Item 1. BUSINESS

Definitions of Abbreviations

Xcel Energy Inc.’s Subsidiaries and Affiliates (current and former)
Capital Services			Capital Services, LLC
Eloigne			Eloigne Company
e prime			e prime inc.
NSP-Minnesota			Northern States Power Company, a Minnesota corporation
NSP System			The electric production and transmission system of NSP-Minnesota and NSP-Wisconsin operated on an integrated basis and managed by NSP-Minnesota
NSP-Wisconsin			Northern States Power Company, a Wisconsin corporation
Operating companies			NSP-Minnesota, NSP-Wisconsin, PSCo and SPS
PSCo			Public Service Company of Colorado
SPS			Southwestern Public Service Co.
Utility subsidiaries			NSP-Minnesota, NSP-Wisconsin, PSCo and SPS
WGI			WestGas InterState, Inc.
WYCO			WYCO Development, LLC
Xcel Energy			Xcel Energy Inc. and its subsidiaries

Federal and State Regulatory Agencies
CPUC			Colorado Public Utilities Commission
D.C. Circuit			United States Court of Appeals for the District of Columbia Circuit
DOC			Minnesota Department of Commerce
DOE			United States Department of Energy
DOT			United States Department of Transportation
EPA			United States Environmental Protection Agency
FERC			Federal Energy Regulatory Commission
Fifth Circuit			United States Court of Appeals for the Fifth Circuit
IRS			Internal Revenue Service
Minnesota District Court			U.S. District Court for the District of Minnesota
MPSC			Michigan Public Service Commission
MPUC			Minnesota Public Utilities Commission
NDPSC			North Dakota Public Service Commission
NERC			North American Electric Reliability Corporation
NMPRC			New Mexico Public Regulation Commission
NRC			Nuclear Regulatory Commission
PHMSA			Pipeline and Hazardous Materials Safety Administration
PSCW			Public Service Commission of Wisconsin
PUCT			Public Utility Commission of Texas
SDPUC			South Dakota Public Utilities Commission
SEC			Securities and Exchange Commission
TCEQ			Texas Commission on Environmental Quality

Electric, Purchased Gas and Resource Adjustment Clauses
CEPA			Colorado Energy Plan Adjustment
CIP			Conservation improvement program
DCRF			Distribution cost recovery factor
DSM			Demand side management
DSMCA			DSM cost adjustment
ECA			Retail electric commodity adjustment
EECRF			Energy efficiency cost recovery factor
EIR			Environmental improvement rider
FCA			Fuel clause adjustment
FPPCAC			Fuel and purchased power cost adjustment clause
GCA			Gas cost adjustment
GUIC			Gas utility infrastructure cost rider
PCCA			Purchased capacity cost adjustment

PCRF			Power cost recovery factor
PGA			Purchased gas adjustment
PSIA			Pipeline system integrity adjustment
RDF			Renewable development fund
RER			Renewable energy rider
RES			Renewable energy standard
RESA			RES adjustment
SCA			Steam cost adjustment
SEP			State energy policy rider
TCA			Transmission cost adjustment
TCR			Transmission cost recovery adjustment
TCRF			Transmission cost recovery factor
WCA			Wind cost adjustment

Other
ADIT			Accumulated deferred income taxes
AFUDC			Allowance for funds used during construction
ALLETE			ALLETE, Inc.
ARO			Asset retirement obligation
ASC			FASB Accounting Standards Codification
ASU			FASB Accounting Standards Update
BART			Best available retrofit technology
Boulder			City of Boulder, CO
C&I			Commercial and Industrial
CAGR			Compound annual growth rate
CACJA			Clean Air Clean Jobs Act
CapX2020			Alliance of electric cooperatives, municipals and investor-owned utilities in the upper Midwest involved in a joint transmission line planning and construction effort
CCR			Coal combustion residuals
CCR Rule			Final rule (40 CFR 257.50 - 257.107) published by the EPA regulating the management, storage and disposal of CCRs as a nonhazardous waste
CDD			Cooling degree-days
CEO			Chief executive officer
CFO			Chief financial officer
CIG			Colorado Interstate Gas Company, LLC
COVID-19			Novel coronavirus
CWA			Clean Water Act
CWIP			Construction work in progress
DECON			Decommissioning method where radioactive contamination is removed and safely disposed of at a requisite facility or decontaminated to a permitted level
DRIP			Dividend Reinvestment Program
EEI			Edison Electric Institute
ELG			Effluent limitations guidelines
EMANI			European Mutual Association for Nuclear Insurance
EPS			Earnings per share
ETR			Effective tax rate
FASB			Financial Accounting Standards Board
FTR			Financial transmission right
GAAP			Generally accepted accounting principles
GE			General Electric
GHG			Greenhouse gas
HDD			Heating degree-days
IM			Integrated market
INPO			Institute of Nuclear Power Operations

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IPP			Independent power producing entity
IRP			Integrated Resource Plan
ITC			Investment Tax Credit
JOA			Joint operating agreement
LSP Transmission			LSP Transmission Holdings, LLC
MDL			Multi-district litigation
MEC			Mankato Energy Center
MGP			Manufactured gas plant
MISO			Midcontinent Independent System Operator, Inc.
Moody’s			Moody’s Investor Services
NAAQS			National Ambient Air Quality Standard
Native load			Demand of retail and wholesale customers that a utility has an obligation to serve under statute or contract
NAV			Net asset value
NEIL			Nuclear Electric Insurance Ltd.
NOL			Net operating loss
O&M			Operating and maintenance
OATT			Open Access Transmission Tariff
PI			Prairie Island nuclear generating plant
Post-65			Post-Medicare
PPA			Purchased power agreement
Pre-65			Pre-Medicare
PTC			Production tax credit
REC			Renewable energy credit
ROE			Return on equity
ROFR			Right-of-first-refusal
ROU			Right-of-use
RPS			Renewable portfolio standards
RTO			Regional Transmission Organization
S&P			Standard & Poor’s Global Ratings
SERP			Supplemental executive retirement plan
SMMPA			Southern Minnesota Municipal Power Agency
SO2			Sulfur dioxide
SPP			Southwest Power Pool, Inc.
TCEH			Texas Competitive Energy Holdings
TCJA			2017 federal tax reform enacted as Public Law No: 115-97, commonly referred to as the Tax Cuts and Jobs Act
THI			Temperature-humidity index
TOs			Transmission owners
TSR			Total shareholder return
VaR			Value at Risk
VIE			Variable interest entity
WOTUS			Waters of the U.S.

