September 2015. In 2020, SPP and Oklahoma Gas & Electric separately filed petitions for review of the FERC’s orders at the D.C. Circuit. In 2021, the D.C. Circuit issued a decision denying these appeals and upholding the FERC’s orders. Refunds received by SPS are expected to be given back to SPS customers through future rates.

In 2017, SPS filed a separate related complaint asserting SPP assessed upgrade charges to SPS in violation of the SPP OATT. In 2018, the FERC issued an order denying the SPS complaint. SPS filed a request for rehearing in 2018. The FERC subsequently issued a tolling order granting a rehearing for further consideration. If SPS’ complaint results in additional charges or refunds, SPS will seek to recover or refund the amount through future SPS customer rates. In 2020, SPS filed a petition for review of the FERC’s 2018 orders at the D.C. Circuit. In February 2022, FERC issued an order rejecting SPS’ request for hearing. SPS has appealed that order. That appeal has been combined with SPS’ prior appeal.

Environmental

MGP, Landfill and Disposal Sites

SPS is investigating, remediating or performing post-closure actions at two MGP, landfill or other disposal sites across its service territories, excluding sites that are being addressed under coal ash regulations.

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

Environmental Requirements — Air

Clean Air Act NOx Allowance Allocations — In June 2023, after disapproving state implementation plans, the EPA published final regulations under the "Good Neighbor" provisions of the Clean Air Act. The final rule applies to generation facilities in Texas, as well as other states outside of our service territory. The rule establishes an allowance trading program for NOx that will impact SPS’ fossil fuel-fired electric generating facilities. Applicable facilities will have to secure additional allowances, install NOx controls and/or develop a strategy of operations that utilizes the existing allowance allocations. Guidelines are also established for allowance banking and emission limit backstops.

While the financial impacts of the final rule are uncertain and dependent on market forces and anticipated generation, SPS anticipates the annual costs could be significant, but would be recoverable through regulatory mechanisms.

SPS has joined other impacted companies in litigation challenging the EPA’s disapproval of Texas’ state implementation plan. Currently, the regulation is under a judicial stay for Texas and not applicable to SPS until litigation concludes.

Regional Haze Rules — In 2016, the EPA adopted a final rule establishing a federal implementation plan for reasonable further progress under the regional haze program for the state of Texas. The rule imposes SO2 emission limitations which would require the installation of dry scrubbers on Tolk Units 1 and 2; compliance would have been required by February 2021. SPS appealed the EPA’s decision and obtained a stay of the final rule. In July 2023, the EPA issued a prepublication proposed rule to address the first planning period for the Clean Air Act regional haze reasonable further progress requirements in Texas. As proposed, no additional controls are required at SPS generating facilities.

In 2017, the EPA adopted a final BART rule for Texas. Under that rule, Harrington Units 1 and 2 participate in an intrastate SO2 budget trading program to meet BART requirements. The rule also implemented participation in a federal ozone season NOx budget and trading program, named the Cross State Air Pollution Rule. The EPA has proposed to require installation of SO2 controls as BART rather than participation in the trading program. For Harrington Units 1 and 2, EPA has alternatively proposed that Harrington may comply with the SO2 control requirements by agreeing to include the planned January 1, 2025 gas conversion in the federal plan.

Leases

SPS evaluates contracts that may contain leases, including PPAs and arrangements for the use of office space and other facilities, vehicles and equipment. A contract contains a lease if it conveys the exclusive right to control the use of a specific asset.

Components of lease expense:

	Three Months Ended June 30
(Millions of Dollars)	2023		2022
Operating leases
PPA capacity payments	$	14	$	13
Other operating leases (a)	1		1
Total operating lease expense (b)	$	15	$	14

(a)Includes $1 million of short-term lease expense for 2023 and an immaterial short-term lease expense for 2022.

(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 operating and maintenance expense and electric fuel and purchased power.

	Six Months Ended June 30
(Millions of Dollars)	2023		2022
Operating leases
PPA capacity payments	$	27	$	26
Other operating leases (a)	2		3
Total operating lease expense (b)	$	29	$	29

(a)Includes $1 million of short-term lease expense for 2023 and an immaterial short-term lease expense for 2022.

(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 operating and maintenance expense and electric fuel and purchased power.

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Commitments under operating leases as of June 30, 2023:

(Millions of Dollars)	PPA Operating Leases		Other Operating Leases		Total Operating Leases
Total minimum obligation	$	474	$	51	$	525
Interest component of obligation	(93)		(13)		(106)
Present value of minimum obligation	$	381	$	38	419
Less current portion					(32)
Noncurrent operating lease liabilities					$	387

Variable Interest Entities

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

In addition, certain solar PPAs provide an option to purchase emission allowances or sharing provisions related to production credits generated by the solar facility under contract. These specific PPAs create a variable interest in the IPP.

SPS had approximately 1,197 MW of capacity under long-term PPAs at both June 30, 2023 and Dec. 31, 2022 with entities that have been determined to be variable interest entities. 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 most significantly impact the entities’ economic performance. The PPAs 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 Instruction 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 ongoing earnings. 

Generally, a non-GAAP financial measure is a measure of a company’s financial performance, financial position or cash flows that adjusts measures calculated and presented in accordance with GAAP.

SPS’ 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.

Earnings Adjusted for Certain Items (Ongoing Earnings)

Ongoing earnings reflect adjustments to GAAP earnings (net income) for certain items. We use this non-GAAP financial measure to evaluate and provide details of SPS’ core earnings and underlying performance.

We believe this measurement is useful to investors to evaluate the actual and projected financial performance and contribution of SPS. For the three and six months ended June 30, 2023 and 2022, there were no such adjustments to GAAP earnings and therefore GAAP earnings equal ongoing earnings.

Results of Operations

SPS’ net income was approximately $135 million for the six months ended June 30, 2023 compared with approximately $145 million for the prior year. The impact of regulatory rate outcomes and sales growth was more than offset by unfavorable weather, increased depreciation and interest expenses (excluding the impact of the prior year Texas rate case surcharge amounts).

Electric Margin

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.

Electric revenues and fuel and purchased power expenses are impacted by fluctuations in the price of natural gas and coal. However, these price fluctuations generally have minimal impact on earnings impact due to fuel recovery mechanisms. In addition, electric customers receive a credit for PTCs generated, which reduce electric revenue and income taxes.

Electric Revenues, Fuel and Purchased Power and Electric Margin

	Six Months Ended June 30
(Millions of Dollars)	2023		2022
Electric revenues	$	1,004	$	1,135
Electric fuel and purchased power	(456)		(519)
Electric margin	$	548	$	616

Changes in Electric Margin

(Millions of Dollars)	Six Months Ended June 30, 2023 vs. 2022
Revenue recognition for the Texas rate case surcharge (a)	$	(85)
Estimated impact of weather	(16)
Firm wholesale	(11)
Regulatory rate outcomes (Texas and New Mexico)	24
Sales and demand	14
Other (net)	6
Total decrease	$	(68)

(a)The decline in electric margin is due to the recognition of the Texas rate case outcome in the second quarter of 2022, which was largely offset by recognition of previously deferred costs.

Non-Fuel Operating Expense and Other Items

O&M Expenses — O&M expenses decreased $10 million year-to-date. The decrease was primarily due to the recognition of previously deferred costs associated with the Texas Electric Rate Case in 2022 (offset in Electric revenues).

Depreciation and Amortization — Depreciation and amortization decreased $27 million year-to-date. The decrease is primarily due to the recognition of previously deferred depreciation costs associated with the Texas Electric Rate Case in 2022 (approximately $40 million), partially offset by system expansion.

14

Taxes (Other than Income Taxes) — Taxes (other than income taxes) decreased $9 million year-to-date, primarily due to the recognition of previously deferred costs associated with the Texas Electric Rate Case in 2022.

Public Utility Regulation and Other

The FERC and state and local regulatory commissions regulate SPS. SPS is subject to rate regulation by state utility regulatory agencies, which have jurisdiction with respect to the rates of electric distribution companies in New Mexico and Texas.

Rates are designed to recover plant investment, operating costs and an allowed return on investment. SPS requests changes in utility rates through commission filings. Changes in operating costs can affect SPS’ financial results, depending on the timing of rate cases and implementation of final rates. Other factors affecting rate filings are new investments, sales, conservation and demand side management efforts, and the cost of capital.

In addition, the regulatory commissions authorize the ROE, capital structure and depreciation rates in rate proceedings. Decisions by these regulators can significantly impact SPS’ results of operations and credit quality.

Except to the extent noted below, the circumstances set forth in Public Utility Regulation included in Item 7 of SPS’ Annual Report on Form 10-K for the year ended Dec. 31, 2022, appropriately represent, in all material respects, the current status of public utility regulation and are incorporated herein by reference.

