10-Q

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2001

OR

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

For the transition period from                to               

Commission File Number	Exact name of registrant as specified in its charter, State or other jurisdiction of incorporation or organization, Address of principal executive offices and Registrant's Telephone Number, including area code	IRS Employer Identification No.
000-31709	NORTHERN STATES POWER COMPANY (a Minnesota Corporation) 414 Nicollet Mall, Minneapolis, Minn. 55401 Telephone (612) 330-5500	41-1967505
001-3140	NORTHERN STATES POWER COMPANY (a Wisconsin Corporation) 1414 W. Hamilton Ave., Eau Claire, Wisc. 54701 Telephone (715) 839-2621	39-0508315
001-3280	PUBLIC SERVICE COMPANY OF COLORADO (a Colorado Corporation) 1225 17th Street, Denver, Colo. 80202 Telephone (303) 571-7511	84-0296600
001-3789	SOUTHWESTERN PUBLIC SERVICE COMPANY (a New Mexico Corporation) Tyler at Sixth, Amarillo, Tex. 79101 Telephone (303) 571-7511	75-0575400

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /x/ No / /

   Northern States Power Co. (a Minnesota corporation), Northern States Power Co. (a Wisconsin corporation), Public Service Co. of Colorado and Southwestern Public Service Co. meet the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and are therefore filing this Form 10-Q with the reduced disclosure format specified in General Instruction H (2) to such Form 10-Q.

   Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. All outstanding common stock is owned beneficially and of record by Xcel Energy Inc., a Minnesota corporation. Shares outstanding at April 30, 2001:

Northern States Power Co. (a Minnesota Corporation)	Common Stock, $0.01 par value	1,000,000 Shares
Northern States Power Co. (a Wisconsin Corporation)	Common Stock, $100 par value	933,000 Shares
Public Service Co. of Colorado	Common Stock, $0.01 par value	100 Shares
Southwestern Public Service Co.	Common Stock, $1 par value	100 Shares

Table of Contents

PART I—FINANCIAL INFORMATION
Item l.	Financial Statements	2
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	36
Item 6.	Exhibits and Reports on Form 8-K	36

    This combined Form 10-Q is separately filed by Northern States Power Co., a Minnesota corporation (NSP-Minnesota), Northern States Power Co., a Wisconsin corporation (NSP-Wisconsin), Public Service Co. of Colorado (PSCo) and Southwestern Public Service Co. (SPS). NSP-Minnesota, NSP-Wisconsin, PSCo and SPS are all wholly owned subsidiaries of Xcel Energy Inc. Xcel Energy is a registered holding company under the Public Utility Holding Company Act (PUHCA). Additional information on Xcel Energy is available on various filings with the SEC.

    Information contained in this report relating to any individual company is filed by such company on its own behalf. Each registrant makes representations only as to itself and makes no other representations whatsoever as to information relating to the other registrants.

    This report should be read in its entirety. No one section of the report deals with all aspects of the subject matter.

1

PART 1. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
NSP-MINNESOTA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Thousands of Dollars)

			Three Months Ended March 31
			2001			2000
Operating revenues:
	Electric utility		$	614,115		$	550,014
	Gas utility			352,738			163,503
		Total operating revenues		966,853			713,517
Operating expenses:
	Electric fuel and purchased power			243,047			197,458
	Cost of gas sold and transported			288,392			110,503
	Other operating and maintenance expenses			199,724			191,310
	Depreciation and amortization			83,179			80,434
	Taxes (other than income taxes)			51,848			53,055
		Total operating expenses		866,190			632,760
Operating income				100,663			80,757
Other (deductions) income—net				(1,062	)		2,175
Interest charges and financing costs:
	Interest charges—net of amount capitalized			25,114			29,979
	Distributions on redeemable preferred securities of subsidiary trust			3,938			3,938
		Total interest charges and financing costs		29,052			33,917
Income before income taxes				70,549			49,015
Income taxes				28,377			18,778
Net income			$	42,172		$	30,237

The Notes to Consolidated Financial Statements are an integral part of the Financial Statements

2

NSP-MINNESOTA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Thousands of Dollars)

				Three Months Ended March 31
				2001			2000
Operating activities:
	Net income			$	42,172		$	30,237
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			86,727			84,835
		Nuclear fuel amortization			9,441			9,228
		Deferred income taxes			(2,628	)		(3,102	)
		Amortization of investment tax credits			(2,052	)		(2,091	)
		Allowance for equity funds used during construction			423			(1,179	)
		Change in accounts receivable			(2,449	)		37,886
		Change in inventories			14,536			12,006
		Change in other current assets			50,350			22,192
		Change in accounts payable			(79,218	)		(39,336	)
		Change in other current liabilities			24,896			22,806
		Change in other assets and liabilities			24,413			18,772
			Net cash provided by operating activities		166,611			192,254
Investing activities:
	Capital/construction expenditures				(74,788	)		(82,000	)
	Allowance for equity funds used during construction				(423	)		1,179
	Investments in external decommissioning fund				(14,426	)		(8,926	)
	Other investments—net				(9,766	)		(2,402	)
			Net cash used in investing activities		(99,403	)		(92,149	)
Financing activities:
	Short-term borrowings—net				(128,002	)		(12,001	)
	Proceeds from issuance of long-term debt—net				—			7,463
	Repayment of long-term debt, including reacquisition premiums				(364	)		(6,728	)
	Capital contributions from parent				175,000			—
	Dividends and cash distributions paid to parent				(37,606	)		(72,239	)
			Net cash provided by (used) in financing activities		9,028			(83,505	)
	Net increase in cash and cash equivalents				76,236			16,600
	Cash and cash equivalents at beginning of period				11,926			11,344
	Cash and cash equivalents at end of period			$	88,162		$	27,944

The Notes to Consolidated Financial Statements are an integral part of the Financial Statements

3

NSP-MINNESOTA AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Thousands of Dollars)

			March 31 2001			Dec. 31 2000
ASSETS
Current assets:
	Cash and cash equivalents		$	88,162		$	11,926
	Accounts receivable—net of allowance for bad debts of $5,948 and $4,952, respectively			300,304			281,611
	Accounts receivables from affiliates			33,455			49,699
	Accrued unbilled revenues			134,036			194,547
	Materials and supplies inventories at average cost			107,438			103,863
	Fuel and gas inventories at average cost.			33,664			51,775
	Prepayments and other			54,976			44,843
		Total current assets		752,035			738,264
Property, plant and equipment, at cost:
	Electric utility			6,392,600			6,388,697
	Gas utility			666,488			666,078
	Other and construction work in progress			569,277			531,678
		Total property, plant and equipment		7,628,365			7,586,453
	Less: accumulated depreciation			(4,081,970	)		(4,017,813	)
	Nuclear fuel—net of accumulated amortization of $977,369 and $967,928, respectively			90,108			86,499
		Net property, plant and equipment		3,636,503			3,655,139
Other assets:
	Nuclear decommissioning fund investments			546,874			563,812
	Other investments			26,976			24,892
	Regulatory assets			201,222			226,547
	Deferred charges and other			184,186			151,334
		Total other assets		959,258			966,585
		Total Assets	$	5,347,796		$	5,359,988
LIABILITIES AND EQUITY
Current liabilities:
	Current portion of long-term debt		$	303,894		$	303,773
	Short-term debt			231,187			359,189
	Accounts payable			230,348			303,053
	Accounts payable to affiliates			24,451			30,965
	Taxes accrued			189,128			130,870
	Other			128,499			162,683
		Total current liabilities		1,107,507			1,290,533
Deferred credits and other liabilities:
	Deferred income taxes			676,194			678,849
	Deferred investment tax credits			89,035			91,088
	Regulatory liabilities			484,766			496,313
	Benefit obligations and other			153,373			146,541
		Total deferred credits and other liabilities		1,403,368			1,412,791
Long-term debt				1,047,166			1,048,995
Mandatorily redeemable preferred securities of subsidiary trust				200,000			200,000
Common stock—authorized 5,000,000 shares of $0.01 par value, outstanding 1,000,000 shares				10			10
Premium on common stock				658,030			479,387
Retained earnings				954,636			952,889
Leveraged shares held by ESOP at cost				(22,921	)		(24,617	)
		Total common stockholder's equity		1,589,755			1,407,669
Commitments and Contingent Liabilities (see Note 5)
		Total Liabilities and Equity	$	5,347,796		$	5,359,988

The Notes to Consolidated Financial Statements are an integral part of the Financial Statements

4

NSP-WISCONSIN
STATEMENTS OF INCOME (UNAUDITED)
(Thousands of Dollars)

			Three Months Ended March 31
			2001		2000
Operating revenues:
	Electric utility		$	113,892	$	105,893
	Gas utility			69,550		38,561
		Total operating revenues		183,442		144,454
Operating expenses:
	Electric fuel and purchased power			60,523		52,776
	Cost of gas sold and transported			57,032		26,858
	Other operating and maintenance expenses			24,832		24,507
	Depreciation and amortization			10,243		10,522
	Taxes (other than income taxes)			4,062		3,972
		Total operating expenses		156,692		118,635
Operating income				26,750		25,819
Other income—net				109		152
Interest charges and financing costs				5,539		4,708
Income before income taxes				21,320		21,263
Income taxes				8,228		8,512
Net income			$	13,092	$	12,751

The Notes to Financial Statements are an integral part of the Financial Statements

5

NSP-WISCONSIN
STATEMENTS OF CASH FLOWS (UNAUDITED)
(Thousands of Dollars)

