psco-20230331

Definitions of Abbreviations


Xcel Energy Inc.’s Subsidiaries and Affiliates (current and former)
e prime			e prime inc.
NSP-Minnesota			Northern States Power Company, a Minnesota corporation
NSP-Wisconsin			Northern States Power Company, a Wisconsin corporation
PSCo			Public Service Company of Colorado
SPS			Southwestern Public Service Company
Utility subsidiaries			NSP-Minnesota, NSP-Wisconsin, PSCo and SPS
Xcel Energy			Xcel Energy Inc. and its subsidiaries


Federal and State Regulatory Agencies
CPUC			Colorado Public Utilities Commission
D.C. Circuit			United States Court of Appeals for the District of Columbia Circuit
EPA			United States Environmental Protection Agency
FERC			Federal Energy Regulatory Commission
SEC			Securities and Exchange Commission


Other
C&I			Commercial and Industrial
CCR			Coal combustion residuals
CCR Rule			Final rule (40 CFR 257.50 - 257.107) published by the EPA regulating the management, storage and disposal of CCRs as a nonhazardous waste
CEO			Chief executive officer
CERCLA			Comprehensive Environmental Response, Compensation, and Liability Act
CFO			Chief financial officer
CORE			CORE Electric Cooperative
CSPV			Crystalline Silicon Photovoltaic
ECA			Retail electric commodity adjustment
ETR			Effective Tax Rate
GAAP			United States generally accepted accounting principles
GCA			Gas cost adjustment
IPP			Independent power producing entity
LDC			Local distribution company
MGP			Manufactured gas plant
NOPR			Notice of proposed rulemaking
O&M			Operating and maintenance
PFAS			Per- and Polyfluoroalkyl Substances
PIM			Performance incentive mechanism
PPA			Power purchase agreement
PTC			Production tax credit
ROE			Return on equity
RFP			Request for proposal
TCA			Transmission cost adjustment
UCA			Colorado Office of the Utility Consumer Advocate


Measurements
MW			Megawatts


Forward-Looking Statements

Except for the historical statements contained in this report, the matters discussed herein are forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements, including those relating to future sales, future expenses, future tax rates, future operating performance, estimated base capital expenditures and financing plans, projected capital additions and forecasted annual revenue requirements with respect to rider filings, expected rate increases to customers, expectations and intentions regarding regulatory proceedings, and expected impact on our results of operations, financial condition and cash flows of resettlement calculations and credit losses relating to certain energy transactions, as well as assumptions and other statements are intended to be identified in this document by the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “objective,” “outlook,” “plan,” “project,” “possible,” “potential,” “should,” “will,” “would” and similar expressions. Actual results may vary materially. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update any forward-looking information. The following factors, in addition to those discussed in PSCo’s Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2022, and subsequent filings with the SEC, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: operational safety; successful long-term operational planning; commodity risks associated with energy markets and production; rising energy prices and fuel costs; qualified employee work force and third-party contractor factors; violations of our Codes of Conduct; our ability to recover costs; changes in regulation; reductions in our credit ratings and the cost of maintaining certain contractual relationships; general economic conditions, including recessionary conditions, inflation rates, monetary fluctuations, supply chain constraints and their impact on capital expenditures and/or the ability of PSCo to obtain financing on favorable terms; availability or cost of capital; our customers’ and counterparties’ ability to pay their debts to us; assumptions and costs relating to funding our employee benefit plans and health care benefits; tax laws; uncertainty regarding epidemics, the duration and magnitude of business restrictions including shutdowns (domestically and globally), the potential impact on the workforce, including shortages of employees or third-party contractors due to quarantine policies, vaccination requirements or government restrictions, impacts on the transportation of goods and the generalized impact on the economy; effects of geopolitical events, including war and acts of terrorism; cyber security threats and data security breaches; seasonal weather patterns; changes in environmental laws and regulations; climate change and other weather events; natural disaster and resource depletion, including compliance with any accompanying legislative and regulatory changes; costs of potential regulatory penalties; regulatory changes and/or limitations related to the use of natural gas as an energy source; challenging labor market conditions and our ability to attract and retain a qualified workforce; and our ability to execute on our strategies or achieve expectations related to environmental, social and governance matters including as a result of evolving legal, regulatory and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs, the availability of requisite financing, and changes in carbon markets.


	Three Months Ended March 31
	2023		2022
Operating activities
Net income	$	214	$	176
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	230		194
Deferred income taxes	(31)		(2)

Allowance for equity funds used during construction	(7)		(6)
Provision for bad debts	10		7


Changes in operating assets and liabilities:
Accounts receivable	40		(73)
Accrued unbilled revenues	200		65
Inventories	120		55
Other current assets	24		4
Accounts payable	(195)		8
Net regulatory assets and liabilities	62		36
Other current liabilities	98		57
Pension and other employee benefit obligations	—		(16)
Other, net	(5)		(23)
Net cash provided by operating activities	760		482

Investing activities
Utility capital/construction expenditures	(464)		(384)


Net cash used in investing activities	(464)		(384)

Financing activities
Repayments of short-term borrowings, net	65		(142)
Borrowings under utility money pool arrangement	—		101
Repayments under utility money pool arrangement	—		(63)
Proceeds from issuance of long-term debt	—		(1)
Repayments of long-term debt	(250)		—
Capital contributions from parent	74		92
Dividends paid to parent	(173)		(104)

Net cash used in financing activities	(284)		(117)

Net change in cash, cash equivalents and restricted cash	12		(19)
Cash, cash equivalents and restricted cash at beginning of period	10		25
Cash, cash equivalents and restricted cash at end of period	$	22	$	6

Supplemental disclosure of cash flow information:
Cash paid for interest (net of amounts capitalized)	$	(79)	$	(77)
Cash received (paid) for income taxes, net	20		(2)

Supplemental disclosure of non-cash investing and financing transactions:
Accrued property, plant and equipment additions	$	154	$	121
Inventory transfers to property, plant and equipment	15		9
Operating lease right-of-use assets	17		—
Allowance for equity funds used during construction	7		6


	March 31, 2023		Dec. 31, 2022
Assets
Current assets
Cash and cash equivalents	$	22	$	10
Accounts receivable, net	513		562
Accounts receivable from affiliates	—		11

Accrued unbilled revenues	319		519
Inventories	184		319
Regulatory assets	450		411
Derivative instruments	38		65
Prepayments and other	83		103
Total current assets	1,609		2,000