Pending and Recently Concluded Regulatory Proceedings

2022 New Mexico Electric Rate Case — In November 2022, SPS filed a New Mexico electric rate case seeking a revenue increase of $78 million, or 10%. In May 2023, SPS revised its request to $75 million. The request is based on a ROE of 10.75%, an equity ratio of 54.7%, a future test year ending June 30, 2024, rate base of $2.4 billion and acceleration of the Tolk coal plant depreciation life from 2032 to 2028.

In May 2023, SPS, Staff, and various parties filed a contested comprehensive stipulation. Two environmental advocacy organizations, opposed the stipulation. However, one intervenor withdrew their opposition and abstained. Hearings were held in June 2023.

Terms of the contested stipulation include:

•Base rate revenue increase of $33 million, based on the filed future test year.

•ROE of 9.5%.

•Equity ratio of 54.7%.

•Acceleration of Tolk coal plant depreciation life to 2028.

A NMPRC decision is anticipated in the fourth quarter of 2023.

2023 Texas Electric Rate Case — In February 2023, SPS filed a Texas electric rate case seeking an increase in base rate revenue of $149 million (13%). In March 2023, SPS updated the filing, which increased the rate revenue request to $158 million (14% impact to customer bills). The request is based on a ROE of 10.65%, an equity ratio of 54.6% and retail rate base of $3.6 billion. Additionally, the request reflects the acceleration of the Tolk coal plant depreciation life from 2034 to 2028. SPS is requesting a surcharge from July 13, 2023 through the effective date of new base rates.

Next steps in the procedural schedule are as follows:

•Intervenor direct testimony: August 4, 2023.

•Staff direct testimony: August 11, 2023.

•Rebuttal testimony: August 25, 2023.

•Hearings: Sept. 12-21, 2023.

•Proposed findings: Oct. 25, 2023.

A PUCT decision is expected in the first quarter of 2024.

Contract Termination — SPS and LP&L have a 25-year, 170 MW partial requirements contract. In May 2021, SPS and LP&L finalized a settlement which would terminate the contract upon LP&L’s move from the SPP to the Electric Reliability Council of Texas (expected in 2023). The settlement agreement requires LP&L to pay SPS $78 million (to the benefit of SPS’ remaining customers). LP&L would remain obligated to pay for SPP transmission charges associated with LP&L’s load in SPP. The agreement has received PUCT approval and is pending FERC approval.

2022 All-Source RFP — In July 2023, SPS filed a recommended portfolio, which includes 418 MW of self-build solar projects. A decision from PUCT and NMPRC is expected in mid-2024.

Other

Supply Chain

SPS’ ability to meet customer energy requirements, respond to storm-related disruptions and execute our capital expenditure program are dependent on maintaining an efficient supply chain. Manufacturing processes have experienced disruptions related to scarcity of certain raw materials and interruptions in production and shipping. These disruptions have been further exacerbated by inflationary pressures, labor shortages and the impact of international conflicts/issues. SPS continues to monitor the situation as it remains fluid and seeks to mitigate the impacts by securing alternative suppliers, modifying design standards, and adjusting the timing of work.

Electric Meters and Transformers

Supply chain issues associated with semi-conductors have delayed the availability of advanced infrastructure meters. As a result of delays, SPS projects impacts to deployment schedules into 2025.

Additionally, the availability of certain transformers is an industry-wide issue that has significantly impacted and in some cases may result in delays in projects and new customer connections. Proposed governmental actions related to transformer efficiency standards may compound these delays in the future. SPS continues to seek alternative suppliers and prioritize work plans to mitigate impacts of supply constraints.

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Solar Resources

In April 2022, the U.S. Department of Commerce initiated an anti-circumvention investigation that would subject CSPV solar panels and cells imported from Malaysia, Vietnam, Thailand, and Cambodia with potential incremental tariffs ranging from 50% to 250%. These countries account for more than 80% of CSPV panel imports.

An interim stay on tariffs has been issued and many significant solar projects have resumed. Further policy action, a change in the interim stay of tariffs, or other restrictions on solar imports (i.e., as a result of implementation of the Uyghur Forced Labor Protection Act) or disruptions in solar imports from key suppliers could impact project timelines and costs.

Environmental

Clean Air Act

Power Plant Greenhouse Gas Regulations — In May 2023, the EPA published proposed rules addressing control of CO2 emissions from the power sector. The rule proposed regulations for new natural gas generating units under Clean Air Act Section 111(b) and emission guidelines for existing coal and certain natural gas generation under Clean Air Action Section 111(d). The proposed rules create subcategories of coal units based on planned retirement date and subcategories of natural gas combustion turbines and combined cycle units based on utilization. The CO2 control requirements vary by subcategory. Until final rules are issued, it is not certain what the impact will be on SPS. SPS believes that the cost of these initiatives or replacement generation would be recoverable through rates based on prior state commission practices.

Emerging Contaminants of Concern

PFAS are man-made chemicals that are widely used in consumer products and can persist and bio-accumulate in the environment. SPS does not manufacture PFAS but because PFAS are so ubiquitous in products and the environment, it may impact our operations.

In September 2022, the EPA proposed to designate two types of PFAS as “hazardous substances” under the CERCLA.

In March 2023, the EPA published a proposed rule that would establish enforceable drinking water standards for certain PFAS chemicals.

SPS provided comments related to both efforts described above through its regulatory coalitions. Final rules are expected in 2024. Costs are uncertain until a final rule is published.

The proposed rules could result in new obligations for investigation and cleanup. SPS is monitoring changes to state laws addressing PFAS. The impact of these proposed regulations is uncertain.

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 CEO and CFO, allowing timely decisions regarding required disclosure.

As of June 30, 2023, 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 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 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. Legal fees are generally expensed as incurred.

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, 2022, which is incorporated herein by reference. There have been no material changes from the risk factors previously disclosed in the Form 10-K.

ITEM 5 — OTHER INFORMATION

None of the Company’s directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended June 30, 2023.

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ITEM 6 — EXHIBITS

* Indicates incorporation by reference

Exhibit Number	Description	Report or Registration Statement	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	3.01
3.02*	Amended and Restated Bylaws of SPS, dated Jan. 25, 2019	SPS Form 10-K for the year ended Dec. 31, 2018	3.02
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	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	Inline XBRL Schema
101.CAL	Inline XBRL Calculation
101.DEF	Inline XBRL Definition
101.LAB	Inline XBRL Label
101.PRE	Inline XBRL Presentation
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

17

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
7/27/2023	By:	/s/ BRIAN J. VAN ABEL
		Brian J. Van Abel
		Executive Vice President, Chief Financial Officer
		(Principal Accounting Officer and Principal Financial Officer)

18

EX-31.01

Exhibit 31.01

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: 7/27/2023

/s/ ROBERT C. FRENZEL

Robert C. Frenzel

Chairman, Chief Executive Officer and Director

(Principal Executive Officer)

1

EX-31.02

Exhibit 31.02

CERTIFICATION

I, Brian J. Van Abel, 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: 7/27/2023

/s/ BRIAN J. VAN ABEL

Brian J. Van Abel

Executive Vice President, Chief Financial Officer and Director

(Principal Accounting Officer and 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, 2023, 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: 7/27/2023

/s/ ROBERT C. FRENZEL

Robert C. Frenzel

Chairman, Chief Executive Officer and Director

(Principal Executive Officer)

/s/ BRIAN J. VAN ABEL

Brian J. Van Abel

Executive Vice President, Chief Financial Officer and Director

(Principal Accounting Officer and 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

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Cover Page - shares	6 Months Ended
	Jun. 30, 2023	Jul. 27, 2023
Cover [Abstract]
Entity Registrant Name	SOUTHWESTERN PUBLIC SERVICE CO
Entity Central Index Key	0000092521
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
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
Entity File Number	001-03789

XML

STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Operating revenues
Operating revenues	$ 496	$ 658	$ 1,004	$ 1,135
Operating expenses
Electric fuel and purchased power	211	282	456	519
Operating and maintenance expenses	69	87	149	159
Demand side management expenses	4	6	10	11
Depreciation and amortization	92	132	183	210
Taxes (other than income taxes)	24	33	49	58
Total operating expenses	400	540	847	957
Operating income	96	118	157	178
Other income, net	1	1	1	1
Allowance for funds used during construction — equity	2	1	3	1
Interest charges and financing costs
Interest charges and other financing costs	37	46	71	75
Allowance for funds used during construction — debt	(2)	(1)	(3)	(1)
Total interest charges and financing costs	35	45	68	74
Income before income taxes	64	75	93	106
Income tax benefit	(17)	(18)	(42)	(39)
Net income	$ 81	$ 93	$ 135	$ 145