Measurements
Bcf			Billion cubic feet
KV			Kilovolts
KWh			Kilowatt hours
MMBtu			Million British thermal units
MW			Megawatts
MWh			Megawatt hours

Where to Find More Information

Xcel Energy’s website address is www.xcelenergy.com. Xcel Energy makes available, free of charge through its website, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after the reports are electronically filed with or furnished to the SEC.

The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically at http://www.sec.gov. The information on Xcel Energy’s website is not a part of, or incorporated by reference in, this annual report on Form 10-K.

Xcel Energy intends to make future announcements regarding Company developments and financial performance through its website, www.xcelenergy.com, as well as through press releases, filings with the SEC, conference calls and webcasts.

Forward-Looking Statements

Except for the historical statements contained in this report, the matters discussed herein are forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements, including the 2021 EPS guidance, long-term EPS and dividend growth rate objectives, future sales, future bad debt expense, future operating performance, estimated base capital expenditures and financing plans, projected capital additions and forecasted annual revenue requirements with respect to rider filings, and expectations regarding regulatory proceedings, as well as assumptions and other statements are intended to be identified in this document by the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “objective,” “outlook,” “plan,” “project,” “possible,” “potential,” “should,” “will,” “would” and similar expressions. Actual results may vary materially. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update any forward-looking information.

The following factors, in addition to those discussed elsewhere in this Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2020 (including risk factors listed from time to time by Xcel Energy Inc. in reports filed with the SEC, including “Risk Factors” in Item 1A of this Annual Report on Form 10-K hereto), could cause actual results to differ materially from management expectations as suggested by such forward-looking information: uncertainty around the impacts and duration of the COVID-19 pandemic; operational safety, including our nuclear generation facilities; successful long-term operational planning; commodity risks associated with energy markets and production; rising energy prices and fuel costs; qualified employee work force and third-party contractor factors; ability to recover costs; changes in regulation and subsidiaries’ ability to recover costs from customers; reductions in our credit ratings and the cost of maintaining certain contractual relationships; general economic conditions, including inflation rates, monetary fluctuations and their impact on capital expenditures and the ability of Xcel Energy Inc. and its subsidiaries to obtain financing on favorable terms; availability or cost of capital; our customers’ and counterparties’ ability to pay their debts to us; assumptions and costs relating to funding our employee benefit plans and health care benefits; our subsidiaries’ ability to make dividend payments; tax laws; effects of geopolitical events, including war and acts of terrorism; cyber security threats and data security breaches; seasonal weather patterns; changes in environmental laws and regulations; climate change and other weather; natural disaster and resource depletion, including compliance with any accompanying legislative and regulatory changes; and costs of potential regulatory penalties.

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Overview

Xcel Energy (the “Company”) is a major U.S. regulated electric and natural gas delivery company headquartered in Minneapolis, Minnesota (incorporated in Minnesota in 1909). Xcel Energy serves customers in eight mid-western and western states, including portions of Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin. Xcel Energy provides a comprehensive portfolio of energy-related products and services to approximately 3.7 million electric customers and 2.1 million natural gas customers through four utility subsidiaries (i.e., NSP-Minnesota, NSP-Wisconsin, PSCo and SPS). Along with the utility subsidiaries, the transmission-only subsidiaries, WYCO (a joint venture formed with CIG to develop and lease natural gas pipelines, storage and compression facilities) and WGI (an interstate natural gas pipeline company) comprise the regulated utility operations. Xcel Energy’s nonregulated subsidiaries include Eloigne, Capital Services and Nicollet Project Holdings.

Utility Subsidiaries’ Service Territory
Electric customers			3.7 million
Natural gas customers			2.1 million
Total assets			$54 billion
Electric generating capacity			20,140 MW
Natural gas storage capacity			53.4 Bcf
Electric transmission lines (conductor miles)			110,353 miles
Electric distribution lines (conductor miles)			208,586 miles
Natural gas transmission lines			2,172 miles
Natural gas distribution lines			35,936 miles

Vision, Mission and Values

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Strategy

Xcel Energy strives to be the preferred and trusted provider of the energy our customers need, while offering a competitive total return to shareholders. We deliver on our vision through three strategic priorities:

Lead the Clean Energy Transition

For more than a decade, Xcel Energy has proactively managed the risk of climate change and responded to increasing customer demand for renewable energy. We reduced carbon emissions from generation serving customers by 51% from 2005 to 2020 and are on track to reach 60% renewable generation by 2030.

Our recently announced generation transition plans include:

• Adding economic wind and solar resources.

• Limiting coal generation through seasonal dispatch of coal facilities where possible and early retirement of coal plants (e.g., Hayden and Craig), including fully exiting coal in the upper Midwest by 2030 (e.g., Sherco).

• Using natural gas as a means to ensure system reliability.

• Extending the life of our Monticello nuclear plant.

• Converting Harrington, our coal plant in Texas, to natural gas.

• A proposal to close the Hayden coal plant, retiring Unit 2 by the end of 2027 and Unit 1 in 2028.

• Retiring Craig coal plant with Unit 1 closing in 2025 and Unit 2 closing in 2028.

Our March 2021 Colorado resource plan filing will outline a range of options for us to achieve 80% carbon reduction by 2030 in the state, including:

• Proposed plans for our remaining coal units (approximately 1,200 MW), such as early retirements and natural gas conversions.

• Additional renewables and storage.

• Transmission expansion.

We are confident we can achieve our 80% interim carbon reduction goal with today’s technology. New carbon-free dispatchable technologies will be required in order to achieve the remaining 20% carbon reduction. Reliability, customer affordability and innovation remain paramount to a successful transition.