Property, plant and equipment, net	19,891		19,652

Other assets
Regulatory assets	1,209		1,277
Derivative instruments	19		22
Operating lease right-of-use assets	432		437
Other	266		231
Total other assets	1,926		1,967
Total assets	$	23,426	$	23,619

Liabilities and Equity
Current liabilities
Current portion of long-term debt	$	—	$	250

Short-term debt	359		294
Accounts payable	512		764
Accounts payable to affiliates	86		75
Regulatory liabilities	70		59
Taxes accrued	353		242
Accrued interest	47		59
Dividends payable to parent	130		120
Derivative instruments	20		30
Operating lease liabilities	90		80
Other	112		115
Total current liabilities	1,779		2,088

Deferred credits and other liabilities
Deferred income taxes	1,965		1,983

Regulatory liabilities	2,532		2,489
Asset retirement obligations	482		476
Derivative instruments	10		9
Customer advances	142		144
Pension and employee benefit obligations	13		13
Operating lease liabilities	365		379
Other	200		198
Total deferred credits and other liabilities	5,709		5,691

Commitments and contingencies
Capitalization
Long-term debt	6,611		6,610
Common stock — 100 shares authorized of $0.01 par value; 100 shares outstanding at March 31, 2023 and Dec. 31, 2022, respectively	—		—
Additional paid in capital	7,057		6,992
Retained earnings	2,291		2,260
Accumulated other comprehensive loss	(21)		(22)
Total common stockholder's equity	9,327		9,230
Total liabilities and equity	$	23,426	$	23,619

PUBLIC SERVICE CO. OF COLORADO AND SUBSIDIARIES

Notes to Consolidated Financial Statements (UNAUDITED)

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly, in accordance with GAAP, the financial position of PSCo and its subsidiaries as of March 31, 2023 and Dec. 31, 2022; the results of PSCo’s operations, including the components of net income, comprehensive income and changes in stockholder’s equity for the three months ended March 31, 2023 and 2022; and PSCo’s cash flows for the three months ended March 31, 2023 and 2022.

All adjustments are of a normal, recurring nature, except as otherwise disclosed. Management has also evaluated the impact of events occurring after March 31, 2023, up to the date of issuance of these consolidated financial statements. These statements contain all necessary adjustments and disclosures resulting from that evaluation. The Dec. 31, 2022 balance sheet information has been derived from the audited 2022 consolidated financial statements included in the PSCo Annual Report on Form 10-K for the year ended Dec. 31, 2022.

Notes to the consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP on an annual basis have been condensed or omitted pursuant to such rules and regulations. For further information, refer to the consolidated financial statements and notes thereto included in the PSCo Annual Report on Form 10-K for the year ended Dec. 31, 2022, filed with the SEC on Feb. 23, 2023. Due to the seasonality of PSCo’s electric and natural gas sales, interim results are not necessarily an appropriate base from which to project annual results.


1. Summary of Significant Accounting Policies

The significant accounting policies set forth in Note 1 to the consolidated financial statements in the PSCo Annual Report on Form 10-K for the year ended Dec. 31, 2022 appropriately represent, in all material respects, the current status of accounting policies and are incorporated herein by reference.


2. Accounting Pronouncements

As of March 31, 2023, there was no material impact from the recent adoption of new accounting pronouncements, nor expected material impact from recently issued accounting pronouncements yet to be adopted, on PSCO’s consolidated financial statements.


3. Selected Balance Sheet Data


(Millions of Dollars)	March 31, 2023		Dec. 31, 2022
Accounts receivable, net
Accounts receivable	$	570	$	616
Less allowance for bad debts	(57)		(54)
Accounts receivable, net	$	513	$	562


(Millions of Dollars)	March 31, 2023		Dec. 31, 2022
Inventories
Materials and supplies	$	80	$	80
Fuel	48		68
Natural gas	56		171
Total inventories	$	184	$	319


(Millions of Dollars)	March 31, 2023		Dec. 31, 2022
Property, plant and equipment, net
Electric plant	$	15,928	$	15,771
Natural gas plant	6,021		5,949
Common and other property	1,424		1,415
Plant to be retired (a)	1,288		1,305
Construction work in progress	1,015		877
Total property, plant and equipment	25,676		25,317
Less accumulated depreciation	(5,785)		(5,665)
Property, plant and equipment, net	$	19,891	$	19,652

(a)Amounts include Comanche Units 2 and 3, Craig Units 1 and 2, Hayden Units 1 and 2 and coal generation assets at Pawnee pending facility gas conversion. Amounts are presented net of accumulated depreciation.


4. Borrowings and Other Financing Instruments

Short-Term Borrowings

PSCo 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. 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 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.

Money pool borrowings:


(Amounts in Millions, Except Interest Rates)	Three Months Ended March 31, 2023		Year Ended Dec. 31, 2022
Borrowing limit	$	250	$	250
Amount outstanding at period end	—		—
Average amount outstanding	—		29
Maximum amount outstanding	—		250
Weighted average interest rate, computed on a daily basis	N/A		1.66		%
Weighted average interest rate at period end	N/A		N/A

Commercial Paper — Commercial paper outstanding:


(Amounts in Millions, Except Interest Rates)	Three Months Ended March 31, 2023			Year Ended Dec. 31, 2022
Borrowing limit	$	700		$	700
Amount outstanding at period end	359			294
Average amount outstanding	276			71
Maximum amount outstanding	454			328
Weighted average interest rate, computed on a daily basis	4.90		%	2.56		%
Weighted average interest rate at period end	5.24			4.73

Letters of Credit — PSCo uses letters of credit, generally with terms of one year, to provide financial guarantees for certain obligations. At both March 31, 2023 and Dec. 31, 2022, there were $27 million of letters of credit outstanding under the credit facility. Amounts approximate their fair value and are subject to fees.

Revolving Credit Facility — In order to issue its commercial paper, PSCo must have a revolving credit facility equal or greater than the amount of its commercial paper borrowing limit and cannot issue commercial paper exceeding available capacity under this credit facility.

The credit facility provides short-term financing in the form of notes payable to banks, letters of credit and back-up support for commercial paper borrowings.

PSCo has the right to request an extension of the revolving credit facility termination date for two additional one-year periods. All extension requests are subject to majority bank group approval.

At March 31, 2023, PSCo had the following committed revolving credit facility available (in millions of dollars):


Credit Facility (a)		Drawn (b)		Available
$	700	$	385	$	315

(a) Expires in September 2027.

(b) Includes outstanding commercial paper and letters of credit.