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STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Operating activities
Net income	$ 135	$ 145
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	184	211
Deferred income taxes	(77)	(19)
Allowance for equity funds used during construction	(3)	(1)
Provision for bad debts	6	4
Changes in operating assets and liabilities:
Accounts receivable	3	(56)
Accrued unbilled revenues	12	27
Inventories	(23)	(15)
Prepayments and other	7	11
Accounts payable	(21)	35
Net regulatory assets and liabilities	194	(30)
Other current liabilities	(10)	8
Pension and other employee benefit obligations	0	1
Other, net	(4)	(2)
Net cash provided by operating activities	379	265
Investing activities
Utility capital/construction expenditures	(351)	(260)
Net cash used in investing activities	(351)	(260)
Financing activities
Proceeds from (repayments of) short-term borrowings, net	34	(137)
Proceeds from issuance of long-term debt, net	0	196
Borrowings under utility money pool arrangement	174	258
Repayments under utility money pool arrangement	(74)	(349)
Capital contributions from parent	0	209
Dividends paid to parent	(163)	(110)
Net cash (used in) provided by financing activities	(29)	67
Net change in cash, cash equivalents and restricted cash	(1)	72
Cash, cash equivalents and restricted cash at beginning of period	2	1
Cash, cash equivalents and restricted cash at end of period	1	73
Supplemental disclosure of cash flow information:
Cash paid for interest (net of amounts capitalized)	(65)	(71)
Cash (paid) received for income taxes, net	(35)	26
Supplemental disclosure of non-cash investing and financing transactions:
Accrued property, plant and equipment additions	41	36
Inventory transfers to property, plant and equipment	17	7
Allowance for equity funds used during construction	3	1
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	$ 1	$ 73

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BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 1	$ 2
Accounts receivable, net	156	167
Accrued unbilled revenues	152	140
Inventories	67	61
Regulatory assets	78	217
Derivative instruments	86	122
Prepaid taxes	5	5
Prepayments and other	61	68
Total current assets	630	797
Property, plant and equipment, net	8,313	8,129
Other assets
Regulatory assets	337	359
Derivative instruments	2	3
Operating lease right-of-use assets	419	434
Other	30	26
Total other assets	788	822
Total assets	9,731	9,748
Current liabilities
Long-Term Debt and Lease Obligation, Current	350	0
Short-term debt	68	34
Borrowings under utility money pool arrangement	100	0
Accounts payable	169	209
Regulatory liabilities	134	148
Taxes accrued	52	61
Accrued interest	31	31
Dividends payable to parent	67	61
Derivative instruments	4	4
Operating lease liabilities	32	31
Other	56	58
Total current liabilities	1,087	660
Deferred credits and other liabilities
Deferred income taxes	669	739
Regulatory liabilities	731	715
Asset retirement obligations	150	147
Derivative instruments	0	2
Pension and employee benefit obligations	12	12
Operating lease liabilities	387	403
Other	8	9
Total deferred credits and other liabilities	1,957	2,027
Capitalization
Long-term debt	2,862	3,211
Common stock — 200 shares authorized of $1.00 par value; 100 shares outstanding at June 30, 2023 and Dec. 31, 2022, respectively	0	0
Additional paid in capital	3,319	3,311
Retained earnings	507	540
Accumulated other comprehensive loss	(1)	(1)
Total common stockholder's equity	3,825	3,850
Total liabilities and equity	9,731	9,748
Related Party
Current assets
Accounts receivable, net	24	15
Current liabilities
Accounts payable	$ 24	$ 23

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BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common Stock, Shares Authorized	200	200
Common Stock, Par or Stated Value Per Share	$ 1.00	$ 1.00
Common Stock, Shares, Outstanding	100	100

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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, 2021		100
Beginning balance at Dec. 31, 2021	$ 3,603	$ 0	$ 3,091	$ 513	$ (1)
Increase (Decrease) in Stockholders' Equity
Net income	145			145
Dividends declared to parent	(111)			(111)
Contributions of capital by parent	210		210
Ending balance (in shares) at Jun. 30, 2022		100
Ending balance at Jun. 30, 2022	3,847	$ 0	3,301	547	(1)
Beginning balance (in shares) at Mar. 31, 2022		100
Beginning balance at Mar. 31, 2022	3,610	$ 0	3,099	512	(1)
Increase (Decrease) in Stockholders' Equity
Net income	93			93
Dividends declared to parent	(58)			(58)
Contributions of capital by parent	202		202
Ending balance (in shares) at Jun. 30, 2022		100
Ending balance at Jun. 30, 2022	$ 3,847	$ 0	3,301	547	(1)
Beginning balance (in shares) at Dec. 31, 2022	100	100
Beginning balance at Dec. 31, 2022	$ 3,850	$ 0	3,311	540	(1)
Increase (Decrease) in Stockholders' Equity
Net income	135			135
Dividends declared to parent	(168)			(168)
Contributions of capital by parent	$ 8		8
Ending balance (in shares) at Jun. 30, 2023	100	100
Ending balance at Jun. 30, 2023	$ 3,825	$ 0	3,319	507	(1)
Beginning balance (in shares) at Mar. 31, 2023		100
Beginning balance at Mar. 31, 2023	3,838	$ 0	3,311	528	(1)
Increase (Decrease) in Stockholders' Equity
Net income	81			81
Dividends declared to parent	(102)			(102)
Contributions of capital by parent	$ 8		8
Ending balance (in shares) at Jun. 30, 2023	100	100
Ending balance at Jun. 30, 2023	$ 3,825	$ 0	$ 3,319	$ 507	$ (1)

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Management's Opinion

6 Months Ended

Jun. 30, 2023

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 GAAP, the financial position of SPS as of June 30, 2023 and Dec. 31, 2022; the results of SPS’ operations, including the components of net income and changes in stockholder’s equity for the three and six months ended June 30, 2023 and 2022; and SPS’ cash flows for the six months ended June 30, 2023 and 2022.

All adjustments are of a normal, recurring nature, except as otherwise disclosed. Management has also evaluated the impact of events occurring after June 30, 2023 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, 2022 balance sheet information has been derived from the audited 2022 financial statements included in the SPS Annual Report on Form 10-K for the year ended Dec. 31, 2022.

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, 2022, filed with the SEC on Feb. 23, 2023.

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, 2023
Accounting Policies [Abstract]
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, 2022 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, 2023
Accounting Standards Update and Change in Accounting Principle [Abstract]
Accounting Pronouncements	As of June 30, 2023, there was no material impact from the recent adoption of new accounting pronouncements, nor expected material impact from recently issued accounting pronouncements yet to be adopted, on SPS’ financial statements.

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Selected Balance Sheet Data

6 Months Ended

Jun. 30, 2023

Balance Sheet Related Disclosures [Abstract]

Selected Balance Sheet Data

3. Selected Balance Sheet Data

(Millions of Dollars)	June 30, 2023		Dec. 31, 2022
Accounts receivable, net
Accounts receivable	$	170	$	180
Less allowance for bad debts	(14)		(13)
Accounts receivable, net	$	156	$	167

(Millions of Dollars)	June 30, 2023		Dec. 31, 2022
Inventories
Materials and supplies	$	51	$	42
Fuel	16		19
Total inventories	$	67	$	61

(Millions of Dollars)	June 30, 2023		Dec. 31, 2022
Property, plant and equipment, net
Electric plant	$	10,451	$	10,182
Plant to be retired (a)	254		266
CWIP	215		167
Total property, plant and equipment	10,920		10,615
Less accumulated depreciation	(2,607)		(2,486)
Property, plant and equipment, net	$	8,313	$	8,129

(a)Amounts include Tolk and coal generation assets at Harrington pending facility gas conversion. Amounts are reported net of accumulated depreciation.

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Borrowings and Other Financing Instruments

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

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 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 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.

Money pool borrowings:

(Amounts in Millions, Except Interest Rates)	Three Months Ended June 30, 2023			Year Ended Dec. 31, 2022
Borrowing limit	$	100		$	100
Amount outstanding at period end	100			—
Average amount outstanding	96			35
Maximum amount outstanding	100			100
Weighted average interest rate, computed on a daily basis	4.88		%	0.44		%
Weighted average interest rate at period end	5.01			N/A

Commercial Paper — Commercial paper outstanding:

(Amounts in Millions, Except Interest Rates)	Three Months Ended June 30, 2023			Year Ended Dec. 31, 2022
Borrowing limit	$	500		$	500
Amount outstanding at period end	68			34
Average amount outstanding	47			100
Maximum amount outstanding	78			324
Weighted average interest rate, computed on a daily basis	5.23		%	0.79		%
Weighted average interest rate at period end	5.26			4.55

Letters of Credit — SPS uses letters of credit, generally with terms of one year, to provide financial guarantees for certain obligations. At both June 30, 2023 and Dec. 31, 2022, there were $2 million of letters of credit outstanding under the credit facility. Amounts approximate their fair value and are subject to fees.