Xcel Energy’s clean energy leadership extends to our natural gas distribution system as we work to keep our methane emissions rate below 0.2%. Our plans include the following:

• Working with upstream suppliers on reducing emissions on their system.

• Reducing methane emissions from our own operations.

• Designing programs that encourage customer conservation and electrification where beneficial.

Enhance the Customer Experience

Xcel Energy is committed to providing programs that customers want and value. We continue to expand renewable offerings and promote cost savings and conservation programs, in which we have invested over $2 billion in the past decade.

Xcel Energy is transforming our electric grid to accommodate increased levels of renewables and distributed energy resources and continues to offer customers directly sourced renewable energy solutions. We are also working to develop new programs for C&I customers who desire higher than standard service reliability, with the goal being to make it both easy and affordable for business customers to meet their resiliency needs.

Additionally, we have partnered with policymakers, state agencies and innovative partners to develop nation-leading electric vehicle solutions for our customers. Our electric vehicle plans include residential, fleet and public charging offerings. In 2020, our residential, flat-fee subscription service pilot won Public Utility Fortnightly’s Smartest Transportation Electrification Project award. Xcel Energy has full or pilot electric vehicle programs underway in Minnesota, Colorado and Wisconsin, including our $110 million, three-year Colorado plan which was approved in December 2020.

In 2020, we set an ambitious goal to power 1.5 million electric vehicles across our service territory by 2030, which is estimated to save customers $1 billion in fueling costs and cut carbon emissions by nearly 5 million tons annually by 2030.

Keep Bills Low

Affordability is foundational to our strategy. Our goal is to keep bill increases at or below the rate of inflation. Xcel Energy has kept residential bills relatively flat since 2013.

Our states benefit from strong wind and solar capacity factors. This geographic advantage, coupled with renewable tax credits and avoided fuel costs, enables Xcel Energy to increase its investment in renewables while saving customers money. We call this our “Steel for Fuel” strategy. From 2017 to 2020, we added nearly 3,000 MW of wind to our system while delivering approximately $430 million in fuel savings to our customers.

Xcel Energy continues to control O&M expense without compromising reliability or safety. Since 2014, total O&M has remained flat and we expect annual growth to remain below 1% through 2025 as declines in base O&M offset approximately $100 million of incremental wind O&M. We are continuing to prudently invest in appropriate areas and remain committed to taking costs out of the business through ongoing improvements in processes and technology.

Deliver a Competitive Total Return to Investors and Maintain Strong Investment Grade Credit Rating

Successful execution of our strategy, along with our disciplined approach to growth, investments, operations and management of environmental, social and corporate governance issues, positions Xcel Energy to continue delivering a competitive TSR.

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We have consistently achieved our financial objectives, meeting or exceeding our initial earnings guidance range for sixteen consecutive years and delivering dividend growth for seventeen consecutive years.

GAAP and ongoing earnings have grown 5.6% and 6.1%, respectively, annually since 2005 and our dividend grew 6.3% annually from 2013-2020. Xcel Energy works to maintain senior secured debt credit ratings in the A range and senior unsecured debt credit ratings in the BBB+ to A range. Our current ratings are consistent with this objective.

Environmental, Social and Governance Leadership

Sustainability is embedded in Xcel Energy’s strategy and our values:

We are retiring coal plants, adding renewables, exploring new technologies and helping to electrify other sectors, while keeping customer bills low. Xcel Energy has demonstrated leadership in mitigating climate, operational and financial risks, while remaining committed to customers, employees and communities.

Environmental

Xcel Energy was the first major U.S. utility to establish a carbon-free vision, targeting 100% carbon-free electricity by 2050 and an 80% carbon reduction by 2030 (from 2005 levels). Our plans to achieve 80% carbon reduction are aligned with targets of the Paris Accord, as validated by a lead author for the Intergovernmental Panel on Climate Change.

Xcel Energy has provided a voluntary, third-party verified annual GHG disclosure since 2005, longer than any other U.S. utility. We are a founding member of The Climate Registry and a supporter of the Task Force on Climate-Related Financial Disclosures. We have been the number one provider of wind to customers for 12 of the past 15 years. Our wind capacity is expected to reach 11,000 MW by the end of 2021, including nearly 4,500 MW of owned wind.

As Xcel Energy transitions to cleaner sources, we expect to achieve a 70% reduction in water consumed in electric generation by 2030 (from 2005 levels). Through 2020, we reduced our water consumption 34% (from 2005 levels).

Social

Community

We work to foster economic sustainability and continued affordability by partnering with communities, policymakers and customers to build facilities, foster job growth and attract new businesses. In 2020, Xcel Energy completed 20 economic development projects across our service territory. Additionally, 71% of Xcel Energy’s supply chain spend was local.

In addition to our annual giving, in 2020 Xcel Energy further supported our communities by committing the net gain of nearly $20 million from our Mankato plant sale to short and long-term corporate giving.

We work to mitigate the impacts of early plant retirements on our employees and community, consistent with our Principles for a Responsible Transition. We provide advanced notice, offer retraining and relocation opportunities and have had no layoffs as a result of plant retirements. We also seek to make investments in the communities in which our coal plants are being shut down to offset the economic impact.

Safety

Safety is embedded in our values and governance practices, and Xcel Energy is focused on preventing life-altering injuries. All employees have “stop work authority” to keep each other, our customers and the public safe. Through our Safety Always approach, employees are encouraged to share experiences and learn from events to help protect themselves, their coworkers and the public.

Human Capital Management

Xcel Energy’s success depends on our ability to actively implement programs to attract, hire, develop and retain skilled employees. Our workforce strategy is designed to put the best talent in place, create a culture that motivates employees to lead the way in achieving our clean energy goals and deliver an exceptional customer experience.

Xcel Energy has implemented a strategic, data-driven approach to workforce and succession planning, which includes best practices in learning and development. Additionally, Xcel Energy partners with educational and community organizations to attract and hire diverse employees who reflect the communities we serve. Also, hiring veterans is a key focus of our workforce strategy, with approximately 10% of employees having served in the military. Xcel Energy offers its employees a competitive benefits package which includes: performance-based compensation, healthcare benefits, recognition programs and an employee development program that emphasizes ongoing coaching.