All credit facility bank borrowings, outstanding letters of credit and outstanding commercial paper reduce the available capacity under the credit facility. PSCo had no direct advances on the credit facility outstanding at March 31, 2023 and Dec. 31, 2022.

Long-Term Borrowings

On April 3, 2023, PSCo issued $850 million of 5.25% first mortgage bonds due April 1, 2053.


5. Revenues

Revenue is classified by the type of goods/services rendered and market/customer type. PSCo’s operating revenues consisted of the following:


	Three Months Ended March 31, 2023
(Millions of Dollars)	Electric		Natural Gas		All Other		Total
Major revenue types
Revenue from contracts with customers:
Residential	$	333	$	541	$	4	$	878
C&I	423		216		12		651
Other	14		—		—		14
Total retail	770		757		16		1,543
Wholesale	75		—		—		75
Transmission	25		—		—		25
Other	11		44		—		55
Total revenue from contracts with customers	881		801		16		1,698
Alternative revenue and other	39		10		—		49
Total revenues	$	920	$	811	$	16	$	1,747


	Three Months Ended March 31, 2022
(Millions of Dollars)	Electric		Natural Gas		All Other		Total
Major revenue types
Revenue from contracts with customers:
Residential	$	302	$	386	$	3	$	691
C&I	383		142		2		527
Other	12		—		—		12
Total retail	697		528		5		1,230
Wholesale	66		—		—		66
Transmission	19		—		—		19
Other	12		43		—		55
Total revenue from contracts with customers	794		571		5		1,370
Alternative revenue and other	34		7		12		53
Total revenues	$	828	$	578	$	17	$	1,423


6. Income Taxes

Reconciliation between the statutory rate and ETR:


	Three Months Ended March 31
	2023		2022
Federal statutory rate	21.0	%	21.0	%
State tax (net of federal tax effect)	3.5		3.6
Increases (decreases):
Wind PTCs (a)	(11.7)		(14.8)
Plant regulatory differences (b)	(4.8)		(3.8)
Other tax credits, net operating loss & tax credit allowances	(0.9)		(1.3)
Other (net)	0.3		0.2
Effective income tax rate	7.4	%	4.9	%

(a)Wind PTCs are credited to customers (reduction to revenue) and do not materially impact net income.

(b)Regulatory differences for income tax primarily relate to the credit of excess deferred taxes to customers through the average rate assumption method. Income tax benefits associated with the credit of excess deferred taxes are offset by corresponding revenue reductions.


7. Fair Value of Financial Assets and Liabilities

Fair Value Measurements

Accounting guidance for fair value measurements and disclosures provides a hierarchical framework for disclosing the observability of the inputs utilized in measuring assets and liabilities at fair value.

•Level 1 — Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. The types of assets and liabilities included in Level 1 are actively traded instruments with observable actual trading prices.

•Level 2 — Pricing inputs are other than actual trading prices in active markets but are either directly or indirectly observable as of the reporting date. The types of assets and liabilities included in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.

•Level 3 — Significant inputs to pricing have little or no observability as of the reporting date. The types of assets and liabilities included in Level 3 include those valued with models requiring significant judgment or estimation.

Specific valuation methods include:

Interest Rate Derivatives — Fair values of interest rate derivatives are based on broker quotes that utilize current market interest rate forecasts.

Commodity Derivatives — Methods used to measure the fair value of commodity derivative forwards and options utilize forward prices and volatilities, as well as pricing adjustments for specific delivery locations, and are generally assigned a Level 2 classification. When contracts relate to inactive delivery locations or extend to periods beyond those readily observable on active exchanges, the significance of the use of less observable inputs on a valuation is evaluated and may result in Level 3 classification.

Derivative Activities and Fair Value Measurements

PSCo enters into derivative instruments, including forward contracts, futures, swaps and options, for trading purposes and to manage risk in connection with changes in interest rates and utility commodity prices.

Interest Rate Derivatives — PSCo enters into contracts that effectively fix the interest rate on a specified principal amount of a hypothetical future debt issuance. These financial swaps net settle based on changes in a specified benchmark interest rate, acting as a hedge of changes in market interest rates that will impact specified anticipated debt issuances. These derivative instruments are designated as cash flow hedges for accounting purposes, with changes in fair value prior to occurrence of the hedged transactions recorded as other comprehensive income.

At March 31, 2023, accumulated other comprehensive loss related to interest rate derivatives included $1 million of net losses expected to be reclassified into earnings during the next 12 months as the hedged transactions impact earnings. As of March 31, 2023, PSCo had no unsettled interest rate derivatives.

Wholesale and Commodity Trading — PSCo conducts various wholesale and commodity trading activities, including the purchase and sale of electric capacity, energy, energy-related instruments and natural gas-related instruments, including derivatives. PSCo is allowed to conduct these activities within guidelines and limitations as approved by its risk management committee, comprised of management personnel not directly involved in the activities governed by this policy.

Results of derivative instrument transactions entered into for trading purposes are presented in the consolidated statements of income as electric revenues, net of any sharing with customers. These activities are not intended to mitigate commodity price risk associated with regulated electric and natural gas operations. Sharing of these margins is determined through state regulatory proceedings as well as the operation of the FERC-approved joint operating agreement.

Commodity Derivatives — PSCo enters into derivative instruments to manage variability of future cash flows from changes in commodity prices in its electric and natural gas operations. This could include the purchase or sale of energy or energy-related products, natural gas to generate electric energy, natural gas for resale, and vehicle fuel.

When PSCo enters into derivative instruments that mitigate commodity price risk on behalf of electric and natural gas customers, the instruments are not typically designated as qualifying hedging transactions. The classification of unrealized losses or gains on these instruments as a regulatory asset or liability, if applicable, is based on approved regulatory recovery mechanisms.

As of March 31, 2023, PSCo had no commodity contracts designated as cash flow hedges.

Gross notional amounts of commodity forwards and options:


(Amounts in Millions) (a)(b)	March 31, 2023	Dec. 31, 2022
Megawatt hours of electricity	7	8
Million British thermal units of natural gas	37	43

(a)Not reflective of net positions in the underlying commodities.

(b)Notional amounts for options included on a gross basis, but weighted for the probability of exercise.

Consideration of Credit Risk and Concentrations — PSCo continuously monitors the creditworthiness of counterparties to its interest rate derivatives and commodity derivative contracts prior to settlement and assesses each counterparty’s ability to perform on the transactions set forth in the contracts. Impact of credit risk was immaterial to the fair value of unsettled commodity derivatives presented on the consolidated balance sheets.