				Three Months Ended March 31
				2001			2000
Operating activities:
	Net income			$	13,092		$	12,751
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			10,495			10,760
		Deferred income taxes			806			164
		Amortization of investment tax credits			(205	)		(207	)
		Allowance for equity funds used during construction			(291	)		(75	)
		Undistributed equity earnings of unconsolidated affiliates			(60	)		(114	)
		Change in accounts receivable			1,507			1,214
		Change in inventories			3,275			2,633
		Change in other current assets			14,250			7,543
		Change in accounts payable			(27,251	)		(7,447	)
		Change in other current liabilities			7,304			9,564
		Change in other assets and liabilities			(924	)		(751	)
			Net cash provided by operating activities		21,998			36,035
Investing activities:
	Capital/construction expenditures				(12,621	)		(26,049	)
	Allowance for equity funds used during construction				291			75
	Other investments—net				(21	)		42
		Net cash used in investing activities			(12,351	)		(25,932	)
Financing activities:
	Short-term borrowings—net				(9,500	)		(3,100	)
	Dividends paid to parent				—			(6,749	)
		Net cash used in financing activities			(9,500	)		(9,849	)
	Net increase in cash and cash equivalents				147			254
	Cash and cash equivalents at beginning of period				31			51
	Cash and cash equivalents at end of period			$	178		$	305

The Notes to Financial Statements are an integral part of the Financial Statements

6

NSP-WISCONSIN
BALANCE SHEETS (UNAUDITED)
(Thousands of Dollars)

			March 31 2001			Dec. 31 2000
ASSETS
Current assets:
	Cash and cash equivalents		$	178		$	31
	Accounts receivable—net of allowance for bad debts of $891 and $798, respectively			51,940			53,447
	Accrued unbilled revenues			21,719			29,113
	Materials and supplies inventories at average cost			6,502			6,544
	Fuel and gas inventories at average cost.			4,787			8,021
	Prepayments and other			9,110			15,966
		Total current assets		94,236			113,122
Property, plant and equipment, at cost:
	Electric utility			1,074,469			1,066,446
	Gas utility			123,980			123,979
	Other and construction work in progress			128,658			127,408
		Total property, plant and equipment		1,327,107			1,317,833
	Less: accumulated depreciation			(523,956	)		(515,798	)
		Net property, plant and equipment		803,151			802,035
Other assets
	Other investments			9,948			9,867
	Regulatory assets			37,579			38,536
	Deferred charges and other			24,307			22,515
		Total other assets		71,834			70,918
		Total Assets	$	969,221		$	986,075
LIABILITIES AND EQUITY
Current Liabilities:
	Current portion of long term debt		$	34		$	34
	Short-term debt—notes payable to affiliate			6,400			15,900
	Accounts payable			19,287			37,981
	Accounts payable to affiliates			15,409			25,202
	Taxes accrued			2,610			0
	Interest accrued			7,165			5,570
	Dividend payable to parent company Xcel Energy			11,207			0
	Accrued payroll			5,266			8,395
	Purchased gas cost recovery liability			6,778			390
	Other			5,437			5,596
		Total current liabilities		79,593			99,068
Deferred credits and other liabilities:
	Deferred income taxes			117,066			115,682
	Deferred investment tax credits			16,245			16,451
	Regulatory liabilities			18,905			18,818
	Benefit obligations and other			32,237			32,787
		Total other liabilities		184,453			183,738
Long-term debt				313,022			313,000
Common stock—authorized 1,000,000 shares of $100 par value, outstanding 933,000 shares				93,300			93,300
Premium on common stock				33,417			33,418
Retained earnings				265,436			263,551
		Total common stockholder's equity		392,153			390,269
Commitments and Contingent Liabilities (see Note 5)
		Total Liabilities and Equity	$	969,221		$	986,075

The Notes to Financial Statements are an integral part of the Financial Statements

7

PUBLIC SERVICE CO. OF COLORADO AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Thousands of Dollars)

			Three Months Ended March 31
			2001		2000
Operating revenues:
	Electric utility		$	589,682	$	403,286
	Electric trading			298,432		44,816
	Gas utility			547,800		270,721
	Steam utility			7,500		3,734
		Total operating revenues		1,443,414		722,557
Operating expenses:
	Electric fuel and purchased power			338,815		190,690
	Electric trading costs			277,142		40,675
	Cost of gas sold and transported			448,296		176,349
	Other operating and maintenance expenses			100,037		97,666
	Depreciation and amortization			58,096		50,364
	Taxes (other than income taxes)			21,849		21,346
		Total operating expenses		1,244,235		577,090
Operating income				199,179		145,467
Other income (deductions)—net				4,843		(438	)
Interest charges and financing costs:
	Interest charges—net of amount capitalized			30,165		36,673
	Distributions on redeemable preferred securities of subsidiary trust			3,800		3,800
		Total interest charges and financing costs		33,965		40,473
Income before income taxes				170,057		104,556
Income taxes				62,667		35,797
Net income			$	107,390	$	68,759

The Notes to Consolidated Financial Statements are an integral part of the Financial Statements

8

PUBLIC SERVICE CO. OF COLORADO AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Thousands of Dollars)

				Three Months Ended March 31
				2001			2000
Operating activities:
	Net income			$	107,390		$	68,759
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			59,956			52,384
		Deferred income taxes			3,753			3,586
		Amortization of investment tax credits			(1,030	)		(1,124	)
		Change in accounts receivable			(39,233	)		13,503
		Change in inventories			26,652			33,265
		Change in other current assets			87,102			167,331
		Change in accounts payable			(161,173	)		(145,969	)
		Change in other current liabilities			64,215			17,246
		Change in other assets and liabilities			21,146			(7,005	)
			Net cash provided by operating activities		168,778			201,976
Investing activities:
	Capital/construction expenditures				(69,724	)		(68,493	)
	Proceeds from disposition of property, plant and equipment				2,709			2,203
	Other investments—net				3,245			1,272
			Net cash used for investing activities		(63,770	)		(65,018	)
Financing activities:
	Short-term borrowings—net				94,625			(123,799	)
	Proceeds from issuance of long-term debt—net				100,180			0
	Repayment of long-term debt, including reacquisition premiums				(239,876	)		(749	)
	Dividends paid to parent				(57,615	)		(44,575	)
			Net cash used for financing activities		(102,686	)		(169,123	)
	Net increase (decrease) in cash and cash equivalents				2,322			(32,165	)
	Cash and cash equivalents at beginning of period				15,696			51,731
	Cash and cash equivalents at end of period			$	18,018		$	19,566

The Notes to Consolidated Financial Statements are an integral part of the Financial Statements

9

PUBLIC SERVICE CO. OF COLORADO AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Thousands of Dollars)

			March 31 2001			Dec. 31 2000
ASSETS
Current assets:
	Cash and cash equivalents		$	18,018		$	15,696
	Accounts receivable—net of allowance for bad debts of $10,623 and $11,352, respectively			268,190			228,957
	Accrued unbilled revenues			286,742			369,018
	Recoverable purchased gas and electric energy costs			157,213			159,013
	Derivative instruments valuation—at market			207,709			0
	Materials and supplies inventories at average cost			38,022			41,106
	Fuel and gas inventories at average cost, except for gas storage underground at LIFO			42,642			66,211
	Prepayments and other			14,958			15,974
		Total current assets		1,033,494			895,975
Property, plant and equipment, at cost:
	Electric utility			4,916,125			4,896,863
	Gas utility			1,358,699			1,345,380
	Other and construction work in progress			898,046			876,332
		Total property, plant and equipment		7,172,870			7,118,575
	Less: accumulated depreciation			(2,617,109	)		(2,576,126	)
		Net property, plant and equipment		4,555,761			4,542,449
Other assets:
	Other investments			7,913			11,158
	Regulatory assets			241,016			251,154
	Deferred charges and other			60,356			73,577
		Total other assets		309,285			335,889
		Total Assets	$	5,898,540		$	5,774,313
LIABILITIES AND EQUITY
Current liabilities:
	Current portion of long-term debt		$	2,909		$	142,043
	Short-term debt			249,825			155,200
	Derivative instruments valuation—at market			215,598			0
	Accounts payable			399,439			575,948
	Accounts payable to affiliates			61,910			46,573
	Taxes accrued			135,391			54,718
	Dividends payable			55,229			57,615
	Recovered electric energy costs			24,267			27,060
	Other			132,640			146,309
		Total current liabilities		1,277,208			1,205,466

10

Deferred credits and other liabilities:
	Deferred income taxes			543,616			543,715
	Deferred investment tax credits			82,775			83,804
	Regulatory liabilities			44,215			45,027
	Other deferred credits			24,066			24,632
	Customers' advances for construction			75,373			70,714
	Benefit obligations and other			74,583			73,028
		Total deferred credits and other liabilities		844,628			840,920
Long-term debt				1,610,180			1,610,741
Mandatorily redeemable preferred securities of subsidiary trust				194,000			194,000
Common stock—authorized 100 shares of $0.01 par value; outstanding 100 shares				0			0
Paid-in capital				1,574,835			1,574,835
Retained earnings				400,512			348,351
Accumulated other comprehensive income				(2,823	)		0
		Total common stockholder's equity		1,972,524			1,923,186
Commitments and Contingent Liabilities (see Note 5)
		Total Liabilities and Equity	$	5,898,540		$	5,774,313

The Notes to Consolidated Financial Statements are an integral part of the Financial Statement.

