Edgar Filing: XCEL ENERGY INC

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM U-13-60

ANNUAL REPORT

FOR THE PERIOD

Beginning January 1, 2004 and ending December 31, 2004

TO THE

U.S. SECURITIES AND EXCHANGE COMMISSION

XCEL ENERGY SERVICES INC.
(Exact Name of Reporting Company)

A Subsidiary SERVICE COMPANY
("Mutual" or "Subsidiary")

Date of Incorporation April 2, 1997

State or Sovereign Power under which Incorporated or Organized: Delaware

Location of Principal Executive Offices of Reporting Company: Minneapolis, MN

Name, title, and address of officer to whom correspondence concerning
this report should be addressed:

Teresa S. Madden
(Name)

Vice President and Controller
(Title)

800 Nicollet Mall
Minneapolis, MN 55402
(Address)

Name of Principal Holding Company Whose Subsidiaries are served by Reporting Company:

XCEL ENERGY INC.

INSTRUCTIONS FOR USE OF FORM U-13-60

1.: Time of Filing.—Rule 94 provides that on or before the first day of May in each calendar year, each mutual service company and each subsidiary service company as to which the Commission shall have made a favorable finding pursuant to Rule 88, and every service company whose application for approval or declaration pursuant to Rule 88 is pending shall file with the Commission an annual report on Form U-13-60 and in accordance with the Instructions for that form.
2.: Number of Copies.—Each annual report shall be filed in duplicate. The company should prepare and retain at least one extra copy for itself in case correspondence with reference to the report becomes necessary.
3.: Period Covered by Report.—The first report filed by any company shall cover the period from the date the Uniform System of Accounts was required to be made effective as to that company under Rules 82 and 93 to the end of that calendar year. Subsequent reports should cover a calendar year.
4.: Report Format.—Reports shall be submitted on the forms prepared by the Commission. If the space provided on any sheet of such form is inadequate, additional sheets may be inserted of the same size as a sheet of the form or folded to each size.
5.: Money Amounts Displayed.—All money amounts required to be shown in financial statements may be expressed in whole dollars, in thousands of dollars or in hundred thousands of dollars, as appropriate and subject to provisions of Regulation S-X (210.3-01(b)).
6.: Deficits Displayed.—Deficits and other like entries shall be indicated by the use of either brackets or a parenthesis with corresponding reference in footnotes. (Regulation S-X,210.3-01(c))
7.: Major Amendments or Corrections.—Any company desiring to amend or correct a major omission or error in a report after it has been filed with the Commission shall submit an amended report including only those pages, schedules, and entries that are to be amended or corrected. A cover letter shall be submitted requesting the Commission to incorporate the amended report changes and shall be signed by a duly authorized officer of the company.
8.: Definitions.—Definitions contained in Instruction 01-8 to the Uniform System of Accounts for Mutual Service Companies and Subsidiary Service Companies, Public Utility Holding Company Act of 1935, as amended February 2, 1979 shall be applicable to words or terms used specifically within this Form U-13-60.
9.: Organization Chart.—The service company shall submit with each annual report a copy of its current organization chart.
10.: Methods of Allocation.—The service company shall submit with each annual report a listing of the currently effective methods of allocation being used by the service company and on file with the Securities and Exchange Commission pursuant to the Public Utility Holding Company Act of 1935.
11.: Annual Statement of Compensation for Use of Capital Billed.—The service company shall submit with each annual report a copy of the annual statement supplied to each associate company in support of the amount of compensation for use of capital billed during the calendar year.

LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS

Description of Schedules and Accounts	Schedule or Account Number	Page Number
Comparative Balance Sheets	Schedule I	3-4
Service Company Property	Schedule II	5
Accumulated Provision for Depreciation and Amortization of Service Company Property	Schedule III	6
Investments	Schedule IV	7
Accounts Receivable from Associate Companies	Schedule V	8-8a
Fuel Stock Expenses Undistributed	Schedule VI	9
Stores Expense Undistributed	Schedule VII	9
Miscellaneous Current and Accrued Assets	Schedule VIII	10
Miscellaneous Deferred Debits	Schedule IX	10
Research, Development, or Demonstration Expenditures	Schedule X	10
Proprietary Capital	Schedule XI	11
Long-Term Debt	Schedule XII	12
Current and Accrued Liabilities	Schedule XIII	13
Notes to Financial Statements	Schedule XIV	14-14f
Comparative Statement of Income	Schedule XV	15
Analysis of Billing—Associate Companies	Account 457	16
Analysis of Billing—Nonassociate Companies	Account 458	17
Analysis of Charges for Service—Associate and Nonassociate Companies	Schedule XVI	18
Schedule of Expense by Department or Service Function	Schedule XVII	19-19f
Departmental Analysis of Salaries	Account 920	20
Outside Services Employed	Account 923	21-21f
Employee Pensions and Benefits	Account 926	22
General Advertising Expenses	Account 930.1	23-23b
Miscellaneous General Expenses	Account 930.2	23c
Rents	Account 931	23c
Taxes Other Than Income Taxes	Account 408	24
Donations	Account 426.1	25
Other Deductions	Accounts 426.4 and 426.5	26
Notes to Statements of Income	Schedule XVIII	27

LISTING OF INSTRUCTIONAL FILING REQUIREMENTS

Organization Chart		28
Methods of Allocation		29-29b
Annual Statement of Compensation for Use of Capital Billed		30
Signature Clause		31

ANNUAL REPORT OF XCEL ENERGY SERVICES INC.

SCHEDULE I—COMPARATIVE BALANCE SHEET
(thousands of dollars)

Give balance sheet of the Company as of December 31 of the current and prior year.

			AS OF DECEMBER 31,
ACCOUNT			AS OF DECEMBER 31,
ACCOUNT	ASSETS AND OTHER DEBITS		2004			2003
	SERVICE COMPANY PROPERTY
101	Service company property	(Schedule II)	$	—		$	—
107	Construction work in progress	(Schedule II)		—			—

	Total Property			—			—

108	Less accumulated provision for depreciation and amortization of service company property	(Schedule III)		—			—

	Net Service Company Property			—			—

	INVESTMENTS
123	Investments in associate companies	(Schedule IV)		—			—
124	Other investments	(Schedule IV)		4,099			3,707

	Total Investments			4,099			3,707

	CURRENT AND ACCRUED ASSETS
131	Cash			—			314
134	Special deposits			—			—
135	Working funds			5			15
136	Temporary cash investments	(Schedule IV)		—			—
141	Notes receivable			32,500			26,175
143	Accounts receivable			1,157			1,039
144	Accumulated provision for uncollectable accounts			—			—
146	Accounts receivable from associate companies	(Schedule V)		64,347			104,285
152	Fuel stock expenses undistributed	(Schedule VI)		—			—
154	Materials and supplies			—			—
163	Stores expense undistributed	(Schedule VII)		(39	)		—
165	Prepayments			36,434			39,413
174	Miscellaneous current and accrued assets	(Schedule VIII)		—			—

	Total Current and Accrued Assets			134,404			171,241

	DEFERRED DEBITS
181	Unamortized debt expense						—
184	Clearing accounts			—			1
186	Miscellaneous deferred debits	(Schedule IX)		76,053			62,959
188	Research, development, or demonstration expenditures	(Schedule X)		—			—
190	Accumulated deferred income taxes			—			—

	Total Deferred Debits			76,053			62,960

	TOTAL ASSETS AND OTHER DEBITS		$	214,556		$	237,908

			AS OF DECEMBER 31,
ACCOUNT			AS OF DECEMBER 31,
ACCOUNT	LIABILITIES AND PROPRIETARY CAPITAL		2004		2003
	PROPRIETARY CAPITAL
201	Common stock issued	(Schedule XI)	$	—	$	—
211	Miscellaneous paid-in-capital	(Schedule XI)		1		(38	)
215	Appropriated retained earnings	(Schedule XI)		—		—
216	Unappropriated retained earnings	(Schedule XI)		—		—

	Total Proprietary Capital			1		(38	)

	LONG-TERM DEBT
223	Advances from associate companies	(Schedule XII)		—		—
224	Other long-term debt	(Schedule XII)		—		—
225	Unamortized premium on long-term debt			—		—
226	Unamortized discount on long-term debt—debit			—		—

	Total Long-Term Debt			—		—

	CURRENT AND ACCRUED LIABILITIES
231	Notes payable			—		—
232	Accounts payable			80,310		127,359
233	Notes payable to associate companies	(Schedule XIII)		55,800		46,275
234	Accounts payable to associate companies	(Schedule XIII)		—		—
236	Taxes accrued			20,288		11,040
237	Interest accrued			—		—
238	Dividends declared			—		—
241	Tax collections payable			324		2,494
242	Miscellaneous current and accrued liabilities	(Schedule XIII)		—		—

	Total Current and Accrued Liabilities			156,722		187,168

	DEFERRED CREDITS AND OTHER NON-CURRENT LIABILITIES
228	Accumulated provision for pension and benefits			17,564		14,032
253	Other deferred credits			34,786		25,239
255	Accumulated deferred investment tax credits			—		—

	Total Deferred Credits and Other Non-Current Liabilities			52,350		39,271

282	ACCUMULATED DEFERRED INCOME TAXES			5,483		11,507

	TOTAL LIABILITIES AND PROPRIETARY CAPITAL		$	214,556	$	237,908

SCHEDULE II—SERVICE COMPANY PROPERTY
(thousands of dollars)

DESCRIPTION		BALANCE AT BEGINNING OF YEAR		ADDITIONS		RETIREMENTS OR SALES		OTHER CHANGES (1),(4)		BALANCE AT CLOSE OF YEAR
SERVICE COMPANY PROPERTY
Account
301	Organization	$	—	$	—	$	—	$	—	$	—
303	Miscellaneous intangible plant		—		—		—		—		—
304	Land and land rights		—		—		—		—		—
305	Structures and improvements		—		—		—		—		—
306	Leasehold improvements		—		—		—		—		—
307	Equipment(2)		—		—		—		—		—
308	Office furniture and equipment		—		—		—		—		—
309	Automobiles, other vehicles and related garage equipment		—		—		—		—		—
310	Aircraft and airport equipment		—		—		—		—		—
311	Other service company property(3)		—		—		—		—		—