Revolving Credit Facility — In order to issue its commercial paper, SPS must have a revolving credit facility equal to or greater than the commercial paper borrowing limit and cannot issue commercial paper exceeding available capacity under this credit facility. The credit facility provides short-term financing in the form of notes payable to banks, letters of credit and back-up support for commercial paper borrowings.

SPS has the right to request an extension of the revolving credit facility termination date for two additional one-year periods. All extension requests are subject to majority bank group approval.

As of June 30, 2023, SPS had the following committed revolving credit facility available (in millions of dollars):

Credit Facility (a)		Drawn (b)		Available
$	500	$	70	$	430

(a)Expires in September 2027.

(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, 2023 and Dec. 31, 2022.

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Revenues

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue

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

	Three Months Ended June 30
(Millions of Dollars)	2023		2022
Major revenue types
Revenue from contracts with customers:
Residential	$	91	$	100
Commercial and Industrial	257		264
Other	14		13
Total retail	362		377
Wholesale	51		109
Transmission	72		74
Other	2		3
Total revenue from contracts with customers	487		563
Alternative revenue and other	9		95
Total revenues	$	496	$	658
	Six Months Ended June 30
(Millions of Dollars)	2023		2022
Major revenue types
Revenue from contracts with customers:
Residential	$	192	$	197
Commercial and Industrial	524		486
Other	26		21
Total retail	742		704
Wholesale	96		178
Transmission	146		146
Other	2		6
Total revenue from contracts with customers	986		1,034
Alternative revenue and other	18		101
Total revenues	$	1,004	$	1,135

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Income Taxes

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

6. Income Taxes

Reconciliation between the statutory rate and ETR:

	Six Months Ended June 30
	2023		2022
Federal statutory rate	21.0	%	21.0	%
State tax (net of federal tax effect)	2.2		2.5
(Decreases) increases:
Wind PTCs (a)	(65.2)		(55.8)
Plant regulatory differences (b)	(3.5)		(4.0)
Amortization of excess nonplant deferred taxes	0.3		(1.1)
Other (net)	—		0.6
Effective income tax rate	(45.2)	%	(36.8)	%

(a)Wind PTCs are credited to customers (reduction to revenue) and do not materially impact net income.

(b)Plant regulatory differences primarily relate to the credit of excess deferred taxes to customers through the average rate assumption method. Income tax benefits associated with the credit are offset by corresponding revenue reductions.

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Fair Value of Financial Assets and Liabilities

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value of Financial Assets and Liabilities

Fair Value Measurements

Accounting guidance for fair value measurements and disclosures provides a hierarchical framework for disclosing the observability of the inputs utilized in measuring assets and liabilities 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 actively traded instruments with observable actual trading prices.

•Level 2 — Pricing inputs are other than actual trading 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 include those valued with models requiring significant judgment or estimation.

Specific valuation methods include:

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

Commodity derivatives — Methods used to measure the fair value of commodity derivative forwards and options utilize forward prices and volatilities, as well as pricing adjustments for specific delivery locations, and are generally assigned a Level 2 classification. When contracts relate to inactive delivery locations or extend to periods beyond those readily observable on active exchanges, 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. 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 values of these instruments are derived from, and designed to offset, the costs 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 these instruments.

FTRs are recognized at fair value and adjusted each period prior to settlement. Given the limited observability of certain variables underlying the reported auction, values of FTRs, these fair value measurements have been assigned a Level 3 classification.

Net congestion costs, including the impact of FTR settlements, are shared through fuel and purchased energy cost recovery mechanisms. As such, the fair value of the unsettled instruments (i.e., derivative asset or liability) is offset/deferred as a regulatory asset or liability.

Derivative Activities and 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 utility commodity prices.

Interest Rate Derivatives — SPS enters into contracts that effectively fix the interest rate on a specified principal amount of a hypothetical future debt issuance. These financial swaps net settle based on changes in a specified benchmark interest rate, acting as a hedge of changes in market interest rates that will impact specified anticipated debt issuances. These derivative instruments are designated as cash flow hedges for accounting purposes, with changes in fair value prior to occurrence of the hedged transactions recorded as other comprehensive income.

As of June 30, 2023, accumulated other comprehensive loss related to interest rate derivatives included immaterial net losses expected to be reclassified into earnings during the next 12 months as the hedged transactions impact earnings. As of June 30, 2023, SPS had no unsettled interest rate derivatives.

Wholesale and Commodity Trading — 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.

Results of derivative instrument transactions entered into for trading purposes are presented in the statements of income as electric revenues, net of any sharing with customers. These activities are not intended to mitigate commodity price risk associated with regulated electric operations. Sharing of these margins is determined through state regulatory proceedings as well as the operation of the FERC-approved joint operating agreement.

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.

The most significant derivative positions outstanding at June 30, 2023 for this purpose relate to FTR instruments administered by SPP. These instruments are intended to offset the impacts of transmission system congestion. Higher congestion costs in recent years have led to an increase in the fair value of FTRs. Settlements of FTRs are shared with electric customers through fuel and purchased energy cost-recovery mechanisms.

When SPS enters into derivative instruments that mitigate commodity price risk on behalf of electric customers, the instruments are not typically designated as qualifying hedging transactions. The classification of unrealized losses or gains on these instruments as a regulatory asset or liability, if applicable, is based on approved regulatory recovery mechanisms.

Gross notional amounts of FTRs:

Amounts in Millions (a)	June 30, 2023	Dec. 31, 2022
Megawatt hours of electricity	17	8

(a)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 on 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.

As of June 30, 2023, four of the ten most significant counterparties for these activities, comprising $12 million, or 34%, of this credit exposure, had investment grade credit ratings from S&P Global Ratings, Moody’s Investor Services or Fitch Ratings.

Five of the ten most significant counterparties, comprising $23 million, or 66%, of this credit exposure, were not rated by external ratings agencies, but based on SPS’ internal analysis, had credit quality consistent with investment grade.

One of these counterparties, comprising an immaterial amount or less than 1% of this credit exposure, had credit quality less than investment grade, based on internal analysis. Nine of these counterparties are municipal or cooperative electric entities, RTOs or other utilities.

Recurring Derivative Fair Value Measurements

Impact of derivative activity:

Pre-Tax Fair Value Gains (Losses) Recognized During the Period in:
(Millions of Dollars)	Regulatory Assets and Liabilities
Three Months Ended June 30, 2023
Other derivative instruments
Electric commodity	$	(8)
Total	$	(8)
Six Months Ended June 30, 2023
Other derivative instruments
Electric commodity	$	(83)
Total	$	(83)
Three Months Ended June 30, 2022
Other derivative instruments
Electric commodity	$	92
Total	$	92
Six Months Ended June 30, 2022
Other derivative instruments
Electric commodity	$	93
Total	$	93

Pre-Tax Losses Reclassified into Income During the Period from:
(Millions of Dollars)	Regulatory Assets and Liabilities
Three Months Ended June 30, 2023
Other derivative instruments
Electric commodity	4		(a)
Total	$	4
Six Months Ended June 30, 2023
Other derivative instruments
Electric commodity	72		(a)
Total	$	72
Three Months Ended June 30, 2022
Other derivative instruments
Electric commodity	24		(a)
Total	$	24
Six Months Ended June 30, 2022
Other derivative instruments
Electric commodity	34		(a)
Total	$	34

(a)Recorded to electric fuel and purchased power. These derivative settlement gains and losses are shared with electric customers through fuel and purchased energy cost-recovery mechanisms, and reclassified out of income as regulatory assets or liabilities, as appropriate. FTR settlements are shared with customers and do not have a material impact on net income. Presented amounts reflect changes in fair value between auction and settlement dates, but exclude the original auction fair value.

SPS had no derivative instruments designated as fair value hedges during the six months ended June 30, 2023 and immaterial derivative instruments designated as fair value hedges during the six months ended June 30, 2022.

Derivative assets and liabilities measured at fair value on a recurring basis were as follows:

	June 30, 2023												Dec. 31, 2022
	Fair Value						Fair Value Total		Netting (a)		Total		Fair Value						Fair Value Total		Netting (a)		Total
(Millions of Dollars)	Level 1		Level 2		Level 3								Level 1		Level 2		Level 3
Current derivative assets
Other derivative instruments:
Electric commodity	$	—	$	—	$	83	$	83	$	—	$	83	$	—	$	—	$	119	$	119	$	—	$	119
Total current derivative assets	$	—	$	—	$	83	$	83	$	—	83		$	—	$	—	$	119	$	119	$	—	119
PPAs (b)											3												3
Current derivative instruments											$	86											$	122
Noncurrent derivative assets
PPAs (b)											2												3
Noncurrent derivative instruments											$	2											$	3
Current derivative liabilities
PPAs (b)											4												4
Current derivative instruments											$	4											$	4
Noncurrent derivative liabilities
PPAs (b)											—												2
Noncurrent derivative instruments											$	—											$	2

(a)SPS nets derivative instruments and related collateral on its balance sheet when supported by a legally enforceable master netting agreement. At June 30, 2023 and Dec. 31, 2022, derivative assets and liabilities include no obligations to return cash collateral or rights to reclaim cash collateral.

