NORTHERN STATES POWER CO - 10-Q Quarterly Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

		For the quarterly period ended March 31, 2004

		OR

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

		For the transition period from _______ to _______


	Exact name of registrant as specified
	in its charter, State or
	other jurisdiction of incorporation or
	organization, Address of
	principal executive offices and
Commission	Registrant's Telephone Number,	IRS Employer
File Number	including area code	Identification No.
001-31387	NORTHERN STATES POWER COMPANY	41-1967505
	(a Minnesota Corporation)
	414 Nicollet Mall, Minneapolis, Minn. 55401
	Telephone (612) 330-5500

001-3140	NORTHERN STATES POWER COMPANY	39-0508315
	(a Wisconsin Corporation)
	1414 W. Hamilton Ave., Eau Claire, Wis. 54701
	Telephone (715) 839-2625

001-03280	PUBLIC SERVICE COMPANY OF COLORADO	84-0296600
	(a Colorado Corporation)
	1225 17th Street, Denver, Colo. 80202 Telephone (303) 571-7511

001-03789	SOUTHWESTERN PUBLIC SERVICE COMPANY	75-0575400
	(a New Mexico Corporation)
	Tyler at Sixth, Amarillo, Texas 79101
	Telephone (303) 571-7511

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 x No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Northern States Power Co. (a Minnesota corporation), Northern States Power Co. (a Wisconsin corporation), Public Service Co. of Colorado and Southwestern Public Service Co. meet the conditions set forth in General Instruction H (1)(a) and (b) of Form 10-Q and are therefore filing this Form 10-Q with the reduced disclosure format specified in General Instruction H (2) to such Form 10-Q.


Northern States Power Co. (a Minnesota Corporation)	Common Stock, $0.01 par Value	1,000,000 Shares
Northern States Power Co. (a Wisconsin Corporation)	Common Stock, $100 par value	933,000 Shares
Public Service Co. of Colorado	Common Stock, $0.01 par value	100 Shares
Southwestern Public Service Co.	Common Stock, $1 par value	100 Shares

Table of Contents


	PART I - FINANCIAL INFORMATION
Item l.	Financial Statements	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	23
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	34
Item 6.	Exhibits and Reports on Form 8-K	34
Certifications Pursuant to Section 302 - NSP-MN
Certifications Pursuant to Section 302 - NSP-WI
Certifications Pursuant to Section 302 - PSCo.
Certifications Pursuant to Section 302 - SPS
Certifications Pursuant to Section 906 - NSP-MN
Certifications Pursuant to Section 906 - NSP-WI
Certifications Pursuant to Section 906 - PSCo.
Certifications Pursuant to Section 906 - SPS
Statement - Private Securities Litigation Act

This combined Form 10-Q is separately filed by Northern States Power Co., a Minnesota corporation (NSP-Minnesota), Northern States Power Co., a Wisconsin corporation (NSP-Wisconsin), Public Service Co. of Colorado (PSCo) and Southwestern Public Service Co. (SPS). NSP-Minnesota, NSP-Wisconsin, PSCo and SPS are all wholly owned subsidiaries of Xcel Energy Inc. (Xcel Energy). Xcel Energy is a registered holding company under the Public Utility Holding Company Act of 1935 (PUHCA). Additional information on Xcel Energy is available on various filings with the Securities and Exchange Commission (SEC).

Information contained in this report relating to any individual company is filed by such company on its own behalf. Each registrant makes representations only as to itself and makes no other representations whatsoever as to information relating to the other registrants.

This report should be read in its entirety. No one section of the report deals with all aspects of the subject matter.