	SUB-TOTAL		—		—		—		—		—
107	Construction work in progress(4)						—				—

	TOTAL	$	—	$	—	$	—	$	—	$	—

(1): Provide an explanation of those changes considered material: None
(2): Subaccounts are required for each class of equipment owned. The service company shall provide a listing by subaccount of equipment additions during the year and the balance at the close of the year: None
(3): Describe other service company property: None
(4): Describe construction work in progress: None

SCHEDULE III—ACCUMULATED PROVISION FOR DEPRECIATION
AND AMORTIZATION OF SERVICE COMPANY PROPERTY
(thousands of dollars)

DESCRIPTION		BALANCE AT BEGINNING OF YEAR		ADDITIONS TO ACCOUNT 403		RETIREMENTS OR SALES		OTHER CHANGES (1)		BALANCE AT CLOSE OF YEAR
Account
301	Organization	$	—	$	—	$	—	$	—	$	—
303	Miscellaneous intangible plant		—		—		—		—		—
304	Land and land rights		—		—		—		—		—
305	Structures and improvements		—		—		—		—		—
306	Leasehold improvements		—		—		—		—		—
307	Equipment		—		—		—		—		—
308	Office furniture and equipment		—		—		—		—		—
309	Automobiles, other vehicles and related garage equipment		—		—		—		—		—
310	Aircraft and airport equipment		—		—		—		—		—
311	Other service company property		—		—		—		—		—

	TOTAL	$	—	$	—	$	—	$	—	$	—

(1): Provide an explanation of those changes considered material: None

SCHEDULE IV—INVESTMENTS
(thousands of dollars)

INSTRUCTIONS: Complete the following schedule concerning investments.

Under Account 124, "Other Investments", state each investment separately, with description, including the name of issuing company, number of shares or principal amount, etc.

Under Account 136, "Temporary Cash Investments", list each investment separately.

ACCOUNT	ASSETS AND OTHER DEBITS	BALANCE AT BEGINNING OF YEAR		BALANCE AT CLOSE OF YEAR
123	Investment in associate companies	$	—	$	—
124	Other investments:
	Pacific Life Insurance Co.; Security Life of Denver; Prudential Insurance Co.(1)		3,707		4,099
136	Temporary cash investments		—		—

	TOTAL	$	3,707	$	4,099

(1): Funding vehicles for key man life insurance and deferred compensation obligations

SCHEDULE V—ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
(thousands of dollars)

INSTRUCTIONS: Complete the following schedule listing accounts receivable from each associate company. Where the service company has provided accommodation or convenience payments for associate companies, a separate listing of total payments for each associate company by subaccount should be provided.

DESCRIPTION			BALANCE AT BEGINNING OF YEAR		BALANCE AT CLOSE OF YEAR
Account 146—Accounts Receivable from Associate Companies
	Public Service Company of Colorado (PSCo)		$	33,138	$	33,952
	Southwestern Public Service Company (SPS)			15,013		10,414
	Northern States Power Company (a Minnesota Corp.) (NSP-MN)			25,931		7,930
	Northern States Power Company (a Wisconsin Corp.) (NSP-WI)			6,652		6,617
	Xcel Energy Inc.			17,718		2,071
	Planergy International Inc.			1,155		1,484
	Xcel Energy Argentina Inc.			—		416
	P.S.R. Investments, Inc.			16		388
	Utility Engineering Corporation			1,151		317
	Xcel Energy Products and Services Inc.			169		303
	Seren Innovations, Inc.			294		226
	Xcel Energy Wholesale Group Inc.			2		82
	Xcel Energy Markets Holdings Inc.			1,312		50
	Xcel Energy Performance Contracting Inc.			32		41
	United Power & Land Company			37		25
	Cheyenne Light, Fuel and Power Company			761		16
	e prime, inc.			173		9
	Xcel Energy International Inc.			299		4
	Xcel Energy Ventures Inc.			71		4
	Xcel Energy Wyco Inc.			7		4
	NCE Communications, Inc.			43		3
	WestGas InterState, Inc.			2		2
	Xcel Energy-Cadence Inc.			2		1
	Reddy Kilowatt Corporation			2		1
	Xcel Energy Retail Holdings Inc.			1		1
	Chippewa and Flambeau Improvement Company			1		1
	Wyco Development LLC			—		1
	XERS Inc.			162		—
	Xcel Energy Transco Inc.			6		—
	e prime Florida, Inc.			1		—
	1480 Welton, Inc.			75		(3	)
	Eloigne Company			27		(6	)
	e prime Energy Marketing, Inc.			32		(7	)

		TOTAL	$	104,285	$	64,347

SCHEDULE V—ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
(thousands of dollars)

			TOTAL PAYMENTS
Analysis of Convenience or Accommodation Payments:
	NSP-MN		$	38,598
	PSCo			30,837
	SPS			14,948
	NSP-WI			7,528
	Xcel Energy Inc.			4,048
	Xcel Energy Products and Services Inc.			1,644
	Utility Engineering Corporation			1,305
	Seren Innovations, Inc.			876
	Xcel Energy International Inc.			536
	Cheyenne Light, Fuel and Power Company			491
	P.S.R. Investments, Inc.			395
	Xcel Energy-Argentina			351
	Hayden Joint Venture			280
	United Power & Land Company			129
	Eloigne Company			126
	Xcel Energy Markets Holdings Inc.			59
	1480 Welton, Inc.			25
	Planergy International Inc.			14
	Xcel Energy Wyco Inc.			7
	NCE Communications, Inc.			4
	Chippewa and Flambeau Improvement Company			3
	XERS Inc.			2
	Reddy Kilowatt Corporation			2
	e prime, inc.			1

		TOTAL PAYMENTS	$	102,209

The majority of convenience payments relate to insurance, donations, employee benefits, postage, freight, printing, facility services, banking activity, legal services, strategic planning contracts, software, hardware, communications and advertising.

SCHEDULE VI—FUEL STOCK EXPENSES UNDISTRIBUTED
(thousands of dollars)

INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to fuel stock expenses during the year and indicate amount attributable to each associate company. Under the section headed "Summary" list below give an overall report of the fuel functions performed by the service company.

DESCRIPTIONql		LABOR		EXPENSE		TOTAL
Account 152—Fuel Stock Expenses Undistributed		$	—	$	—	$	—

	TOTAL	$	—	$	—	$	—

Summary: None

SCHEDULE VII—STORES EXPENSE UNDISTRIBUTED

INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to stores expenses during the year and indicate amount attributable to each associate company.

DESCRIPTION		LABOR		EXPENSE			TOTAL
Account 163—Stores Expenses Undistributed		$	—	$	(39	)	$	(39	)

	TOTAL	$	—	$	(39	)	$	(39	)

SCHEDULE VIII—MISCELLANEOUS CURRENT AND ACCRUED ASSETS
(thousands of dollars)

INSTRUCTIONS: Provide detail of items in this account. Items less than $10,000 may be grouped, showing the number of items in each group.

DESCRIPTION		BALANCE AT BEGINNING OF YEAR		BALANCE AT CLOSE OF YEAR
Account 174—Miscellaneous Current and Accrued Assets		$	—	$	—

	TOTAL	$	—	$	—

SCHEDULE IX—MISCELLANEOUS DEFERRED DEBITS
(thousands of dollars)

INSTRUCTIONS: Provide detail of items in this account. Items less than $10,000 may be grouped by class showing the number of items in each class.

DESCRIPTION		BALANCE AT BEGINNING OF YEAR		BALANCE AT CLOSE OF YEAR
Account 186—Miscellaneous Deferred Debits
Prepaid pension		$	62,959	$	76,053

	TOTAL	$	62,959	$	76,053

SCHEDULE X—RESEARCH, DEVELOPMENT OR DEMONSTRATION EXPENDITURES
(thousands of dollars)

INSTRUCTIONS: Provide a description of each material research, development, or demonstration project which incurred costs by the service corporation during the year.

DESCRIPTION		BALANCE AT BEGINNING OF YEAR		BALANCE AT CLOSE OF YEAR
Account 188—Research, Development, or Demonstration Expenditures		$	—	$	—

	TOTAL	$	—	$	—

SCHEDULE XI—PROPRIETARY CAPITAL
(thousands of dollars, except per share data)

					OUTSTANDING AT CLOSE OF PERIOD
			PAR OR STATED VALUE PER SHARE		OUTSTANDING AT CLOSE OF PERIOD
ACCOUNT NUMBER	CLASS OF STOCK	NUMBER OF SHARES AUTHORIZED	PAR OR STATED VALUE PER SHARE		NUMBER OF SHARES	TOTAL AMOUNT
201	Common Stock Issued	1,000	$	0.01	1,000	$	—

INSTRUCTIONS: Classify amounts in each account with a brief explanation, disclosing the general nature of transactions which give rise to the amounts.

DESCRIPTION		AMOUNT
Account 211—Miscellaneous Paid-In Capital		$	1
Account 215—Appropriated Retained Earnings			—

	TOTAL	$	1

INSTRUCTIONS: Give particulars concerning net income or (loss) during the year, distinguishing between compensation for the use of capital owned or net loss remaining from servicing nonassociates per the General Instructions of the Uniform System of Accounts. For dividends paid during the year in cash or otherwise, provide rate percentage, amount of dividend, date declared and date paid.

DESCRIPTION		BALANCE AT BEGINNING OF YEAR		NET INCOME OR (LOSS)		DIVIDENDS PAID		BALANCE AT CLOSE OF YEAR
Account 216—Unappropriated Retained Earnings		$	—	$	—	$	—	$	—

	TOTAL	$	—	$	—	$	—	$	—

SCHEDULE XII—LONG-TERM DEBT
(thousands of dollars)

INSTRUCTIONS: Advances from associate companies should be reported separately for advances on notes and advances on open accounts. Names of associate companies from which advances were received shall be shown under the class and series of obligation column. For Account 224—Other long-term debt provide the name of creditor company or organization, terms of the obligation, date of maturity, interest rate, and the amount authorized and outstanding.

NAME OF CREDITOR		AMOUNT AUTHORIZED		BALANCE AT BEGINNING OF YEAR		ADDITIONS		DEDUCTIONS (1)		BALANCE AT CLOSE OF YEAR
Account 223—Advances From Associate Companies:		$	—	$	—	$	—	$	—	$	—
Account 224—Other Long-Term Debt:			—		—		—		—		—

	TOTAL	$	—	$	—	$	—	$	—	$	—

(1) Give an explanation of deductions: None

SCHEDULE XIII—CURRENT AND ACCRUED LIABILITIES
(thousands of dollars)

INSTRUCTIONS: Provide balance of notes and accounts payable to each associate company. Give description and amount of miscellaneous current and accrued liabilities. Items less than $10,000 may be grouped, showing the number of items in each group.

