Nuclear Obligations (Tables)

12 Months Ended

Dec. 31, 2017

Funded Status of Nuclear Decommissioning Obligation

As of Dec. 31, 2017, NSP-Minnesota has accumulated $2.1 billion of assets held in external decommissioning trusts. The following table summarizes the funded status of NSP-Minnesota’s decommissioning obligation based on parameters established in the most recently approved decommissioning study. Xcel Energy believes future decommissioning costs, if necessary, will continue to be recovered in customer rates. The amounts presented below were prepared on a regulatory basis, and are not recorded in the financial statements for the ARO.



	Regulatory Basis
(Millions of Dollars)	2017			2016
Estimated decommissioning cost obligation from most recently approved study (in 2014 dollars)	$	3,012		$	3,012
Effect of escalating costs (to 2017 and 2016 dollars, respectively, at 4.36/3.36 percent)	396			258
Estimated decommissioning cost obligation (in current dollars)	3,408			3,270
Effect of escalating costs to payment date (4.36/3.36 percent)	7,797			7,935
Estimated future decommissioning costs (undiscounted)	11,205			11,205
Effect of discounting obligation (using average risk-free interest rate of 2.80 percent and 3.25 percent for 2017 and 2016, respectively)	(6,398		)	(7,068		)
Discounted decommissioning cost obligation	$	4,807		$	4,137

Assets held in external decommissioning trust	$	2,143		$	1,861
Underfunding of external decommissioning fund compared to the discounted decommissioning obligation	2,664			2,276

Reconciliation of Decommissioning Cost Obligation - Regulatory to GAAP

Calculations and data used by the regulator in approving NSP-Minnesota’s rates are useful in assessing future cash flows. The regulatory basis information is a means to reconcile amounts previously provided to the MPUC and utilized for regulatory purposes to amounts used for financial reporting. The following table provides a reconciliation of the discounted decommissioning cost obligation - regulated basis to the ARO recorded in accordance with GAAP:



(Millions of Dollars)	2017			2016
Discounted decommissioning cost obligation - regulated basis	$	4,807		$	4,137
Differences in discount rate and market risk premium	(1,403		)	(1,044		)
O&M costs not included for GAAP	(1,041		)	(844		)
ARO differences between 2017 and 2014 cost studies	(489		)	—
Nuclear production decommissioning ARO - GAAP	$	1,874		$	2,249

Nuclear Decommissioning Expenses Recognized as Result of Regulation

Decommissioning expenses recognized as a result of regulation for the years ending Dec. 31 were:



(Millions of Dollars)	2017		2016		2015
Annual decommissioning recorded as depreciation expense: ^{(a) (b)}	$	20	$	20	$	7


^(a)	Decommissioning expense does not include depreciation of the capitalized nuclear asset retirement costs.


^(b)	Decommissioning expenses in 2017 and 2016 include Minnesota’s retail jurisdiction annual funding requirement of approximately $14 million. The 2015 expense was offset by the DOE settlement refund.