PART 1. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

NSP-MINNESOTA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Thousands of Dollars)


	Three Months Ended March 31
	2004			2003
Operating revenues:
Electric utility	$	608,316		$	586,911
Electric trading margin		1,351			1,400
Natural gas utility		312,132			333,250
Other		7,863			6,194

Total operating revenues		929,662			927,755
Operating expenses:
Electric fuel and purchased power		216,280			208,990
Cost of natural gas sold and transported		246,845			268,692
Other operating and maintenance expenses		207,495			211,610
Depreciation and amortization		82,166			91,202
Taxes (other than income taxes)		44,243			44,346

Total operating expenses		797,029			824,840

Operating income		132,633			102,915
Other income (expense):
Interest income		1,630			1,900
Other nonoperating income		3,287			2,600
Nonoperating expense		(1,335	)		(1,480	)

Total other income		3,582			3,020
Interest charges and financing costs:
Interest charges — net of amounts capitalized, includes other financing costs of $2,305 and $1,734, respectively		32,862			31,974
Distributions on redeemable preferred securities of subsidiary trust		—			3,938

Total interest charges and financing costs		32,862			35,912

Income before income taxes		103,353			70,023
Income taxes		34,996			25,572

Net income	$	68,357		$	44,451

See disclosures regarding NSP-Minnesota in the Notes to Consolidated Financial Statements

NSP-MINNESOTA
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Thousands of Dollars)


	Three Months Ended March 31
	2004			2003
Operating activities:
Net income	$	68,357		$	44,451
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		85,461			93,533
Nuclear fuel amortization		11,596			11,791
Deferred income taxes		3,165			(10,395	)
Amortization of investment tax credits		(1,787	)		(1,841	)
Allowance for equity funds used during construction		(3,715	)		(2,009	)
Change in accounts receivable		(24,714	)		(62,091	)
Change in accounts receivable from affiliates		44,887			7,841
Change in inventories		34,645			25,375
Change in other current assets		26,502			(14,683	)
Change in accounts payable		(19,029	)		7,997
Change in other current liabilities		32,275			3,775
Change in other noncurrent assets		13,685			1,261
Change in other noncurrent liabilities		16,397			14,217

Net cash provided by operating activities		287,725			119,222
Investing activities:
Capital/construction expenditures		(121,502	)		(90,564	)
Proceeds from sale of property		—			—
Allowance for equity funds used during construction		3,715			2,009
Investments in external decommissioning fund		(20,145	)		(8,406	)
Other investments — net		(922	)		(1,638	)

Net cash used in investing activities		(138,854	)		(98,599	)
Financing activities:
Short-term borrowings — net		(58,000	)		(2	)
Repayment of long-term debt, including reacquisition premiums		(54	)		(107,790	)
Capital contribution from parent		50,000			—
Dividends paid to parent		(53,852	)		(52,280	)

Net cash used in financing activities		(61,906	)		(160,072	)
Net increase (decrease) in cash and cash equivalents		86,965			(139,449	)
Cash and cash equivalents at beginning of year		82,015			310,338

Cash and cash equivalents at end of year	$	168,980		$	170,889

See disclosures regarding NSP-Minnesota in the Notes to Consolidated Financial Statements

NSP-MINNESOTA AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Thousands of Dollars)


	March 31			Dec. 31
	2004			2003
ASSETS
Current assets:
Cash and cash equivalents	$	168,980		$	82,015
Accounts receivable — net of allowance for bad debts: $7,052 and $7,581, respectively		302,860			278,146
Accounts receivable from affiliates		27,639			72,526
Accrued unbilled revenues		106,033			125,872
Materials and supplies inventories at average cost		99,722			100,297
Fuel inventory — at average cost		30,494			27,727
Natural gas inventory — at average cost		6,642			43,479
Income tax receivable		—			11,249
Derivative instrument valuation at market		35,421			26,666
Prepayments and other		33,616			30,011

Total current assets		811,407			797,988

Property, plant and equipment, at cost:
Electric utility plant		7,350,890			7,268,609
Natural gas utility plant		757,049			746,835
Construction work in progress		335,961			328,880
Other		417,386			400,448