Xcel Energy views diversity, equity and inclusion as an integral part of who we are, how we operate and how we see our future. We are committed to an inclusive culture where diversity is celebrated and employees are treated equitably. Our senior leadership team leads by example, fostering an inclusive work environment, which recognizes the need for crucial conversations on diversity. Additionally, Xcel Energy supports an inclusive environment by offering company-wide trainings on topics addressing microinequities and unconscious bias. We hold ourselves accountable and measure our progress through corporate scorecard metrics that include, among other things, employee feedback in our engagement survey Inclusion Index.

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In 2020, Xcel Energy received the following recognitions:

Xcel Energy has publicly confirmed our commitment to the advancement and protection of human rights throughout our operations, consistent with U.S. human rights laws and the general principles set forth in the International Labour Organization Conventions. Xcel Energy requires annual Code of Conduct training for all employees and members of the Board of Directors. Xcel Energy does not tolerate discrimination, violations of our Code of Conduct or other unacceptable behaviors. We offer employees multiple avenues to raise concerns or report wrong-doing and do not permit any retaliation for doing so.

We respect employees’ freedom of association and their right to collectively organize. As of Dec. 31, 2020, Xcel Energy’s employees were as follows:

			Employees Covered by Collective Bargaining Agreements			Total Full-Time Employees
NSP-Minnesota			2,033			3,144
NSP-Wisconsin			394			540
PSCo			1,882			2,378
SPS			769			1,141
XES			—			4,164
Total			5,078			11,367

Our workforce demographics as of December 2020 were as follows:

			Female			Ethnically Diverse
Board of Directors			20%			20%
CEO direct reports			38%			13%
Management			22%			10%
Employees			23%			16%
New hires			33%			22%
Interns (hired throughout 2020)			33%			28%

Governance

For decades, Xcel Energy has fostered a culture of compliance and ethical conduct. Our Code of Conduct serves as the foundation that all employees, contractors and the Board of Directors are expected to follow, along with corporate policies that establish rules and guidelines in areas such as safety, environmental leadership, diversity, community giving and political contributions.

Xcel Energy has a diverse and qualified Board of Directors, with eight members elected within the past five years.

Accountability and Incentive

We consistently set aggressive goals and hold ourselves accountable to our customers, communities and investors. Xcel Energy instituted Board of Directors oversight of environmental performance in 2000 and was among the first U.S. utilities to tie carbon reduction directly to executive compensation over fifteen years ago.

In 2020, 60% of annual incentive pay was tied to safety and system reliability. In 2021, we added an incentive-based metric to reinforce our commitment to diversity and inclusion. Xcel Energy has clear Board of Directors committee oversight for safety and our human capital strategy, including diversity and inclusion initiatives.

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Utility Subsidiaries

NSP-Minnesota
Electric customers			1.5 million									NSP-Minnesota conducts business in Minnesota, North Dakota and South Dakota and has electric operations in all three states including the generation, purchase, transmission, distribution and sale of electricity. NSP-Minnesota and NSP-Wisconsin electric operations are managed on the NSP System. NSP-Minnesota also purchases, transports, distributes and sells natural gas to retail customers and transports customer-owned natural gas in Minnesota and North Dakota.
Natural gas customers			0.6 million
Consolidated earnings contribution			35% to 45%
Total assets			$21.1 billion
Rate Base (estimated)			$12.4 billion
ROE (net income / average stockholder's equity)			9.20%
Electric generating capacity			8,137 MW
Gas storage capacity			17.1 Bcf
Electric transmission lines (conductor miles)			33,660 miles
Electric distribution lines (conductor miles)			80,508 miles
Natural gas transmission lines			80 miles
Natural gas distribution lines			10,629 miles

NSP-Wisconsin
Electric customers			0.3 million									NSP-Wisconsin conducts business in Wisconsin and Michigan and generates, transmits, distributes and sells electricity. NSP-Minnesota and NSP-Wisconsin electric operations are managed on the NSP System. NSP-Wisconsin also purchases, transports, distributes and sells natural gas to retail customers and transports customer-owned natural gas.
Natural gas customers			0.1 million
Consolidated earnings contribution			5% to 10%
Total assets			$2.9 billion
Rate Base (estimated)			$1.8 billion
ROE (net income / average stockholder's equity)			10.52%
Electric generating capacity			548 MW
Gas storage capacity			3.8 Bcf
Electric transmission lines (conductor miles)			12,288 miles
Electric distribution lines (conductor miles)			27,611 miles
Natural gas transmission lines			3 miles
Natural gas distribution lines			2,492 miles

PSCo
Electric customers			1.5 million									PSCo conducts business in Colorado and generates, purchases, transmits, distributes and sells electricity. PSCo also purchases, transports, distributes and sells natural gas to retail customers and transports customer-owned natural gas.
Natural gas customers			1.4 million
Consolidated earnings contribution			35% to 45%
Total assets			$20.4 billion
Rate Base (estimated)			$13.3 billion
ROE (net income / average stockholder's equity)			8.06%
Electric generating capacity			6,223 MW
Gas storage capacity			32.5 Bcf
Electric transmission lines (conductor miles)			24,386 miles
Electric distribution lines (conductor miles)			78,483 miles
Natural gas transmission lines			2,058 miles
Natural gas distribution lines			22,815 miles

SPS
Electric customers			0.4 million									SPS conducts business in Texas and New Mexico and generates, purchases, transmits, distributes and sells electricity.
Consolidated earnings contribution			15% to 20%
Total assets			$8.9 billion
Rate Base (estimated)			$5.4 billion
ROE (net income / average stockholder's equity)			9.54%
Electric generating capacity			5,232 MW
Electric transmission lines (conductor miles)			40,019 miles
Electric distribution lines (conductor miles)			21,984 miles

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Operations Overview

Utility operations are generally conducted as either electric or gas utilities in our four utility subsidiaries.