11

SOUTHWESTERN PUBLIC SERVICE CO.
STATEMENTS OF INCOME (UNAUDITED)
(Thousands of Dollars)

			Three Months Ended March 31
			2001		2000
Electric operating revenues			$	329,273	$	216,232
Operating expenses:
	Electric fuel and purchased power			198,379		107,854
	Other operating and maintenance expenses			41,583		35,861
	Depreciation and amortization			20,269		19,354
	Taxes (other than income taxes)			14,909		12,082
		Total operating expenses		275,140		175,151
Operating income				54,133		41,081
Other income—net				1,823		3,410
Interest charges and financing costs:
	Interest charges—net of amount capitalized			12,080		13,342
	Distributions on redeemable preferred securities of subsidiary trust			1,963		1,963
		Total interest charges and financing costs		14,043		15,305
Income before income taxes				41,913		29,186
Income taxes				15,864		10,930
Net income			$	26,049	$	18,256

The Notes to Financial Statements are an integral part of the Financial Statements

12

SOUTHWESTERN PUBLIC SERVICE CO.
STATEMENTS OF CASH FLOWS (UNAUDITED)
(Thousands of Dollars)

				Three months ended March 31
				2001			2000
Operating activities:
	Net income			$	26,049		$	18,256
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			21,355			20,352
		Deferred income taxes			18,632			3,803
		Amortization of investment tax credits			(63	)		(63	)
		Change in accounts receivable			18,831			21,904
		Change in inventories			2,725			(3,484	)
		Change in other current assets			(43,387	)		(18,955	)
		Change in accounts payable			(9,369	)		5,048
		Change in other current liabilities			(19,305	)		(2,590	)
		Change in other assets and liabilities			(2,131	)		(14,889	)
			Net cash provided by operating activities		13,337			29,382
Investing activities:
	Capital/construction expenditures				(27,810	)		(22,356	)
	Proceeds/costs from disposition of property, plant and equipment				2,193			(629	)
	Other investments—net				456			(33	)
			Net cash used for investing activities		(25,161	)		(23,018	)
Financing activities:
	Short-term borrowings—net				54,546			47,488
	Repayment of long-term debt, including reacquisition premiums				168			(27,000	)
	Dividends paid to parent				(22,354	)		(20,957	)
		Net cash provided by (used for) financing activities			32,360			(469	)
	Net increase in cash and cash equivalents				20,536			5,895
	Cash and cash equivalents at beginning of period				10,826			1,532
	Cash and cash equivalents at end of period			$	31,362		$	7,427

The Notes to Financial Statements are an integral part of the Financial Statements

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SOUTHWESTERN PUBLIC SERVICE CO.
BALANCE SHEETS (UNAUDITED)
(Thousands of Dollars)

			March 31 2001			Dec. 31 2000
ASSETS
Current assets:
	Cash and cash equivalents		$	31,362		$	10,826
	Accounts receivable—net of allowance for bad debts of $918 and $845, respectively			54,743			73,986
	Accounts receivable from affiliates			5,304			4,893
	Accrued unbilled revenues			71,404			87,484
	Recoverable electric energy costs.			147,230			104,249
	Materials and supplies inventories at average cost			9,703			13,500
	Fuel and gas inventories at average cost			2,133			1,061
	Prepayments and other			2,976			38
		Total current assets		324,855			296,037
Property, plant and equipment, at cost:
	Electric utility			2,896,642			2,884,702
	Other and construction work in progress			130,394			115,210
		Total property, plant and equipment		3,027,036			2,999,912
	Less: accumulated depreciation			(1,221,488	)		(1,199,158	)
		Net property, plant and equipment		1,805,548			1,800,754
Other assets:
	Notes receivable from affiliate			119,036			119,036
	Other investments			11,838			12,295
	Regulatory assets			71,406			74,359
	Prepaid pension asset			66,604			61,359
	Deferred charges and other			28,401			28,796
		Total other assets		297,285			295,845
		Total Assets	$	2,427,688		$	2,392,636
LIABILITIES AND EQUITY
Current liabilities:
	Short-term debt		$	729,125		$	674,579
	Accounts payable			90,476			97,285
	Accounts payable to affiliates			10,546			13,107
	Taxes accrued			5,361			19,141
	Interest accrued			3,466			7,139
	Dividends payable			21,585			22,354
	Current portion of accumulated deferred income taxes			51,827			36,307
	Other			42,102			57,122
		Total current liabilities		954,488			927,034

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Deferred credits and other liabilities:
	Deferred income taxes			361,002			362,206
	Deferred investment tax credits			4,655			4,718
	Regulatory liabilities			0			1,275
	Derivative instruments valuation—at market			5,465			0
	Benefit obligations and other			23,063			19,268
		Total deferred credits and other liabilities		394,185			387,467
Long-term debt				226,678			226,506
Mandatorily redeemable preferred securities of subsidiary trust				100,000			100,000
Common stock—authorized 200 shares of $1 par value; outstanding 100 shares				0			0
Paid in capital				353,099			353,099
Retained earnings				402,994			398,530
Accumulated other comprehensive income				(3,756	)		0
		Total common stockholder's equity		752,337			751,629
Commitments and Contingent Liabilities (see Note 5)
		Total Liabilities and Equity	$	2,427,688		$	2,392,636

The Notes to Financial Statements are an integral part of the Financial Statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

    In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position of NSP-Minnesota, NSP-Wisconsin, PSCo and SPS (collectively referred to as the Utility Subsidiaries of Xcel Energy) as of March 31, 2001, and Dec. 31, 2000, the results of their operations for the three months ended March 31, 2001 and 2000, and their cash flows for the three months ended March 31, 2001 and 2000. Due to the seasonality of electric and gas sales of the Utility Subsidiaries of Xcel Energy, quarterly and year-to-date results are not necessarily an appropriate base from which to project annual results.

    The accounting policies of NSP-Minnesota, NSP-Wisconsin, PSCo and SPS are set forth in Note 1 to the financial statements in their respective Annual Reports on Form 10-K for the year ended Dec. 31, 2000. The following notes should be read in conjunction with such policies and other disclosures in the Form 10-K's.

1.  Merger to Create Xcel Energy (NSP-Minnesota, NSP-Wisconsin, PSCo and SPS)

    On Aug. 18, 2000, New Century Energies Inc. (NCE) and Northern States Power Co. (NSP) merged and formed Xcel Energy Inc. Xcel Energy, a Minnesota corporation, is a registered holding company under the Public Utility Holding Company Act of 1935. Each share of NCE common stock was exchanged for 1.55 shares of Xcel Energy common stock. NSP shares became Xcel Energy shares on a one-for-one basis. The merger was structured as a tax-free, stock-for-stock exchange for shareholders of both companies (except for fractional shares), and accounted for as a pooling of interests.

    As part of the merger, NSP transferred its existing utility operations that were being conducted directly by NSP at the parent company level to a newly formed wholly-owned subsidiary of Xcel Energy named NSP-Minnesota. The results of NSP-Minnesota for periods prior to the merger have been restated for comparability with post-merger results. Xcel Energy has the following wholly owned public utility subsidiary companies that are Registrants reported herein: NSP-Minnesota, NSP-Wisconsin, PSCo and SPS.

2.  Special Charges (NSP-Minnesota, NSP-Wisconsin, PSCo and SPS)

    Upon consummation of the merger in 2000, Xcel Energy expensed pretax special charges related to its regulated operations totaling $199 million. During 2000, an allocation of approximately $188 million of merger costs was made to Xcel Energy's utility subsidiaries consistent with prior regulatory filings and is reported on the accompanying financial statements as special charges. Of the total pretax special charges recorded by Xcel Energy that related to its regulated operations, $159 million was recorded during the third quarter of 2000, and $40 million was recorded during the fourth quarter of 2000.

    The total pretax charges included $52 million related to one-time transaction-related costs incurred in connection with the merger of NSP and NCE. Also included in the total were $147 million of pretax charges pertaining to incremental costs of transition and integration activities associated with merging operations. The transition costs included costs for severance and related expenses associated with staff reductions of 721 employees, 677 of whom were released through April 30, 2001.

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    A portion of these special charges was accrued as a liability at Dec. 31, 2000. The following table summarizes the change in the liability (reported in other current liabilities) for special charges during the first quarter of 2001.

Millions of Dollars		Dec. 31, 2000 Liability		Accrual Adjustments Expensed	Payments Against Liability			March 31, 2001 Liability
Employee separation and other related costs		$	48	—	$	(9	)	$	39
Regulatory transition costs			5	—		—			5
Other transition and integration costs			2	—		(2	)		—
	Total accrued merger costs	$	55	—	$	(11	)	$	44
NSP-Minnesota portion		$	19	—	$	(5	)	$	14
NSP-Wisconsin portion		$	3	—	$	(1	)	$	2
PSCo portion		$	2	—		—		$	2
SPS portion		$	1	—		—		$	1

3.  Business Developments (NSP-Minnesota)

    In April 2001, NSP-Minnesota selected a developer to add more wind-generated electricity to its portfolio. Chanarambie Power Partners, LLC, will build wind turbines in southwestern Minnesota to add another 80 megawatts of wind power. Completion of the project will mean that NSP-Minnesota has fulfilled a 1994 Minnesota legislative requirement to develop 425 megawatts of Minnesota wind energy relating to the authorization to store spent nuclear fuel in dry casks outside the Prairie Island nuclear plant.

