5.	Rate Matters

Except to the extent noted below, the circumstances set forth in Note 10 to the financial statements included in SPS' Annual Report on Form 10-K for the year ended Dec. 31, 2011 appropriately represent, in all material respects, the current status of other rate matters, and are incorporated herein by reference.

Pending Regulatory Proceedings - Federal Energy Regulatory Commission (FERC)

Wholesale Rate Complaint - In April 2012, Golden Spread Electric Cooperative, Inc. (Golden Spread) filed a rate complaint with the FERC alleging that SPS' rates for wholesale service were excessive. Golden Spread alleges that the base ROE currently charged to them through their production formula rate, of 10.25 percent, and the transmission formula rate, of 10.77 percent, is unjust and unreasonable. Golden Spread alleges that the appropriate base ROE is 9.15 percent, or an annual difference of approximately $3.3 million. An additional 50 basis point incentive is added to the base ROE for the transmission formula rate for participation in a Regional Transmission Organization (RTO). Golden Spread is not contesting this transmission incentive. The FERC has taken no action on this complaint.