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Benefit Plans and Other Postretirement Benefits (Tables)

12 Months Ended

Dec. 31, 2012

Benefit Plans and Other Postretirement Benefits [Abstract]

Projected Benefit Payments for the Pension and Postretirement Benefit Plans

Projected Benefit Payments — The following table lists SPS' projected benefit payments for the pension and postretirement benefit plans:

(Thousands of Dollars)	Projected Pension Benefit Payments		Gross Projected Postretirement Health Care Benefit Payments		Expected Medicare Part D Subsidies		Net Projected Postretirement Health Care Benefit Payments
2013	$	24,684	$	3,271	$	32	$	3,239
2014		26,123		3,363		38		3,325
2015		26,660		3,643		42		3,601
2016		26,715		3,758		51		3,707
2017		28,019		3,832		56		3,776
2018-2022		146,565		18,239		210		18,029

Pension Plans [Member]

Benefit Plans and Other Postretirement Benefits [Abstract]

Target Asset Allocations and Plan Assets Measured at Fair Value

The following table presents the target pension asset allocations for SPS:

	2012			2011
Domestic and international equity securities		21	%		20	%
Long-duration fixed income securities		50			50
Short-to-intermediate term fixed income securities		8			9
Alternative investments		19			18
Cash		2			3
Total		100	%		100	%

The ongoing investment strategy is based on plan-specific investment recommendations that seek to minimize potential investment and interest rate risk as a plan's funded status increases over time. The investment recommendations result in a greater percentage of long-duration fixed income securities being allocated to specific plans having relatively higher funded status ratios, and a greater percentage of growth assets being allocated to plans having relatively lower funded status ratios. The aggregate projected asset allocation presented in the table above for the master pension trust results from the plan-specific strategies.

Pension Plan Assets

The following tables present, for each of the fair value hierarchy levels, SPS' pension plan assets that are measured at fair value as of Dec. 31, 2012 and 2011:

	Dec. 31, 2012
(Thousands of Dollars)	Level 1		Level 2			Level 3		Total
Cash equivalents	$	26,765	$	-		$	-	$	26,765
Derivatives		-		1,388			-		1,388
Government securities		-		33,676			-		33,676
Corporate bonds		-		95,726			-		95,726
Asset-backed securities		-		-			1,755		1,755
Mortgage-backed securities		-		-			4,331		4,331
Common stock		7,762		-			-		7,762
Private equity investments		-		-			17,049		17,049
Commingled funds		-		183,957			-		183,957
Real estate		-		-			6,969		6,969
Securities lending collateral obligation and other		-		(3,240	)		-		(3,240	)
Total	$	34,527	$	311,507		$	30,104	$	376,138

	Dec. 31, 2011
(Thousands of Dollars)	Level 1		Level 2			Level 3		Total
Cash equivalents	$	13,539	$	-		$	-	$	13,539
Derivatives		-		1,600			-		1,600
Government securities		-		25,233			-		25,233
Corporate bonds		-		112,328			-		112,328
Asset-backed securities		-		-			4,018		4,018
Mortgage-backed securities		-		-			7,907		7,907
Common stock		6,770		-			-		6,770
Private equity investments		-		-			16,159		16,159
Commingled funds		-		165,495			-		165,495
Real estate		-		-			3,586		3,586
Securities lending collateral obligation and other		-		(6,581	)		-		(6,581	)
Total	$	20,309	$	298,075		$	31,670	$	350,054

Changes in Level 3 Plan Assets

The following tables present the changes in SPS' Level 3 pension plan assets for the years ended Dec. 31, 2012, 2011 and 2010:

