Borrowings and Other Financing Instruments

6 Months Ended

Jun. 30, 2011

Borrowings and Other Financing Instruments [Abstract]

Borrowings and Other Financing Instruments

7.	Borrowings and Other Financing Instruments

Commercial Paper - SPS meets its short-term liquidity requirements primarily through the issuance of commercial paper and borrowings under its credit facility. The following table presents commercial paper outstanding for SPS:

(Millions of Dollars)	Three Months Ended June 30, 2011			Twelve Months Ended Dec. 31, 2010
Borrowing limit	$	300		$	248
Amount outstanding at period end		131			49
Average amount outstanding		92			8
Maximum amount outstanding		138			65
Weighted average interest rate, computed on a daily basis		0.37	%		0.37	%
Weighted average interest rate at end of period		0.36			0.37

Credit Facilities - In order to use its commercial paper program to fulfill short-term funding needs, SPS must have a revolving credit facility in place at least equal to the amount of its commercial paper borrowing limit and cannot issue commercial paper in an aggregate amount exceeding available capacity under the credit agreement.

During March 2011, SPS executed a new 4-year credit agreement. The total size of the credit facility is $300 million and terminates in March 2015. SPS has the right to request an extension of the revolving termination date for two additional one year periods, subject to majority bank group approval.

The line of credit provides short-term financing in the form of notes payable to banks, letters of credit and back-up support for commercial paper borrowings. Other features of SPS' credit facility include:

The credit facility may be increased by up to $50 million.

The credit facility has a financial covenant requiring that SPS' debt-to-total capitalization ratio be less than or equal to 65 percent. SPS was in compliance as its debt-to-total capitalization ratio was 50 percent at June 30, 2011 and Dec. 31, 2010. If SPS does not comply with the covenant, an event of default may be declared, and if not remedied, any outstanding amounts due under the facility can be declared due by the lender.

The credit facility has a cross-default provision that provides SPS will be in default on its borrowings under the facility if Xcel Energy Inc. or any of its subsidiaries, comprising 15 percent or more of the consolidated assets, defaults on any indebtedness in an aggregate principal amount exceeding $75 million.

The interest rates under the line of credit are based on the Eurodollar rate, plus a borrowing margin based on the applicable credit ratings of 100 to 200 basis points per year.

The commitment fees, also based on applicable long-term credit ratings, are calculated on the unused portion of the line of credit at a range of 10 to 35 basis points per year.

At June 30, 2011, SPS had the following committed credit facility available (in millions of dollars):

Credit Facility				Drawn (a)				Available
$	300.0			$	131.0			$	169.0

(a)	Includes outstanding commercial paper and 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 at June 30, 2011 and Dec. 31, 2010.

Letters of Credit - SPS uses letters of credit, generally with terms of one year, to provide financial guarantees for certain operating obligations. At June 30, 2011 and Dec. 31, 2010 there were no letters of credit outstanding.

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

The following table presents the money pool borrowings for SPS:

(Millions of Dollars)	Three Months Ended June 30, 2011			Twelve Months Ended Dec. 31, 2010
Borrowing limit	$	100		$	100
Amount outstanding at period end		-			-
Average amount outstanding		19			16
Maximum amount outstanding		71			77
Weighted average interest rate, computed on a daily basis		0.34	%		0.37	%
Weighted average interest rate at end of period		N/A			N/A

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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