4. Borrowings and Other Financing Instruments

Short-Term Borrowings

Commercial Paper - PSCo meets its short-term liquidity requirements primarily through the issuance of commercial paper and borrowings under its credit facility with a borrowing limit of $700 million, of which there were no borrowings outstanding during the three months ended Dec. 31, 2011. Commercial paper outstanding for PSCo was as follows:

(Amounts in Millions, Except Interest Rates)	Twelve Months Ended Dec. 31, 2011			Twelve Months Ended Dec. 31, 2010			Twelve Months Ended Dec. 31, 2009
Borrowing limit	$	700		$	675		$	675
Amount outstanding at period end		-			269			95
Average amount outstanding		73			49			9
Maximum amount outstanding		304			275			105
Weighted average interest rate, computed on a daily basis		0.37	%		0.37	%		0.70	%
Weighted average interest rate at end of period		N/A			0.42			0.35

Credit Facilities - In order to use its commercial paper program to fulfill short-term funding needs, PSCo must have a revolving credit facility in place at least equal to the amount of its commercial paper borrowing limit and cannot issue commercial paper in an aggregate amount exceeding available capacity under the credit agreement.

During 2011, PSCo executed a new four-year credit agreement. The total size of the credit facility is $700 million and terminates in March 2015. PSCo has the right to request an extension of the revolving termination date for two additional one-year periods, subject to majority bank group approval.

The credit facility provides short-term financing in the form of notes payable to banks, letters of credit and back-up support for commercial paper borrowings. Other features of PSCo's credit facility include:

The credit facility may be increased by up to $100 million.

The credit facility has a financial covenant requiring that PSCo's debt-to-total capitalization ratio be less than or equal to 65 percent. PSCo was in compliance as its debt-to-total capitalization ratio was 45 percent at Dec. 31, 2011. If PSCo does not comply with the covenant, an event of default may be declared, and if not remedied, any outstanding amounts due under the facility can be declared due by the lender.

The credit facility has a cross-default provision that provides PSCo will be in default on its borrowings under the facility if PSCo or any of its subsidiaries whose total assets exceed 15 percent of PSCo's consolidated total assets, default on certain indebtedness in an aggregate principal amount exceeding $75 million.

The interest rates under the line of credit are based on the Eurodollar rate or an alternate base rate, plus a borrowing margin of 0 to 200 basis points per year based on the applicable credit ratings.

The commitment fees, also based on applicable long-term credit ratings, are calculated on the unused portion of the line of credit at a range of 10 to 35 basis points per year.

At Dec. 31, 2011, PSCo had the following committed credit facility available (in millions):

Credit Facility			Drawn (a)			Available
$	700.0		$	4.9		$	695.1

(a)	Includes outstanding letters of credit.

All credit facility bank borrowings, outstanding letters of credit and outstanding commercial paper reduce the available capacity under the credit facility. PSCo had no direct advances on the credit facility outstanding at Dec. 31, 2011 and 2010.

Letters of Credit - PSCo uses letters of credit, generally with terms of one year, to provide financial guarantees for certain operating obligations. At Dec. 31, 2011 and 2010, there were $4.9 million and $4.7 million of letters of credit outstanding, respectively. The contract amounts of these letters of credit approximate their fair value and are subject to fees determined in the marketplace.

Money Pool - Xcel Energy Inc. and its utility subsidiaries have established a money pool arrangement that allows for short-term investments in and borrowings between the utility subsidiaries. Xcel Energy Inc. may make investments in the utility subsidiaries at market-based interest rates; however, the money pool arrangement does not allow the utility subsidiaries to make investments in Xcel Energy Inc. With a borrowing limit of $250 million, PSCo had no borrowings outstanding during the three months ended Dec. 31, 2011. Money pool borrowings outstanding for PSCo were as follows:

(Amounts in Millions, Except Interest Rates)	Twelve Months Ended Dec. 31, 2011			Twelve Months Ended Dec. 31, 2010			Twelve Months Ended Dec. 31, 2009
Borrowing limit	$	250		$	250		$	250
Amount outstanding at period end		-			-			84
Average amount outstanding		3			8			28
Maximum amount outstanding		53			84			145
Weighted average interest rate, computed on a daily basis		0.35	%		0.33	%		1.10	%
Weighted average interest rate at end of period		N/A			N/A			0.36

Long-Term Borrowings

Generally, all real and personal property used in or in connection with the electric utility business of PSCo is subject to the liens of its first mortgage indentures. Additionally, debt premiums, discounts and expenses are amortized over the life of the related debt. The premiums, discounts and expenses associated with refinanced debt are deferred and amortized over the life of the related new issuance, in accordance with regulatory guidelines.

In August 2011, PSCo issued $250 million of 4.75 percent first mortgage bonds due Aug. 15, 2041. In November 2010, PSCo issued $400 million of 3.2 percent first mortgage bonds, due Nov. 15, 2020.

Maturities of long-term debt are as follows:

(Millions of Dollars)
2012	$	606
2013		257
2014		282
2015		8
2016		8

PSCo plans to refinance the current portion of long-term debt coming due in 2012.

Deferred Financing Costs - Other assets included deferred financing costs of approximately $18.5 million and $18.3 million, net of amortization, at Dec. 31, 2011 and 2010, respectively. PSCo is amortizing these financing costs over the remaining maturity periods of the related debt.