								Purchases,
			Net Realized		Net Unrealized			Issuances, and
(Thousands of Dollars)	Jan. 1, 2012		Gains (Losses)		Gains (Losses)			Settlements, Net			Dec. 31, 2012
Asset-backed securities	$	4,018	$	531	$	(741	)	$	(2,053	)	$	1,755
Mortgage-backed securities		7,907		245		(265	)		(3,556	)		4,331
Private equity investments		16,159		1,886		(2,296	)		1,300			17,049
Real estate		3,586		2		551			2,830			6,969
Total	$	31,670	$	2,664	$	(2,751	)	$	(1,479	)	$	30,104

									Purchases,
			Net Realized			Net Unrealized			Issuances, and
(Thousands of Dollars)	Jan. 1, 2011		Gains (Losses)			Gains (Losses)			Settlements, Net			Dec. 31, 2011
Asset-backed securities	$	3,450	$	328		$	(355	)	$	595		$	4,018
Mortgage-backed securities		11,060		170			(865	)		(2,458	)		7,907
Private equity investments		11,464		401			1,300			2,994			16,159
Real estate		10,132		(61	)		3,131			(9,616	)		3,586
Total	$	36,106	$	838		$	3,211		$	(8,485	)	$	31,670

									Purchases,
			Net Realized			Net Unrealized			Issuances, and
(Thousands of Dollars)	Jan. 1, 2010		Gains (Losses)			Gains (Losses)			Settlements, Net			Dec. 31, 2010
Asset-backed securities	$	6,563	$	466		$	(378	)	$	(3,201	)	$	3,450
Mortgage-backed securities		16,444		1,744			(1,732	)		(5,396	)		11,060
Private equity investments		11,303		(95	)		9,703			(9,447	)		11,464
Real estate		9,183		(156	)		1,118			(13	)		10,132
Total	$	43,493	$	1,959		$	8,711		$	(18,057	)	$	36,106

Change in Projected Benefit Obligation

(Thousands of Dollars)	2012			2011
Accumulated Benefit Obligation at Dec. 31	$	416,808		$	368,585

Change in Projected Benefit Obligation:
Obligation at Jan. 1	$	403,367		$	370,587
Service cost		8,520			7,690
Interest cost		19,697			20,036
Plan amendments		98			-
Actuarial loss		45,881			27,512
Benefit payments		(23,379	)		(22,458	)
Obligation at Dec. 31	$	454,184		$	403,367

Change in Fair Value of Plan Assets

(Thousands of Dollars)	2012			2011
Change in Fair Value of Plan Assets:
Fair value of plan assets at Jan. 1	$	350,054		$	337,421
Actual return on plan assets		36,403			29,913
Employer contributions		13,060			5,178
Benefit payments		(23,379	)		(22,458	)
Fair value of plan assets at Dec. 31	$	376,138		$	350,054

Funded Status of Plans

(Thousands of Dollars)	2012			2011
Funded Status of Plans at Dec. 31:
Funded status (a)	$	(78,046	)	$	(53,313	)

(a)	Amounts are recognized in noncurrent liabilities on SPS' balance sheets.

Amounts Not Yet Recognized as Components of Net Periodic Benefit Cost

(Thousands of Dollars)	2012		2011
SPS Amounts Not Yet Recognized as Components of Net Periodic Benefit Cost:
Net loss	$	244,412	$	222,849
Prior service cost		963		2,401
Total	$	245,375	$	225,250

(Thousands of Dollars)	2012		2011
Amounts Related to the Funded Status of the Plans Have Been Recorded as Follows Based Upon Expected Recovery in Rates:
Current regulatory assets	$	14,877	$	14,761
Noncurrent regulatory assets		230,498		210,489
Total	$	245,375	$	225,250

Significant Assumptions Used to Measure Benefit Obligations

Measurement date	Dec. 31, 2012			Dec. 31, 2011

	2012			2011
Significant Assumptions Used to Measure Benefit Obligations:
Discount rate for year-end valuation		4.00	%		5.00	%
Expected average long-term increase in compensation level		3.75			4.00
Mortality table	RP 2000			RP 2000