Electric Operations

Electric operations consist of energy supply, generation, transmission and distribution activities across all four operating companies. Xcel Energy had electric sales volume of 104,731 (millions of KWh), 3.7 million customers and electric revenues of $9,802 (millions of dollars) for 2020.

Sales/Revenue Statistics (a)

						2020						2019
KWh sales per retail customer						23,910						24,712
Revenue per retail customer						$	2,199					$	2,244
Residential revenue per KWh						12.12		¢				11.97		¢
Large C&I revenue per KWh						5.78		¢				5.96		¢
Small C&I revenue per KWh						9.56		¢				9.43		¢
Total retail revenue per KWh						9.20		¢				9.08		¢

(a) See Note 6 to the consolidated financial statements for further information.

Owned and Purchased Energy Generation — 2020

Electric Energy Sources

Total electric generation by source (including energy market purchases) for the year ended Dec. 31, 2020:

• Distributed generation from the Solar*Rewards® program is not included (approximately 675 million KWh for 2020).

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Carbon-Free Energy

Xcel Energy’s carbon-free energy portfolio includes wind, nuclear hydroelectric, biomass and solar power from both owned generation facilities and PPAs. Carbon-free percentages will vary year-over-year based on system additions, weather, system demand and transmission constraints.

See Item 2 — Properties for further information.

Carbon-free energy as a percentage of total energy for 2020:

• Includes biomass and hydroelectric.

Wind

Owned — Owned and operated wind farms with corresponding capacity:

						2020												2019
Utility Subsidiary						Wind Farms						Capacity (a)						Wind Farms						Capacity (b)
NSP System						11						1,540 MW						7						1,079 MW
PSCo						2						1,059 MW						1						582 MW
SPS						2						967 MW						1						460 MW
Total						15						3,566 MW						9						2,121 MW

(a) Summer 2020 net dependable capacity.

(b) Summer 2019 net dependable capacity.

PPAs — Number of PPAs with capacity range:

Utility Subsidiary						2020												2019
			PPAs						Range						PPAs						Range
NSP System						129						1 MW — 206 MW						131						1 MW — 206 MW
PSCo						17						23 MW — 301 MW						20						2 MW — 301 MW
SPS						18						1 MW — 250MW						18						1 MW — 250 MW

Capacity — Wind capacity:

Utility Subsidiary						2020						2019
NSP System						3,348 MW						2,767 MW
PSCo						4,085 MW						3,145 MW
SPS						2,535 MW						2,027 MW

Average Cost (Owned) — Average cost per MWh of wind energy from owned generation:

Utility Subsidiary						2020						2019
NSP System						$	23					$	35
PSCo						35						47
SPS						17						—

Average Cost (PPAs) — Average cost per MWh of wind energy under existing PPAs:

Utility Subsidiary						2020						2019
NSP System						$	38					$	41
PSCo						40						41
SPS						26						25

Wind Development

Xcel Energy placed approximately 1,450 MW of owned wind and approximately 700 MW of PPAs into service during 2020:

Project						Utility Subsidiary						Capacity
Blazing Star 1						NSP-Minnesota						200 MW (a)(b)
Crowned Ridge 2						NSP-Minnesota						192 MW (a)(b)
Community Wind North						NSP-Minnesota						26 MW (a)(b)
Jeffers						NSP-Minnesota						43 MW (a)(b)
Cheyenne Ridge						PSCo						477 MW (a)(b)
Sagamore						SPS						507 MW (a)(b)
Various PPAs						Various						~700 MW (c)

(a) Summer 2020 net dependable capacity.

(b) Values disclosed are the maximum generation levels for these wind units. Capacity is attainable only when wind conditions are sufficiently available (on-demand net dependable capacity is zero).

(c) Based on contracted capacity.

Xcel Energy currently has approximately 1,450 MW of owned wind under development or construction. In addition, Xcel Energy expects to add approximately 450 MW of planned PPAs.

Project						Utility Subsidiary						Capacity						Estimated Completion
Dakota Range						NSP-Minnesota						300 MW						2021
Freeborn						NSP-Minnesota						200 MW						2021
Blazing Star 2						NSP-Minnesota						200 MW						2021
Nobles						NSP-Minnesota						200 MW						2022
Pleasant Valley						NSP-Minnesota						200 MW						2024
Border Winds						NSP-Minnesota						150 MW						2024
Grand Meadow						NSP-Minnesota						100 MW						2023
Mower						NSP-Minnesota						99 MW						2021
Various PPAs						Various						~450 MW						2021

Solar

Solar PPA(s):

Type						Utility Subsidiary						Capacity
Distributed Generation						NSP System						899 MW
Utility-Scale						NSP System						268 MW
Distributed Generation						PSCo						643 MW
Utility-Scale						PSCo						306 MW
Distributed Generation						SPS						11 MW
Utility-Scale						SPS						190 MW
Total												2,317 MW

Average Cost (PPAs) — Average cost per MWh of solar energy under existing PPAs:

Utility Subsidiary						2020						2019
NSP System						$	90					$	81
PSCo						89						89
SPS						59						56

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Solar Development

In October 2020, Xcel Energy filed a request with the PSCW to purchase a 74 MW, $100 million solar array in Pierce County, WI. A PSCW decision is expected in the third quarter of 2021. Also, as part of the Minnesota Recovery and Relief Recovery docket, NSP-Minnesota, proposed the addition of 460 MW of solar facilities with an expected $550 million incremental investment. An MPUC decision is expected in the second half of 2021.

Additionally, Xcel Energy projects approximately 3,500 MW of solar through 2034 in our Minnesota resource plan and will be addressing solar energy within its upcoming Colorado resource plan.

Nuclear

Xcel Energy has two nuclear plants with approximately 1,700 MW of total 2020 net summer dependable capacity that serves the NSP-System. Our nuclear fleet has become one of the safest and well-run in the nation, as rated by both the NRC and INPO. Xcel Energy secures contracts for uranium concentrates, uranium conversion, uranium enrichment and fuel fabrication to operate its nuclear plants. We use varying contract lengths as well as multiple producers for uranium concentrates, conversion services and enrichment services to minimize potential impacts caused by supply interruptions due to geographical and world political issues.