DESCRIPTION			BALANCE AT BEGINNING OF YEAR		BALANCE AT CLOSE OF YEAR
Account 233—Notes Payable to Associate Companies
	Notes Payable—Xcel Energy Inc.		$	46,275	$	55,800

		TOTAL	$	46,275	$	55,800

Account 234—Accounts Payable to Associate Companies			$	—	$	—

		TOTAL	$	—	$	—

Account 242—Miscellaneous Current and Accrued Liabilities
	Current Liability—Suspense Account		$	—	$	—

		TOTAL	$	—	$	—

Schedule XIV—NOTES TO FINANCIAL STATEMENTS

INSTRUCTIONS: The space below is provided for important notes regarding the financial statements or any account thereof. Furnish particulars as to any significant contingent assets or liabilities existing at the end of the year. Notes relating to financial statements shown elsewhere in this report may be indicated here by reference.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Financial Statement Presentation

Xcel Energy Services Inc. (XES or the Company) is a wholly owned subsidiary of Xcel Energy Inc. (Xcel Energy). XES is the service company for Xcel Energy and its subsidiaries and began its operations effective August 1, 2000. XES provides various administrative, management, environmental and other support services to Xcel Energy and its subsidiaries, at cost, pursuant to service agreements approved by the Securities and Exchange Commission (SEC) under the Public Utility Holding Company Act of 1935 (PUHCA), as amended. The majority of the services performed by XES for Xcel Energy and its subsidiaries are provided to Xcel Energy's four major operating utilities, Northern States Power Company, a Minnesota corporation (NSP-Minnesota), Northern States Power Company, a Wisconsin corporation (NSP-Wisconsin), Public Service Company of Colorado (PSCo) and Southwestern Public Service Company (SPS).

Discontinued utility operations of Xcel Energy include the activity of Viking Gas Transmission Co., an interstate natural gas pipeline company that was sold in January 2003; Black Mountain Gas Co., a regulated natural gas and propane distribution company that was sold in October 2003; and Cheyenne Light, Fuel and Power Company, a regulated electric and natural gas utility that was sold in January 2005.

During 2003, Xcel Energy also divested its ownership interest in NRG Energy, Inc. (NRG), an independent power producer. On May 14, 2003, NRG filed for bankruptcy to restructure its debt. As a result of the reorganization, Xcel Energy relinquished its ownership interest in NRG.

Regulation

XES is subject to regulation by the SEC under the PUHCA. XES' accounting policies conform to accounting principles generally accepted in the United States of America. XES maintains its accounts in accordance with the Uniform System of Accounts for Mutual Service Companies as administered by the SEC.

Use of Estimates

The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The carrying amount of financial instruments approximates fair value. Fair values have been determined through information obtained from market sources and management estimates.

Income Taxes

The Company's operations are included in the consolidated Federal income tax return of Xcel Energy. The allocation of income tax consequences to the Company, including alternative minimum tax, is calculated under a parent company policy which provides that benefits or liabilities created by the Company, computed on a separate return basis, will be allocated to (and paid to or by) the Company to the extent the benefits are usable or additional liabilities are incurred in Xcel Energy's consolidated tax returns. Deferred taxes are provided on temporary differences between the financial accounting and tax bases of assets and liabilities using the tax rates that are in effect at the balance sheet date (see Note 6).

Stock-based Compensation

The Company uses the intrinsic value based method of accounting for its stock-based compensation plan.

2. COMMON STOCK

XES is authorized to issue 1,000 shares of Common Stock at a par value of one cent ($0.01) per share. As of Dec. 31, 2004, all shares of common stock were issued and held by Xcel Energy.

3. SHORT-TERM BORROWINGS

The Board of Directors has authorized the Company to borrow directly from Xcel Energy. At Dec. 31, intercompany borrowings outstanding and the weighted average interest rate were as follows:

(Thousands of Dollars)		2004			2003
Intercompany borrowings		$	23,300		$	20,100
Weighted average interest rate			4.02	%		1.24	%

In 2003, Xcel Energy established a money pool arrangement with the utility subsidiaries, subject to receipt of required state regulatory approvals. The money pool allows for short-term loans between the utility subsidiaries and from the holding company to the utility subsidiaries at market-based interest rates. The money pool arrangement does not allow loans from the utility subsidiaries to the holding company. State regulatory commission approvals have been received for NSP-Minnesota, PSCo and SPS, and borrowing and lending activity for these utilities has commenced. On Jan. 18, 2005, NSP-Wisconsin submitted a letter to the Public Service Commission of Wisconsin (PSCW) withdrawing its request for approval to participate in the money pool arrangement after it became apparent the conditions likely to be imposed by the PSCW would have limited flexibility and reduced the economic benefits of NSP-Wisconsin's participation.

XES is the administrator of the utility money pool. At Dec. 31, 2004, XES held a note payable to Xcel Energy and a note receivable from Cheyenne, both in the amount of $32.5 million, related to funds contributed to the utility money pool from Cheyenne. The interest rate for funds in the utility money pool was 4.02% at Dec. 31, 2004.

4. COMMITMENTS AND CONTINGENCIES

Leasing Programs

The Company made payments for leases of various facilities used in the normal course of business. The majority of the operating leases are under a leasing program that has initial noncancelable terms of one year, while the remaining leases have various terms. These leases may be renewed or replaced. No material restrictions exist in these leasing agreements concerning dividends, additional debt, or further

14a

leasing. Rental expense under operating lease obligations for the years ended Dec. 31, 2004 and 2003 was approximately $10.7 million and $12.5 million, respectively.

Expected operating lease expenses at Dec. 31, 2004 are as follows:

(Thousands of Dollars)
2005	$	9,670
2006		8,821
2007		8,184
2008		8,272
2009		8,439
Thereafter		9,648

Technology Agreement

XES has a contract that extends through 2011 with International Business Machines Corp. (IBM) for information technology services. The contract is cancelable at our option, although there are financial penalties for early termination. In 2004, Xcel Energy paid IBM $152.5 million under the contract and $24.5 million for other project business. In 2003, XES paid IBM $114.2 million under the contract and $19.4 million for other project business. The contract also has a committed minimum payment each year from 2005 through 2011.

5. BENEFIT PLANS AND OTHER POSTRETIREMENT BENEFITS

Xcel Energy offers various benefit plans to its benefit employees. At Dec. 31, 2004, there were 10,650 full-time Xcel Energy employees (including 3,015 full-time Company employees) eligible for benefits.

Pensions

The Company participates in various tax qualified noncontributory defined benefit pension plans, which cover substantially all Xcel Energy employees. Xcel Energy, as the plan sponsor, has overall responsibility for directly allocating such costs of each individual plan to each of the participating employers. The plans' actuary determined this allocation based on benefit obligations for active participants. Benefits are based on a combination of years of service, the employee's average pay and Social Security benefits.

Xcel Energy's policy is to fully fund into an external trust the actuarially determined pension costs recognized for ratemaking and financial reporting purposes, subject to the limitations of applicable employee benefit and tax laws. Plan assets principally consist of the common stock of public companies, corporate bonds and U.S. government securities. In 2004, Xcel Energy completed a review of its pension plan asset allocation and adopted revised asset allocation targets. The target range for our pension asset allocation is 60 percent in equity investments, 20 percent in fixed income investments, no cash investments and 20 percent in nontraditional investments, such as real estate, timber ventures, private equity and a diversified commodities index.

14b

The actual composition of pension plan assets at Dec. 31 was:

	2004		2003
Equity securities	69	%	75	%
Debt securities	19		14
Real estate	4		3
Cash	1		—
Nontraditional investments	7		8

	100	%	100	%

Summary information of the actuarially computed benefit obligation, plan assets, funded status and prepaid pension asset for the Xcel Energy plans at Dec. 31, 2004 and 2003, is presented in the following table:

(Thousands of Dollars)	2004		2003
Benefit obligation	$	2,732,263	$	2,632,491
Fair value of plan assets		3,062,016		3,024,661

Funded status: Plan assets exceed benefit obligations	$	329,753	$	392,170

Xcel Energy prepaid pension asset (a)	$	642,873	$	566,568

(a): $18.5 million of the 2004 prepaid pension asset and $18.7 million of the 2003 prepaid pension asset relates to Xcel Energy's remaining obligation for companies that are now classified as discontinued operations.

The Company's net periodic pension credit for the years ended Dec. 31, 2004 and 2003 was $13.1 million and $18.3 million, respectively. Significant assumptions used by the Company's actuary in the determination of these amounts are presented in the following table:

		2004		2003
Significant assumptions used to measure benefit obligations:
	Discount rate for year-end valuation	6.00	%	6.25	%
	Expected average long-term increase in compensation level	3.50	%	3.50	%
Significant assumptions used to measure costs:
	Expected average long-term rate of return on assets	9.00	%	9.25	%

Defined Contribution Plans

The Company participates in various defined contribution plans, which cover substantially all Xcel Energy employees. Total contributions to these plans by Xcel Energy were approximately $21.9 million and $15.9 million in 2004 and 2003, respectively.

Postretirement Health Care Benefits

The Company participates in various health and welfare plans administered by Xcel Energy. Xcel Energy has contributory health and welfare benefit plans that provide health care and death benefits to most Xcel Energy retirees. The former NSP discontinued contributing toward health care benefits for nonbargaining employees retiring after 1998 and for bargaining employees of NSP-Minnesota and NSP-Wisconsin who retired after 1999. Xcel Energy discontinued contributing toward health care benefits for former NCE nonbargaining employees retiring after June 30, 2003.

14c

In conjunction with the 1993 adoption of Statement of Financial Accounting Standards No. 106— "Employers' Accounting for Postretirement Benefits Other Than Pensions," Xcel Energy elected to amortize the unrecognized accumulated postretirement benefit obligation (APBO) on a straight-line basis over 20 years.

