Segments and Related Information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Information

Segments and Related Information

Operating results from the regulated electric utility and regulated natural gas utility are each separately and regularly reviewed by PSCo’s chief operating decision maker.  PSCo evaluates performance based on profit or loss generated from the product or service provided. These segments are managed separately because the revenue streams are dependent upon regulated rate recovery, which is separately determined for each segment.

PSCo has the following reportable segments: regulated electric utility, regulated natural gas utility and all other.

• PSCo’s regulated electric utility segment generates electricity which is transmitted and distributed in Colorado. In addition, this segment includes sales for resale and provides wholesale transmission service to various entities in the United States. Regulated electric utility also includes PSCo’s wholesale commodity and trading operations.

• PSCo’s regulated natural gas utility segment transports, stores and distributes natural gas in portions of Colorado.

• Revenues from operating segments not included above are below the necessary quantitative thresholds and are therefore included in the all other category. Those primarily include steam revenue, appliance repair services and nonutility real estate activities.

Asset and capital expenditure information is not provided for PSCo’s reportable segments because as an integrated electric and natural gas utility, PSCo operates significant assets that are not dedicated to a specific business segment, and reporting assets and capital expenditures by business segment would require arbitrary and potentially misleading allocations which may not necessarily reflect the assets that would be required for the operation of the business segments on a stand-alone basis.

To report income from operations for regulated electric and regulated natural gas utility segments, the majority of costs are directly assigned to each segment. However, some costs, such as common depreciation, common O&M expenses and interest expense are allocated based on cost causation allocators. A general allocator is used for certain general and administrative expenses, including office supplies, rent, property insurance and general advertising.

The accounting policies of the segments are the same as those described in Note 1.

(Thousands of Dollars)	Regulated Electric		Regulated Natural Gas		All Other			Reconciling Eliminations			Consolidated Total
2016
Operating revenues (a)	$	3,049,352	$	957,721	$	40,723		$	—		$	4,047,796
Intersegment revenues	275		110		—			(385		)	—
Total revenues	$	3,049,627	$	957,831	$	40,723		$	(385	)	$	4,047,796
Depreciation and amortization	$	337,583	$	101,663	$	4,309		$	—		$	443,555
Interest charges and financing costs	136,274		37,881		431			—			174,586
Income tax expense (benefit)	228,825		45,960		(867		)	—			273,918
Net income	383,973		75,426		4,092			—			463,491

(Thousands of Dollars)	Regulated Electric		Regulated Natural Gas		All Other			Reconciling Eliminations			Consolidated Total
2015
Operating revenues (a)	$	3,115,257	$	1,006,666	$	41,590		$	—		$	4,163,513
Intersegment revenues	301		67		—			(368		)	—
Total revenues	$	3,115,558	$	1,006,733	$	41,590		$	(368	)	$	4,163,513
Depreciation and amortization	$	311,122	$	96,384	$	4,161		$	—		$	411,667
Interest charges and financing costs	136,397		34,935		576			—			171,908
Income tax expense (benefit)	234,873		44,192		(625		)	—			278,440
Net income	391,257		74,267		1,278			—			466,802

(Thousands of Dollars)	Regulated Electric		Regulated Natural Gas		All Other			Reconciling Eliminations			Consolidated Total
2014
Operating revenues (a)	$	3,125,937	$	1,215,324	$	41,888		$	—		$	4,383,149
Intersegment revenues	339		180		—			(519		)	—
Total revenues	$	3,126,276	$	1,215,504	$	41,888		$	(519	)	$	4,383,149
Depreciation and amortization	$	285,968	$	89,186	$	4,048		$	—		$	379,202
Interest charges and financing costs	124,118		29,987		535			—			154,640
Income tax expense (benefit)	208,095		50,874		(15,378		)	—			243,591
Net income	349,793		84,324		21,071			—			455,188

^(a)  Operating revenues include $13 million, $13 million and $14 million of intercompany revenue for the years ended Dec. 31, 2016, 2015 and 2014, respectively. See Note 16 for further discussion of related party transactions by reportable segment.