Nuclear Fuel Cost

Delivered cost per MMBtu of nuclear fuel consumed for owned electric generation and the percentage of total fuel requirements:

Utility Subsidiary						Nuclear
NSP System						Cost						Percent
2020						$	0.80					51		%
2019						0.81						45

Other Carbon-Free Energy

Xcel Energy’s other carbon-free energy portfolio includes hydro from owned generating facilities.

See Item 2 — Properties for further information.

Fossil Fuel Energy

Xcel Energy’s fossil fuel energy portfolio includes coal and natural gas power from both owned generating facilities and PPAs.

Coal

Xcel Energy owns and operates coal units with approximately 6,500 MW of total 2020 net summer dependable capacity.

Approved and proposed early coal plant retirements:

Approved / Authorized
Year						Utility Subsidiary						Plant Unit						Capacity
2022						PSCo						Comanche 1						325 MW
2023						NSP-Minnesota						Sherco 2						682 MW
2024						SPS						Harrington (a)						1,018 MW
2025						PSCo						Comanche 2						335 MW
2025						PSCo						Craig 1						42 MW (b)
2026						NSP-Minnesota						Sherco 1						680 MW
2028						PSCo						Craig 2						40 MW (b)

(a)Reflects expected conversion from coal to natural gas following the TCEQ order that Harrington cease use of coal fuel by Jan. 1, 2025, pending PUCT and NMPRC review.

(b)Based on Xcel Energy’s ownership interest.

Proposed
Year						Utility Subsidiary						Plant Unit						Capacity
2027						PSCo						Hayden 2						98 MW (a)
2028						PSCo						Hayden 1						135 MW (b)
2028						NSP-Minnesota						A.S. King						511 MW
2030						NSP-Minnesota						Sherco 3						517 MW (c)
2032						SPS						Tolk 1						532 MW
2032						SPS						Tolk 2						535 MW

(a)Based on PSCo’s ownership of 37% of Unit 2.

(b)Based on PSCo’s ownership of 76% of Unit 1.

(c)Based on Xcel Energy’s ownership interest.

Plans for our remaining Colorado coal fleet will be outlined when PSCo submits its 2021 resource plan, which is expected to be filed in March 2021.

Coal Fuel Cost

Delivered cost per MMBtu of coal consumed for owned electric generation and percentage of fuel requirements:

						Coal (a)
Utility Subsidiary						Cost						Percent
NSP System
2020						$	1.97					31		%
2019						2.02						36
PSCo
2020						1.41						51
2019						1.45						55
SPS
2020						2.28						40
2019						2.19						45

(a) Includes refuse-derived fuel and wood for the NSP System.

Natural Gas

Xcel Energy has 22 natural gas plants with approximately 7,900 MW of total 2020 net summer dependable capacity.

Natural gas supplies, transportation and storage services for power plants are procured to provide an adequate supply of fuel. Remaining requirements are procured through a liquid spot market. Generally, natural gas supply contracts have variable pricing that is tied to natural gas indices. Natural gas supply and transportation agreements include obligations for the purchase and/or delivery of specified volumes or payments in lieu of delivery.

Natural Gas Cost

Delivered cost per MMBtu of natural gas consumed for owned electric generation and percentage of total fuel requirements:

						Natural Gas
Utility Subsidiary						Cost						Percent
NSP System
2020						$	2.67					17		%
2019						3.09						19
PSCo
2020						3.01						49
2019						3.27						45
SPS
2020						1.43						60
2019						1.14						55

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Capacity and Demand

Uninterrupted system peak demand and occurrence date for the regulated utilities:

						System Peak Demand (in MW)
						2020												2019
NSP System						8,571						July 8						8,774						July 19
PSCo						6,899						Aug. 17						7,111						July 19
SPS						4,195						July 14						4,261						Aug. 5

Transmission

Transmission lines deliver electricity at higher voltage and over longer distances from power sources to transmission substations closer to homes and businesses. A strong transmission system ensures continued reliable and affordable service, ability to meet state and regional energy policy goals, and support for a diverse generation mix, including renewable energy. Xcel Energy owns more than 20,000 miles of transmission lines, serving 22,000 MW of customer load.

Transmission projects completed in 2020 include:

Project						Utility Subsidiary						Miles						Size
Maple River-Red River						NSP-Minnesota						4						115 KV
Glenwood Douglas						NSP-Minnesota						20						69 KV
Prentice to Structure						NSP-Wisconsin						8						115 KV
Lufkin to Naples						NSP-Wisconsin						13						69 KV
Belgrade to Ironwood						NSP-Wisconsin						13						35 KV
Cornucopia to Bayfield Phase 2						NSP-Wisconsin						5						35 KV
Pawnee-Daniels Park						PSCo						113						345 KV
Cheyenne Ridge						PSCo						73						345 KV
TUCO-Yoakum Co.						SPS						107						345 KV
Eddy Co-Kiowa						SPS						34						345 KV
Mustang-Seminole						SPS						20						115 KV
Loving South-Phantom						SPS						21						115 KV

Notable upcoming projects:

Project						Utility Subsidiary						Miles						Size						Completion Date
Hibbing Taconite Relocation						NSP-Minnesota						3						500 KV						2021
Huntley-Wilmarth						NSP-Minnesota						50						345 KV						2021
Helena Scott County						NSP-Minnesota						16						345 KV						2021
Baytown to Long Lake						NSP-Minnesota						9						115 KV						2022
Centerville to Lincoln County						NSP-Minnesota						14						69 KV						2021
Turtle Lake Almena						NSP-Wisconsin						4						69 KV						2021
Bayfield Second Circuit						NSP-Wisconsin						19						35 KV						2022
Roadrunner-China Draw						SPS						41						345 KV						2021

See Item 2 - Properties for further information.

Distribution

Distribution lines allow electricity to travel at lower voltages from substations directly to homes and businesses. Xcel Energy has a vast distribution network, owning and operating approximately 210,000 conductor miles of distribution lines across our eight-state service territory, both above ground and underground.