4.  Restructuring and Regulation (NSP-Wisconsin and SPS)

SPS

    Restructuring legislation has been enacted in Texas and New Mexico. Recent developments include a five-year delay in the implementation date for New Mexico and legislation introduced in Texas and Oklahoma to delay the implementation of electric utility restructuring for the SPS system. Regulatory filings before the Public Utility Commission of Texas (PUCT), the New Mexico Public Regulation Commission (NMPRC) and the Federal Energy Regulatory Commission (FERC) are on hold pending final legislative action.

    Due to expected restructuring impacts, SPS discontinued regulatory accounting under SFAS 71 for the generation portion of its business during the second quarter of 2000. SPS' transmission and distribution business continues to meet the requirements of SFAS 71, as that business is expected to remain regulated.

New Mexico Restructuring—In April 1999, New Mexico enacted the Electric Utility Restructuring Act of 1999, which provides for customer choice. In March 2001, the Governor of New Mexico signed into law a five-year delay in the implementation of customer choice. Customer choice is expected to be available in 2007. SPS must submit its transition plan for NMPRC approval by January 2005. By January 2006, SPS must separate its utility operations into at least two entities: energy generation and competitive services, and transmission and distribution utility services, either by the creation of separate affiliates that may be owned by a common holding company or by the sale of assets to one or more third parties. A regulated company, in general, is prohibited from providing unregulated services.

Texas Restructuring—In June 1999, an electric utility restructuring act (SB-7) was passed in Texas, which provides for the implementation of retail competition for most areas of the state, including SPS' service area, beginning January 2002. The Texas Legislature is currently considering amendments to

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SB-7 that would delay the implementation of business separation and customer choice in SPS' market area for five years.

SPS Texas Retail Fuel Factor and Fuel Surcharge Application—SPS has filed an application with the PUCT to increase its fixed fuel factor and to surcharge past fuel cost under-recoveries. Intervenors in the proceeding are protesting SPS' application and are claiming SPS should be crediting revenues from wholesale firm sales to Texas retail eligible fuel expenses. Hearings are scheduled for May 2001 and a final decision is expected by June 2001. SPS opposes the revenue treatment suggested by the Intervenors. The final outcome or impact of the wholesale firm sales on Xcel Energy's earnings will not be known until later in 2001.

NSP-Wisconsin

NSP-Wisconsin Electric Rate Request—On May 11, 2001, NSP-Wisconsin filed an application with the Public Service Commission of Wisconsin (PSCW) requesting an emergency increase in Wisconsin retail electric rates due to significant increases in power supply costs. This increase is necessary to recover fuel and purchased power costs from wholesale suppliers whose commodities are priced at unregulated market prices. In addition, rising gas prices and the potential volatility of wholesale electric prices have combined to increase the cost of power supply. NSP-Wisconsin is requesting a surcharge to be implemented July 1, 2001. If approved, this rate request would increase NSP-Wisconsin's electric revenue by approximately $6.4 million for 2001.

5.  Commitments and Contingent Liabilities (NSP-Minnesota, NSP-Wisconsin and PSCo)

    Lawsuits and claims arise in the normal course of business. Management, after consultation with legal counsel, has recorded an estimate of the probable cost of settlement or other disposition of them.

    Xcel Energy's Utility Subsidiaries have been or are currently involved with the cleanup of contamination from certain hazardous substances at several sites. In many situations, Xcel Energy's Utility Subsidiaries are pursuing, or intend to pursue, insurance claims and believes it will recover some portion of these costs through such claims. Additionally, where applicable, Xcel Energy's Utility Subsidiaries are pursuing, or intend to pursue, recovery from other potentially responsible parties and through the rate regulatory process. To the extent any costs are not recovered through the options listed above, Xcel Energy's Utility Subsidiaries would be required to recognize an expense for such unrecoverable amounts.

    The circumstances set forth in Notes 12 and 13 to the financial statements in NSP-Minnesota's, NSP-Wisconsin's, PSCo's and SPS' Annual Reports on Form 10-K for the year-ended Dec. 31, 2000, appropriately represent, in all material respects, the current status of commitments and contingent liabilities, including those regarding public liability for claims resulting from any nuclear incident, except as for the following updated developments.

NSP-Minnesota

Conservation Incentive Recovery—In June 1999, the Minnesota Public Utilities Commission (MPUC) denied NSP-Minnesota recovery of 1998 lost margins, load management discounts and incentives associated with state-mandated programs for electric energy conservation. NSP-Minnesota recorded a $35 million charge in 1999, based on this action. NSP-Minnesota appealed the MPUC decision and in December 2000, the Minnesota Court of Appeals reversed the MPUC decision.

    In January 2001, the MPUC appealed the lower court decision to the Minnesota Supreme Court. On Feb. 23, 2001, the Minnesota Supreme Court declined to hear the MPUC's appeal. As of March 31, 2001, NSP-Minnesota had recorded a liability of approximately $41 million, including carrying charges, for potential refunds to customers, pending the resolution of this matter.

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NSP-Minnesota is awaiting an order from the MPUC regarding the implementation of the appeals court decision before adjusting any liabilities recorded for this matter.

NSP-Wisconsin

French Island—NSP-Wisconsin's French Island plant generates electricity by burning a mixture of wood waste and refuse derived fuel. The fuel is derived from municipal solid waste furnished under a contract with LaCrosse County, Wisconsin. In 1997, the EPA found that the French Island plant was a "small municipal waste combustor" and therefore not subject to EPA regulations applicable to large combustors. In October 2000, the EPA reversed its decision and found that the plant was subject to the large combustor regulations. Those regulations became effective on Dec. 19, 2000. NSP-Wisconsin did not have adequate time to install the emission controls necessary to come into compliance with the large combustor regulations by the compliance date. As a result, on March 29, 2001, the EPA issued a finding of violation to the company. On April 2, 2001, a conservation group sent NSP-Wisconsin a notice of intent to sue under the citizen suit provisions of the Clean Air Act. In addition, the state of Wisconsin has alleged that the French Island plant has violated an emission limit contained in its state emission permit. NSP-Wisconsin is engaged in negotiations with La Crosse County regarding the effect of these issues on the contract for delivery of waste to the French Island plant. It is also attempting to work with the EPA, the state, and the conservation group to resolve the environmental compliance issues related to the facility. Resolution of these issues, whether through litigation or settlement, may require changes in the French Island plant's operations, the installation of control equipment and/or the payment of penalties.

PSCo

Postemployment Benefits—PSCo adopted accrual accounting for postemployment benefits under SFAS No. 112—"Employers Accounting for Postemployment Benefits" in 1994. The costs of these benefits were historically recorded on a pay-as-you go basis and, accordingly, PSCo recorded regulatory assets in anticipation of obtaining future rate recovery of these costs. PSCo recovered its FERC jurisdictional portion of these costs. PSCo requested approval to recover its Colorado retail natural gas jurisdictional portion in a 1996 retail rate case and its retail electric jurisdictional portion in the electric earnings test filing for 1997. In the 1996 rate case, the Colorado Public Utilities Commission (CPUC) allowed recovery of postemployment benefit costs on an accrual basis, but denied PSCo's request to amortize the regulatory asset. PSCo appealed this decision to the Denver District Court. In 1998, the CPUC deferred the final determination of the regulatory treatment of the electric jurisdictional costs pending the outcome of PSCo's appeals on the natural gas rate case. On Dec. 16, 1999, the Denver District Court affirmed the decision by the CPUC. On Jan. 31, 2000, PSCo filed a Notice of Appeal with the Colorado Supreme Court and in February 2001 presented oral arguments. A final decision on this matter is expected during 2001. PSCo continues to believe that it will ultimately be allowed to recover this regulatory asset. If PSCo is unsuccessful in its appeal, the unrecoverable portion of deferral amounts totaling approximately $23 million will be written off.

6.  Short-Term Borrowings and Financing Activities (NSP-Minnesota, NSP-Wisconsin, PSCo and SPS)

NSP-Minnesota

    At March 31, 2001, NSP-Minnesota had approximately $231 million of short-term debt outstanding at a weighted average interest rate of 5.35 percent.

    In April 2001, NSP-Minnesota filed a $600 million long-term debt shelf registration with the SEC. NSP-Minnesota intends to issue debt under this shelf registration during the second or third quarter of 2001.

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NSP-Wisconsin

    At March 31, 2001, NSP-Wisconsin had approximately $6 million of short-term notes payable to NSP-Minnesota outstanding at a weighted average interest rate of 5.35 percent.

PSCo

    At March 31, 2001, PSCo had approximately $250 million of short-term debt outstanding at a weighted average interest rate of 5.45 percent.

SPS

    At March 31, 2001, SPS had approximately $729 million of short-term debt outstanding at a weighted average interest rate of 5.54 percent.

7.  Segment Information (NSP-Minnesota, NSP-Wisconsin, PSCo and SPS)

    Xcel Energy's utility subsidiaries each have two reportable segments Electric Utility and Gas Utility, with the exception of SPS, which has only a Electric Utility reportable segment. All figures are in thousands of dollars.