Components of Net Periodic Benefit Costs

Benefit Costs — The components of SPS' net periodic pension cost were:

(Thousands of Dollars)	2012			2011			2010
Service cost	$	8,520		$	7,690		$	7,008
Interest cost		19,697			20,036			19,997
Expected return on plan assets		(24,928	)		(26,316	)		(27,542	)
Amortization of prior service cost		1,438			1,505			1,504
Amortization of net loss		12,897			9,046			4,826
Net periodic pension cost	$	17,624		$	11,961		$	5,793
Costs not recognized due to effects of regulation		(4,300	)		(2,300	)		-
Net benefit cost recognized for financial reporting	$	13,324		$	9,661		$	5,793

Schedule of Assumptions Used to Measure Costs

	2012			2011			2010
Significant Assumptions Used to Measure Costs:
Discount rate		5.00	%		5.50	%		6.00	%
Expected average long-term increase in compensation level		4.00			4.00			4.00
Expected average long-term rate of return on assets		6.68			6.80			6.80

Postretirement Benefit Plan [Member]

Benefit Plans and Other Postretirement Benefits [Abstract]

Target Asset Allocations and Plan Assets Measured at Fair Value

The following tables present, for each of the fair value hierarchy levels, SPS' postretirement benefit plan assets that are measured at fair value as of Dec. 31, 2012 and 2011:

	Dec. 31, 2012
(Thousands of Dollars)	Level 1		Level 2			Level 3		Total
Cash equivalents	$	8,774	$	-		$	-	$	8,774
Government securities		-		7,061			-		7,061
Insurance contracts		-		4,807			-		4,807
Corporate bonds		-		4,211			-		4,211
Asset-backed securities		-		-			73		73
Mortgage-backed securities		-		-			3,841		3,841
Commingled funds		-		21,958			-		21,958
Other		-		(4,503	)		-		(4,503	)
Total	$	8,774	$	33,534		$	3,914	$	46,222

	Dec. 31, 2011
(Thousands of Dollars)	Level 1		Level 2			Level 3		Total
Cash equivalents	$	5,387	$	-		$	-	$	5,387
Derivatives		-		1,238			-		1,238
Government securities		-		6,156			-		6,156
Corporate bonds		-		5,740			-		5,740
Asset-backed securities		-		-			730		730
Mortgage-backed securities		-		-			2,535		2,535
Preferred stock		-		40			-		40
Commingled funds		-		18,892			-		18,892
Securities lending collateral obligation and other		-		(1,039	)		-		(1,039	)
Total	$	5,387	$	31,027		$	3,265	$	39,679

Changes in Level 3 Plan Assets

The following tables present the changes in SPS' Level 3 postretirement benefit plan assets for the years ended Dec. 31, 2012, 2011 and 2010:

								Purchases,
			Net Realized			Net Unrealized		Issuances, and
(Thousands of Dollars)	Jan. 1, 2012		Gains (Losses)			Gains (Losses)		Settlements, Net			Dec. 31, 2012
Asset-backed securities	$	730	$	(32	)	$	179	$	(804	)	$	73
Mortgage-backed securities		2,535		(70	)		377		999			3,841
Total	$	3,265	$	(102	)	$	556	$	195		$	3,914

									Purchases,
			Net Realized			Net Unrealized			Issuances, and
(Thousands of Dollars)	Jan. 1, 2011		Gains (Losses)			Gains (Losses)			Settlements, Net		Dec. 31, 2011
Asset-backed securities	$	245	$	(2	)	$	(101	)	$	588	$	730
Mortgage-backed securities		1,820		(157	)		194			678		2,535
Total	$	2,065	$	(159	)	$	93		$	1,266	$	3,265