To continue providing reliable, affordable electric service and enable more flexibility for customers, we are working to digitize the distribution grid, while at the same time keeping it secure. Over the five year project, Xcel Energy plans to invest approximately $1.8 billion implementing new network infrastructure, smart meters, advanced software, equipment sensors and related data analytics capabilities.

These investments will further improve reliability and reduce outage restoration times for our customers, while at the same time enabling new options and opportunities for increased efficiency savings. The new capabilities will also enable integration of battery storage and other distributed energy resources into the grid, including electric vehicles.

See Item 2 - Properties for further information.

Natural Gas Operations

Natural gas operations consist of purchase, transportation and distribution of natural gas to end-use residential, C&I and transport customers in NSP-Minnesota, NSP-Wisconsin and PSCo. Xcel Energy had natural gas deliveries of 444,340 (thousands of MMBtu), 2.1 million customers and natural gas revenues of $1,636 (millions of dollars) for 2020.

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Sales/Revenue Statistics (a)

						2020						2019
MMBtu sales per retail customer						118.13						129.31
Revenue per retail customer						$	720.42					$	851.94
Residential revenue per MMBtu						6.64						7.14
C&I revenue per MMBtu						5.22						5.73
Transportation and other revenue per MMBtu						0.67						0.57

(a) See Note 6 to the consolidated financial statements for further information.

Capability and Demand

Natural gas supply requirements are categorized as firm or interruptible (customers with an alternate energy supply).

Maximum daily output (firm and interruptible) and occurrence date:

						2020												2019
Utility Subsidiary						MMBtu						Date						MMBtu						Date
NSP-Minnesota						871,921						Jan. 16						897,615						Feb. 25
NSP-Wisconsin						150,320						Dec. 24						166,009						Jan. 30
PSCo						1,931,888						Feb. 4						2,139,420						March 3

Natural Gas Supply and Cost

Xcel Energy seeks natural gas supply, transportation and storage alternatives to yield a diversified portfolio, which increase flexibility, decrease interruption and financial risks and economic customer rates. In addition, the utility subsidiaries conduct natural gas price hedging activities approved by their states’ commissions.

Average delivered cost per MMBtu of natural gas for regulated retail distribution:

Utility Subsidiary						2020						2019
NSP-Minnesota						$	3.32					$	3.71
NSP-Wisconsin						3.08						3.49
PSCo						2.52						2.95

NSP-Minnesota, NSP-Wisconsin and PSCo have natural gas supply transportation and storage agreements that include obligations for purchase and/or delivery of specified volumes or to make payments in lieu of delivery.

General

General Economic Conditions

Economic conditions may have a material impact on Xcel Energy’s operating results. Other events impact overall economic conditions and management cannot predict the impact of fluctuating energy prices, terrorist activity, war or the threat of war. We could experience a material impact to our results of operations, future growth or ability to raise capital resulting from a sustained general slowdown in economic growth or a significant increase in interest rates.

Seasonality

Demand for electric power and natural gas is affected by seasonal differences in the weather. In general, peak sales of electricity occur in the summer months and peak sales of natural gas occur in the winter months. As a result, the overall operating results may fluctuate substantially on a seasonal basis. Additionally, Xcel Energy’s operations have historically generated less revenues and income when weather conditions are milder in the winter and cooler in the summer.

Competition

Xcel Energy is subject to public policies that promote competition and development of energy markets. Xcel Energy’s industrial and large commercial customers have the ability to generate their own electricity. In addition, customers may have the option of substituting other fuels or relocating their facilities to a lower cost region.

Customers have the opportunity to supply their own power with distributed generation including solar generation and in most jurisdictions can currently avoid paying for most of the fixed production, transmission and distribution costs incurred to serve them.

Several states have incentives for the development of rooftop solar, community solar gardens and other distributed energy resources. Distributed generating resources are potential competitors to Xcel Energy’s electric service business with these incentives and federal tax subsidies.

The FERC has continued to promote competitive wholesale markets through open access transmission and other means. Xcel Energy’s wholesale customers can purchase their output from generation resources of competing suppliers or non-contracted quantities and use the transmission systems of the utility subsidiaries on a comparable basis to serve their native load.

FERC Order No. 1000 established competition for construction and operation of certain new electric transmission facilities. State utility commissions have also created resource planning programs that promote competition for electric generation resources used to provide service to retail customers.

Xcel Energy Inc.’s utility subsidiaries have franchise agreements with cities subject to periodic renewal; however, a city could seek alternative means to access electric power or gas, such as municipalization.

While each utility subsidiary faces these challenges, Xcel Energy believes their rates and services are competitive with alternatives currently available.

Public Utility Regulation

See Item 7 for discussion of public utility regulation.

Environmental

Environmental Regulation

Our facilities are regulated by federal and state agencies that have jurisdiction over air emissions, water quality, wastewater discharges, solid wastes and hazardous substances. Certain Xcel Energy activities require registrations, permits, licenses, inspections and approvals from these agencies. Xcel Energy has received necessary authorizations for the construction and continued operation of its generation, transmission and distribution systems. Our facilities operate in compliance with applicable environmental standards and related monitoring and reporting requirements. However, it is not possible to determine when or to what extent additional facilities or modifications of existing or planned facilities will be required as a result of changes to regulations, interpretations or enforcement policies or what effect future laws or regulations may have. We may be required to incur expenditures in the future for remediation of MGP and other sites if it is determined that prior compliance efforts are not sufficient.

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Xcel Energy must comply with emission levels in Minnesota, Texas and Wisconsin that may require the purchase of emission allowances. The Denver North Front Range Non-attainment Area does not meet either the 2008 or 2015 ozone NAAQS. Colorado will continue to consider further reductions available in the non-attainment area as it develops plans to meet ozone standards. Gas plants which operate in PSCo’s non-attainment area may be required to improve or add controls, implement further work practices and/or enhanced emissions monitoring as part of future Colorado state plans.

There are significant environmental regulations to encourage use of clean energy technologies and regulate emissions of GHGs. We have undertaken numerous initiatives to meet current requirements and prepare for potential future regulations, reduce GHG emissions and respond to state renewable and energy efficiency goals. Future environmental regulations may result in substantial costs.