Total property, plant and equipment		8,861,286			8,744,772
Less accumulated depreciation		(4,064,301	)		(3,991,875	)
Nuclear fuel – net of accumulated amortization: $1,113,528 and $1,101,932, respectively		71,505			80,289

Net property, plant and equipment		4,868,490			4,833,186

Other assets:
Nuclear decommissioning fund investments		835,836			779,382
Other investments		25,419			25,055
Regulatory assets		431,262			492,491
Prepaid pension asset		328,661			317,956
Derivative instrument valuation at market		256,044			177,581
Other		53,146			59,463

Total other assets		1,930,368			1,851,928

Total assets	$	7,610,265		$	7,483,102

LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	4,501		$	4,502
Short-term debt		—			58,000
Accounts payable		205,276			250,628
Accounts payable to affiliates		59,207			32,884
Taxes accrued		170,989			116,862
Accrued interest		24,879			44,485
Dividends payable to parent		52,294			53,852
Derivative instrument valuation at market		53,940			67,664
Other		41,107			44,863

Total current liabilities		612,193			673,740

Deferred credits and other liabilities:
Deferred income taxes		754,852			738,677
Deferred investment tax credits		64,790			66,681
Regulatory liabilities		921,501			889,152
Asset retirement obligations		1,040,778			1,024,529
Derivative instrument valuation at market		254,568			212,263
Benefit obligations and other		145,586			128,247

Total deferred credits and other liabilities		3,182,075			3,059,549

Long-term debt		1,941,146			1,940,958
Common stock — authorized 5,000,000 shares of $0.01 par value, outstanding 1,000,000 shares		10			10
Premium on common stock		892,969			842,969
Retained earnings		981,942			965,880
Accumulated other comprehensive loss		(70	)		(4	)

Total common stockholder’s equity		1,874,851			1,808,855
Commitments and contingencies (see Note 4)

Total liabilities and equity	$	7,610,265		$	7,483,102

See disclosures regarding NSP-Minnesota in the Notes to Consolidated Financial Statements

NSP-WISCONSIN
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Thousands of Dollars)


	Three Months Ended March 31,
	2004			2003
Operating revenues:
Electric utility	$	123,125		$	120,526
Natural gas utility		58,200			64,433
Other		163			68

Total operating revenues		181,488			185,027
Operating expenses:
Electric fuel and purchased power		53,900			55,463
Cost of natural gas sold and transported		45,762			50,656
Other operating and maintenance expenses		29,380			24,438
Depreciation and amortization		11,362			11,334
Taxes (other than income taxes)		4,316			4,227

Total operating expenses		144,720			146,118
Operating income		36,768			38,909
Other income (expense):
Interest income		146			161
Other nonoperating income		556			281
Nonoperating expense		(157	)		(102	)

Total other income (expense)		545			340
Interest charges — net of amounts capitalized; includes other financing costs of $303 and $224, respectively		5,280			5,731

Income before income taxes		32,033			33,518
Income taxes		12,819			13,664

Net income	$	19,214		$	19,854

See disclosures regarding NSP-Wisconsin in the Notes to Consolidated Financial Statements

NSP-WISCONSIN
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Thousands of Dollars)


	Three Months Ended March 31
	2004			2003
Operating activities:
Net income	$	19,214		$	19,854
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		11,800			11,591
Deferred income taxes		1,039			668
Amortization of investment tax credits		(197	)		(198	)
Allowance for equity funds used during construction		(468	)		(207	)
Undistributed equity in earnings of unconsolidated affiliates		7			(2	)
Change in accounts receivable		(5,849	)		(7,657	)
Change in inventories		5,745			3,950
Change in other current assets		10,142			4,483
Change in accounts payable		(7,212	)		1,968
Change in other current liabilities		17,845			16,532
Change in other assets		(2,885	)		(834	)
Change in other liabilities		(865	)		(675	)