(b)SPS currently applies the normal purchase exception to qualifying PPAs. Balance relates to specific contracts that were previously recognized at fair value prior to applying the normal purchase exception, and are being amortized over the remaining contract lives along with the offsetting regulatory assets and liabilities.

Changes in Level 3 commodity derivatives:

	Three Months Ended June 30
(Millions of Dollars)	2023		2022
Balance at April 1	$	23	$	32
Purchases (a)	68		232
Settlements (a)	(32)		(85)
Net transactions recorded during the period:
Net gains recognized as regulatory assets and liabilities (a)	24		105
Balance at June 30	$	83	$	284
	Six Months Ended June 30
(Millions of Dollars)	2023		2022
Balance at Jan. 1	$	119	$	27
Purchases (a)	74		237
Settlements (a)	(48)		(94)
Net transactions recorded during the period:
Net (losses) gains recognized as regulatory assets and liabilities (a)	(62)		114
Balance at June 30	$	83	$	284

(a)Relates primarily to FTR instruments administered by SPP.

Fair Value of Long-Term Debt

As of June 30, 2023, other financial instruments for which the carrying amount did not equal fair value:

	June 30, 2023				Dec. 31, 2022
(Millions of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion	$	3,212	$	2,678	$	3,211	$	2,674

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, 2023 and Dec. 31, 2022, 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, 2023

Retirement Benefits [Abstract]

Benefit Plans and Other Postretirement Benefits

Components of Net Periodic Benefit Cost

	Three Months Ended June 30
	2023		2022		2023		2022
(Millions of Dollars)	Pension Benefits				Postretirement Health Care Benefits
Service cost	$	2	$	3	$	—	$	—
Interest cost (a)	6		4		—		1
Expected return on plan assets (a)	(8)		(7)		—		(1)
Amortization of net loss (a)	—		2		—		—
Net periodic benefit cost	$	—	$	2	$	—	$	—
Effects of regulation	1		(1)		—		—
Net benefit cost recognized for financial reporting	$	1	$	1	$	—	$	—

	Six Months Ended June 30
	2023		2022		2023		2022
(Millions of Dollars)	Pension Benefits				Postretirement Health Care Benefits
Service cost	$	3	$	5	$	—	$	—
Interest cost (a)	12		8		1		1
Expected return on plan assets (a)	(16)		(15)		(1)		(1)
Amortization of net loss (a)	1		5		—		—
Net periodic benefit (credit) cost	$	—	$	3	$	—	$	—
Effects of regulation	2		—		—		—
Net benefit cost recognized for financial reporting	$	2	$	3	$	—	$	—

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

In January 2023, contributions totaling $50 million were made across Xcel Energy’s pension plans, none of which was attributable to SPS. Xcel Energy does not expect additional pension contributions during 2023.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

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, 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. Legal fees are generally expensed as incurred.

Other Litigation — In 2019, SPS and Xcel Energy Services, Inc. were served with a lawsuit related to a traffic accident that resulted in two fatalities in New Mexico. In July 2022, a confidential settlement was reached of approximately $50 million. No impact to earnings occurred, as the amounts will be reimbursed by SPS’ insurers. An asset has been recorded to reflect the reimbursement within Prepayments and other current assets.

Rate Matters and Other

SPS is involved in various regulatory proceedings arising in the ordinary course of business. Until resolution, typically in the form of a rate order, uncertainties may exist regarding the ultimate rate treatment for certain activities and transactions. Amounts have been recognized for probable and reasonably estimable losses that may result. Unless otherwise disclosed, any reasonably possible range of loss in excess of any recognized amount is not expected to have a material effect on the financial statements.

SPP OATT Upgrade Costs — Costs of transmission upgrades may be recovered from other SPP customers whose transmission service depends on capacity enabled by the upgrade under the SPP OATT. 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 2018, SPS’ appeal to the D.C. Circuit over the FERC rulings granting SPP the right to recover previously unbilled charges was remanded to the FERC. In 2019, the FERC reversed its 2016 decision and ordered SPP to refund charges retroactively collected from its transmission customers, including SPS, related to periods before September 2015. In 2020, SPP and Oklahoma Gas & Electric separately filed petitions for review of the FERC’s orders at the D.C. Circuit. In 2021, the D.C. Circuit issued a decision denying these appeals and upholding the FERC’s orders. Refunds received by SPS are expected to be given back to SPS customers through future rates.

In 2017, SPS filed a separate related complaint asserting SPP assessed upgrade charges to SPS in violation of the SPP OATT. In 2018, the FERC issued an order denying the SPS complaint. SPS filed a request for rehearing in 2018. The FERC subsequently issued a tolling order granting a rehearing for further consideration. If SPS’ complaint results in additional charges or refunds, SPS will seek to recover or refund the amount through future SPS customer rates. In 2020, SPS filed a petition for review of the FERC’s 2018 orders at the D.C. Circuit. In February 2022, FERC issued an order rejecting SPS’ request for hearing. SPS has appealed that order. That appeal has been combined with SPS’ prior appeal.

Environmental

MGP, Landfill and Disposal Sites

SPS is investigating, remediating or performing post-closure actions at two MGP, landfill or other disposal sites across its service territories, excluding sites that are being addressed under coal ash regulations.

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

Environmental Requirements — Air

Clean Air Act NOx Allowance Allocations — In June 2023, after disapproving state implementation plans, the EPA published final regulations under the "Good Neighbor" provisions of the Clean Air Act. The final rule applies to generation facilities in Texas, as well as other states outside of our service territory. The rule establishes an allowance trading program for NOx that will impact SPS’ fossil fuel-fired electric generating facilities. Applicable facilities will have to secure additional allowances, install NOx controls and/or develop a strategy of operations that utilizes the existing allowance allocations. Guidelines are also established for allowance banking and emission limit backstops.

While the financial impacts of the final rule are uncertain and dependent on market forces and anticipated generation, SPS anticipates the annual costs could be significant, but would be recoverable through regulatory mechanisms.

SPS has joined other impacted companies in litigation challenging the EPA’s disapproval of Texas’ state implementation plan. Currently, the regulation is under a judicial stay for Texas and not applicable to SPS until litigation concludes.

Regional Haze Rules —

Leases

SPS evaluates contracts that may contain leases, including PPAs and arrangements for the use of office space and other facilities, vehicles and equipment. A contract contains a lease if it conveys the exclusive right to control the use of a specific asset.

Components of lease expense:

	Three Months Ended June 30
(Millions of Dollars)	2023		2022
Operating leases
PPA capacity payments	$	14	$	13
Other operating leases (a)	1		1
Total operating lease expense (b)	$	15	$	14

(a)Includes $1 million of short-term lease expense for 2023 and an immaterial short-term lease expense for 2022.

(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 operating and maintenance expense and electric fuel and purchased power.

	Six Months Ended June 30
(Millions of Dollars)	2023		2022
Operating leases
PPA capacity payments	$	27	$	26
Other operating leases (a)	2		3
Total operating lease expense (b)	$	29	$	29

(a)Includes $1 million of short-term lease expense for 2023 and an immaterial short-term lease expense for 2022.

(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 operating and maintenance expense and electric fuel and purchased power.

Commitments under operating leases as of June 30, 2023:

(Millions of Dollars)	PPA Operating Leases		Other Operating Leases		Total Operating Leases
Total minimum obligation	$	474	$	51	$	525
Interest component of obligation	(93)		(13)		(106)
Present value of minimum obligation	$	381	$	38	419
Less current portion					(32)
Noncurrent operating lease liabilities					$	387

Variable Interest Entities

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

In addition, certain solar PPAs provide an option to purchase emission allowances or sharing provisions related to production credits generated by the solar facility under contract. These specific PPAs create a variable interest in the IPP.

SPS had approximately 1,197 MW of capacity under long-term PPAs at both June 30, 2023 and Dec. 31, 2022 with entities that have been determined to be variable interest entities. 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 most significantly impact the entities’ economic performance. The PPAs have expiration dates through 2041.

