8-K

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) June 15, 2001

Southwestern Public Service Company(Exact name of registrant as specified in its charter)

New Mexico(State or other jurisdiction of incorporation)

001-3789	75-0575400
(Commission File Number)	(IRS Employer Identification No.)
Tyler at Sixth, Amarillo, Texas	79101
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code 303-571-7511

(Former name or former address, if changed since last report)

Item 5. Other Events

    On June 15, 2001, the Governor of Texas signed legislation postponing the deregulation and restructuring of Southwestern Public Service Company (SPS) for at least five years (see the attached press release entitled "Texas Postpones SPS Deregulation Until 2007" for additional information). SPS is an integrated electric utility serving retail and wholesale customers in portions of Texas, New Mexico, Kansas and Oklahoma, and is a wholly-owned subsidiary of Xcel Energy Inc. This legislation amended the 1999 legislation, Senate Bill No. 7 (SB-7), which provided for retail electric competition beginning January 1, 2002.

    Under the requirements of SB-7 the Public Utility Commission of Texas (PUCT) had previously approved SPS' business separation and power plant divestiture plans associated with implementing customer choice. Under the newly-adopted legislation, prior PUCT orders issued in connection with the restructuring of SPS will be considered null and void. In addition, under the new legislation, SPS is entitled to recover all reasonable and necessary expenditures made or incurred before Sept. 1, 2001, to comply with SB-7. As required, SPS plans to file an application during the fourth quarter of 2001, requesting a rate rider to recover these costs incurred preparing for customer choice.

    In March 2001, the state of New Mexico enacted legislation that delayed customer choice until 2007 and amended the Electric Utility Restructuring Act of 1999. SPS has requested recovery of its costs incurred to prepare for customer choice in New Mexico. A decision on this and other matters is pending before the New Mexico Public Regulation Commission (NMPRC).

    As a result of these recent legislative developments, SPS will reapply the provisions of Statement of Financial Accounting Standards No. 71 (SFAS 71), "Accounting for the Effects of Certain Types of Regulation" for its generation business during the second quarter of 2001. More than 95 percent of SPS' retail electric revenues are from operations in Texas and New Mexico. Because of the delays to electric restructuring passed by Texas and New Mexico, SPS' previous plans to implement restructuring, including the divestiture of generation assets, have been abandoned. Accordingly, SPS will now continue to be subject to rate regulation under traditional cost of service regulation, consistent with its past accounting and ratemaking practices. At this time, management is uncertain as to whether restructuring will be completed in 2007 or later and as to what the transition plan to competition will be at that time.

    SPS does not expect to recognize any earnings impact for financial reporting purposes as a result of its reapplication of SFAS 71 during 2001. In 2000, SPS recognized extraordinary charges of approximately $19 million after taxes as a direct result of discontinuing the application of SFAS 71. Through the second quarter of 2001, SPS has incurred more than $40 million of pretax costs associated with restructuring, a portion of which has been deferred based on expected regulatory recovery. SPS has requested regulatory recovery of a portion of these costs from retail customers in New Mexico, and plans to file a similar request in Texas later in 2001. However, it is not known when regulators will act on such filings.

Item 7. Financial Statements and Exhibits

(c)

Exhibits

Exhibit No.	Description
99.01	News Release of Xcel Energy Inc. dated June 18, 2001

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 hereunto duly authorized.

SOUTHWESTERN PUBLIC SERVICE COMPANY (a New Mexico Corporation)
By:	/s/ DAVID HUDSON David Hudson Secretary & Treasurer

June 22, 2001

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Item 5. Other Events
Item 7. Financial Statements and Exhibits

SIGNATURES

EX-99.01

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Exhibit 99.01

June 18, 2001

Xcel Energy News Release

Texas Postpones SPS Deregulation Till 2007
Utility also preserved "as is' in N.M., Okla., Kan.

    AMARILLO, Texas—A new Texas law will continue Southwestern Public Service Company as a price-regulated electric utility—not subject to the state's "deregulation" plans—for at least five years.

    Texas Governor Rick Perry signed legislation June 15 that selectively postpones deregulation of SPS until 2007, or later. Most other Texas investor-owned utilities will be deregulated Jan. 1, 2002.

    New Mexico, in which SPS also serves, and Oklahoma and Kansas—parts of which are "traditional SPS territory"—similarly have postponed or rejected plans to deregulate electric utilities.

    "This means SPS will continue to operate in all four states as we have traditionally," said Southwestern's president, Gary Gibson. "And our tradition is to provide electric service at prices lower than those offered by comparable utilities in the region.

    "We supported the legislation that postponed deregulation of SPS-served markets. In the long term, a competitive market can provide benefits to customers. But in the short term it would be difficult to realize many of those benefits in the low-cost, SPS-served area," he said.

    "The delays in Texas and New Mexico serve the interests of SPS's retail and wholesale customers, and, in turn, the interests of our wholesale customers' retail customers."

    Gibson commended the legislators from SPS-served areas who supported postponement of deregulation. He said Texas House members Warren Chisum of Pampa and Pete Laney of Hale Center, and Texas Senator Teel Bivins of Amarillo, were primary movers of the Texas legislation.

    "All the legislators from SPS-served areas, in each of our states, sponsored or supported the deregulation delays and preservation of the status quo," he said.

    This year's Texas legislation requires SPS to construct high-voltage transmission lines to interconnect with other electricity suppliers. By 2007, a combination of the new high-voltage lines and Southwestern's existing interconnections will allow competitors to offer service in the region now served by SPS.

    It had appeared the 1999 Texas Electric Choice Act would require SPS to sell most of its power plants. Sale of plant capacity would reduce the company's "market power" in the service territory; and selling the plants to at least four new owners was expected to "create competition" in the SPS-served area. Constructing the high-voltage interconnections is an alternative approach to addressing market power issues.

    David Wilks, Xcel Energy's president of energy supply, praised the new tie-line, "import-export," approach.

    "We are relieved and pleased that we will continue to own and operate all of our Texas and New Mexico power plants—some of the highest-performing units in the nation," he said.

    SPS already is constructing one of the new, high-voltage transmission lines. It is a 345-kilovolt tie between Amarillo and Holcomb, Kan. It will interconnect SPS to a major electricity-exchange point. SPS plans to construct another line, connecting Amarillo and Oklahoma City, before 2007. The company will be studying that line, and others, in the next several years.

    "Improvements such as these will assure that more suppliers can compete in the area. Then, the forces of competition can put downward pressure on prices of service," Gibson said.

    SPS is a regional electric utility that provides retail and wholesale service to about one million persons in a 52,000-square-mile area comprised of the South Plains and Panhandle of Texas, eastern New Mexico, the Oklahoma Panhandle and southwestern Kansas. SPS is an operating company of Minneapolis-based Xcel Energy, the nation's fourth-largest combined electric and natural gas supplier.

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Exhibit 99.01
Xcel Energy News Release