In 2004, the investment strategy for the union asset fund was changed to increase the exposure to equity funds. Also, a portion of the assets contributed on behalf of nonbargaining retirees has been funded into a sub-account of the Xcel Energy pension plans. These assets are invested in a manner consistent with the investment strategy for the pension plan.

The actual composition of postretirement benefit plan assets at Dec. 31, was:

	2004		2003
Fixed income/debt securities	21	%	2	%
Equity and equity mutual fund securities	54		14
Cash equivalents	25		84
	100	%	100	%

Summary information of the actuarially computed benefit obligation, plan assets, funded status and accrued benefit cost for the Xcel Energy plans at Dec. 31 is presented in the following table:

(Thousands of Dollars)	2004		2003
Benefit obligation	$	929,125	$	775,230
Fair value of plan assets		318,667		285,861

Funded status: Plan obligations exceed assets	$	610,458	$	489,369

Xcel Energy accrued benefit liability recorded (a)	$	127,746	$	120,510

(a): $0.7 million of the 2004 accrued benefit liability and $1.1 million of the 2003 accrued benefit liability relate to Xcel Energy's remaining obligation for companies that are now classified as discontinued operations.

The Company's net periodic postretirement benefit cost for the years ended Dec. 31, 2004 and 2003 was $2.0 million and $1.3 million, respectively. Significant assumptions used by the Company's actuary in the determination of these amounts are presented in the following table:

		2004		2003
Significant assumptions used to measure benefit obligations:
	Discount rate for year-end valuation	6.00	%	6.25	%
Significant assumptions used to measure costs:
	Expected average long-term rate of return on assets	5.50-8.50	%	8.00-9.00	%

Xcel Energy bases its investment-return assumption for the postretirement health care fund assets on expected long-term performance for each of the investment types included in its postretirement health care asset portfolio. Given the fairly short time period in which funding has been required, Xcel Energy does not consider the actual historical returns achieved by its postretirement health care fund asset portfolio to be significant in establishing long-term return assumptions. Instead, Xcel Energy considers the long-term return levels projected and recommended by investment experts, weighted for the target mix of asset categories in our portfolio. Investment-return volatility is not considered to be a material factor in postretirement health care costs.

Effective Dec. 31, 2004, Xcel Energy raised its initial medical trend assumption from 6.5 percent to 9.0 percent and lowered the ultimate trend assumption from 5.5 percent to 5.0 percent. The period

14d

until the ultimate rate is reached also was increased from two years to six years. This trend assumption was used to value the actuarial benefit obligations at year-end 2004, and will be used in 2005 retiree medical cost determinations.

A 1-percent increase in the assumed health care cost trend rate would increase the Company's total accumulated benefit obligation by approximately $5,543,000 and the service and interest cost components of net periodic postretirement benefit costs by approximately $389,000. A 1-percent decrease in the assumed health care cost trend rate will decrease the Company's total accumulated benefit obligation by approximately $4,595,000 and the service and interest cost components of net periodic postretirement benefit costs by approximately $317,000.

Impact of 2003 Medicare Legislation—On Dec. 8, 2003, President Bush signed into law the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act). The Act expanded Medicare to include, for the first time, coverage for prescription drugs. This new coverage is generally effective Jan. 1, 2006. Many of Xcel Energy's retiree medical programs provide prescription drug coverage for retirees over age 65 with coverage at least equivalent to the benefit to be provided under Medicare. While retirees remain in Xcel Energy's postretirement health care plan without participating in the new Medicare prescription drug coverage, Medicare will share the cost of Xcel Energy's plan. This legislation has therefore reduced Xcel Energy's share of the obligation for future retiree medical benefits.

As of Dec. 31, 2003, Xcel Energy had reduced the postretirement health care benefit obligation by $64.6 million due to the expected sharing of the cost of the program by Medicare under the new legislation. Also, beginning in 2004, the annual net periodic postretirement benefit cost was reduced by approximately $10 million as a result of the expected sharing of the cost of the program by Medicare, with similar savings expected in subsequent years. These estimated reductions do not reflect any changes that may result in future levels of participation in the plan or the associated per capita claims cost due to the availability of prescription drug coverage for Medicare-eligible retirees. Also, in reflecting this legislation, Medicare cost sharing for a plan has been assumed only if Xcel Energy's projected contribution to the plan is expected to be at least equal to the Medicare Part D basic benefit.

6. INCOME TAXES

The provision for income taxes for the years ended Dec. 31, 2004 and 2003 consist of the following:

(Thousands of Dollars)		2004			2003
Current income taxes:
	Federal	$	15,540		$	164
	State		2,989			(380	)

	Total current income taxes		18,529			(216	)

Deferred income taxes:
	Federal		(14,168	)		380
	State		(2,920	)		71

	Total deferred income taxes		(17,088	)		451

Total provision for income taxes		$	1,441		$	235

14e

A reconciliation of the statutory U.S. income tax rate and the effective tax rates for the years ended Dec. 31, 2004 and 2003 follows:

(Thousands of Dollars)	2004					2003
Tax computed at U.S. statutory rate on pre-tax accounting income	$	504		35	%	$	82		35	%
Increase (decrease) in tax from:
State income taxes, net of Federal income tax benefit		45		3			(211	)	(90	)
Non-deductible business meals		346		24			395		168
Stock options		(142	)	(10	)		(155	)	(66	)
Lobbying expenses		(70	)	(5	)		140		60
Excess executive compensation		559		39			42		18
Out of period adjustments		199		14			(58	)	(25	)

Total income taxes	$	1,441		100	%	$	235		100	%

The tax effects of significant temporary differences representing deferred tax liabilities and assets are as follows:

(Thousands of Dollars)			2004		2003
Deferred income tax liabilities:
	Difference between book and tax basis of property		$	1,682	$	1,415
	Information systems charges			11,369		2,500
	Pension related costs			28,907		19,929
	Rent adjustments			—		2,307
	Vacation liability			—		652
	Prepaid advertising			—		175

		Total	$	41,958	$	26,978

Deferred income tax assets:
	Postretirement benefit costs		$	19,898	$	4,913
	Employee severance costs			440		504
	NOL carryforward adjustment			3,572		199
	Executive incentive plans			7,441		9,855
	Vacation liability			4,075		—
	State tax deduction cash vs accrual			1,049		—

		Total	$	36,475	$	15,471

Net deferred income tax liability			$	5,483	$	11,507

14f

SCHEDULE XV—COMPARATIVE STATEMENT OF INCOME
(thousands of dollars)

ACCOUNT	DESCRIPTION	CURRENT YEAR			PRIOR YEAR
	INCOME
457	Services rendered to associate companies	$	743,406		$	707,781
458	Services rendered to nonassociate companies		—			—
421	Miscellaneous income and loss		24			—

	TOTAL INCOME		743,430			707,781

	EXPENSES
920	Salaries and wages		238,964			267,482
921	Office supplies and expenses		304,730			242,493
922	Administrative expenses transferred—credit		(85,914	)		(11,370	)
923	Outside services employed		180,333			94,845
924	Property insurance		108			72
925	Injuries and damages		162			4,222
926	Employee pensions and benefits		24,866			22,021
928	Regulatory commission expenses		173			(5	)
930.1	General advertising expenses		13,966			13,767
930.2	Miscellaneous general expenses		17,073			15,250
931	Rents		16,084			9,169
932	Maintenance of structures and equipment		420			1
	OTHER EXPENSES
403	Depreciation and amortization expense		—			—
408	Taxes other than income taxes		16,339			17,389
409	Income taxes		18,529			(216	)
410	Provision for deferred income taxes		(17,088	)		451
411	Provision for deferred income taxes—credit		—			—
411.5	Investment tax credit		—			—
426.1	Donations		3,546			3,728
426.4	Civic and Political Activities		5,077			3,578
426.5	Other deductions		3,004			23,866
427	Interest on long-term debt		—			—
430	Interest on debt to associate companies		1,265			1,635
431	Other interest expense		1,793			(597	)

	TOTAL EXPENSE		743,430			707,781

	NET INCOME OR (LOSS)	$	—		$	—

ANALYSIS OF BILLING

ASSOCIATE COMPANIES—ACCOUNT 457
(thousands of dollars)

NAME OF ASSOCIATE COMPANY	DIRECT COSTS CHARGED			INDIRECT COSTS CHARGED		COMPENSATION FOR USE OF CAPITAL		TOTAL AMOUNT BILLED
	457-1			457-2		457-3
PSCo	$	214,800		$	81,844	$	1,117	$	297,761
NSP-MN		190,684			82,495		862		274,041
SPS		67,983			25,729		365		94,077
NSP-WI		34,111			17,087		138		51,336
Xcel Energy Inc.		5,970			6,345		413		12,728
Cheyenne Light, Fuel and Power Company		2,539			1,815		640		4,994
Utility Engineering Corporation		1,268			2,680		7		3,955
Seren Innovations, Inc.		551			1,168		2		1,721
Xcel Energy International Inc.		472			22		—		494
e prime, inc.		380			2		—		382
XERS Inc.		353			5		—		358
Public Service Company of Colorado (Hayden)		295			5		—		300
Planergy International Inc.		112			1		152		265
1480 Welton, Inc.		(10	)		264		—		254
Eloigne Company		106			76		1		183
Xcel Energy Products and Services Inc.		129			6		10		145
P.S.R. Investments, Inc.		86			24		—		110
e-prime Energy Marketing, Inc.		90			3		—		93
Xcel Energy WYCO Inc.		18			22		—		40
Public Service Company of Colorado (Tri-State)		33			—		—		33
United Power and Land Company		22			10		—		32
WestGas InterState, Inc.		25			—		—		25
Chippewa and Flambeau Improvement Company		25			—		—		25
Xcel Energy Transco Inc.		20			—		—		20
NCE Communications, Inc.		7			11		—		18
Xcel Energy Wholesale Group Inc.		14			—		—		14
Xcel Energy-Argentina		—			—		9		9
e-prime Florida, Inc.		9			—		—		9
Xcel Energy Performance Contracting Inc.		4			—		4		8
Reddy Kilowatt Corporation		3			5		—		8
Clearwater Investments, Inc.		5			—		—		5
Xcel Energy-Cadence Inc.		4			—		—		4
NSP Lands, Inc.		4			—		—		4
Xcel Energy Ventures Inc.		2			—		—		2
Xcel Energy Retail Holdings Inc.		2			—		—		2
Texas Ohio Pipeline, Inc.		1			—		—		1
Xcel Energy Markets Holdings Inc.		(50	)		—		—		(50	)

TOTAL	$	520,067		$	219,619	$	3,720	$	743,406

ANALYSIS OF BILLING

NONASSOCIATE COMPANIES—ACCOUNT 458
(thousands of dollars)

INSTRUCTIONS: Provide a brief description of the services rendered to each nonassociate company.