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NSP-Minnesota

Three months ended: March 31, 2001			Electric Utility		Gas Utility		All Other			Consolidated Total
Revenues from:
	External customers		$	613,936	$	351,166	$	—		$	965,102
	Internal customers			179		1,572		—			1,751
		Total revenue		614,115		352,738		—			966,853
Segment net income			$	26,162	$	16,133	$	(123	)	$	42,172
March 31, 2000
Revenues from:
	External customers		$	549,852	$	162,976	$	—		$	712,828
	Internal customers			162		527		—			689
		Total revenue		550,014		163,503		—			713,517
Segment net income			$	17,880	$	12,461	$	(104	)	$	30,237
NSP-Wisconsin
Three months ended: March 31, 2001			Electric Utility		Gas Utility		All Other			Consolidated Total
Revenues from:
	External customers		$	113,842	$	69,109	$	—		$	182,951
	Internal customers			50		441		—			491
		Total revenue		113,892		69,550		—			183,442
Segment net income			$	8,118	$	4,974	$	—		$	13,092
March 31, 2000
Revenues from:
	External customers		$	105,853	$	37,877	$	—		$	143,730
	Internal customers			40		684		—			724
		Total revenue		105,893		38,561		—			144,454
Segment net income			$	8,181	$	4,570	$	—		$	12,751
PSCo
Three months ended: March 31, 2001			Electric Utility		Gas Utility		All Other			Consolidated Total
Revenues from:
	External customers		$	888,081	$	547,239	$	7,500		$	1,442,820
	Internal customers			33		561		—			594
		Total revenue		888,114		547,800		7,500			1,443,414
Segment net income			$	70,185	$	25,309	$	11,896		$	107,390
March 31, 2000
Revenues from:
	External customers		$	448,102	$	270,721	$	3,734		$	722,557
	Internal customers			—		—		—			—
		Total revenue		448,102		270,721		3,734			722,557
Segment net income			$	40,470	$	24,075	$	4,214		$	68,759

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SPS

    SPS operates in the regulated electric utility industry providing wholesale and retail electric services in the states of Texas, New Mexico, Kansas and Oklahoma. Revenues from external customers were $329.2 million and $216.2 million for the three months ended March 31, 2001 and 2000, respectively.

8.  Adoption of Statement of Financial Accounting Standards (SFAS) No. 133 (PSCo and SPS)

    On Jan. 1, 2001, Xcel Energy's Utility Subsidiaries adopted Statement of Financial Accounting Standard (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activity," as amended. This statement requires that all derivative instruments be recorded on the balance sheet at fair value. Changes in the derivative instrument's fair value must be recognized currently in earnings unless specific accounting criteria are met or specific exclusions are applicable. Accounting for qualifying hedges within the terms of SFAS 133 allows a derivative instrument's gains and losses to offset related results on the hedged item in the income statement, to the extent effective. SFAS 133 requires that a company formally document, designate and assess the effectiveness of transactions that receive hedge accounting.

    Xcel Energy's Utility Subsidiaries have applied SFAS No. 133 to energy and energy related commodities, financial instruments, long-term power sales contracts and long-term gas purchase contracts used to mitigate variability in earnings due to fluctuations in spot market prices, hedge fuel requirements at generation facilities and protect investment in fuel inventories. SFAS No. 133 also applies to various interest rate swaps used to mitigate the risks associated with movements in interest rates.

    Xcel Energy conducts energy acquisition, wholesale sales and trading activities through its utility operations. The primary objective of Xcel Energy's energy acquisition and trading operations is to maximize asset value while simultaneously minimizing pricing and credit risks. These activities are subject to SFAS 133 as they typically meet the definition of derivative instruments. For the company's regulated utility customers, Xcel Energy acquires electric capacity and energy as well as natural gas supplies. Included in this operation are certain wholesale trading activities to optimize asset utilization. Xcel Energy is exposed to some level of market and credit risk under its obligation to manage its retail electric distribution and natural gas needs. Xcel Energy enters into derivative instruments to hedge fuel requirements, inventories, excess generation capacity, and purchase power contracts.

    Xcel Energy's Utility Subsidiaries formally document hedge relationships, including the identification of the hedging instrument and the hedged transaction, as well as the risk management objectives and strategies for undertaking the hedged transaction. Derivatives are recorded in the balance sheet at fair value. Xcel Energy's Utility Subsidiaries also formally assesses both at inception and at least quarterly thereafter, whether the derivative instruments being used are highly effective in offsetting changes in either the fair value or cash flows of the hedged items.

    For fair value hedges, both the effective and ineffective portion of the changes in the fair value of the derivative instrument, along with the gain or loss on the hedged item are required to be recorded currently in earnings and reported in the income statement. The effective portion of the changes in fair value of a derivative instrument that is designated as a cash flow hedge is reported in other comprehensive income. When the hedged item is realized, the gain or loss included in other comprehensive income is reported in the income statement. Additionally, both the fair value changes excluded from the effectiveness assessment, the time value component of options, and the ineffective portion of the changes in fair value of the derivative instruments used as cash flow hedges are recorded in the income statement.

22

    The adoption of SFAS 133 on Jan. 1, 2001, by Xcel Energy's Utility Subsidiaries did not result in an impact to earnings. However, upon adoption of SFAS 133 PSCo and SPS recorded a net transition gain (loss) of approximately $1.6 million and $(2.6) million, respectively, recorded in other comprehensive income. The impact to other comprehensive income is related to existing cash flow hedges during increasing price conditions.

    PSCo's earnings for the first quarter of 2001 were increased by approximately $1.1 million (before tax), due to the mark-to-market impacts of SFAS 133 on the valuation of derivative instruments and is recorded in electric fuel and purchased power in the income statement. During the first quarter of 2001, PSCo and SPS recorded after-tax losses of approximately $3.1 million and $1.2 million, respectively. These losses related to changes in fair values of the derivatives accounted for as hedges recorded on Jan. 1, 2001 and new hedges recorded during the period. Also during the first quarter of 2001, PSCo and SPS reclassified from other comprehensive income into earnings $1.1 million and $(0.1) million of accumulated net derivative gains (losses), respectively. The cumulative balance in other comprehensive income relating to SFAS 133 valuation adjustments as of March 31, 2001, were losses of approximately $2.8 million and $3.8 million for PSCo and SPS, respectively.

Interest rates—To manage interest rate risk, SPS has entered into interest rate swaps that effectively fix the interest payments of certain floating rate debt instruments. Interest rate swap agreements are accounted for as cash flow hedges. The effective portion of the cumulative gain or loss on the derivative instrument is reported as a component of other comprehensive income in shareholders' equity and recognized into earnings as the underlying interest payments are made. No ineffectiveness was recognized on interest rate cash flow hedges during the first quarter of 2001. SPS expects to reclassify into earnings in interest expense during the next twelve months net losses from other comprehensive income of approximately $0.2 million.

Energy and energy related commodities—Xcel Energy's Utility Subsidiaries are exposed to commodity price variability and credit risk in their generation, retail distribution and energy trading operations. In order to manage these commodity price risks, Xcel Energy's utility subsidiaries enter into financial instruments, which may take the form of fixed price, floating price or indexed sales or purchases, and options, such as puts, calls, basis transactions and swaps.

    Derivatives designated to be hedges by Xcel Energy's Utility Subsidiaries are accounted for as cash flow hedges. The effective portion of the cumulative gain or loss on the derivative instrument is reported as a component of other comprehensive income in shareholders' equity and recognized into earnings in the same period or periods during which the hedged transaction affects earnings i.e., when electricity is generated, fuel is consumed etc.

    At March 31, 2001, PSCo had various commodity related contracts extending through October 2002. PSCo expects to reclassify into earnings during the next twelve months net losses from other comprehensive income of approximately $2.7 million.

    For the quarter ending March 31, 2001, PSCo recorded a $0.3 million net gain related to cash flow hedge ineffectiveness and a $1.4 million net gain related to derivative instruments excluded from the assessment of effectiveness in the income statement. Two cash flow hedges were discontinued during the period because the hedged transactions were no longer probable. The amount transferred out of other comprehensive income for these hedges was $0.02 million.

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9.  Comprehensive Income (NSP-Minnesota, NSP-Wisconsin, PSCo, SPS)

NSP-Minnesota

    Comprehensive income equals net income for the quarter ended March 31, 2001 and 2000.

NSP-Wisconsin

    Comprehensive income equals net income for the quarter ended March 31, 2001 and 2000.

PSCo

    The components of total comprehensive income are shown below:

	Three months ended March 31
	2001			2000
Net income	$	107,390		$	68,759
Cumulative effect of accounting change-SFAS 133		1,649			—
Gains (losses) on derivatives		(4,472	)		—
Comprehensive income	$	104,567		$	68,759

    Accumulated comprehensive loss at March 31, 2001 relates to SFAS 133 valuation adjustments.

SPS

    The components of total comprehensive income are shown below:

	Three months ended March 31
	2001			2000
Net income	$	26,049		$	18,256
Cumulative effect of accounting change-SFAS 133		(2,626	)		—
Gains (losses) on derivatives		(1,130	)		—
Comprehensive income	$	22,293		$	18,256

    Accumulated comprehensive loss at March 31, 2001 relates to SFAS 133 valuation adjustments.

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REPORTS OF INDEPENDENT PUBLIC ACCOUNTANTS

To Northern States Power Company-Minnesota:

    We have reviewed the accompanying consolidated balance sheet of Northern States Power Company-Minnesota (a Minnesota corporation) and subsidiaries as of March 31, 2001, and the related consolidated statements of income and cash flows for the three-month period ended March 31, 2001. These financial statements are the responsibility of the Company's management.

    We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

    Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States.