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Selected Balance Sheet Data (Tables)

6 Months Ended

Jun. 30, 2023

Balance Sheet Related Disclosures [Abstract]

Accounts Receivable, Net

(Millions of Dollars)	June 30, 2023		Dec. 31, 2022
Accounts receivable, net
Accounts receivable	$	170	$	180
Less allowance for bad debts	(14)		(13)
Accounts receivable, net	$	156	$	167

Inventories

(Millions of Dollars)	June 30, 2023		Dec. 31, 2022
Inventories
Materials and supplies	$	51	$	42
Fuel	16		19
Total inventories	$	67	$	61

Property, Plant and Equipment, Net

(Millions of Dollars)	June 30, 2023		Dec. 31, 2022
Property, plant and equipment, net
Electric plant	$	10,451	$	10,182
Plant to be retired (a)	254		266
CWIP	215		167
Total property, plant and equipment	10,920		10,615
Less accumulated depreciation	(2,607)		(2,486)
Property, plant and equipment, net	$	8,313	$	8,129

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Borrowings and Other Financing Instruments (Tables)

6 Months Ended

Jun. 30, 2023

Borrowings and Other Financing Instruments [Abstract]

Credit Facilities

As of June 30, 2023, SPS had the following committed revolving credit facility available (in millions of dollars):

Credit Facility (a)		Drawn (b)		Available
$	500	$	70	$	430

(a)Expires in September 2027.

(b)Includes outstanding letters of credit.

Money Pool

Borrowings and Other Financing Instruments [Abstract]

Short-Term Borrowings

Money pool borrowings:

(Amounts in Millions, Except Interest Rates)	Three Months Ended June 30, 2023			Year Ended Dec. 31, 2022
Borrowing limit	$	100		$	100
Amount outstanding at period end	100			—
Average amount outstanding	96			35
Maximum amount outstanding	100			100
Weighted average interest rate, computed on a daily basis	4.88		%	0.44		%
Weighted average interest rate at period end	5.01			N/A

Commercial Paper

Borrowings and Other Financing Instruments [Abstract]

Short-Term Borrowings

Commercial paper outstanding:

(Amounts in Millions, Except Interest Rates)	Three Months Ended June 30, 2023			Year Ended Dec. 31, 2022
Borrowing limit	$	500		$	500
Amount outstanding at period end	68			34
Average amount outstanding	47			100
Maximum amount outstanding	78			324
Weighted average interest rate, computed on a daily basis	5.23		%	0.79		%
Weighted average interest rate at period end	5.26			4.55

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Revenues (Tables)

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

SPS’ operating revenues consisted of the following:

	Three Months Ended June 30
(Millions of Dollars)	2023		2022
Major revenue types
Revenue from contracts with customers:
Residential	$	91	$	100
Commercial and Industrial	257		264
Other	14		13
Total retail	362		377
Wholesale	51		109
Transmission	72		74
Other	2		3
Total revenue from contracts with customers	487		563
Alternative revenue and other	9		95
Total revenues	$	496	$	658
	Six Months Ended June 30
(Millions of Dollars)	2023		2022
Major revenue types
Revenue from contracts with customers:
Residential	$	192	$	197
Commercial and Industrial	524		486
Other	26		21
Total retail	742		704
Wholesale	96		178
Transmission	146		146
Other	2		6
Total revenue from contracts with customers	986		1,034
Alternative revenue and other	18		101
Total revenues	$	1,004	$	1,135

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

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

Reconciliation between the statutory rate and ETR:

	Six Months Ended June 30
	2023		2022
Federal statutory rate	21.0	%	21.0	%
State tax (net of federal tax effect)	2.2		2.5
(Decreases) increases:
Wind PTCs (a)	(65.2)		(55.8)
Plant regulatory differences (b)	(3.5)		(4.0)
Amortization of excess nonplant deferred taxes	0.3		(1.1)
Other (net)	—		0.6
Effective income tax rate	(45.2)	%	(36.8)	%

(a)Wind PTCs are credited to customers (reduction to revenue) and do not materially impact net income.

(b)Plant regulatory differences primarily relate to the credit of excess deferred taxes to customers through the average rate assumption method. Income tax benefits associated with the credit are offset by corresponding revenue reductions.

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Fair Value of Financial Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Gross Notional Amounts of Commodity FTRs

Amounts in Millions (a)	June 30, 2023	Dec. 31, 2022
Megawatt hours of electricity	17	8

(a)Not reflective of net positions in the underlying commodities.

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

	June 30, 2023												Dec. 31, 2022
	Fair Value						Fair Value Total		Netting (a)		Total		Fair Value						Fair Value Total		Netting (a)		Total
(Millions of Dollars)	Level 1		Level 2		Level 3								Level 1		Level 2		Level 3
Current derivative assets
Other derivative instruments:
Electric commodity	$	—	$	—	$	83	$	83	$	—	$	83	$	—	$	—	$	119	$	119	$	—	$	119
Total current derivative assets	$	—	$	—	$	83	$	83	$	—	83		$	—	$	—	$	119	$	119	$	—	119
PPAs (b)											3												3
Current derivative instruments											$	86											$	122
Noncurrent derivative assets
PPAs (b)											2												3
Noncurrent derivative instruments											$	2											$	3
Current derivative liabilities
PPAs (b)											4												4
Current derivative instruments											$	4											$	4
Noncurrent derivative liabilities
PPAs (b)											—												2
Noncurrent derivative instruments											$	—											$	2

(a)SPS nets derivative instruments and related collateral on its balance sheet when supported by a legally enforceable master netting agreement. At June 30, 2023 and Dec. 31, 2022, derivative assets and liabilities include no obligations to return cash collateral or rights to reclaim cash collateral.

(b)SPS currently applies the normal purchase exception to qualifying PPAs. Balance relates to specific contracts that were previously recognized at fair value prior to applying the normal purchase exception, and are being amortized over the remaining contract lives along with the offsetting regulatory assets and liabilities.

Changes in Level 3 Commodity Derivatives

	Three Months Ended June 30
(Millions of Dollars)	2023		2022
Balance at April 1	$	23	$	32
Purchases (a)	68		232
Settlements (a)	(32)		(85)
Net transactions recorded during the period:
Net gains recognized as regulatory assets and liabilities (a)	24		105
Balance at June 30	$	83	$	284
	Six Months Ended June 30
(Millions of Dollars)	2023		2022
Balance at Jan. 1	$	119	$	27
Purchases (a)	74		237
Settlements (a)	(48)		(94)
Net transactions recorded during the period:
Net (losses) gains recognized as regulatory assets and liabilities (a)	(62)		114
Balance at June 30	$	83	$	284

(a)Relates primarily to FTR instruments administered by SPP.

Carrying Amount and Fair Value of Long-term Debt

	June 30, 2023				Dec. 31, 2022
(Millions of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion	$	3,212	$	2,678	$	3,211	$	2,674

Derivative Instruments, Gain (Loss)

Pre-Tax Fair Value Gains (Losses) Recognized During the Period in:
(Millions of Dollars)	Regulatory Assets and Liabilities
Three Months Ended June 30, 2023
Other derivative instruments
Electric commodity	$	(8)
Total	$	(8)
Six Months Ended June 30, 2023
Other derivative instruments
Electric commodity	$	(83)
Total	$	(83)
Three Months Ended June 30, 2022
Other derivative instruments
Electric commodity	$	92
Total	$	92
Six Months Ended June 30, 2022
Other derivative instruments
Electric commodity	$	93
Total	$	93

Pre-Tax Losses Reclassified into Income During the Period from:
(Millions of Dollars)	Regulatory Assets and Liabilities
Three Months Ended June 30, 2023
Other derivative instruments
Electric commodity	4		(a)
Total	$	4
Six Months Ended June 30, 2023
Other derivative instruments
Electric commodity	72		(a)
Total	$	72
Three Months Ended June 30, 2022
Other derivative instruments
Electric commodity	24		(a)
Total	$	24
Six Months Ended June 30, 2022
Other derivative instruments
Electric commodity	34		(a)
Total	$	34

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Benefit Plans and Other Postretirement Benefits (Tables)

6 Months Ended

Jun. 30, 2023

Retirement Benefits [Abstract]

Components of Net Periodic Benefit Cost (Credit)

Components of Net Periodic Benefit Cost

	Three Months Ended June 30
	2023		2022		2023		2022
(Millions of Dollars)	Pension Benefits				Postretirement Health Care Benefits
Service cost	$	2	$	3	$	—	$	—
Interest cost (a)	6		4		—		1
Expected return on plan assets (a)	(8)		(7)		—		(1)
Amortization of net loss (a)	—		2		—		—
Net periodic benefit cost	$	—	$	2	$	—	$	—
Effects of regulation	1		(1)		—		—
Net benefit cost recognized for financial reporting	$	1	$	1	$	—	$	—

	Six Months Ended June 30
	2023		2022		2023		2022
(Millions of Dollars)	Pension Benefits				Postretirement Health Care Benefits
Service cost	$	3	$	5	$	—	$	—
Interest cost (a)	12		8		1		1
Expected return on plan assets (a)	(16)		(15)		(1)		(1)
Amortization of net loss (a)	1		5		—		—
Net periodic benefit (credit) cost	$	—	$	3	$	—	$	—
Effects of regulation	2		—		—		—
Net benefit cost recognized for financial reporting	$	2	$	3	$	—	$	—

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

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Commitments and Contingencies (Tables)

3 Months Ended

6 Months Ended

Jun. 30, 2023

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Lease, Cost

Components of lease expense:

	Three Months Ended June 30
(Millions of Dollars)	2023		2022
Operating leases
PPA capacity payments	$	14	$	13
Other operating leases (a)	1		1
Total operating lease expense (b)	$	15	$	14

(a)Includes $1 million of short-term lease expense for 2023 and an immaterial short-term lease expense for 2022.