NAME OF NONASSOCIATE COMPANY		DIRECT COSTS CHARGED		INDIRECT COSTS CHARGED		COMPENSATION FOR USE OF CAPITAL		TOTAL COST		EXCESS OR DEFICIENCY		TOTAL AMOUNT BILLED
		458-1		458-2		458-3				458-4
None

SCHEDULE XVI—ANALYSIS OF CHARGES FOR SERVICE—ASSOCIATE AND NONASSOCIATE COMPANIES
(thousands of dollars)

INSTRUCTIONS: Total cost of service will equal for associate and nonassociate companies the total amount billed under their separate analysis of billing schedules.

		ASSOCIATE COMPANY CHARGES								NONASSOCIATE COMPANY CHARGES
ACCOUNT	DESCRIPTION OF ITEMS	DIRECT COST			INDIRECT COST		TOTAL
920	Salaries and wages	$	191,736		$	47,228	$	238,964		(None)
921	Office supplies and expenses		187,421			117,309		304,730
922	Administrative expense transferred—credit		(85,914	)		—		(85,914	)
923	Outside services employed		154,355			25,978		180,333
924	Property insurance		96			12		108
925	Injuries and damages		122			40		162
926	Employee pensions and benefits		20,046			4,820		24,866
928	Regulatory commission expense		116			57		173
930.1	General advertising expenses		4,270			9,696		13,966
930.2	Miscellaneous general expense		13,252			3,821		17,073
931	Rents		16,065			19		16,084
932	Maintenance of structures and equipment		416			4		420
403	Depreciation and amortization expense		—			—		—
408	Taxes other than income taxes		13,696			2,643		16,339
409	Income taxes		18,529			—		18,529
410	Provision for deferred income taxes		(17,088	)		—		(17,088	)
411	Provision for deferred income taxes—credit		—			—		—
411.5	Investment tax credit		—			—		—
426.1	Donations		216			3,330		3,546
426.4	Civic and Political Activities		2,533			2,544		5,077
426.5	Other deductions		931			2,073		3,004
427	Interest on long-term debt		—			—		—
431	Other interest expense		1,724			69		1,793

	TOTAL EXPENSES		522,522			219,643		742,165

	Compensation for use of equity capital		—			—		—
430	Interest on debt to associate companies		1,265			—		1,265

	TOTAL COST OF SERVICE	$	523,787		$	219,643	$	743,430

SCHEDULE XVII—SCHEDULE OF EXPENSE
BY DEPARTMENT OR SERVICE FUNCTION
(thousands of dollars)

INSTRUCTIONS: Indicate each department or service function. (See Instruction 01-3 General Structure of Accounting System: Uniform System of Accounts).

							DEPARTMENT OR SERVICE FUNCTION
ACCOUNT	DESCRIPTION OF ITEMS	TOTAL AMOUNT			OVERHEAD		EXECUTIVE MGMT SRVS		INVESTOR RELATIONS		INTERNAL AUDIT		LEGAL
920	Salaries and wages		238,964			60,813		1,746		487		1,318		3,435
921	Office supplies and expenses		304,730					774		573		130		923
922	Administrative expense transferred—credit		(85,914	)
923	Outside services employed		180,333					691		730		125		4,280
924	Property insurance		108											2
925	Injuries and damages		162			41								31
926	Employee pensions and benefits		24,866			24,866
928	Regulatory commission expense		173
930.1	General advertising expenses		13,966							22
930.2	Miscellaneous general expense		17,073					2,007		1,445
931	Rents		16,084
932	Maintenance of structures and equipment		420
935	Maintenance of general plant		—
403	Depreciation and amortization expense		—
408	Taxes other than income taxes		16,339			16,322
409	Income taxes		18,529
410	Provision for deferred income taxes		(17,088	)
411	Provision for deferred income taxes—credit		—
411.5	Investment tax credit		—
426.1	Donations		3,546					1						4
426.4	Civic and Political Activities		5,077			270				252
426.5	Other deductions		3,004					5						3
427	Interest on long-term debt		—
430	Interest on debt to associate companies		1,265
431	Other interest expense		1,793

	TOTAL EXPENSES	$	743,430		$	102,312	$	5,224	$	3,509	$	1,573	$	8,678

SCHEDULE XVII—SCHEDULE OF EXPENSE
BY DEPARTMENT OR SERVICE FUNCTION
(thousands of dollars)

INSTRUCTIONS: Indicate each department or service function. (See Instruction 01-3 General Structure of Accounting System: Uniform System of Accounts).

		DEPARTMENT OR SERVICE FUNCTION
ACCOUNT	DESCRIPTION OF ITEMS	CLAIMS SERVICES		CORPORATE COMMUNICATIONS			CORP STRATEGY & BUS DEVELOP		GOVERNMENT AFFAIRS		FACILITIES & REAL ESTATE
920	Salaries and wages		686		2,650			3,531		1,081		2,023
921	Office supplies and expenses		126		1,857			1,309		419		2,343
922	Administrative expense transferred—credit											(4,889	)
923	Outside services employed		68		1,119			2,762		251		5,521
924	Property insurance		4		1					1		3
925	Injuries and damages
926	Employee pensions and benefits
928	Regulatory commission expense				80			56
930.1	General advertising expenses				12,796			4
930.2	Miscellaneous general expense				137			1,229		92
931	Rents				6							15,751
932	Maintenance of structures and equipment											32
935	Maintenance of general plant
403	Depreciation and amortization expense
408	Taxes other than income taxes
409	Income taxes
410	Provision for deferred income taxes
411	Provision for deferred income taxes—credit
411.5	Investment tax credit
426.1	Donations				2,766			27		101
426.4	Civic and Political Activities				3			494		3,898
426.5	Other deductions				(25	)		3		6
427	Interest on long-term debt
430	Interest on debt to associate companies
431	Other interest expense

	TOTAL EXPENSES	$	884	$	21,390		$	9,415	$	5,849	$	20,784

19a

SCHEDULE XVII—SCHEDULE OF EXPENSE
BY DEPARTMENT OR SERVICE FUNCTION
(thousands of dollars)

INSTRUCTIONS: Indicate each department or service function. (See Instruction 01-3 General Structure of Accounting System: Uniform System of Accounts).

		DEPARTMENT OR SERVICE FUNCTION
ACCOUNT	DESCRIPTION OF ITEMS	FACILITIES ADMINISTRATIVE SERVICES			SUPPLY CHAIN			SUPPLY CHAIN SPECIAL PROGRAMS			HUMAN RESOURCES		FINANCE & TREASURY
920	Salaries and wages		184			4,852			208			9,499		4,012
921	Office supplies and expenses		1,561			1,033			109			3,187		835
922	Administrative expense transferred—credit		(3,676	)		(7,218	)		(452	)
923	Outside services employed		1,896			2,161			52			2,029		88
924	Property insurance					1						11		1
925	Injuries and damages											34		56
926	Employee pensions and benefits
928	Regulatory commission expense
930.1	General advertising expenses
930.2	Miscellaneous general expense											3
931	Rents					55
932	Maintenance of structures and equipment		2									1
935	Maintenance of general plant
403	Depreciation and amortization expense
408	Taxes other than income taxes
409	Income taxes
410	Provision for deferred income taxes
411	Provision for deferred income taxes—credit
411.5	Investment tax credit
426.1	Donations					5						5
426.4	Civic and Political Activities											4
426.5	Other deductions					3
427	Interest on long-term debt
430	Interest on debt to associate companies
431	Other interest expense

	TOTAL EXPENSES	$	(33	)	$	892		$	(83	)	$	14,773	$	4,992

19b

SCHEDULE XVII—SCHEDULE OF EXPENSE
BY DEPARTMENT OR SERVICE FUNCTION
(thousands of dollars)

INSTRUCTIONS: Indicate each department or service function. (See Instruction 01-3 General Structure of Accounting System: Uniform System of Accounts).

		DEPARTMENT OR SERVICE FUNCTION
ACCOUNT	DESCRIPTION OF ITEMS	ACCOUNTING FINANCIAL RPTG AND TAXES			BUSINESS UNIT ACCOUNTING AND BUDGETING		PAYMENT & REPORTING		RECEIPTS PROCESSING		PAYROLL
920	Salaries and wages		11,391			8,870		834		471		497
921	Office supplies and expenses		1,008			1,638		214		116		216
922	Administrative expense transferred—credit
923	Outside services employed		8,516			2,178		658		252		16
924	Property insurance					1
925	Injuries and damages
926	Employee pensions and benefits
928	Regulatory commission expense
930.1	General advertising expenses					17
930.2	Miscellaneous general expense		11,105			70
931	Rents									12
932	Maintenance of structures and equipment									133
935	Maintenance of general plant
403	Depreciation and amortization expense
408	Taxes other than income taxes		17
409	Income taxes		18,529
410	Provision for deferred income taxes		(17,088	)
411	Provision for deferred income taxes—credit
411.5	Investment tax credit
426.1	Donations		503			49
426.4	Civic and Political Activities					155
426.5	Other deductions		2,623			74						1
427	Interest on long-term debt
430	Interest on debt to associate companies		1,265
431	Other interest expense		1,793

	TOTAL EXPENSES	$	39,662		$	13,052	$	1,706	$	984	$	730

19c

SCHEDULE XVII—SCHEDULE OF EXPENSE
BY DEPARTMENT OR SERVICE FUNCTION
(thousands of dollars)

INSTRUCTIONS: Indicate each department or service function. (See Instruction 01-3 General Structure of Accounting System: Uniform System of Accounts).