PSCo’s most significant concentrations of credit risk with particular entities or industries are contracts with counterparties to its wholesale, trading and non-trading commodity activities.

As of March 31, 2023, three of PSCo’s ten most significant counterparties for these activities, comprising $37 million, or 45%, of this credit exposure, had investment grade credit ratings from S&P Global Ratings, Moody’s Investor Services or Fitch Ratings.

Five of the ten most significant counterparties, comprising $24 million, or 29%, of this credit exposure, were not rated by these external ratings agencies, but based on PSCo’s internal analysis, had credit quality consistent with investment grade.

Two of these significant counterparties, comprising $21 million, or 26%, of this credit exposure, had credit quality less than investment grade, based on internal analysis. Five of these significant counterparties are independent system operators, municipal or cooperative electric entities, Regional Transmission Organizations or other utilities.

Credit Related Contingent Features — Contract provisions for derivative instruments that PSCo enters into, including those accounted for as normal purchase and normal sale contracts and therefore not reflected on the consolidated balance sheets, may require the posting of collateral or settlement of the contracts for various reasons, including if PSCo’s credit ratings are downgraded below its investment grade credit rating by any of the major credit rating agencies.

As of March 31, 2023 and Dec. 31, 2022, there were no derivative liabilities position with such underlying contract provisions.

Certain contracts also contain cross default provisions that may require the posting of collateral or settlement of the contracts if there was a failure under other financing arrangements related to payment terms or other covenants.

As of March 31, 2023 and Dec. 31, 2022, there were no derivative instruments in a liability position with such underlying contract provisions.

Certain derivative instruments are also subject to contract provisions that contain adequate assurance clauses. These provisions allow counterparties to seek performance assurance, including cash collateral, in the event that PSCo’s ability to fulfill its contractual obligations is reasonably expected to be impaired. PSCo had no collateral posted related to adequate assurance clauses in derivative contracts as of March 31, 2023 and Dec. 31, 2022.

Recurring Derivative Fair Value Measurements

Changes in the fair value of natural gas commodity derivatives recognized as regulatory assets and liabilities included immaterial net losses and $1 million of net gains for the three months ended March 31, 2023 and 2022, respectively. The classification as a regulatory asset or liability is based on commission approved regulatory recovery mechanisms.

Changes in Level 3 commodity derivatives:


	Three Months Ended March 31
(Millions of Dollars)	2023		2022
Balance at Jan. 1	$	9	$	(63)
Settlements (a)	—		2
Net transactions recorded during the period:
Gains (losses) recognized in earnings (a)	1		(8)
Balance at March 31	$	10	$	(69)

(a)Relates to commodity trading and is subject to substantial offsetting losses and gains on derivative instruments categorized as levels 1 and 2 in the income statement. See above tables for the income statement impact of derivative activity, including commodity trading gains and losses.

Fair Value of Long-Term Debt

As of March 31, 2023, other financial instruments for which the carrying amount did not equal fair value:


	March 31, 2023				Dec. 31, 2022
(Millions of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion	$	6,611	$	5,801	$	6,860	$	5,881

Fair value of PSCo’s long-term debt is estimated based on recent trades and observable spreads from benchmark interest rates for similar securities. Fair value estimates are based on information available to management as of March 31, 2023 and Dec. 31, 2022 and given the observability of the inputs, fair values presented for long-term debt were assigned as Level 2.


8. Benefit Plans and Other Postretirement Benefits

Components of Net Periodic Benefit Cost (Credit)


	Three Months Ended March 31
	2023		2022		2023		2022
(Millions of Dollars)	Pension Benefits				Postretirement Health Care Benefits
Service cost	$	5	$	7	$	—	$	—
Interest cost (a)	14		10		4		3
Expected return on plan assets (a)	(19)		(19)		(4)		(4)
Amortization of prior service credit (a)	—		—		—		(1)
Amortization of net loss (a)	1		6		1		—

Net periodic benefit cost	1		4		1		(2)
Effects of regulation	3		3		—		1
Net benefit cost recognized for financial reporting	$	4	$	7	$	1	$	(1)

(a)The components of net periodic cost other than the service cost component are included in the line item “Other income, net” in the consolidated statements of income or capitalized on the consolidated balance sheets as a regulatory asset.

In January 2023, contributions totaling $50 million were made across Xcel Energy’s pension plans, of which none was attributable to PSCo. Xcel Energy does not expect additional pension contributions during 2023.


9. Commitments and Contingencies

Legal

PSCo is involved in various litigation matters in the ordinary course of business. The assessment of whether a loss is probable or is a reasonable possibility, and whether the loss or a range of loss is estimable, often involves a series of complex judgments about future events. Management maintains accruals for losses probable of being incurred and subject to reasonable estimation. Management is sometimes unable to estimate an amount or range of a reasonably possible loss in certain situations, including but not limited to when (1) the damages sought are indeterminate, (2) the proceedings are in the early stages, or (3) the matters involve novel or unsettled legal theories.

In such cases, there is considerable uncertainty regarding the timing or ultimate resolution, including a possible eventual loss. For current proceedings not specifically reported herein, management does not anticipate that the ultimate liabilities, if any, would have a material effect on PSCo’s consolidated financial statements. Legal fees are generally expensed as incurred.

Comanche Unit 3 Litigation — In 2021, CORE filed a lawsuit in Denver County District Court, alleging PSCo breached ownership agreement terms by failing to operate Comanche Unit 3 in accordance with prudent utility practices. In January 2022, the Court granted PSCo’s motion to dismiss CORE’s claims for unjust enrichment, declaratory judgment and damages for replacement power costs. In April 2022, CORE filed a supplement to include the January 2022 outage and damages related to this event. Also in 2022, CORE sent notice of withdrawal from the ownership agreement based on the same alleged breaches. In February 2023, CORE disclosed its expert witness, who estimated damages incurred of $270 million. Also in February 2023, the court granted PSCo’s motion precluding CORE from seeking damages related to its withdrawal as part of the lawsuit. PSCo continues to believe CORE's claims are without merit and disputes CORE’s right to withdraw.

Rate Matters

PSCo is involved in various regulatory proceedings arising in the ordinary course of business. Until resolution, typically in the form of a rate order, uncertainties may exist regarding the ultimate rate treatment for certain activities and transactions. Amounts have been recognized for probable and reasonably estimable losses that may result. Unless otherwise disclosed, any reasonably possible range of loss in excess of any recognized amount is not expected to have a material effect on the consolidated financial statements.