    We have previously audited, in accordance with auditing standards generally accepted in the United States, the balance sheet of Northern States Power Company-Minnesota and subsidiaries as of December 31, 2000 (not presented herein), and, in our report dated March 2, 2001, we expressed an unqualified opinion on that statement. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2000, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

ARTHUR ANDERSEN LLP

Minneapolis, Minnesota
May 14, 2001

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To Northern States Power Company-Wisconsin:

    We have reviewed the accompanying balance sheet of Northern States Power Company-Wisconsin (a Wisconsin corporation) and subsidiaries as of March 31, 2001, and the related statements of income and cash flows for the three-month period ended March 31, 2001. These financial statements are the responsibility of the Company's management.

    We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

    Based on our review, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States.

    We have previously audited, in accordance with auditing standards generally accepted in the United States, the balance sheet of Northern States Power Company-Wisconsin as of December 31, 2000 (not presented herein), and, in our report dated March 2, 2001, we expressed an unqualified opinion on that statement. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2000, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

ARTHUR ANDERSEN LLP

Minneapolis, Minnesota
May 14, 2001

26

To Public Service Company of Colorado:

    We have reviewed the accompanying consolidated balance sheet of Public Service Company of Colorado (a Colorado corporation) and subsidiaries as of March 31, 2001, and the related consolidated statements of income and cash flows for the three-month periods ended March 31, 2001 and 2000. These financial statements are the responsibility of the Company's management.

    We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

    Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States.

    We have previously audited, in accordance with auditing standards generally accepted in the United States, the balance sheet of Public Service Company of Colorado and subsidiaries as of December 31, 2000 (not presented herein), and, in our report dated March 2, 2001, we expressed an unqualified opinion on that statement. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2000, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

ARTHUR ANDERSEN LLP

Minneapolis, Minnesota
May 14, 2001

27

To Southwestern Public Service Company:

    We have reviewed the accompanying balance sheet of Southwestern Public Service Company (a New Mexico corporation) as of March 31, 2001, and the related statements of income and cash flows for the three-month periods ended March 31, 2001 and 2000. These financial statements are the responsibility of the Company's management.

    We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

    Based on our review, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States.

    We have previously audited, in accordance with auditing standards generally accepted in the United States, the balance sheet of Southwestern Public Service Company as of December 31, 2000 (not presented herein), and, in our report dated March 2, 2001, we expressed an unqualified opinion on that statement. In our opinion, the information set forth in the accompanying balance sheet as of December 31, 2000, is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.

ARTHUR ANDERSEN LLP

Minneapolis, Minnesota
May 14, 2001

28

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

    Discussion of financial condition and liquidity for the Utility Subsidiaries of Xcel Energy are 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 and the results of operations as set forth in general instructions H (2) (a) of Form 10-Q for wholly owned subsidiaries (reduced disclosure format).

Forward Looking Information

    The following discussion and analysis by management focuses on those factors that had a material effect on the financial condition and results of operations of Xcel Energy's Utility Subsidiaries during the periods presented, or are expected to have a material impact in the future. It should be read in conjunction with the accompanying unaudited Consolidated Financial Statements and Notes.

    Except for the historical statements contained in this report, the matters discussed in the following discussion and analysis are forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements are intended to be identified in this document by the words "anticipate," "estimate," "expect," "objective," "outlook," "possible," "potential" and similar expressions. Actual results may vary materially. Factors that could cause actual results to differ materially include, but are not limited to:

•

general economic conditions, including their impact on capital expenditures and the ability of the Xcel Energy's utility subsidiaries to obtain financing on favorable terms;



•

business conditions in the energy industry;



•

competitive factors, including the extent and timing of the entry of additional competition in the markets served by the Utility Subsidiaries of Xcel Energy;



•

unusual weather;



•

state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an impact on rate structures, and affect the speed and degree to which competition enters the electric and gas markets;



•

risks associated with the California power markets; and



•

the other risk factors listed from time to time by the Utility Subsidiaries of Xcel Energy in reports filed with the Securities and Exchange Commission (SEC), including Exhibit 99.01 to this Report on Form 10-Q for the quarter ended March 31, 2001.

Market Risks

    The utility subsidiaries of Xcel Energy and its subsidiaries are exposed to market risks, including changes in commodity prices, interest rates and currency exchange rates as disclosed in Management's Discussion and Analysis in their annual reports on Form 10-K for the year ended Dec. 31, 2000. The Utility Subsidiaries of Xcel Energy have limited exposure to commodity price and interest rate risk due to cost-based rate regulation. There have been no material changes in the market risk exposures that affect the quantitative and qualitative disclosures presented as of Dec. 31, 2000.

29

NSP-MINNESOTA'S MANAGEMENT'S DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS

    NSP-Minnesota's net income was approximately $42.2 million for the first three months of 2001, compared with approximately $30.2 million for the first three months of 2000.

Electric Utility Margins

    The following table details the change in electric revenue and margin. Electric production expenses tend to vary with changing retail and wholesale sales requirements and unit cost changes in fuel and purchased power. Due to fuel clause cost recovery mechanisms for retail customers in several states and the ability to vary wholesale prices with changing market conditions, most fluctuations in energy costs do not affect electric margin. However, the fuel clause cost recovery in the Minnesota, North Dakota and South Dakota jurisdictions does not allow for complete recovery of all variable production expenses and, therefore, higher costs in periods of extreme temperatures can result in an adverse earnings impact.

		Three months ended March 31
(Millions of dollars)
		2001		2000
Electric retail, firm wholesale and other revenue		$	568	$	509
Short-term wholesale revenue			46		41
	Total electric utility revenue		614		550
Electric retail and firm wholesale fuel and purchase power			210		170
Short-term wholesale fuel and purchase power			33		27
	Total electric utility fuel and purchase power		243		197
Electric retail, firm wholesale and other margin			358		339
Short-term wholesale margin			13		14
	Total electric utility margin	$	371	$	353

    Electric revenue increased by approximately $64 million, or 11.7 percent, in the first quarter of 2001, compared with the first three months of 2000. Electric margin increased by approximately $18 million, or 5.1 percent, in the first quarter of 2001. The increase in retail revenue was primarily due to an increase in purchase power costs recovered in electric rates. Additionally, more favorable temperatures during the first quarter of 2001 increased retail revenue by approximately $12 million and retail margin by approximately $9 million. Retail revenue and margin were reduced by approximately $2 million in the first quarter of 2001 due to a rate reduction in Minnesota that was agreed to as part of the merger approval process. The increase in revenue and margin was also attributed to the shared trading margins from the Joint Operating Agreement (JOA) for the operating utilities of Xcel Energy. The JOA was approved and placed into effect by the FERC as part of the NSP/NCE Merger in August 2000.

Gas Utility Margins

    The following table details the change in gas revenue and margin. The cost of gas tends to vary with changing sales requirements and unit cost of gas purchases. However, due to purchased gas cost

30

recovery mechanisms for retail customers, fluctuations in the cost of gas have little effect on gas margin.

	Three months ended March 31
(Millions of dollars)
	2001			2000
Gas revenue	$	353		$	164
Cost of gas purchased and transported		(288	)		(111	)
Gas margin	$	65		$	53

    Gas revenue for the first three months of 2001 increased by $189 million, or 115.7 percent, compared with the first three months of 2000, largely due to higher cost of gas. Gas margin for the first three months of 2001 increased by $12 million, or 22.6 percent, compared with the first three months of 2000. Cooler winter temperatures increased gas sales in the first quarter of 2001, increasing gas revenues by approximately $27 million and gas margins by approximately $9 million.

Non-Fuel Operating Expense and Other Costs

    Regulated Other Operating and Maintenance Expense increased by approximately $9 million, or 4.6 percent, for the first three months of 2001, compared with the first three months of 2000. The change is largely due to increased reserves for uncollectible accounts and start-up costs to establish the Nuclear Management Co.

    Depreciation and Amortization Expense increased by approximately $3 million, or 3.4 percent, for the three months of 2001, compared with the first three months of 2000, primarily due to increased capital additions to utility plant.

    Interest expense decreased by approximately $5 million, or 16.2 percent, for the first three months of 2001, compared with the first three months of 2000. The change is largely due to decreased debt levels and decreasing interest rates.

31

NSP-WISCONSIN'S MANAGEMENT'S DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS

    NSP-Wisconsin's net income was $13.1 million for the first three months of 2001, compared with $12.8 million for the first three months of 2000.

Electric Utility Margins

    The following table details the change in electric revenue and margin. Electric production expenses tend to vary with changing retail and wholesale sales requirements and unit cost changes in fuel and purchased power. Wisconsin does not have an automatic retail electric fuel adjustment clause. Instead, it has a procedure, which compares actual monthly and anticipated annual fuel costs with those costs that were included in the latest retail electric rates approved by the PSCW. If the comparison results in a difference outside a certain range, the PSCW may hold hearings limited to fuel costs and revise rates. Therefore, the fuel clause cost recovery in Wisconsin does not allow for complete recovery of all variable production expenses and higher costs, particularly in periods of extreme temperatures, can result in an adverse earnings impact.

	Three months ended March 31
(Millions of dollars)
	2001			2000
Electric revenue	$	114		$	106
Electric fuel and purchased power		(61	)		(53	)
Electric margin	$	53		$	53

    Electric revenue increased, and margin for the first three months of 2001 was relatively flat for the first quarter of 2001, compared with the first quarter of 2000. Electric revenue increased for the first quarter of 2001, largely due to a fuel surcharge that was in effect during the first quarter of 2001 to recover increased fuel and purchased power costs.