		DEPARTMENT OR SERVICE FUNCTION
ACCOUNT	DESCRIPTION OF ITEMS	RATES & REGULATION		ENERGY SUPPLY ENGINEERING & ENVIRONMENTAL		ENERGY SUPPLY BUSINESS RESOURCES		ENERGY MARKETS REGULATED TRADING AND MARKETING
920	Salaries and wages		6,253		5,307		10,647		8,643
921	Office supplies and expenses		1,185		1,923		3,820		2,221
922	Administrative expense transferred—credit
923	Outside services employed		641		14,482		1,346		895
924	Property insurance		1		5		11		1
925	Injuries and damages
926	Employee pensions and benefits
928	Regulatory commission expense		37
930.1	General advertising expenses								6
930.2	Miscellaneous general expense		56		467		378		46
931	Rents						1		13
932	Maintenance of structures and equipment
935	Maintenance of general plant
403	Depreciation and amortization expense
408	Taxes other than income taxes
409	Income taxes
410	Provision for deferred income taxes
411	Provision for deferred income taxes—credit
411.5	Investment tax credit
426.1	Donations		41		11		1		32
426.4	Civic and Political Activities				1
426.5	Other deductions								87
427	Interest on long-term debt
430	Interest on debt to associate companies
431	Other interest expense

	TOTAL EXPENSES	$	8,214	$	22,196	$	16,204	$	11,944

19d

SCHEDULE XVII—SCHEDULE OF EXPENSE
BY DEPARTMENT OR SERVICE FUNCTION
(thousands of dollars)

INSTRUCTIONS: Indicate each department or service function. (See Instruction 01-3 General Structure of Accounting System: Uniform System of Accounts).

		DEPARTMENT OR SERVICE FUNCTION
ACCOUNT	DESCRIPTION OF ITEMS	ENERGY MARKETS FUEL PROCUREMENT		ENERGY DELIVERY MARKETING		ENERGY DELIVERY CONSTRUCTION OPERATION & MTCE		ENERGY DELIVERY ENGINEERING/ DESIGN
920	Salaries and wages		2,333		463		10,331		19,144
921	Office supplies and expenses		665		66		2,348		35,412
922	Administrative expense transferred—credit
923	Outside services employed		8				794		20,150
924	Property insurance						9		9
925	Injuries and damages
926	Employee pensions and benefits
928	Regulatory commission expense
930.1	General advertising expenses								6
930.2	Miscellaneous general expense		19				2
931	Rents								209
932	Maintenance of structures and equipment								3
935	Maintenance of general plant
403	Depreciation and amortization expense
408	Taxes other than income taxes
409	Income taxes
410	Provision for deferred income taxes
411	Provision for deferred income taxes—credit
411.5	Investment tax credit
426.1	Donations
426.4	Civic and Political Activities
426.5	Other deductions								5
427	Interest on long-term debt
430	Interest on debt to associate companies
431	Other interest expense

	TOTAL EXPENSES	$	3,025	$	529	$	13,484	$	74,938

19e

SCHEDULE XVII—SCHEDULE OF EXPENSE
BY DEPARTMENT OR SERVICE FUNCTION
(thousands of dollars)

INSTRUCTIONS: Indicate each department or service function. (See Instruction 01-3 General Structure of Accounting System: Uniform System of Accounts).

		DEPARTMENT OR SERVICE FUNCTION
ACCOUNT	DESCRIPTION OF ITEMS	MARKETING AND SALES		CUSTOMER SERVICE		INFORMATION TECHNOLOGY			AVIATION SERVICES			FLEET
920	Salaries and wages		12,409		31,437		12,263			647			499
921	Office supplies and expenses		2,532		12,288		217,690			5,951			258
922	Administrative expense transferred—credit						(65,701	)		(3,978	)
923	Outside services employed		2,226		13,078		93,196			95			29
924	Property insurance		9		35		2						1
925	Injuries and damages
926	Employee pensions and benefits
928	Regulatory commission expense
930.1	General advertising expenses		282		833
930.2	Miscellaneous general expense		17
931	Rents		1		14		4						18
932	Maintenance of structures and equipment		32		217
935	Maintenance of general plant
403	Depreciation and amortization expense
408	Taxes other than income taxes
409	Income taxes
410	Provision for deferred income taxes
411	Provision for deferred income taxes—credit
411.5	Investment tax credit
426.1	Donations
426.4	Civic and Political Activities
426.5	Other deductions		219
427	Interest on long-term debt
430	Interest on debt to associate companies
431	Other interest expense

	TOTAL EXPENSES	$	17,727	$	57,902	$	257,454		$	2,715		$	805

19f

DEPARTMENTAL ANALYSIS OF SALARIES—ACCOUNT 920
(thousands of dollars)

	DEPARTMENTAL SALARY EXPENSE
			INCLUDED IN AMOUNTS BILLED TO:
NAME OF DEPARTMENT OR SERVICE FUNCTION	TOTAL AMOUNT		PARENT COMPANY		OTHER ASSOCIATES		NON- ASSOCIATES		NUMBER OF PERSONNEL END OF YEAR
Executive Management Services	$	2,195	$	230	$	1,966	$	—	10
Internal Audit		1,651		42		1,609		—	23
Aviation Services		814				814		—	9
Government Affairs		1,444		39		1,404		—	21
Corporate and Employee Communications		3,336		156		3,180		—	39
Legal		4,312		12		4,301		—	37
Claims Services		860		0		860		—	15
Corporate Strategy and Business Development		8,621		166		8,455		—	27
Energy Supply Business Resources		13,289				13,289		—	141
Energy Markets Regulated Trading & Marketing		10,798				10,798		—	130
Energy Supply Engineering & Environmental		6,663				6,663		—	95
Energy Markets Fuel Procurement		2,632				2,632		—	32
Information Technology		15,348		36		15,312		—	121
Supply Chain		5,978				5,978		—	73
Supply Chain Special Programs		259				259		—	5
Investor Relations		612		67		545		—	7
Payment & Reporting		1,046				1,046		—	24
Human Resources		25,844		1,104		24,740		—	187
Payroll		625		6		619		—	17
Rates and Regulation		7,768				7,768		—	94
Accounting, Financial Reporting and Taxes		13,358		2,778		10,581		—	132
Energy Delivery Engineering/Design		23,998				23,998		—	379
Energy Delivery Construction, Oper & Maint		12,940				12,940		—	149
Fleet		628				628		—	9
Energy Delivery Marketing		574				574		—	27
Customer Service		37,911				37,911		—	1,011
Marketing and Sales		16,014				16,014		—	224
Facilities & Real Estate		2,552				2,552		—	26
Facilities Administrative Services		231				231		—	18
Finance & Treasury		4,990		226		4,764		—	35
Business Unit Accounting and Budgeting		11,091		2		11,089		—	181
Receipts Processing		584				584		—	14

TOTAL	$	238,964	$	4,863	$	234,102	$	—	3,312	*

*: Includes temporary employees

OUTSIDE SERVICES EMPLOYED—ACCOUNT 923
(thousands of dollars)

INSTRUCTIONS: Provide a breakdown of outside services employed. If the aggregate amounts paid to any one payee and included within one category is less than $25,000, only the aggregate number and amount of all such payments included within the subaccounts need be shown. Provide a subtotal for each type of service.

FROM WHOM PURCHASED		SERVICES PROVIDED	RELATIONSHIP "A"=ASSOCIATED "NA"=NONASSOCIATED	AMOUNT
Legal Services
	Briggs & Morgan	Legal Services	NA	$	99
	Brown, Williams, Moorehead & Quinn, Inc.	Legal Services	NA		182
	Brownstein, Hyatt & Farber, P.C.	Legal Services	NA		157
	Cornerstone Research	Legal Services	NA		171
	Denton Wilde Sapte	Legal Services	NA		30
	Dorsey & Whitney LLP	Legal Services	NA		80
	Gray, Plant, Mooty, Mooty, & Bennett, P.A.	Legal Services	NA		58
	Hogan & Hartson LLP	Legal Services	NA		29
	Hunton & Williams	Legal Services	NA		61
	Jones Day	Legal Services	NA		2,034
	Lindquist & Vennum PLLP	Legal Services	NA		36
	Marval & O'Farrell	Legal Services	NA		230
	Maslon, Edelman, Borman & Brand LLP	Legal Services	NA		56
	McDermott, Will & Emery	Legal Services	NA		672
	Merchant & Gould	Legal Services	NA		53
	Rider Bennett	Legal Services	NA		45
	Sidley, Austin, Brown & Wood LLP	Legal Services	NA		68
	Skadden, Arps, Slate, Meagher & Flom LLP	Legal Services	NA		113
	Other (33)	Legal Services	NA		173

		Total Legal Services			4,347

Auditing, Tax, Consulting and Accounting Services
	Deloitte & Touche LLP	Auditing, Tax and Other Services	NA		6,935
	Price Waterhouse Coopers	Auditing, Tax and Other Services	NA		404
	KPMG LLP	Auditing, Tax and Other Services	NA		949
	Jefferson Wells	Auditing, Tax and Other Services	NA		49

		Total Auditing, Tax, Consulting and Other Services			8,337

Consulting/Outside Services
	AA American Moving & Storage	Consulting/Outside Services	NA		106
	ABB Inc.	Consulting/Outside Services	NA		123
	Accountemps Inc.	Consulting/Outside Services	NA		128
	Accurint	Consulting/Outside Services	NA		29
	ACEEE	Consulting/Outside Services	NA		28
	Ackerman Construction	Consulting/Outside Services	NA		456
	Acme $ of Ormond Beach, Inc.	Consulting/Outside Services	NA		446
	Adecco Employment Service	Consulting/Outside Services	NA		3,193
	Advanced Asset Alliance Inc.	Consulting/Outside Services	NA		25
	Advecta	Consulting/Outside Services	NA		1,770
	AE&CS Inc.	Consulting/Outside Services	NA		51
	Affiliated Credit Services Inc.	Consulting/Outside Services	NA		117
	AG Wassenaar Inc.	Consulting/Outside Services	NA		86
	Agentis Software Inc.	Consulting/Outside Services	NA		571
	Air Pollution Testing Inc.	Consulting/Outside Services	NA		93
	AKW Consultants Inc.	Consulting/Outside Services	NA		326
	Allied Interstate Inc.	Consulting/Outside Services	NA		110
	America Efficiency Services	Consulting/Outside Services	NA		31
	American Engineering Testing	Consulting/Outside Services	NA		135
	Analysts International Corporation	Consulting/Outside Services	NA		136
	Apoorva Corporation	Consulting/Outside Services	NA		254
	APR Construction Company	Consulting/Outside Services	NA		143
	Arizona Public Service Company	Consulting/Outside Services	NA		33