Environmental

MGP, Landfill and Disposal Sites

PSCo is investigating, remediating or performing post-closure actions at two MGP, landfill or other disposal sites across its service territory, excluding sites that are being addressed under current coal ash regulations.

PSCo has recognized its best estimate of costs/liabilities from final resolution of these issues, however, the outcome and timing are unknown. In addition, there may be insurance recovery and/or recovery from other potentially responsible parties, offsetting a portion of costs incurred.

Environmental Requirements — Water and Waste

Coal Ash Regulation — PSCo’s operations are subject to federal and state regulations that impose requirements for handling, storage, treatment and disposal of solid waste. Under the CCR Rule, utilities are required to complete groundwater sampling around their applicable landfills and surface impoundments as well as perform corrective actions where offsite groundwater has been impacted.

As of March 31, 2023, PSCo has five regulated ash units in operation.

PSCo has executed an agreement with a third party that will excavate and process ash for beneficial use (at two sites) at a cost of approximately $45 million. An estimated liability has been recorded and amounts are expected to be fully recoverable through regulatory mechanisms.

Investigation and feasibility studies for additional corrective action related to offsite groundwater are ongoing (at three sites). While the results are uncertain, additional costs are estimated to be at least $30 million. A liability has been recorded for the portion of these actions that are estimable/probable, and are expected to be fully recoverable through regulatory mechanisms.

Leases

PSCo evaluates contracts that may contain leases, including PPAs and arrangements for the use of office space and other facilities, vehicles and equipment. A contract contains a lease if it conveys the exclusive right to control the use of a specific asset.

Components of lease expense:


	Three Months Ended March 31.
(Millions of Dollars)	2023		2022
Operating leases
PPA capacity payments	$	22	$	25
Other operating leases (a)	5		6
Total operating lease expense (b)	$	27	$	31
Finance leases
Amortization of ROU assets	$	1	$	1
Interest expense on lease liability	4		4
Total finance lease expense	$	5	$	5

(a)Includes immaterial short-term lease expense for 2023 and 2022.

(b)PPA capacity payments are included in electric fuel and purchased power on the consolidated statements of income. Expense for other operating leases is included in O&M expense and electric fuel and purchased power.

Commitments under operating and finance leases as of March 31, 2023:


(Millions of Dollars)	PPA Operating Leases		Other Operating Lease		Total Operating Leases		Finance Leases
Total minimum obligation	$	437	$	72	$	509	$	432
Interest component of obligation	(46)		(8)		(54)		(316)
Present value of minimum obligation	$	391	$	64	455		116
Less current portion					(90)		(3)
Noncurrent operating and finance lease liabilities					$	365	$	113

Variable Interest Entities

Under certain PPAs, PSCo purchases power from IPPs for which PSCo is required to reimburse fuel costs, or to participate in tolling arrangements under which PSCo procures the natural gas required to produce the energy that they purchase. These specific PPAs create a variable interest in the IPP.

PSCo had approximately 1,509 MW and 1,442 MW of capacity under long-term PPAs at March 31, 2023 and Dec. 31, 2022 with entities that have been determined to be variable interest entities. PSCo concluded that these entities are not required to be consolidated in its financial statements because it does not have the power to direct the activities that most significantly impact the entities’ economic performance. The PPAs have expiration dates through 2032.


11. Segment Information

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 — The regulated electric utility segment generates electricity which is transmitted and distributed in Colorado. This segment includes sales for resale and provides wholesale transmission service to various entities in the United States. The regulated electric utility segment also includes PSCo’s wholesale commodity and trading operations.

•Regulated Natural Gas — The regulated natural gas utility segment transports, stores and distributes natural gas in portions of Colorado.

PSCo also presents All Other, which includes operating segments with revenues below the necessary quantitative thresholds. Those operating segments primarily include steam revenue, appliance repair services and non-utility 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.

Certain costs, such as common depreciation, common O&M expenses and interest expense are allocated based on cost causation allocators across each segment. In addition, a general allocator is used for certain general and administrative expenses, including office supplies, rent, property insurance and general advertising.

PSCo’s segment information:


	Three Months Ended March 31
(Millions of Dollars)	2023		2022
Regulated Electric


Total revenues	$	920	$	828
Net income	99		96
Regulated Natural Gas


Total revenues	$	811	$	578
Net income	113		80
All Other
Total revenues (a)	$	16	$	17
Net income	2		—
Consolidated Total
Total revenues (a)	$	1,747	$	1,423


Net income	214		176

(a) Total revenues include $1 million of other affiliate revenue for both the three months ended March 31, 2023 and 2022.


ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Discussion of financial condition and liquidity for PSCo is omitted per conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q for wholly owned subsidiaries. It is replaced with management’s narrative analysis of the results of operations set forth in General Instruction H(2)(a) of Form 10-Q for wholly owned subsidiaries (reduced disclosure format).

Non-GAAP Financial Measures

The following discussion includes financial information prepared in accordance with GAAP, as well as certain non-GAAP financial measures such as ongoing earnings. Generally, a non-GAAP financial measure is a measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are adjusted from measures calculated and presented in accordance with GAAP.

PSCo’s management uses non-GAAP measures for financial planning and analysis, for reporting of results to the Board of Directors, in determining performance-based compensation and communicating its earnings outlook to analysts and investors. Non-GAAP financial measures are intended to supplement investors’ understanding of our performance and should not be considered alternatives for financial measures presented in accordance with GAAP. These measures are discussed in more detail below and may not be comparable to other companies’ similarly titled non-GAAP financial measures.

Earnings Adjusted for Certain Items (Ongoing Earnings)

Ongoing earnings reflect adjustments to GAAP earnings (net income) for certain items.

We use this non-GAAP financial measure to evaluate and provide details of PSCo’s core earnings and underlying performance. We believe this measurement is useful to investors to evaluate the actual and projected financial performance and contribution of PSCo. For the three months ended March 31, 2023 and 2022, there were no such adjustments to GAAP earnings and therefore GAAP earnings equal ongoing earnings.


Results of Operations

PSCo’s net income was $214 million for the three months ended March 31, 2023, compared to $176 million for the prior year. The higher earnings primarily reflect the timing of recovery of electric and natural gas infrastructure investment and the impact of colder than normal weather, partially offset by increased depreciation, O&M expenses and interest charges. Incremental investment recovery was implemented for electric operations in April 2022 and natural gas operations in November 2022, resulting in higher revenues in the first quarter of 2023 compared to 2022. The year-over-year impact of these higher revenues is not expected to continue throughout the rest of the year. Earnings are not a result of higher natural gas prices as PSCo does not profit on fuel or power costs purchased for its customers.

