Segment 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, transmits and distributes electricity primarily in portions of 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 commodity trading operations.


•	PSCo’s regulated natural gas utility segment transports, stores and distributes natural gas primarily 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.



(Thousands of Dollars)	Regulated Electric		Regulated Natural Gas		All Other		Reconciling Eliminations			Consolidated Total
Three Months Ended March 31, 2018
Operating revenues ^(a)(b)	$	698,274	$	363,986	$	11,038	$	—		$	1,073,298
Intersegment revenues	112		64		—		(176		)	—
Total revenues	$	698,386	$	364,050	$	11,038	$	(176	)	$	1,073,298
Net income	$	79,551	$	53,712	$	459	$	—		$	133,722



(Thousands of Dollars)	Regulated Electric		Regulated Natural Gas		All Other		Reconciling Eliminations			Consolidated Total
Three Months Ended March 31, 2017
Operating revenues ^(a)(b)	$	711,388	$	356,136	$	13,010	$	—		$	1,080,534
Intersegment revenues	92		56		—		(148		)	—
Total revenues	$	711,480	$	356,192	$	13,010	$	(148	)	$	1,080,534
Net income (loss)	$	76,144	$	34,483	$	919	$	—		$	111,546

^(a)Operating revenues include $1 million and $2 million of affiliate electric revenue for the three months ended March 31, 2018 and 2017.

^(b)Operating revenues include $1 million of other affiliate revenue for the three months ended March 31, 2018 and 2017.