21a

Arrow J Landscape & Design Inc.	Consulting/Outside Services	NA	50
Aspect Com Workforce Management	Consulting/Outside Services	NA	33
Aspen Commercial Security Inc.	Consulting/Outside Services	NA	27
Associated Supply Company	Consulting/Outside Services	NA	57
Auger Services Inc.	Consulting/Outside Services	NA	89
Avacom Inc.	Consulting/Outside Services	NA	228
Barr Engineering Company	Consulting/Outside Services	NA	65
Bass Trigon	Consulting/Outside Services	NA	276
BC Services Inc.	Consulting/Outside Services	NA	294
Bearing Point	Consulting/Outside Services	NA	1,388
Behrent Engineering Company	Consulting/Outside Services	NA	125
Benco Messenger Service, Inc.	Consulting/Outside Services	NA	295
Black & Veatch, Engineering-Architectural	Consulting/Outside Services	NA	7,651
Black Diamond	Consulting/Outside Services	NA	196
Blackstone	Consulting/Outside Services	NA	530
Booz Allen and Hamilton Inc.	Consulting/Outside Services	NA	1,150
Brown Home Enterprises	Consulting/Outside Services	NA	99
Business Objects Americas	Consulting/Outside Services	NA	76
Business Wire Corporation	Consulting/Outside Services	NA	59
C3IPROS Computer Contract Consultant	Consulting/Outside Services	NA	25
Cambell Services	Consulting/Outside Services	NA	103
Cambridge Energy Research Association	Consulting/Outside Services	NA	59
Caminus Corporation	Consulting/Outside Services	NA	358
Carlson School of Management	Consulting/Outside Services	NA	65
CBIZ Valuation Group	Consulting/Outside Services	NA	105
Central Minnesota Delivery	Consulting/Outside Services	NA	27
CES International Inc.	Consulting/Outside Services	NA	961
Change Management	Consulting/Outside Services	NA	62
Charan Associates, Inc.	Consulting/Outside Services	NA	64
Charles River Associates Inc.	Consulting/Outside Services	NA	82
Checkfree Services Corporation	Consulting/Outside Services	NA	126
Citigate Financial Intelligence	Consulting/Outside Services	NA	59
Clean Harbor Environmental Service	Consulting/Outside Services	NA	44
Collaboract Consulting LLC	Consulting/Outside Services	NA	112
Collective View Inc.	Consulting/Outside Services	NA	398
Colorado Independent Energy	Consulting/Outside Services	NA	116
Commonwealth Associates, Inc.	Consulting/Outside Services	NA	95
Compucom Systems, Inc.	Consulting/Outside Services	NA	29
Computas NA Inc.	Consulting/Outside Services	NA	37
Computer Contract Consultants	Consulting/Outside Services	NA	518
Compuware Corporation	Consulting/Outside Services	NA	69
Connect the Knowledge Network	Consulting/Outside Services	NA	176
Connolly Consulting Associates	Consulting/Outside Services	NA	482
Contract Engineering Services	Consulting/Outside Services	NA	64
Cook-Hurlbert Inc.	Consulting/Outside Services	NA	579
Core Integration Partners Inc.	Consulting/Outside Services	NA	885
Corporate Executive Board	Consulting/Outside Services	NA	153
Corrosion Monitoring Services	Consulting/Outside Services	NA	189
Creative Financial Staffing	Consulting/Outside Services	NA	27
Custom Compliance Solutions	Consulting/Outside Services	NA	51
Custom Environmental Services	Consulting/Outside Services	NA	36
David Wethington	Consulting/Outside Services	NA	81
DBO2 Inc.	Consulting/Outside Services	NA	39
Deep Nines Inc.	Consulting/Outside Services	NA	199
Dennhardt & Associates	Consulting/Outside Services	NA	40
Distributed Office Environment	Consulting/Outside Services	NA	75
DL Williams Wood Products	Consulting/Outside Services	NA	51
Dominion Construction Co.	Consulting/Outside Services	NA	3,203
Donovan Construction Inc.	Consulting/Outside Services	NA	848
Douglas Brandon	Consulting/Outside Services	NA	70
DST Output, Inc.	Consulting/Outside Services	NA	78
Duke Electric Company	Consulting/Outside Services	NA	140
e prime, inc.	Consulting/Outside Services	A	214
Edaw Inc.	Consulting/Outside Services	NA	32
EDM International Inc.	Consulting/Outside Services	NA	259

21b

Efficiency Engineering, Inc.	Consulting/Outside Services	NA	62
Eide Bailly LLP	Consulting/Outside Services	NA	214
Eloquar Consulting Inc.	Consulting/Outside Services	NA	216
Emergency Outfitters Inc.	Consulting/Outside Services	NA	46
Emergent Consulting	Consulting/Outside Services	NA	38
Emmanual B. Hangar	Consulting/Outside Services	NA	69
Employee/Management Involvement Concept	Consulting/Outside Services	NA	70
Employer Management Solutions	Consulting/Outside Services	NA	364
Engineering Repro Systems	Consulting/Outside Services	NA	127
Entegee	Consulting/Outside Services	NA	2,226
Enterprise Advisory Services Inc.	Consulting/Outside Services	NA	1,601
EPRI	Consulting/Outside Services	NA	75
Equifax Credit Information Services	Consulting/Outside Services	NA	164
Esquire Search LTD	Consulting/Outside Services	NA	165
Eurasia Business Services	Consulting/Outside Services	NA	362
Evergreen Caissons, Inc.	Consulting/Outside Services	NA	1,739
Excel Engineering	Consulting/Outside Services	NA	166
Express Services Inc.	Consulting/Outside Services	NA	49
Find/SVP Inc.	Consulting/Outside Services	NA	26
First Revenue Assurance	Consulting/Outside Services	NA	176
Ford Personnel Services	Consulting/Outside Services	NA	44
Freelance Creative Services	Consulting/Outside Services	NA	302
Freeman Decorating Company	Consulting/Outside Services	NA	25
Gantz Wiley Research	Consulting/Outside Services	NA	66
GCI Tunheim	Consulting/Outside Services	NA	122
Genesis Corp.	Consulting/Outside Services	NA	160
Global Enterprise Managers	Consulting/Outside Services	NA	29
Global Environment Consulting	Consulting/Outside Services	NA	33
Global Insight Inc.	Consulting/Outside Services	NA	25
Gold Cross Courier Service	Consulting/Outside Services	NA	88
Golder Associates	Consulting/Outside Services	NA	157
Graham Land Acquisition Associates	Consulting/Outside Services	NA	102
Gregory L. Stark	Consulting/Outside Services	NA	27
Ground Engineering Consultants	Consulting/Outside Services	NA	27
Gunther Douglas, Inc.	Consulting/Outside Services	NA	2,160
Hayden Search Group	Consulting/Outside Services	NA	79
HDR Engineering Inc.	Consulting/Outside Services	NA	726
Health Promotion Management, Inc.	Consulting/Outside Services	NA	395
Heidrick & Struggles Inc.	Consulting/Outside Services	NA	99
Henwood Energy Service Inc.	Consulting/Outside Services	NA	42
High Energy Group	Consulting/Outside Services	NA	109
Hinz Automation Inc.	Consulting/Outside Services	NA	87
Hitachi Consulting	Consulting/Outside Services	NA	1,725
Holliday Enterprises Inc.	Consulting/Outside Services	NA	175
Holly D. Neel	Consulting/Outside Services	NA	29
Honeywell Inc.	Consulting/Outside Services	NA	42
HSB Company	Consulting/Outside Services	NA	30
Hudson Global Resources	Consulting/Outside Services	NA	90
IBM	Consulting/Outside Services	NA	71,227
Ideal Fencing Corp.	Consulting/Outside Services	NA	31
Indicon	Consulting/Outside Services	NA	142
Indus International	Consulting/Outside Services	NA	1,201
Information Handling Services	Consulting/Outside Services	NA	60
Innovative Energy Consulting Service	Consulting/Outside Services	NA	61
Intervoice Brite Inc.	Consulting/Outside Services	NA	383
Iron Mountain Secure Shredding	Consulting/Outside Services	NA	52
Itasca Group	Consulting/Outside Services	NA	436
Itron Inc.	Consulting/Outside Services	NA	1,270
J&J Excavating	Consulting/Outside Services	NA	126
JD Powers and Associates	Consulting/Outside Services	NA	91
Jeane Thorne Inc.	Consulting/Outside Services	NA	470
JF Sato & Associates	Consulting/Outside Services	NA	137
JMT Financial Partners LLC	Consulting/Outside Services	NA	33
JNR Adjustment Company	Consulting/Outside Services	NA	37
Job Store Staffing	Consulting/Outside Services	NA	40