Electric Margin

Electric margin is presented as electric revenues less electric fuel and purchased power expenses. Expenses incurred for electric fuel and purchased power are generally recovered through various regulatory recovery mechanisms. As a result, changes in these expenses are generally offset in operating revenues.

Electric revenues and fuel and purchased power expenses are impacted by fluctuations in the price of natural gas and coal. However, these fluctuations have minimal impact on margin due to fuel recovery mechanisms. In addition, electric customers receive a credit for PTCs generated, which reduce electric revenue and margin (offset by lower tax expense).

Electric revenues, fuel and purchased power and electric margin and explanation of the changes are listed as follows:


	Three Months Ended March 31
(Millions of Dollars)	2023		2022
Electric revenues	$	920	$	828
Electric fuel and purchased power	(382)		(344)
Electric margin	$	538	$	484


(Millions of Dollars)	Three Months Ended March 31, 2023 vs. 2022
Regulatory rate outcomes	$	27
Wholesale transmission (net)	8
Non-fuel riders	4
Sales and demand (a)	3
Other, net	12
Total increase	$	54

(a)Sales excludes weather impact, net of decoupling.

Natural Gas Margin

Natural gas margin is presented as natural gas revenues less the cost of natural gas sold and transported. Expenses incurred for the cost of natural gas sold are generally recovered through various regulatory recovery mechanisms. As a result, changes in these expenses are generally offset in operating revenues.

Natural gas revenues, cost of natural gas sold and transported and natural gas margin and explanation of the changes are listed as follows:


	Three Months Ended March 31
(Millions of Dollars)	2023		2022
Natural gas revenues	$	811	$	578
Cost of natural gas sold and transported	(501)		(329)
Natural gas margin	$	310	$	249


(Millions of Dollars)	Three Months Ended March 31, 2023 vs. 2022
Regulatory rate outcomes	$	47
Estimated impact of weather	18
Other, net	(4)
Total increase	$	61

Non-Fuel Operating Expenses and Other Items

O&M Expenses — O&M costs increased $14 million year-to-date. The increase is due to timing of regulatory recovery mechanisms, emergent maintenance at generation facilities, higher bad debt expense and the impact of inflationary pressures, including labor increases.

Depreciation and Amortization — Depreciation and amortization expense increased $35 million year-to-date. The increase was primarily due to normal system expansion and new electric and natural gas depreciation rates.

Interest Charges — Interest charges increased $13 million year-to-date, largely due to higher interest rates and increased long-term debt levels to fund capital investments.

Income Taxes — Income tax expense increased $8 million for the first quarter, primarily driven by higher pretax earnings.

See Note 6 to the consolidated financial statements.


Public Utility Regulation and Other

The FERC and state and local regulatory commissions regulate PSCo. PSCo is subject to rate regulation by state utility regulatory agencies, which have jurisdiction with respect to the rates of electric and natural gas distribution companies in Colorado.

Rates are designed to recover plant investment, operating costs and an allowed return on investment. PSCo requests changes in utility rates through commission filings. Changes in operating costs can affect PSCo’s financial results, depending on the timing of rate cases and implementation of final rates. Other factors affecting rate filings are new investments, sales, conservation and demand side management efforts, and the cost of capital.

In addition, the regulatory commissions authorize the ROE, capital structure and depreciation rates in rate proceedings. Decisions by these regulators can significantly impact PSCo’s results of operations.

Except to the extent noted below, the circumstances set forth in Public Utility Regulation included in Item 7 of PSCo’s Annual Report on Form 10-K for the year ended Dec. 31, 2022, appropriately represent, in all material respects, the current status of public utility regulation and are incorporated herein by reference.

Pending and Recently Concluded Regulatory Proceedings

Colorado Electric Rate Case — In November 2022, PSCo filed an electric rate case seeking a net increase of $262 million, or 8.2%. The total request reflects a $312 million increase, which includes $50 million of authorized costs currently recovered through various rider mechanisms. The request is based on a 10.25% ROE, an equity ratio of 55.7% and a 2023 forecast test year with a 2023 year-end rate base of $11.3 billion. PSCo requested rates effective in September 2023.

Next steps in the procedural schedule are expected to be as follows:

•Answer testimony May 3, 2023.

•Rebuttal testimony: May 31, 2023.

•Settlement deadline: June 14, 2023.

•Hearing: July 6-21, 2023.

•Statement of position: Aug. 10, 2023.

A CPUC decision is expected in the third quarter of 2023.

Colorado Resource Plan — In August 2022, the CPUC approved an updated settlement, which will result in the further acceleration of the retirement of the Comanche Unit 3 coal plant, an expected carbon reduction of at least 85% and an 80% renewable mix by 2030. The CPUC deferred a decision on the method of cost recovery for the retiring coal units to a separate docket, which will consider accelerated depreciation, creation of regulatory assets and securitization. In April 2023, PSCo filed a coal cost recovery settlement with the CPUC that includes regulatory asset recovery of the remaining plant balances at retirement and a potential bundled securitization of the remaining coal plant book values including Comanche Unit 3 in 2031.

In December 2022, PSCo commenced the RFP process for generation resources with bids due in March 2023. After reviewing the bids received, PSCo will file a report with the CPUC with recommended resource acquisitions and a CPUC decision on the resources to be acquired is expected in November 2023.

Decoupling Filing — PSCo has a decoupling program, effective April 1, 2020 through Dec. 31, 2023. The program applies to Residential and metered small C&I customers who do not pay a demand charge. The program includes a refund and surcharge cap not to exceed 3% of forecasted base rate revenue for a specified period.

In October 2021, a settlement was reached on Winter Storm Uri costs and also addressed certain components of the 2020 decoupling refunds.

In April 2022, PSCo made its annual filing on this matter. In December 2022, the ALJ approved a settlement between PSCo, CPUC Staff and the UCA. In the first quarter of 2023, PSCo filed a petition for CPUC declaratory judgment to address the treatment of any expired balance under the 3% soft cap provisions. A decision is pending.

As of March 31, 2023, PSCo has recognized a refund for Residential customers and a surcharge for small C&I customers based on 2020, 2021, 2022 and the first quarter of 2023 results.

Transmission Cost Adjustment — In December 2022, the CPUC suspended PSCo’s request for 2023 TCA rate changes. The CPUC Staff protested the TCA on the grounds that only projects resulting in new transmission should be included and no repair or replacement of existing infrastructure should be included. The CPUC consolidated the matter with the pending electric rate case for assessment.