Gas Utility Margins

    The following table details the change in gas revenue and margin. The cost of gas tends to vary with changing sales requirements and unit cost of gas purchases. However, due to purchased gas cost recovery mechanisms for retail customers, fluctuations in the cost of gas have little effect on gas margin.

	Three months ended March 31
(Millions of dollars)
	2001			2000
Gas revenue	$	70		$	39
Cost of gas purchased and transported		(57	)		(27	)
Gas margin	$	13		$	12

    Gas revenue for the first three months of 2001 increased by $31.0 million, or 80.4 percent, compared with the first three months of 2000, largely due to the higher cost of natural gas. Gas margin for the first three months of 2001 increased by approximately $1 million, compared with the first three months of 2000, largely due to more favorable temperatures, which increased gas revenue by approximately $3.8 million and gas margin by approximately $1.4 million.

32

Non-Fuel Operating Expense and Other Costs

    Regulated Other Operation and Maintenance Expense increased by approximately $0.3 million, or 1.3 percent, for the first three months of 2001, compared with the first three months of 2000. The change is largely due to expense timing and general inflation.

    Depreciation and Amortization Expense decreased by approximately $0.3 million, or 2.7 percent, for the three months of 2001, compared with the first three months of 2000. Increased capital additions were offset by decreases due to computer equipment and software becoming fully depreciated.

    Interest expense increased by approximately $0.8 million, or 17.7 percent, for the first three months of 2001 compared with the first three months of 2000, due to increased long-term debt levels.

PSCo'S MANAGEMENT'S DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS

    PSCo's net income was $107.4 million for the first three months of 2001, compared with $68.8 million for the first three months of 2000.

Electric Utility Margins

    The following table details the change in electric revenue and margin. Electric production expenses tend to vary with changing retail and wholesale sales requirements and unit cost changes in fuel and purchased power. Electric margins reflect the impact of sharing of energy costs and savings relative to a target cost per delivered kilowatt-hour and certain trading margins under the incentive cost adjustment (ICA). In addition to the ICA, PSCo has other adjustment clauses that allow certain costs to be passed through to retail customers. The Qualifying Facilities Capacity Cost Adjustment (QFCCA) provides for recovery of purchased capacity costs from certain Qualifying Facilities projects not otherwise reflected in base electric rates. The fuel clause cost recovery does not allow for complete recovery of all variable production expenses and higher costs can result in an adverse earnings impact.

		Three months ended March 31
(Millions of dollars)
		2001		2000
Electric retail and firm wholesale revenue		$	351	$	382
Short-term wholesale revenue			239		21
	Total electric utility revenue		590		403
Electric retail and firm wholesale fuel and purchase power			172		171
Short-term wholesale fuel and purchase power			167		20
	Total electric utility fuel and purchase power		339		191
Electric retail and firm wholesale margin			179		211
Short-term wholesale margin			72		1
	Total electric utility margin	$	251	$	212

    Electric revenue increased by approximately $187 million, or 46.4 percent, in the first quarter of 2001. Electric margin increased by approximately $39 million, or 18.4 percent, in the first quarter of 2001. Retail margin declined in the first quarter of 2001, due to increased fuel and purchased power costs, which are not completely recoverable from customers in Colorado due to various sharing mechanisms. Retail revenue and margin was reduced by approximately $3 million in the first quarter of 2001, due to a rate reduction in Colorado that was agreed to as part of the merger approval process. Short-term wholesale revenue and margin increased due to the expansion of the wholesale marketing operations and favorable market conditions.

33

Gas Utility Margins

    The following table details the change in gas revenue and margin. The cost of gas tends to vary with changing sales requirements and unit cost of gas purchases. PSCo has in place a Gas Cost Adjustment mechanism for natural gas sales, which recognizes the majority of the effects of changes in the cost of gas purchased for resale and adjusts revenues to reflect such changes in costs on a timely basis. Therefore, fluctuations in the cost of gas have little effect on gas margin.

	Three months ended March 31
(Millions of dollars)
	2001			2000
Gas revenue	$	548		$	271
Cost of gas purchased and transported		(448	)		(176	)
Gas margin	$	100		$	95

    Gas revenue for the first three months of 2001 increased by $277 million, or 102 percent, compared with the first three months of 2000, due to higher cost of gas and sales growth. Gas margin for the first three months of 2001 increased by $5 million, or 5.3 percent, compared with the first three months of 2000, due to cooler temperatures in the first quarter of 2001, which increased gas sales.

Electric Trading Margins

    Trading revenues and costs of goods sold do not include the revenue and production costs associated with energy produced from generation assets. The following table details the changes in electric trading revenue and margin. Trading margins reflect the impact of sharing of certain trading margins under the ICA.

	Three months ended March 31
(Millions of dollars)
	2001			2000
Trading revenue	$	298		$	45
Trading cost of sales		(277	)		(41	)
Trading margin	$	21		$	4

    Trading revenue increased by approximately $253 million and trading margin increased by approximately $17 million in 2000. The increase in trading revenue and margin is a result of the expansion of PSCo's electric trading. The trading revenue and margin was reduced under the provisions of the JOA for the operating utilities of Xcel Energy. The JOA requires certain PSCo trading margins to be shared with NSP-Minnesota and SPS and was approved and placed into effect by the FERC as part of the NSP/NCE Merger in August 2000.

Non-Fuel Operating Expense and Other Costs

    Regulated Other Operation and Maintenance Expense increased by approximately $2.4 million, or 2.4 percent, for the first three months of 2001, compared with the first three months of 2000. The change is largely due to general inflation and increased costs due to customer growth.

    Depreciation and Amortization Expense increased by approximately $7.7 million, or 15.4 percent, for the first three months of 2001, compared with the first three months of 2000, primarily due to increased amortization costs of software and increased capital additions to utility plant.

    Interest expense decreased by approximately $6.5 million, or 17.7 percent, for the first three months of 2001, compared with the first three months of 2000.

34

    Other income and expense increased in the first quarter of 2001, compared with the first quarter of 2000. In March 2001, PSCo sold its Boulder Hydro facility in Colorado and recorded a gain of $11 million (before tax) on this transaction. The gain on this sale will be shared with customers due to its inclusion in the PSCo Electric Earnings Test in Colorado.

SPS' MANAGEMENT'S DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS

    SPS' net income was $26.0 million for the first three months of 2001, compared with $18.3 million for the first three months of 2000.

Electric Utility Margins

    The following table details the change in electric revenue and margin. Electric production expenses tend to vary with changing retail and wholesale sales requirements and unit cost changes in fuel and purchased power. Fuel and purchased power costs are recoverable in SPS' Texas jurisdiction through a fixed fuel factor, which is included in rates. In the New Mexico retail jurisdiction, fuel and purchased energy costs are adjusted through a fuel clause and a fixed annual factor. In all other jurisdictions, SPS currently recovers substantially all increases and refunds substantially all decreases in fuel and purchased power costs pursuant to monthly adjustment clauses. Due to these fuel clause cost recovery mechanisms for retail customers and the ability to vary wholesale prices with changing market conditions, most fluctuations in energy costs do not affect electric margin. However, the fuel clause cost recovery does not allow for complete recovery of all variable production expenses and, therefore, higher costs can result in an adverse earnings impact.

		Three months ended March 31
(Millions of dollars)
		2001		2000
Electric retail, firm wholesale and other revenue		$	328	$	214
Short-term wholesale revenue			1		2
	Total electric utility revenue		329		216
Electric retail and firm wholesale fuel and purchase power			197		106
Short-term wholesale fuel and purchase power			1		2
	Total electric utility fuel and purchase power		198		108
Electric retail, firm wholesale and other margin			131		108
Short-term wholesale margin			0		0
	Total electric utility margin		131		108

    Electric revenue increased by approximately $113 million, or 52.3 percent, in the first quarter of 2001. Electric margin increased by approximately $23 million, or 21.3 percent, in the first quarter of 2001. Electric revenues increased in the first quarter of 2001, largely due to increases in fuel and purchased power costs, particularly the increased cost of natural gas generation. More favorable temperatures during the first quarter of 2001 increased retail revenue by approximately $9 million and retail margin by approximately $5 million. In addition, recovery of higher transmission costs from the Southwest Power Pool increased electric revenue and margin by approximately $8 million for the first quarter of 2001. The increase in revenue and margin was also attributed to the shared trading margins from the JOA for the operating utilities of Xcel Energy. The JOA was approved and placed into effect by the FERC as part of the NSP/NCE Merger in August 2000.

35

Non-Fuel Operating Expense and Other Costs

    Regulated Other Operation and Maintenance Expense increased by approximately $5.7 million, or 16 percent, for the first three months of 2001, compared with the first three months of 2000. The change is largely due to increased transmission costs from the Southwest Power Pool (which are offset by increased electric revenue).

    Depreciation and Amortization Expense increased by approximately $0.9 million, or 4.7 percent, for the first three months of 2001, compared with the first three months of 2000, primarily due to increased capital additions to utility plant.

    Interest expense decreased by approximately $1.3 million, or 9.5 percent, for the first three months of 2001, compared with the first three months of 2000. The change is largely due to lower interest expense due to a shift to more short-term debt and less long-term debt.

