Revenues

PSCo principally generates revenue from the transmission, distribution and sale of electricity and the transportation, distribution and sale of natural gas to wholesale and retail customers. Performance obligations related to the sale of energy are satisfied as energy is delivered to customers. PSCo recognizes revenue in an amount that corresponds directly to the price of the energy delivered to the customer. The measurement of energy sales to customers is generally based on the reading of their meters, which occurs on a systematic basis throughout the month. At the end of each month, amounts of energy delivered to customers since the date of the last meter reading are estimated, and the corresponding unbilled revenue is recognized. Contract terms are generally short-term in nature, and as such PSCo does not recognize a separate financing component of its collections from customers. PSCo presents its revenues net of any excise or other fiduciary-type taxes or fees.

PSCo has various rate-adjustment mechanisms in place that provide for the recovery of natural gas, electric fuel and purchased energy costs. These cost-adjustment tariffs may increase or decrease the level of revenue collected from customers and are revised periodically for differences between the total amount collected under the clauses and the costs incurred. When applicable, under governing regulatory commission rate orders, fuel cost over-recoveries (the excess of fuel revenue billed to customers over fuel costs incurred) are deferred as regulatory liabilities and under-recoveries (the excess of fuel costs incurred over fuel revenues billed to customers) are deferred as regulatory assets.

Certain rate rider mechanisms qualify as alternative revenue programs under GAAP. These mechanisms arise from costs imposed upon the utility by action of a regulator or legislative body related to an environmental, public safety or other mandate. When certain criteria are met (including collection within 24 months), revenue is recognized equal to the revenue requirement, which may include return on rate base items and incentives. The mechanisms are revised periodically for differences between the total amount collected and the revenue recognized, which may increase or decrease the level of revenue collected from customers. Alternative revenue is recorded on a gross basis and is disclosed separate from revenue from contracts with customers in the period earned.

In the following tables, revenue is classified by the type of goods/services rendered and market/customer type. The tables also reconcile revenue to the reportable segments.



	Three Months Ended March 31, 2018
(Thousands of Dollars)	Regulated Electric		Regulated Natural Gas		All Other		Total
Major revenue types
Revenue from contracts with customers:
Residential	$	227,649	$	227,746	$	2,696	$	458,091
Commercial and industrial (C&I)	343,226		86,028		7,159		436,413
Other	12,176		—		60		12,236
Total retail	583,051		313,774		9,915		906,740
Wholesale	47,890		—		—		47,890
Transmission	12,252		—		—		12,252
Other	18,831		24,929		—		43,760
Total revenue from contracts with customers	662,024		338,703		9,915		1,010,642
Alternative revenue and other	36,250		25,283		1,123		62,656
Total revenues	$	698,274	$	363,986	$	11,038	$	1,073,298



	Three Months Ended March 31, 2017
(Thousands of Dollars)	Regulated Electric		Regulated Natural Gas		All Other		Total
Major revenue types
Revenue from contracts with customers:
Residential	$	234,434	$	225,910	$	2,564	$	462,908
C&I	359,697		86,242		9,260		455,199
Other	12,675		—		63		12,738
Total retail	606,806		312,152		11,887		930,845
Wholesale	43,576		—		—		43,576
Transmission	14,639		—		—		14,639
Other	16,695		22,610		—		39,305
Total revenue from contracts with customers	681,716		334,762		11,887		1,028,365
Alternative revenue and other	29,672		21,374		1,123		52,169
Total revenues	$	711,388	$	356,136	$	13,010	$	1,080,534