ECA Fuel Recovery — In December 2022, PSCo filed its first quarter 2023 ECA Advice Letter, which sought to recover $123 million of under-recovered 2022 fuel costs over two quarters (instead of one quarter, as more typical). In December 2022, the CPUC found that the $123 million should be removed from the proposed ECA rates, and required PSCo to file a separate application to recover these costs.

In February 2023, PSCo submitted an interim ECA filing which included $70 million of the 2022 under-recovered costs and collections commenced on March 1, 2023. The remaining $53 million of under-recovered costs consists of $25 million of ordinary fuel and purchased energy costs and $28 million costs attributable to coal curtailments resulting from rail transportation labor shortages. PSCo expects to make filings in the second quarter regarding the prudence of costs associated with coal curtailments, and to request that recovery of the remaining $25 million of ordinary fuel and purchased energy costs commence in the third quarter.

GCA NOPR — In June 2021, the CPUC issued a NOPR addressing the recovery of costs through the GCA. The CPUC has proposed a 2-step process aimed at 1) considering near term process changes to the GCA and 2) a longer-term process to evaluate potential performance incentive structures. In step 1, consensus proposed rule amendments to update the process and filing requirements for GCA and related filings have been submitted to the CPUC for consideration. PSCo worked with other utilities and stakeholders regarding consensus proposed rule amendments for step 2, including a provision that each LDC bring forward its own PIM in a future filing. In December 2022, the CPUC approved the consensus proposal. PSCo expects to file its proposed PIM in the second quarter of 2023.

In February 2023, the Governor of Colorado issued an open letter to the CPUC, utilities and other stakeholders directing agencies to take additional steps to address energy costs. It is likely this request will result in the opening of additional dockets to further explore the GCA and other related mechanisms. Additionally, the Colorado Legislature formed a Joint Select Committee to investigate the source of rising utility rates and explore potential actions to prevent future price instability. Legislation has been introduced by members of the Joint Select Committee on a number of topics including natural gas and electric fuel incentive mechanisms, natural gas planning rules, regulatory filing requirements, and non-recovery of certain expenses (e.g., certain organizational or membership dues, tax penalties or fines).

Natural Gas Planning — In the first quarter of 2023, final rules were issued to implement recent state legislation requiring natural gas utilities to develop clean heat plans to meet state greenhouse gas emission reduction targets, as well as updated demand-side management criteria. Additionally, the rules included new comprehensive natural gas infrastructure planning requirements and Certificate of Public Convenience and Necessity application procedures, changes in natural gas line extension policy, and details on emission accounting related to clean heat plans.

Real-Time Energy Imbalance Market — In April 2023, PSCo joined the SPP Western Energy Imbalance Service market which balances generation and load regionally and in real time for participants in the Western Interconnection. PSCo’s participation in the SPP Western Energy Imbalance Service market replaces its joint dispatch agreement while extending the geographic area for which energy sales are made.

Other

Supply Chain

PSCo’s ability to meet customer energy requirements, respond to storm-related disruptions and execute our capital expenditure program are dependent on maintaining an efficient supply chain. Manufacturing processes have experienced disruptions related to scarcity of certain raw materials and interruptions in production and shipping. These disruptions have been further exacerbated by inflationary pressures, labor shortages and the impact of international conflicts/issues. PSCo continues to monitor the situation as it remains fluid and seeks to mitigate the impacts by securing alternative suppliers, modifying design standards, and adjusting the timing of work.

Electric Meters and Transformers

Supply chain issues associated with semi-conductors have delayed the availability of advanced infrastructure meters, which led to a reduced number of meters deployed in 2022. While we have seen improvements in the 2023 deployment plan, the supply chain challenges persist. Full 2023 impacts and mitigation plans are currently being evaluated.

Additionally, the availability of certain transformers is an industry-wide issue that has significantly impacted and in some cases may result in delays in projects and new customer connections. Proposed governmental actions related to transformer efficiency standards may compound these delays in the future. PSCo continues to seek alternative suppliers and prioritize work plans to mitigate impacts of supply constraints.

Solar Resources

In April 2022, the U.S. Department of Commerce initiated an anti-circumvention investigation that would subject CSPV solar panels and cells imported from Malaysia, Vietnam, Thailand, and Cambodia with potential incremental tariffs ranging from 50% to 250%. These countries account for more than 80% of CSPV panel imports.

An interim stay on tariffs has been issued and many significant solar projects have resumed with modified costs and projected in-service dates, including certain PPAs in PSCo. Further policy action, a change in the interim stay of tariffs, or other restrictions on solar imports (i.e., as a result of implementation of the Uyghur Forced Labor Protection Act) could impact project timelines and costs.

Marshall Wildfire

In December 2021, a wildfire ignited in Boulder County, Colorado (the “Marshall Fire”), which burned over 6,000 acres and destroyed or damaged over 1,000 structures. Boulder County authorities are currently investigating the fire and have not yet determined a cause. There were no downed power lines in the ignition area, and nothing PSCo has seen to this point indicates that our equipment or operations caused the fire.

In Colorado, the standard of review governing liability differs from the “inverse condemnation” or strict liability standard utilized in California. In Colorado, courts look to whether electric power companies have operated their system with a heightened duty of care consistent with the practical conduct of its business, and liability does not extend to occurrences that cannot be reasonably anticipated. In addition, PSCo has been operating under a commission approved wildfire mitigation plan and carries wildfire liability insurance.

In March 2022, a class action suit was filed in Boulder County pertaining to the Marshall Fire. In the remote event PSCo was found liable related to this litigation and were required to pay damages, such amounts could exceed our insurance coverage and have a material adverse effect on our financial condition, results of operations or cash flows. In December 2022, the District Court judge denied PSCo’s Motion to Dismiss. An evidentiary hearing regarding our request to dismiss Xcel Energy, Inc. from the suit is scheduled for May 2023.

Environmental

Clean Air Act

GHG Emissions Limits — It is anticipated the EPA will propose rules to limit GHG emissions from new fossil fuel-fired electric generating units and natural gas-fired stationary combustion units under Clean Air Act Section 111(b) as well as emission guidelines under Clean Air Act Section 111(d) to limit GHG emissions from existing fossil fuel-fired electric generating units in 2023.

If any new rules require additional investment, PSCo believes that the cost of these initiatives or replacement generation would be recoverable through rates based on prior state commission practices.

