17. Acquisition of Generation Assets

In December 2010, PSCo purchased Blue Spruce Energy Center and Rocky Mountain Energy Center from Calpine Development Holdings, Inc. and Riverside Energy Center LLC for $739.0 million plus an additional $3.0 million for working capital adjustments. The working capital adjustments consisted of the settlement of PSCo's most recent purchases of energy and capacity under terminated purchased power agreements, adjusted for accrued operating liabilities of the acquired plants of $6.5 million.

The Blue Spruce Energy Center is a 310 MW simple cycle natural gas-fired power plant that began commercial operations in 2003. The Rocky Mountain Energy Center is a 652 MW combined-cycle natural gas-fired power plant that began commercial operations in 2004. Both power plants previously provided energy and capacity to PSCo under purchased power agreements, which were set to expire in 2013 and 2014, respectively. The acquisition developed out of PSCo's resource planning activities, in which customers' future energy needs are addressed in a formal planning process for meeting PSCo's generation obligations, considering various assumptions and objectives including prices, reliability, and emissions levels. The generation assets were offered to PSCo as a competitive bid in the resource planning process, and the offer was the least cost option for thermal generation resources.

The purchase price has been allocated as follows based on the estimated fair values of the assets acquired and the liabilities assumed at the date of acquisition, including working capital adjustments of approximately $0.2 million recorded in 2011 which were identified through examination of the plants' books and records:

(Thousands of Dollars)
Assets acquired
Inventory	$	3,791
Property, plant and equipment		735,959
Total assets acquired		739,750

Liabilities assumed
Accrued expenses		7,437
Total liabilities assumed		7,437

Net assets acquired	$	732,313

Operating results for the plants subsequent to the date of acquisition are included in the consolidated statements of income for the year ended Dec. 31, 2010 and Dec 31, 2011.