Part II. OTHER INFORMATION
Item 1. Legal Proceedings

    In the normal course of business, various lawsuits and claims have arisen against the Utility Subsidiaries of Xcel Energy. Management, after consultation with legal counsel, has recorded an estimate of the probable cost of settlement or other disposition for such matters. See Notes 4 and 5 of the Financial Statements in this Form 10-Q for further discussion of legal proceedings, including Regulatory Matters and Commitments and Contingent Liabilities, which are hereby incorporated by reference. Reference also is made to Item 3 of NSP-Minnesota, NSP-Wisconsin's, PSCo's and SPS' 2000 Form 10-K for a description of certain legal proceedings presently pending. There are no new significant cases to report against the Utility Subsidiaries of Xcel Energy and there have been no notable changes in the previously reported proceedings, except as set forth below.

Light Rail Transit (LRT)—On Feb. 16, 2001, NSP-Minnesota filed a suit in the United States District Court in Mpls., against the Minnesota Metropolitan Council, Minnesota Department of Transportation, State of Minnesota and the Federal Transit Administration to prevent pave-over of NSP-Minnesota's underground facilities during construction of the LRT system. NSP-Minnesota is also seeking recovery of relocation expenses. State defendants countersued, seeking delay damages and a $330 million surety bond. A hearing on state defendants' Motion for Preliminary Injunction is scheduled for May 15, 2001. This matter is at the very early stages of litigation. NSP-Minnesota denies the merits of the defendants' countersuits and intends to vigorously defend against their claims.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

    The following Exhibits are filed with this report:

15(a)	Letter from Arthur Andersen LLP regarding unaudited interim information for NSP-Minnesota.
15(b)	Letter from Arthur Andersen LLP regarding unaudited interim information for PSCo.
15(C)	Letter from Arthur Andersen LLP regarding unaudited interim information for SPS.
99.01	Statement pursuant to Private Securities Litigation Reform Act.

36

(b) Reports on Form 8-K

    The following reports on Form 8-K were filed either during the three months ended March 31, 2001, or between March 31, 2001, and the date of this report:

NSP-Minnesota

    None

NSP-Wisconsin

    None.

PSCo

    None.

SPS

    None.

37

NORTHERN STATES POWER CO. (A MINNESOTA CORPORATION) SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on May 14, 2001.

Northern States Power Co. (a Minnesota corporation) (Registrant)
	/s/ DAVID E. RIPKA David E. Ripka Vice President and Controller
	/s/ EDWARD J. MCINTYRE Edward J. McIntyre Vice President and Chief Financial Officer

NORTHERN STATES POWER CO. (A WISCONSIN CORPORATION) SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on May 14, 2001.

Northern States Power Co. (a Wisconsin corporation) (Registrant)
	/s/ DAVID E. RIPKA David E. Ripka Vice President and Controller
	/s/ EDWARD J. MCINTYRE Edward J. McIntyre Vice President and Chief Financial Officer

38

PUBLIC SERVICE CO. OF COLORADO SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on May 14, 2001.

Public Service Co. of Colorado (Registrant)
	/s/ DAVID E. RIPKA David E. Ripka Vice President and Controller
	/s/ EDWARD J. MCINTYRE Edward J. McIntyre Vice President and Chief Financial Officer

SOUTHWESTERN PUBLIC SERVICE CO.

    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on May 14, 2001.

Southwestern Public Service Co. (Registrant)
	/s/ GARY L. GIBSON Gary L. Gibson President and Chairman
	/s/ DAVID HUDSON David Hudson Secretary & Treasurer

39

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PART 1. FINANCIAL INFORMATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
NSP–MINNESOTA'S MANAGEMENT'S DISCUSSION AND ANALYSIS
Part II. OTHER INFORMATION
Part II. OTHER INFORMATION
SIGNATURES

EX-15.(A)

Exhibit 15 (a)

May 14, 2001

Northern States Power Company-Minnesota:

    We are aware that Northern States Power Company-Minnesota has incorporated by reference in its Registration Statement (Form S-3, File No. 333-59098) pertaining to debt securities, its Form 10-Q for the quarter ended March 31, 2001, which includes our report dated May 14, 2001, covering the unaudited financial statements contained therein. Pursuant to Regulation C of the Securities Act of 1933, that report is not considered a part of the registration statement prepared or certified by our Firm or a report prepared or certified by our Firm within the meaning of Sections 7 and 11 of the Act.

Very truly yours,

ARTHUR ANDERSEN LLP

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EX-15.(B)

Exhibit 15 (b)

May 14, 2001

Public Service Company of Colorado:

    We are aware that Public Service Company of Colorado has incorporated by reference in its Registration Statement (Form S-3, File No. 33-37431) as amended on Dec. 4, 1990, pertaining to the shelf registration of Public Service Co. of Colorado's First Mortgage Bonds; its Registration Statement (Form S-3, File No. 33-51167) pertaining to the shelf registration of Public Service Co. of Colorado's First Collateral Trust Bonds; its Registration Statement (Form S-3, File No. 33-54877) pertaining to the shelf registration of Public Service Co. of Colorado's First Collateral Trust Bonds and Cumulative Preferred Stock and its Registration Statement (Form S-3, File No. 333-81791) pertaining to the shelf registration of Public Service Co. of Colorado's Senior Debt Securities, its Form 10-Q for the quarter ended March 31, 2001, which includes our report dated May 14, 2001, covering the unaudited consolidated financial statements contained therein. Pursuant to Regulation C of the Securities Act of 1933, that report is not considered a part of the registration statement prepared or certified by our Firm or a report prepared or certified by our Firm within the meaning of Sections 7 and 11 of the Act.

Very truly yours,

ARTHUR ANDERSEN LLP

41

EX-15.(C)

Exhibit 15 (c)

May 14, 2001

Southwestern Public Service Company:

    We are aware that Southwestern Public Service Company has incorporated by reference in its Registration Statement (Form S-3, File No. 333-05199) pertaining to Southwestern Public Service Company's Preferred Stock and Debt Securities, its Form 10-Q for the quarter ended March 31, 2001, which includes our report dated May 14, 2001, covering the unaudited financial statements contained therein. Pursuant to Regulation C of the Securities Act of 1933, that report is not considered a part of the registration statement prepared or certified by our Firm or a report prepared or certified by our Firm within the meaning of Sections 7 and 11 of the Act.

Very truly yours,

ARTHUR ANDERSEN LLP

42

EX-99.01

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Exhibit 99.01

Utility Subsidiaries of Xcel Energy Cautionary Factors

    The Private Securities Litigation Reform Act provides a "safe harbor" for forward-looking statements to encourage such disclosures without the threat of litigation, providing those statements are identified as forward-looking and are accompanied by meaningful, cautionary statements identifying important factors that could cause the actual results to differ materially from those projected in the statement. Forward-looking statements are made in written documents and oral presentations of the Utility Subsidiaries of Xcel Energy. These statements are based on management's beliefs as well as assumptions and information currently available to management. When used in the Utility Subsidiaries of Xcel Energy's documents or oral presentations, the words "anticipate," "estimate," "expect," "projected," objective," "outlook," "forecast," "possible," "potential" and similar expressions are intended to identify forward-looking statements. In addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements, factors that could cause the actual results of the Utility Subsidiaries of Xcel Energy to differ materially from those contemplated in any forward-looking statements include, among others, the following:

•

Economic conditions, including inflation rates and monetary fluctuations;



•

Trade, monetary, fiscal, taxation and environmental policies of governments, agencies and similar organizations in geographic areas where the Utility Subsidiaries of Xcel Energy have a financial interest;



•

Customer business conditions, including demand for their products or services and supply of labor and materials used in creating their products and services;



•

Financial or regulatory accounting principles or policies imposed by the Financial Accounting Standards Board, the SEC, the Federal Energy Regulatory Commission and similar entities with regulatory oversight;



•

Availability or cost of capital such as changes in: interest rates; market perceptions of the utility industry, Xcel Energy or any of its subsidiaries; or security ratings;



•

Factors affecting utility and nonutility operations such as unusual weather conditions; catastrophic weather-related damage; unscheduled generation outages, maintenance or repairs; unanticipated changes to fossil fuel, nuclear fuel or gas supply costs or availability due to higher demand, shortages, transportation problems or other developments; nuclear or environmental incidents; or electric transmission or gas pipeline constraints;



•

Employee workforce factors, including loss or retirement of key executives, collective bargaining agreements with union employees, or work stoppages;



•

Increased competition in the utility industry;



•

State, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an impact on rate structures and affect the speed and degree to which competition enters the electric and gas markets; industry restructuring initiatives; transmission system operation and/or administration initiatives; recovery of investments made under traditional regulation; nature of competitors entering the industry; retail wheeling; a new pricing structure; and former customers entering the generation market;



•

Rate-setting policies or procedures of regulatory entities, including environmental externalities, which are values established by regulators assigning environmental costs to each method of electricity generation when evaluating generation resource options;

43

•

Nuclear regulatory policies and procedures, including operating regulations and spent nuclear fuel storage;



•

Social attitudes regarding the utility and power industries;



•

Risks associated with the California power market;



•

Cost and other effects of legal and administrative proceedings, settlements, investigations and claims;



•

Technological developments that result in competitive disadvantages and create the potential for impairment of existing assets;



•

Factors associated with nonregulated investments, including conditions of final legal closing, foreign government actions, foreign economic and currency risks, political instability in foreign countries, partnership actions, competition, operating risks, dependence on certain suppliers and customers, domestic and foreign environmental and energy regulations; and



•

Other business or investment considerations that may be disclosed from time to time in the SEC filings of the Utility Subsidiaries of Xcel Energy or in other publicly disseminated written documents.

    The Utility Subsidiaries of Xcel Energy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing review of factors should not be construed as exhaustive.

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