Coal Ash Regulation

In February 2023, the EPA entered into a Consent Decree committing the agency to either issue new proposed rules by May 5, 2023, to regulate inactive CCR landfills under the CCR Rule for the first time or to determine no such rules are necessary by that date.

If proposed rules are issued, the EPA has committed to a May 2024 effective date for those new rules. It is also anticipated that the EPA may issue other CCR proposed rules in 2023 that further expand the scope of the CCR Rule. Until proposed rules are issued, it is not certain what the impact will be on PSCo.

Emerging Contaminants of Concern

PFAS are man-made chemicals that are widely used in consumer products and can persist and bio-accumulate in the environment. PSCo does not manufacture PFAS but because PFAS are so ubiquitous in products and the environment, it may impact our operations.

In September 2022, the EPA proposed to designate two types of PFAS as “hazardous substances” under the CERCLA.

In March 2023, the EPA published a proposed rule that would establish enforceable drinking water standards for certain PFAS chemicals.

The proposed rules could result in new obligations for investigation and cleanup. PSCo is monitoring changes to state laws addressing PFAS. The impact of these proposed regulations is uncertain.

Effluent Limitation Guidelines

In March 2023, the EPA released a proposed rule under the Clean Water Act, setting forth proposed Effluent Limitations Guidelines and Standards for steam generating coal plants. This proposed rule establishes more stringent wastewater discharge standards for bottom ash transport water, flue-gas desulfurization wastewater, and combustion residuals leachate from steam electric power plants, particularly coal-fired power plants. Comments to the proposed regulations are due May 30, 2023. The impact of these proposed regulations is uncertain.


ITEM 4 — CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

PSCo maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms.

In addition, the disclosure controls and procedures ensure that information required to be disclosed is accumulated and communicated to management, including the CEO and CFO, allowing timely decisions regarding required disclosure.

As of March 31, 2023, based on an evaluation carried out under the supervision and with the participation of PSCo’s management, including the CEO and CFO, of the effectiveness of its disclosure controls and procedures, the CEO and CFO have concluded that PSCo’s disclosure controls and procedures were effective.

Internal Control Over Financial Reporting

No changes in PSCo’s internal control over financial reporting occurred during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, PSCo’s internal control over financial reporting.

PART II — OTHER INFORMATION


ITEM 1 — LEGAL PROCEEDINGS

Management is sometimes unable to estimate an amount or range of a reasonably possible loss in certain situations, including but not limited to, when (1) the damages sought are indeterminate, (2) the proceedings are in the early stages, or (3) the matters involve novel or unsettled legal theories. In such cases, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss.

For current proceedings not specifically reported herein, management does not anticipate that the ultimate liabilities, if any, would have a material effect on PSCo’s consolidated financial statements. Legal fees are generally expensed as incurred.

See Note 9 to the consolidated financial statements and Part I Item 2 for further information.


ITEM 1A — RISK FACTORS

PSCo’s risk factors are documented in Item 1A of Part I of its Annual Report on Form 10-K for the year ended Dec. 31, 2022, which is incorporated herein by reference. There have been no material changes from the risk factors previously disclosed in the Form 10-K.


Colorado						84-0296600
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)


Class						Outstanding at April 27, 2023
Common Stock, $0.01 par value						100 shares


PART I — FINANCIAL INFORMATION
Item 1 —	Financial Statements (unaudited)	4
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Cash Flows	6
	Consolidated Balance Sheets	7
	Consolidated Statements of Common Stockholder’s Equity	8
	Notes to Consolidated Financial Statements	9
Item 2 —	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 4 —	Controls and Procedures	18

PART II — OTHER INFORMATION
Item 1 —	Legal Proceedings	19
Item 1A —	Risk Factors	19
Item 6 —	Exhibits	19

SIGNATURES		20


	Pre-Tax Losses Reclassified into Income During the Period from:			Pre-Tax Losses Recognized During the Period in Income
(Millions of Dollars)	Regulatory Assets and Liabilities







Three Months Ended March 31, 2023



Other derivative instruments

Natural gas commodity	9		(a)	(12)		(a)(b)
Total	$	9		$	(12)











Three Months Ended March 31, 2022
Other derivative instruments

Natural gas commodity	2		(a)	(11)		(a)(b)
Total	$	2		$	(11)


Exhibit Number	Description	Report or Registration Statement	Exhibit Reference
3.01*	Amended and Restated Articles of Incorporation, dated July 15, 1998	PSCo Form 10-Q for the quarter ended Sept. 30, 2017	3.01
3.02*	Amended and Restated Bylaws of PSCo, dated Jan. 25, 2019	PSCo Form 10-K for the year ended Dec. 31, 2018	3.02
4.01*	Supplemental Indenture No. 34 dated as of March 1, 2023, between PSCo and U.S. Bank Trust Company, National Association, as successor Trustee, creating $850 million aggregate principal amount of 5.25% First Mortgage Bonds, Series No. 40 due April 1, 2053	PSCo Form 8-K dated April 3, 2023	4.01
31.01	Principal Executive Officer’s certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.02	Principal Financial Officer’s certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.01	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Schema
101.CAL	Inline XBRL Calculation
101.DEF	Inline XBRL Definition
101.LAB	Inline XBRL Label
101.PRE	Inline XBRL Presentation
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Public Service Company of Colorado
(Exact Name of Registrant as Specified in its Charter)


	Common Stock Issued					Retained Earnings		Accumulated Other Comprehensive Loss		Total Common Stockholder's Equity
	Shares	Par Value		Additional Paid In Capital
Three Months Ended March 31, 2023 and 2022
Balance at Dec. 31, 2021	100	$	—	$	6,426	$	2,040	$	(22)	$	8,444
Net income						176				176

Dividends declared to parent						(129)				(129)
Contribution of capital by parent				80						80
Balance at March 31, 2022	100	$	—	$	6,506	$	2,087	$	(22)	$	8,571

Balance at Dec. 31, 2022	100	$	—	$	6,992	$	2,260	$	(22)	$	9,230
Net income						214				214
Other comprehensive income								1		1
Dividends declared to parent						(183)				(183)
Contribution of capital by parent				65						65
Balance at March 31, 2023	100	$	—	$	7,057	$	2,291	$	(21)	$	9,327


		Public Service Company of Colorado

4/27/2023	By:	/s/ BRIAN J. VAN ABEL
		Brian J. Van Abel
		Executive Vice President, Chief Financial Officer
		(Principal Accounting Officer and Principal Financial Officer)