In July 2019, the EPA adopted the Affordable Clean Energy rule, which required states to develop plans by 2022 for GHG reductions from coal-fired power plants. In a Jan. 19, 2021 decision, the U.S. Court of Appeals for the D.C. Circuit issued a decision vacating and remanding the Affordable Clean Energy rule. That decision, if not successfully appealed or reconsidered, would allow the EPA to proceed with alternate regulation of coal-fired power plants, either reviving the Clean Power Plan or proposing additional regulation. It is too early to predict an outcome, but new rules could require substantial additional investment, even in plants slated for retirement. Xcel Energy believes, based on prior state commission practices, the cost of these initiatives or replacement generation would be recoverable through rates.

In October 2020, the TCEQ approved an agreement that ensures SPS will convert the Harrington plant from coal to natural gas by Jan. 1, 2025. This conversion is necessary to attain Federal Clean Air Act standards for emissions of SO2.

Xcel Energy seeks to address climate change and potential climate change regulation through efforts to reduce its GHG emissions in a balanced, cost-effective manner.

In 2020, Xcel Energy estimates that it reduced carbon emissions associated with electric generating resources, both owned and under PPAs, used to serve its customers by approximately 51% from 2005 levels.

Environmental Costs

Environmental costs include amounts for nuclear plant decommissioning and payments for storage of spent nuclear fuel, disposal of hazardous materials and waste, remediation of contaminated sites, monitoring of discharges to the environment and compliance with laws and permits with respect to emissions.

Costs charged to operating expenses for nuclear decommissioning, spent nuclear fuel disposal, environmental monitoring and remediation and disposal of hazardous materials and waste were approximately:

• $400 million in 2020.

• $345 million in 2019.

• $335 million in 2018.

Average annual expense of approximately $465 million from 2021 – 2025 is estimated for similar costs. The precise timing and amount of environmental costs, including those for site remediation and disposal of hazardous materials, are unknown. Additionally, the extent to which environmental costs will be included in and recovered through rates may fluctuate.

Capital expenditures for environmental improvements were approximately:

• $30 million in 2020.

• $30 million in 2019.

• $50 million in 2018.

Capital Spending and Financing

See Item 7 for discussion of capital expenditures and funding sources.

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Information about our Executive Officers (a)
Name						Age (b)						Current and Recent Positions						Time in Position
Ben Fowke						62						Chairman of the Board of Directors, Chief Executive Officer and Director, Xcel Energy Inc.						August 2011 — Present
												Chief Executive Officer, NSP-Minnesota, NSP-Wisconsin, PSCo, and SPS						January 2015 — Present
												President, Xcel Energy Inc.						August 2011 — March 2020
Robert C. Frenzel						50						President and Chief Operating Officer, Xcel Energy Inc.						March 2020 — Present
												Executive Vice President, Chief Financial Officer, Xcel Energy Inc.						May 2016 — March 2020
												Senior Vice President and Chief Financial Officer, Luminant, a subsidiary of Energy Future Holdings Corp. (c)						February 2012 — April 2016
Brett C. Carter						54						Executive Vice President and Chief Customer and Innovation Officer, Xcel Energy Inc.						May 2018 — Present
												Senior Vice President and Shared Services Executive, Bank of America, an institutional investment bank and financial services company						October 2015 — May 2018
Christopher B. Clark						54						President and Director, NSP-Minnesota						January 2015 — Present
Darla Figoli						58						Executive Vice President, Human Resources & Employee Services, Chief Human Resources Officer, Xcel Energy Inc.						June 2020 — Present
												Senior Vice President, Human Resources & Employee Services, Chief Human Resources Officer, Xcel Energy Inc.						May 2018 — June 2020
												Senior Vice President, Human Resources and Employee Services, Xcel Energy Inc.						May 2015 — May 2018
David T. Hudson						60						President and Director, SPS						January 2015 — Present
Alice Jackson						42						President and Director, PSCo						May 2018 — Present
												Area Vice President, Strategic Revenue Initiatives, Xcel Energy Services Inc.						November 2016 — May 2018
												Regional Vice President, Rates and Regulatory Affairs, PSCo						November 2013 — November 2016
Timothy O’Connor						61						Executive Vice President, Chief Generation Officer, Xcel Energy Inc.						March 2020 — Present
												Senior Vice President, Chief Nuclear Officer, Xcel Energy Services Inc						February 2013 — March 2020
Frank Prager						58						Senior Vice President, Strategy, Planning and External Affairs, Xcel Energy Inc.						March 2020 — Present
												Vice President, Policy and Federal Affairs, Xcel Energy Services Inc.						January 2015 — March 2020
Amanda Rome						40						Executive Vice President, General Counsel, Xcel Energy Inc.						June 2020 — Present
												Vice President and Deputy General Counsel, Xcel Energy Services Inc.						October 2019 — June 2020
												Managing Attorney, Xcel Energy Services Inc.						July 2018 — October 2019
												Rotational Position, Xcel Energy Services Inc.						January 2018 — July 2018
												Lead Assistant General Counsel, Xcel Energy Services Inc.						July 2015 — January 2018
Jeffrey S. Savage						49						Senior Vice President, Controller, Xcel Energy Inc.						January 2015 — Present
Mark E. Stoering						60						President and Director, NSP-Wisconsin						January 2015 — Present
Brian J. Van Abel						39						Executive Vice President, Chief Financial Officer, Xcel Energy Inc.						March 2020 — Present
												Senior Vice President, Finance and Corporate Development, Xcel Energy Services Inc.						September 2018 — March 2020
												Vice President, Treasurer, Xcel Energy Services Inc.						July 2015 — September 2018

(a) No family relationships exist between any of the executive officers or directors.

(b) Ages as of Feb. 17, 2021.

(c) In April 2014, Energy Future Holdings Corp., the majority of its subsidiaries, including TCEH the parent company of Luminant, filed a voluntary bankruptcy petition under Chapter 11 of the United States Bankruptcy Code. TCEH emerged from Chapter 11 in October 2016.