Net cash provided by operating activities		48,316			49,473
Investing activities:
Capital/construction expenditures		(10,010	)		(9,155	)
Allowance for equity funds used during construction		468			207
Other investments – net		(183	)		(10	)

Net cash used in investing activities		(9,725	)		(8,958	)
Financing activities:
Short-term borrowings from affiliate – net		(23,710	)		(6,880	)
Dividends paid to parent		(12,563	)		(12,260	)

Net cash used in financing activities		(36,273	)		(19,140	)

Net increase in cash and cash equivalents		2,318			21,375
Net increase in cash and cash equivalents – adoption of FIN No. 46		683			—
Cash and cash equivalents at beginning of period		137			98

Cash and cash equivalents at end of period	$	3,138		$	21,473

See disclosures regarding NSP-Wisconsin in the Notes to Consolidated Financial Statements

NSP-WISCONSIN
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Thousands of Dollars)


	March 31,			Dec. 31,
	2004			2003
ASSETS
Current assets:
Cash and cash equivalents	$	3,138		$	137
Accounts receivable — net of allowance for bad debts: $1,109 and $1,212, respectively		45,478			42,603
Accounts receivable from affiliates		4,413			1,389
Accrued unbilled revenues		16,046			21,522
Materials and supplies inventories – at average cost		5,374			5,274
Fuel inventory – at average cost		7,977			4,962
Natural gas inventory — at average cost		719			9,578
Current deferred income taxes		5,343			3,430
Prepaid taxes		3,393			17,082
Prepayments and other		2,493			3,877

Total current assets		94,374			109,854

Property, plant and equipment, at cost:
Electric utility plant		1,205,382			1,189,122
Natural gas utility plant		139,536			138,767
Common and other plant		92,678			85,639
Construction work in progress		23,417			31,428

Total property, plant and equipment		1,461,013			1,444,956
Less accumulated depreciation		(556,538	)		(543,768	)

Net property, plant and equipment		904,475			901,188

Other assets:
Other investments		8,076			9,989
Regulatory assets		50,910			50,049
Prepaid pension asset		47,881			46,384
Other		7,648			7,407

Total other assets		114,515			113,829

Total assets	$	1,113,364		$	1,124,871

LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	34		$	34
Notes payable to affiliate		—			23,710
Accounts payable		18,136			23,586
Accounts payable to affiliates		5,228			6,910
Accrued interest		9,257			4,266
Accrued payroll and benefits		4,956			5,431
Dividends payable to parent		12,291			12,563
Other		9,433			6,245

Total current liabilities		59,335			82,745

Deferred credits and other liabilities:
Deferred income taxes		161,938			158,972
Deferred investment tax credits		13,830			14,027
Regulatory liabilities		87,763			87,180
Customer advances for construction		16,763			18,015
Benefit obligations and other		26,193			25,371

Total deferred credits and other liabilities		306,487			303,565

Minority interest in subsidiaries		100			—
Long-term debt		315,349			313,410
Common stock — authorized 1,000,000 shares of $100 par value; outstanding 933,000 shares		93,300			93,300
Premium on common stock		63,457			63,457
Retained earnings		276,439			269,516
Accumulated other comprehensive income (loss)		(1,103	)		(1,122	)

Total common stockholder’s equity		432,093			425,151
Commitments and contingent liabilities (see Note 4)

Total liabilities and equity	$	1,113,364		$	1,124,871

See disclosures regarding NSP-Wisconsin in the Notes to Consolidated Financial Statements


	Three Months ended March 31,
	2004			2003
Operating revenues:
Electric utility	$	511,762		$	494,489
Electric trading margin		(453	)		(2,051	)
Natural gas utility		392,530			256,677
Steam and other		8,081			6,648

Total operating revenues		911,920			755,763
Operating expenses:
Electric fuel and purchased power		282,612			255,795
Cost of natural gas sold and transported		301,645			154,907
Cost of sales – steam and other		5,128		&