Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Borrowings and Other Financing Instruments

5. Borrowings and Other Financing Instruments

Short Term Borrowings

NSP-Wisconsin 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 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 money pool arrangement does not allow the utility subsidiaries to make investments in Xcel Energy Inc. NSP-Wisconsin began participation in the money pool in 2021 following approval by the PSCW in October 2020.

Money pool borrowings:

(Millions of Dollars, Except Interest Rates)	Three Months Ended Dec. 31, 2021			Year Ended
				2021
Borrowing limit	$	150		$	150
Amount outstanding at period end	—			—
Average amount outstanding	31			16
Maximum amount outstanding	78			78
Weighted average interest rate, computed on a daily basis	0.05		%	0.05		%
Weighted average interest rate at period end	N/A			N/A

Commercial Paper — Commercial paper outstanding:

(Millions of Dollars, Except Interest Rates)	Three Months Ended Dec. 31, 2021		Year Ended Dec. 31
			2021		2020		2019
Borrowing limit	$	150	$	150	$	150	$	150
Amount outstanding at period end	83		83		19		65
Average amount outstanding	3		3		30		51
Maximum amount outstanding	83		83		95		93
Weighted average interest rate, computed on a daily basis	0.21		0.18		1.59		2.38
Weighted average interest rate at end of period	0.21		0.21		0.17		1.97

Letters of Credit — NSP-Wisconsin may use letters of credit, typically with terms of one year, to provide financial guarantees for certain operating obligations. At Dec. 31, 2021 and 2020, there were no letters of credit outstanding.

Credit Facility — In order to use commercial paper programs to fulfill short-term funding needs, NSP-Wisconsin must have revolving credit facilities in place at least equal to the amount of their respective commercial paper borrowing limits and cannot issue commercial paper exceeding available capacity under these credit facilities. The lines of credit provide short-term financing in the form of notes payable to banks, letters of credit and back-up support for commercial paper borrowings.

Features of the credit facility:

Debt-to-Total Capitalization Ratio (a)				Amount Facility May Be Increased (millions of dollars)	Additional Periods for Which a One-Year Extension May Be Requested (b)
2021		2020
49	%	46	%	N/A	1

(a)    The credit facility has a financial covenant requiring that the debt-to-total capitalization ratio be less than or equal to 65%.

(b)    All extension requests are subject to majority bank group approval.

The credit facility has a cross-default provision that NSP-Wisconsin would be in default on borrowings under the facility if NSP-Wisconsin or any of its subsidiaries, whose total assets exceed 15% of NSP-Wisconsin’s consolidated total assets, default on certain indebtedness in an aggregate principal amount exceeding $75 million.

If NSP-Wisconsin 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. As of Dec. 31, 2021, NSP-Wisconsin was in compliance with all financial covenants.

NSP-Wisconsin had the following committed credit facility available as of Dec. 31, 2021 (in millions of dollars):

Credit Facility (a)		Drawn (b)		Available
$	150	$	83	$	67

(a)This credit facility matures in June 2024.

(b)Includes outstanding commercial paper.

All credit facility bank borrowings, outstanding letters of credit and outstanding commercial paper reduce the available capacity under the credit facility. NSP-Wisconsin had no direct advances on the facility outstanding at Dec. 31, 2021 and 2020, respectively.

Other Short-Term Borrowings — Clearwater Investments, Inc., a NSP-Wisconsin subsidiary, had an immaterial note payable to Xcel Energy Inc. at Dec. 31, 2021 and 2020, respectively.

Long-Term Borrowings and Other Financing Instruments

Generally, all property of NSP-Wisconsin is subject to the lien of its first mortgage indenture. Debt premiums, discounts and expenses are amortized over the life of the related debt. The premiums, discounts and expenses for refinanced debt are deferred and amortized over the life of new issuance.

Long-term debt obligations for NSP-Wisconsin as of Dec. 31 (in millions of dollars):

Financing Instrument	Interest Rate		Maturity Date	2021		2020
City of La Crosse resource recovery bond	6.00	%	Nov. 1, 2021	$	—	$	19
First mortgage bonds	3.30		June 15, 2024	100		100
First mortgage bonds	3.30		June 15, 2024	100		100
First mortgage bonds	6.375		Sept. 1, 2038	200		200
First mortgage bonds	3.70		Oct. 1, 2042	100		100
First mortgage bonds	3.75		Dec. 1, 2047	100		100
First mortgage bonds	4.20		Sept. 1, 2048	200		200
First mortgage bonds (b)	3.05		May 1, 2051	100		100
First mortgage bonds (a)	2.82		May 1, 2051	100		—
Other long-term debt				1		—
Unamortized discount				(4)		(4)
Unamortized debt issuance cost				(10)		(9)
Current maturities				—		(19)
Total long-term debt				$	987	$	887

(a)2021 financing.

(b)2020 financing.

Maturities of long-term debt:

(Millions of Dollars)
2022	$	—
2023	—
2024	200
2025	—
2026	—

Deferred Financing Costs — Deferred financing costs of approximately $10 million and $9 million, net of amortization, are presented as a deduction from the carrying amount of long-term debt at Dec. 31, 2021 and 2020, respectively. NSP-Wisconsin is amortizing these financing costs over the remaining maturity periods of the related debt.

Dividend Restrictions — NSP-Wisconsin’s dividends are subject to the FERC’s jurisdiction, which prohibits the payment of dividends out of capital accounts. Dividends are solely to be paid from retained earnings.

NSP-Wisconsin’s state regulatory commission additionally imposes dividend limitations, which are more restrictive than those imposed by the FERC.

Requirements and actuals as of Dec. 31, 2021:

Equity to Total Capitalization Ratio Required Range			Equity to Total Capitalization Ratio Actual
Low		High	2021
52.5	%	N/A	52.8	%

Unrestricted Retained Earnings			Total Capitalization		Limit on Total Capitalization (a)
$	11	million	2,091	million	N/A

(a) NSP-Wisconsin cannot pay annual dividends in excess of forecasted levels if its average equity-to-total capitalization ratio falls below the commission authorized level.

^[1],[2]

[1] All extension requests are subject to majority bank group approval.

[2] The credit facility has a financial covenant requiring that the debt-to-total capitalization ratio be less than or equal to 65%.