								Purchases,
			Net Realized			Net Unrealized		Issuances, and
(Thousands of Dollars)	Jan. 1, 2010		Gains (Losses)			Gains (Losses)		Settlements, Net			Dec. 31, 2010
Asset-backed securities	$	752	$	(25	)	$	75	$	(557	)	$	245
Mortgage-backed securities		4,266		(88	)		332		(2,690	)		1,820
Total	$	5,018	$	(113	)	$	407	$	(3,247	)	$	2,065

Change in Projected Benefit Obligation

(Thousands of Dollars)	2012			2011
Change in Projected Benefit Obligation:
Obligation at Jan. 1	$	55,165		$	50,582
Service cost		1,259			1,092
Interest cost		2,831			2,722
Medicare subsidy reimbursements		404			404
Early Retiree Reinsurance Program proceeds shared with retirees		-			260
Plan amendments		(4,334	)		-
Plan participants' contributions		2,004			2,315
Actuarial loss		7,120			4,065
Benefit payments		(5,189	)		(6,275	)
Obligation at Dec. 31	$	59,260		$	55,165

Change in Fair Value of Plan Assets

(Thousands of Dollars)	2012			2011
Change in Fair Value of Plan Assets:
Fair value of plan assets at Jan. 1	$	39,679		$	39,946
Actual return on plan assets		5,375			61
Plan participants' contributions		2,004			2,315
Employer contributions		4,353			3,632
Benefit payments		(5,189	)		(6,275	)
Fair value of plan assets at Dec. 31	$	46,222		$	39,679

Funded Status of Plans

(Thousands of Dollars)	2012			2011
Funded Status of Plans at Dec. 31:
Funded status (a)	$	(13,038	)	$	(15,486	)

(a)	Amounts are recognized in noncurrent liabilities on SPS' balance sheet.

Amounts Not Yet Recognized as Components of Net Periodic Benefit Cost

(Thousands of Dollars)	2012			2011
SPS Amounts Not Yet Recognized as Components of Net Periodic Benefit Credit:
Net gain	$	(90	)	$	(3,281	)
Prior service credit		(4,317	)		(131	)
Transition obligations		-			1,545
Total	$	(4,407	)	$	(1,867	)

(Thousands of Dollars)	2012			2011
Amounts Related to the Funded Status of the Plans Have Been Recorded as Follows Based Upon Expected Recovery in Rates:
Current regulatory liabilities	$	(954	)	$	(1,867	)
Noncurrent regulatory liabilities		(3,453	)		-
Total	$	(4,407	)	$	(1,867	)

Significant Assumptions Used to Measure Benefit Obligations

Measurement date	Dec. 31, 2012			Dec. 31, 2011

	2012			2011
Significant Assumptions Used to Measure Benefit Obligations:
Discount rate for year-end valuation		4.10	%		5.00	%
Mortality table	RP 2000			RP 2000
Health care costs trend rate - initial		7.50	%		6.31	%

Components of Net Periodic Benefit Costs

Benefit Costs — The components of SPS' net periodic postretirement benefit cost were:

(Thousands of Dollars)	2012			2011			2010
Service cost	$	1,259		$	1,092		$	951
Interest cost		2,831			2,722			2,899
Expected return on plan assets		(2,701	)		(3,006	)		(2,639	)
Amortization of transition obligation		1,545			1,669			1,669
Amortization of prior service cost		(148	)		(51	)		(51	)
Amortization of net loss		1,256			855			772
Net periodic postretirement benefit cost	$	4,042		$	3,281		$	3,601

Schedule of Assumptions Used to Measure Costs

	2012			2011			2010
Significant Assumptions Used to Measure Costs:
Discount rate		5.00	%		5.50	%		6.00	%
Expected average long-term rate of return on assets		6.75			7.50			7.50

Effects of 1-Percent Change in Assumed Health Care Cost Trend Rate

A 1-percent change in the assumed health care cost trend rate would have the following effects on SPS:

	One Percentage Point
(Thousands of Dollars)	Increase		Decrease
APBO	$	5,220	$	(4,196	)
Service and interest components		472		(380	)