(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 operating and maintenance expense and electric fuel and purchased power.

	Six Months Ended June 30
(Millions of Dollars)	2023		2022
Operating leases
PPA capacity payments	$	27	$	26
Other operating leases (a)	2		3
Total operating lease expense (b)	$	29	$	29

(a)Includes $1 million of short-term lease expense for 2023 and an immaterial short-term lease expense for 2022.

(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 operating and maintenance expense and electric fuel and purchased power.

Lessee, Operating Lease, Liability, Maturity

Commitments under operating leases as of June 30, 2023:

(Millions of Dollars)	PPA Operating Leases		Other Operating Leases		Total Operating Leases
Total minimum obligation	$	474	$	51	$	525
Interest component of obligation	(93)		(13)		(106)
Present value of minimum obligation	$	381	$	38	419
Less current portion					(32)
Noncurrent operating lease liabilities					$	387

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Selected Balance Sheet Data Accounts Receivable, Net (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Accounts receivable, net
Accounts receivable	$ 170	$ 180
Less allowance for bad debts	(14)	(13)
Accounts receivable, net	$ 156	$ 167

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Selected Balance Sheet Data Selected Balance Sheet Data Inventories (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Inventories	$ 67	$ 61
Inventory, Net	67	61
Materials and supplies
Inventories	51	42
Fuel
Inventories	$ 16	$ 19

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Selected Balance Sheet Data Balance Sheet Related Disclosures, Property, Plant and Equipment, Net (Details) - USD ($) $ in Millions		Jun. 30, 2023	Dec. 31, 2022
Public Utility, Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross		$ 10,920	$ 10,615
Accumulated depreciation		(2,607)	(2,486)
Property, plant and equipment, net		8,313	8,129
Electric plant
Public Utility, Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross		10,451	10,182
Plant to be Retired
Public Utility, Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	[1]	254	266
Construction work in progress
Public Utility, Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross		$ 215	$ 167

[1] Amounts include Tolk and coal generation assets at Harrington pending facility gas conversion. Amounts are reported net of accumulated depreciation.

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Borrowings and Other Financing Instruments - Money Pool (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Short-term Debt [Line Items]
Short-term debt	$ 68	$ 34
Money Pool
Short-term Debt [Line Items]
Borrowing limit	100	100
Short-term debt	100	0
Average amount outstanding	96	35
Maximum amount outstanding	$ 100	$ 100
Weighted average interest rate, computed on a daily basis	4.88%	0.44%
Weighted average interest rate at period end	5.01%
Commercial Paper
Short-term Debt [Line Items]
Borrowing limit	$ 500	$ 500
Short-term debt	68	34
Average amount outstanding	47	100
Maximum amount outstanding	$ 78	$ 324
Weighted average interest rate, computed on a daily basis	5.23%	0.79%
Weighted average interest rate at period end	5.26%	4.55%

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Borrowings and Other Financing Instruments - Commercial Paper (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Short-term Debt [Line Items]
Short-term debt	$ 68	$ 34
Commercial Paper
Short-term Debt [Line Items]
Borrowing limit	500	500
Short-term debt	68	34
Average amount outstanding	47	100
Maximum amount outstanding	$ 78	$ 324
Weighted average interest rate, computed on a daily basis	5.23%	0.79%
Weighted average interest rate at period end	5.26%	4.55%

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Borrowings and Other Financing Instruments - Letters of Credit (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Line of Credit Facility [Line Items]
Short-term debt	$ 68,000,000	$ 34,000,000
Letter of Credit
Line of Credit Facility [Line Items]
Short-term debt	$ 2,000,000	2,000,000
Debt Instrument, Term	1 year
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Direct advances on the credit facility outstanding	$ 0	$ 0

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Borrowings and Other Financing Instruments - Credit Facility (Details)		6 Months Ended
		Jun. 30, 2023 USD ($) Plan	Dec. 31, 2022 USD ($)
Line of Credit Facility [Line Items]
Number of extension you can request | Plan		2
Credit Facility
Line of Credit Facility [Line Items]
Credit Facility	[1]	$ 500,000,000
Outstanding	[2]	70,000,000
Available		430,000,000
Direct advances on the credit facility outstanding		$ 0	$ 0

[1] Expires in September 2027

[2] Includes outstanding letters of credit.

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Borrowings and Other Financing Instruments - Narrative (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
Short-term debt	$ 68	$ 34

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Revenues (Details) - Regulated Electric - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	$ 487	$ 563	$ 986	$ 1,034
Total revenues
Disaggregation of Revenue [Line Items]
Total revenues	496	658	1,004	1,135
Retail
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	362	377	742	704
Retail | Residential
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	91	100	192	197
Retail | C&I
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	257	264	524	486
Retail | Other
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	14	13	26	21
Wholesale
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	51	109	96	178
Transmission
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	72	74	146	146
Other
Disaggregation of Revenue [Line Items]
Revenue from contracts with customers	2	3	2	6
Alternative and Other
Disaggregation of Revenue [Line Items]
Alternative revenue and other	$ 9	$ 95	$ 18	$ 101

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Income Taxes (Details)		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Federal statutory rate, percent		21.00%	21.00%
State tax (net of federal tax effect), percent		2.20%	2.50%
Wind PTCs, percent	[1]	(65.20%)	(55.80%)
Plant regulatory differences, percent	[2]	(3.50%)	(4.00%)
Other tax credits, percent		0.30%	(1.10%)
Other (net), percent		0.00%	0.60%
Effective income tax rate, percent		(45.20%)	(36.80%)

[1] Wind PTCs are credited to customers (reduction to revenue) and do not materially impact net income.

[2] Plant regulatory differences primarily relate to the credit of excess deferred taxes to customers through the average rate assumption method. Income tax benefits associated with the credit are offset by corresponding revenue reductions.

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Fair Value of Financial Assets and Liabilities - Commodity Derivatives (Details) - MWh MWh in Millions		Jun. 30, 2023	Dec. 31, 2022
Electric Commodity [Member]
Derivative [Line Items]
Mwh of electricity	[1]	17	8

[1] Not reflective of net positions in the underlying commodities.

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Fair Value of Financial Assets and Liabilities - Consideration of Credit Risk Concentrations (Details) - Credit Concentration Risk $ in Millions	Jun. 30, 2023 USD ($) Counterparty
Derivative [Line Items]
Significant counterparties	10
Municipal or cooperative electric entities or other utilities
Derivative [Line Items]
Significant counterparties	9
External credit rating, investment grade
Derivative [Line Items]
Significant counterparties	4
Credit exposure | $	$ 12
Credit exposure, percentage	34.00%
Internal investment grade
Derivative [Line Items]
Significant counterparties	5
Credit exposure | $	$ 23
Credit exposure, percentage	66.00%
External Credit Rating, Non Investment Grade [Member]
Derivative [Line Items]
Significant counterparties	1
Credit exposure, percentage	1.00%

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Fair Value of Financial Assets and Liabilities - Impact of Derivative Activities on Income and Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Impact of Derivative Activity on Accumulated Other Comprehensive Loss, Regulatory Assets and Liabilities, and Income [Abstract]
Derivative instruments designated as fair value hedges		$ 0	$ 0	$ 0	$ 0
Interest Rate Swap [Member]
Impact of Derivative Activity on Accumulated Other Comprehensive Loss, Regulatory Assets and Liabilities, and Income [Abstract]
Derivative Liability, Notional Amount		0		0
Other Derivative Instruments
Impact of Derivative Activity on Accumulated Other Comprehensive Loss, Regulatory Assets and Liabilities, and Income [Abstract]
FTR settlement gains		4	24	72
Unrealized Gain (Loss) on Price Risk Cash Flow Derivatives, before Tax		(8)	92
Pre-Tax fair value gains (losses) recognized during the period in				(83)
Other Derivative Instruments | Electric Commodity
Impact of Derivative Activity on Accumulated Other Comprehensive Loss, Regulatory Assets and Liabilities, and Income [Abstract]
Changes in fair value of FTRs pre-tax gains					34
FTR settlement gains	[1]	4	24	72	34
Pre-Tax fair value gains (losses) recognized during the period in					(93)
Other Derivative Instruments | Commodity Contract [Member]
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		$ (8)	$ 92	$ (83)	$ 93

[1] Recorded to electric fuel and purchased power. These derivative settlement gains and losses are shared with electric customers through fuel and purchased energy cost-recovery mechanisms, and reclassified out of income as regulatory assets or liabilities, as appropriate. FTR settlements are shared with customers and do not have a material impact on net income. Presented amounts reflect changes in fair value between auction and settlement dates, but exclude the original auction fair value.

