Segments and Related Information

12 Months Ended

Dec. 31, 2011

Segments and Related Information [Abstract]

Segments and Related Information

14.   Segments and Related Information

Operating results from the regulated electric utility and regulated natural gas utility are each separately and regularly reviewed by the chief operating decision maker to evaluate the dual performance of PSCo.  PSCo's performance is evaluated based on profit or loss generated from the product or service provided.  These segments are managed separately because the revenue streams are dependent upon regulated rate recovery, which is separately determined for each segment.

Given the similarity of its regulated electric and regulated natural gas utility operations, PSCo has the following reportable segments:  regulated electric, regulated natural gas and all other.

· PSCo's regulated electric utility segment generates electricity which is transmitted and distributed in Colorado.  In addition, this segment includes sales for resale and provides wholesale transmission service to various entities in the United States.  Regulated electric utility also includes PSCo's commodity trading operations.

· PSCo's regulated natural gas utility segment transports, stores and distributes natural gas in portions of Colorado.

· Revenues from operating segments not included above are below the necessary quantitative thresholds and are therefore included in the all other category.  Those primarily include steam revenue, appliance repair services and nonutility real estate activities.

Asset and capital expenditure information is not provided for PSCo's reportable segments because as an integrated electric and natural gas utility, PSCo operates significant assets that are not dedicated to a specific business segment, and reporting assets and capital expenditures by business segment would require arbitrary and potentially misleading allocations which may not necessarily reflect the assets that would be required for the operation of the business segments on a stand-alone basis.

To report income from continuing operations for regulated electric and regulated natural gas utility segments, the majority of costs are directly assigned to each segment. However, some costs, such as common depreciation, common O&M expenses and interest expense are allocated based on cost causation allocators.  A general allocator is used for certain general and administrative expenses, including office supplies, rent, property insurance and general advertising.

The accounting policies of the segments are the same as those described in Note 1.

(Thousands of Dollars)	Regulated Electric		Regulated Natural Gas		All Other			Reconciling Eliminations			Consolidated Total
2011
Operating revenues from external customers	$	3,114,370	$	1,087,749	$	38,683		$	-		$	4,240,802
Intersegment revenues		318		242		-			(560	)		-
Total revenues	$	3,114,688	$	1,087,991	$	38,683		$	(560	)	$	4,240,802
Depreciation and amortization	$	265,078	$	59,189	$	4,315		$	-		$	328,582
Interest charges and financing costs		149,291		33,249		939			-			183,479
Income tax expense (benefit)		202,355		30,957		(4,951	)		-			228,361
Net income		334,516		55,446		6,841			-			396,803

2010
Operating revenues from external customers	$	3,055,045	$	1,075,446	$	33,879		$	-		$	4,164,370
Intersegment revenues		236		154		-			(390	)		-
Total revenues	$	3,055,281	$	1,075,600	$	33,879		$	(390	)	$	4,164,370
Depreciation and amortization	$	226,374	$	53,535	$	4,230		$	-		$	284,139
Interest charges and financing costs		133,518		29,623		3,497			-			166,638
Income tax expense (benefit)		198,139		36,278		(5,236	)		-			229,181
Net income		299,148		70,279		30,293			-			399,720

2009
Operating revenues from external customers	$	2,678,578	$	1,093,959	$	35,772		$	-		$	3,808,309
Intersegment revenues		266		79		-			(345	)		-
Total revenues	$	2,678,844	$	1,094,038	$	35,772		$	(345	)	$	3,808,309
Depreciation and amortization	$	200,776	$	50,795	$	4,491		$	-		$	256,062
Interest charges and financing costs		121,434		25,242		1,084			-			147,760
Income tax expense (benefit)		123,047		57,375		(10,017	)		-			170,405
Net income		242,265		67,288		13,767			-			323,320