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Fair Value of Financial Assets and Liabilities - Recurring Fair Value Measurements (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Derivatives, Fair Value
Return Cash Collateral						$ 0
External credit rating, investment grade | Credit Concentration Risk
Changes in Level 3 Commodity Derivatives
Credit exposure, percentage		34.00%		34.00%
Commodity Contract [Member]
Changes in Level 3 Commodity Derivatives
Balance at beginning of period		$ 23	$ 32	$ 119	$ 27
Purchases	[1]	68	232	74	237
Settlements	[1]	(32)	(85)	(48)	(94)
Net gains recognized as regulatory assets and liabilities	[1]	24	105	(62)	114
Balance at end of period		83	$ 284	83	$ 284
Other Current Assets
Derivatives, Fair Value
Derivative asset, net		86		86		122
Other Noncurrent Assets
Derivatives, Fair Value
Derivative asset, net		2		2		3
Other Current Liabilities
Derivatives, Fair Value
Derivative liability, net		4		4		4
Other Noncurrent Liabilities
Derivatives, Fair Value
Derivative liability, net		0		0		2
Fair Value Measured on a Recurring Basis
Derivatives, Fair Value
Derivative asset, gross		83		83		119
Asset, netting	[2]	0		0		0
Derivative asset, net		83		83		119
Fair Value Measured on a Recurring Basis | Level 1
Derivatives, Fair Value
Derivative asset, gross		0		0		0
Fair Value Measured on a Recurring Basis | Level 2
Derivatives, Fair Value
Derivative asset, gross		0		0		0
Fair Value Measured on a Recurring Basis | Level 3
Derivatives, Fair Value
Derivative asset, gross		83		83		119
Fair Value Measured on a Recurring Basis | Other Derivative Instruments | Electric Commodity
Derivatives, Fair Value
Derivative asset, gross		83		83		119
Asset, netting	[2]	0		0		0
Derivative asset, net		83		83		119
Fair Value Measured on a Recurring Basis | Other Derivative Instruments | Level 1 | Electric Commodity
Derivatives, Fair Value
Derivative asset, gross		0		0		0
Fair Value Measured on a Recurring Basis | Other Derivative Instruments | Level 2 | Electric Commodity
Derivatives, Fair Value
Derivative asset, gross		0		0		0
Fair Value Measured on a Recurring Basis | Other Derivative Instruments | Level 3 | Electric Commodity
Derivatives, Fair Value
Derivative asset, gross		83		83		119
Fair Value, Measurements, Nonrecurring | Other Current Assets | PPAs
Derivatives, Fair Value
Derivative asset, net	[3]	3		3		3
Fair Value, Measurements, Nonrecurring | Other Noncurrent Assets | PPAs
Derivatives, Fair Value
Derivative asset, net	[3]	2		2		3
Fair Value, Measurements, Nonrecurring | Other Current Liabilities | PPAs
Derivatives, Fair Value
Derivative liability, net	[3]	4		4		4
Fair Value, Measurements, Nonrecurring | Other Noncurrent Liabilities | PPAs
Derivatives, Fair Value
Derivative liability, net	[3]	$ 0		$ 0		$ 2

[1] Relates primarily to FTR instruments administered by SPP.

[2] SPS nets derivative instruments and related collateral on its balance sheet when supported by a legally enforceable master netting agreement. At June 30, 2023 and Dec. 31, 2022, derivative assets and liabilities include no obligations to return cash collateral or rights to reclaim cash collateral.

[3] SPS currently applies the normal purchase exception to qualifying PPAs. Balance relates to specific contracts that were previously recognized at fair value prior to applying the normal purchase exception, and are being 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 Long-Term Debt (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term Debt, Carrying Amount	$ 3,212	$ 3,211
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term Debt, Fair Value	$ 2,678	$ 2,674

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Benefit Plans and Other Postretirement Benefits (Details) - USD ($) $ in Millions		1 Months Ended	3 Months Ended				6 Months Ended
		Jan. 31, 2023	Jun. 30, 2023		Jun. 30, 2022		Jun. 30, 2023		Jun. 30, 2022
Pension Plan [Member]
Components of Net Periodic Benefit Cost (Credit) [Abstract]
Service cost			$ 2		$ 3		$ 3		$ 5
Interest cost (a)	[1]		6		4		12		8
Expected return on plan assets (a)	[1]		(8)		(7)		(16)		(15)
Amortization of net loss (gain) (a)	[1]				2		1		5
Net periodic benefit cost (credit)			0		2		0		3
Contributions to pension plans		$ 0
Defined Benefit Plan Credits Not Recognized Due To Effects of Regulation			1		(1)		2		0
Defined Benefit Plan, Net Periodic Benefit Cost (Credit)			1		1		2		3
Amortization of prior service credit (a)	[1]		0
Pension Plan [Member] | Xcel Energy Inc.
Components of Net Periodic Benefit Cost (Credit) [Abstract]
Contributions to pension plans		$ 50
Other Postretirement Benefits Plan [Member]
Components of Net Periodic Benefit Cost (Credit) [Abstract]
Service cost			0		0		0		0
Interest cost (a)			0	[1]	1	[1]	1	[1]	1
Expected return on plan assets (a)	[1]		0		(1)		(1)		(1)
Amortization of net loss (gain) (a)			0	[1]	0	[1]	0	[1]	0
Net periodic benefit cost (credit)			0		0		0		0
Defined Benefit Plan Credits Not Recognized Due To Effects of Regulation			0		0		0		0
Defined Benefit Plan, Net Periodic Benefit Cost (Credit)			$ 0		$ 0		$ 0		$ 0

[1] The components of net periodic cost other than the service cost component are included in the line item “Other income, net” in the statements of income or capitalized on the balance sheets as a regulatory asset.

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Commitments and Contingencies - SPP OATT Upgrade Costs (Details) $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)
Southwest Power Pool (SPP) | SPP Open Access Transmission Tariff Upgrade Costs | SPS
Public Utilities, General Disclosures [Line Items]
Charges For Transmission Service Upgrades	$ 13

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FERC NOPR on ROE Incentive Adders (Details) $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)
Southwest Power Pool (SPP) | SPS | SPP Open Access Transmission Tariff Upgrade Costs
Public Utilities, General Disclosures [Line Items]
Charges For Transmission Service Upgrades	$ 13

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Commitments and Contingencies - Environmental (Details)	Jun. 30, 2023
Other MGP, Landfill, or Disposal Sites
Public Utilities, General Disclosures [Line Items]
Number of identified MGP, landfill, or disposal sites under current investigation and/or remediation	2

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Leases (Details) - USD ($) $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2023		Jun. 30, 2022		Jun. 30, 2023		Jun. 30, 2022		Dec. 31, 2022
Lessee, Lease, Description [Line Items]
Operating Lease, Cost	$ 15	[1]	$ 14	[1]	$ 29	[2]	$ 29	[2]
Lessee, Operating Lease, Liability, to be Paid	525				525
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	(106)				(106)
Operating Lease, Liability	419				419
Operating Lease, Liability, Current	(32)				(32)				$ (31)
Operating lease liabilities	387				387				$ 403
Short-term Lease, Cost	1				1
PPAs
Lessee, Lease, Description [Line Items]
Operating Lease, Cost	14		13		27		26
Lessee, Operating Lease, Liability, to be Paid	474				474
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	(93)				(93)
Operating Lease, Liability	381				381
Property, Plant and Equipment, Other Types
Lessee, Lease, Description [Line Items]
Operating Lease, Cost	1		$ 1		2	[3]	$ 3	[3]
Lessee, Operating Lease, Liability, to be Paid	51				51
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	(13)				(13)
Operating Lease, Liability	$ 38				$ 38

[1] PPA capacity payments are included in electric fuel and purchased power on the statements of income. Expense for other operating leases is included in operating and maintenance expense and electric fuel and purchased power.

[2] PPA capacity payments are included in electric fuel and purchased power on the statements of income. Expense for other operating leases is included in operating and maintenance expense and electric fuel and purchased power.

[3] Includes $1 million of short-term lease expense for 2023 and an immaterial short-term lease expense for 2022.

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Commitments and Contingencies - Variable Interest Entities (Details) - MW	Jun. 30, 2023	Dec. 31, 2022
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member]
Purchased Power Agreements [Abstract]
Generating capacity (in MW)	1,197	1,197

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Legal (Details) $ in Millions	Jun. 30, 2023 USD ($)
Settled Litigation
Loss Contingencies [Line Items]
Loss Contingency Accrual	$ 50

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Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]
Income Tax Expense (Benefit)	$ (17)	$ (18)	$ (42)	$ (39)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive loss at beginning of period			3,850
Accumulated other comprehensive loss at end of period	$ 3,825		$ 3,825