21c

Joseph Frangipane	Consulting/Outside Services	NA	38
Juran Institute Inc.	Consulting/Outside Services	NA	32
K1 Concepts LLC	Consulting/Outside Services	NA	76
Kema Consulting	Consulting/Outside Services	NA	135
Kforce Inc.	Consulting/Outside Services	NA	91
Kim Michael Staudt	Consulting/Outside Services	NA	71
Kimsey Guarantee	Consulting/Outside Services	NA	126
Knight Project Services	Consulting/Outside Services	NA	48
Language Line LLC	Consulting/Outside Services	NA	247
Leggette Brashears & Graham	Consulting/Outside Services	NA	52
Liaison Creative Services	Consulting/Outside Services	NA	175
Lindberg Consulting	Consulting/Outside Services	NA	33
Llano Permain Environmental	Consulting/Outside Services	NA	25
Logic Bay Corporation	Consulting/Outside Services	NA	74
Lucidity Consulting Group	Consulting/Outside Services	NA	474
Lynn Bileti	Consulting/Outside Services	NA	104
Lynx Research Consulting	Consulting/Outside Services	NA	34
Management Systems International	Consulting/Outside Services	NA	343
Manpower Temporary Services	Consulting/Outside Services	NA	175
Market Strategies, Inc.	Consulting/Outside Services	NA	155
Master Electric Inc.	Consulting/Outside Services	NA	127
McPherson Group	Consulting/Outside Services	NA	27
MDA Consulting Group Inc.	Consulting/Outside Services	NA	106
Mercury Interactive Corporation	Consulting/Outside Services	NA	1,107
Merrick & Company	Consulting/Outside Services	NA	504
Meta Group	Consulting/Outside Services	NA	63
Metro Sales	Consulting/Outside Services	NA	44
Metropolitan Mechanical Contractor	Consulting/Outside Services	NA	32
Michigan Technology University	Consulting/Outside Services	NA	85
Mincom Inc.	Consulting/Outside Services	NA	55
Minneapolis Consulting Group	Consulting/Outside Services	NA	288
Mobile Data Solutions	Consulting/Outside Services	NA	1,267
Monique Lovato	Consulting/Outside Services	NA	28
More Than Normal Music & Company	Consulting/Outside Services	NA	96
Mr. Wolf LTD	Consulting/Outside Services	NA	185
MTR Resources Inc.	Consulting/Outside Services	NA	71
Mueller Pipeliners Inc.	Consulting/Outside Services	NA	26
Murphy Enterprises	Consulting/Outside Services	NA	60
Nancy E Hoffman	Consulting/Outside Services	NA	190
Natsource LLC	Consulting/Outside Services	NA	53
Navigant Consulting	Consulting/Outside Services	NA	36
NETG	Consulting/Outside Services	NA	43
New Market Strategies	Consulting/Outside Services	NA	31
New York Stock Exchange, Inc.	Consulting/Outside Services	NA	421
Nexant Inc.	Consulting/Outside Services	NA	36
Nisoft LLC	Consulting/Outside Services	NA	60
Northwestern Travel Agency	Consulting/Outside Services	NA	48
Office Information Systems Inc.	Consulting/Outside Services	NA	424
Office Team	Consulting/Outside Services	NA	49
Opus 21 Management Solutions	Consulting/Outside Services	NA	620
Oracular of Minnesota	Consulting/Outside Services	NA	55
PA Consulting Group	Consulting/Outside Services	NA	141
Pace Analytical Services	Consulting/Outside Services	NA	54
Pacioli Companies	Consulting/Outside Services	NA	107
Panorama Business Views	Consulting/Outside Services	NA	42
Pantellos Group Limited Partnership	Consulting/Outside Services	NA	34
Par Electrical Contractors	Consulting/Outside Services	NA	3,038
Paradigm Learning	Consulting/Outside Services	NA	34
Pear Commercial Interiors	Consulting/Outside Services	NA	67
Peoplesoft USA	Consulting/Outside Services	NA	275
Personnel Decisions International Corp.	Consulting/Outside Services	NA	92
Pettigrew & Associates	Consulting/Outside Services	NA	205
Pinerock Productions	Consulting/Outside Services	NA	30
Platts Research & Consulting	Consulting/Outside Services	NA	62
PMC Facilities Management Group	Consulting/Outside Services	NA	41

21d

Power Costs Inc.	Consulting/Outside Services	NA	98
Powerhouse Rigging	Consulting/Outside Services	NA	114
PowerPlant Consultants	Consulting/Outside Services	NA	177
Powerplus Engineering LLC	Consulting/Outside Services	NA	77
Precision Excavating	Consulting/Outside Services	NA	88
Precision Resource Co.	Consulting/Outside Services	A	738
Pro Staff Personnel Services	Consulting/Outside Services	NA	212
Proactive Systems	Consulting/Outside Services	NA	763
Process Innovations	Consulting/Outside Services	NA	37
Prosource Technologies	Consulting/Outside Services	NA	29
QC Data Inc.	Consulting/Outside Services	NA	99
Quanta Utility Installation Company	Consulting/Outside Services	NA	49
Raptor Resource Project	Consulting/Outside Services	NA	40
Red Planet Consulting	Consulting/Outside Services	NA	62
Rellek Dev., Inc.	Consulting/Outside Services	NA	79
Resources Connection, Inc.	Consulting/Outside Services	NA	78
Revenew International Inc.	Consulting/Outside Services	NA	281
Rick Souther	Consulting/Outside Services	NA	83
Right Management Consulting, Inc.	Consulting/Outside Services	NA	407
RJ Services, Inc.	Consulting/Outside Services	NA	79
RM Software, Inc.	Consulting/Outside Services	NA	374
Robert Half	Consulting/Outside Services	NA	360
Royster Enterprises	Consulting/Outside Services	NA	137
S G S Statistical Services LLC	Consulting/Outside Services	NA	55
Sageriver Consulting	Consulting/Outside Services	NA	48
Sapphire Technologies	Consulting/Outside Services	NA	38
Satellite Shelters	Consulting/Outside Services	NA	206
Scott Madden & Associates	Consulting/Outside Services	NA	49
Seacrest Group	Consulting/Outside Services	NA	28
SGS Witter	Consulting/Outside Services	NA	172
Shared Resource Management	Consulting/Outside Services	NA	190
Shareholder.Com	Consulting/Outside Services	NA	32
Shaw Power Technologies Inc.	Consulting/Outside Services	NA	201
Shirley A Stadjuhar	Consulting/Outside Services	NA	56
Siemens Power T&D, Inc.	Consulting/Outside Services	NA	1,325
SJ Luzum Inc.	Consulting/Outside Services	NA	123
Soft Link Solutions	Consulting/Outside Services	NA	112
Solutions Marketing Consulting	Consulting/Outside Services	NA	288
Southwest Power Pool	Consulting/Outside Services	NA	31
Southwire/Forte Power Systems	Consulting/Outside Services	NA	183
Spectra	Consulting/Outside Services	NA	95
Spherion Corporation	Consulting/Outside Services	NA	292
SPL Worldgroup Inc.	Consulting/Outside Services	NA	553
Sprint Press Denver	Consulting/Outside Services	NA	34
Stop Processing Center	Consulting/Outside Services	NA	30
Stork Twin City Testing	Consulting/Outside Services	NA	70
STS Consultants	Consulting/Outside Services	NA	32
Sundel Research Inc.	Consulting/Outside Services	NA	25
Sungard Enform Consulting	Consulting/Outside Services	NA	193
Synergetic Design Inc.	Consulting/Outside Services	NA	960
Synova Inc.	Consulting/Outside Services	NA	133
Tabors Caramanis & Associates	Consulting/Outside Services	NA	90
Technology Resource Group, Inc.	Consulting/Outside Services	NA	106
Techreation	Consulting/Outside Services	NA	47
TekSystems, Inc.	Consulting/Outside Services	NA	352
The Apogee Group Inc.	Consulting/Outside Services	NA	106
The Bank Of New York	Consulting/Outside Services	NA	277
The Blackstone Group LP	Consulting/Outside Services	NA	29
The Gallup Organization	Consulting/Outside Services	NA	218
The Marathon Group	Consulting/Outside Services	NA	87
The Maris Group	Consulting/Outside Services	NA	446
The Mosaic Company	Consulting/Outside Services	NA	589
The Rapid Change Group	Consulting/Outside Services	NA	52
The Weitz Company LLC	Consulting/Outside Services	NA	237
Thermo Electron Scientific Instruments	Consulting/Outside Services	NA	36

21e

Thomson Financial Corporation	Consulting/Outside Services	NA		42
Towers Perrin	Consulting/Outside Services	NA		184
Trace Analysis	Consulting/Outside Services	NA		25
Trainor Construction Company Inc.	Consulting/Outside Services	NA		203
Trans Alarm	Consulting/Outside Services	NA		788
Transformer Disposal	Consulting/Outside Services	NA		76
TRC Mariah associates	Consulting/Outside Services	NA		49
Tree Specialists	Consulting/Outside Services	NA		129
Tru-check Inc.	Consulting/Outside Services	NA		29
Two Degrees	Consulting/Outside Services	NA		65
Ulteig Engineers, Inc.	Consulting/Outside Services	NA		822
United Accounts Inc.	Consulting/Outside Services	NA		38
United Sciences Testing	Consulting/Outside Services	NA		35
United States Department of Energy	Consulting/Outside Services	NA		51
UP Tempo Consulting	Consulting/Outside Services	NA		53
Utilities International, Inc.	Consulting/Outside Services	NA		3,663
Utility Engineering	Consulting/Outside Services	A		4,875
Varian Associates	Consulting/Outside Services	NA		33
Verifications Inc.	Consulting/Outside Services	NA		495
Verint Systems	Consulting/Outside Services	NA		260
Virginia A. Varga	Consulting/Outside Services	NA		64
Visual Horizon Communications	Consulting/Outside Services	NA		27
Wackenhut	Consulting/Outside Services	NA		2,691
Waltco, Inc.	Consulting/Outside Services	NA		68
Ware Consulting LLC	Consulting/Outside Services	NA		662
Waste Management	Consulting/Outside Services	NA		179
Wave Real Estate Group	Consulting/Outside Services	NA		106
Weather Eye Inc.	Consulting/Outside Services	NA		29
Wenck Associates, Inc.	Consulting/Outside Services	NA		295
Western Area Power Administration	Consulting/Outside Services	NA		30
Willa Inc.	Consulting/Outside Services	NA		28
WIPRO Limited	Consulting/Outside Services	NA		53
Wyndham Mills International Inc.	Consulting/Outside Services	NA		144
Xdata Corporation	Consulting/Outside Services	NA		84
Xelco Collection Service	Consulting/Outside Services	NA		286
Younger Brothers LLC	Consulting/Outside Services	NA		60
Zenith Consulting LLC	Consulting/Outside Services	NA		34
Zinn Corp	Consulting/Outside Services	NA		58
Other (789)	Various	NA		1,872

	Total Consulting/Outside Services			167,649

	TOTAL CONSULTING/OUTSIDE SERVICES EMPLOYED		$	180,333

21f

EMPLOYEE PENSION AND BENEFITS—ACCOUNT 926
(thousands of dollars)

INSTRUCTIONS: Provide a listing of each pension plan and benefit program provided by the service company. Such listing should be limited to $25,000.

DESCRIPTION	AMOUNT
Pensions	$	(12,592	)
Managed Health Care/Dental/Vision		19,999
Employee Savings Plans (401K)		7,377
Supplemental Executive Retirement Plan		5,655
Post Retirement Health Care		1,978
Life Insurance		1,250
Post Employment Benefits		(168	)
Long Term Disability		346
Other		1,021

TOTAL	$	24,866

GENERAL ADVERTISING EXPENSE—ACCOUNT 930.1
(thousands of dollars)

INSTRUCTIONS: Provide a listing of the amount included in Account 930.1, "General Advertising Expenses", classifying the items according to the nature of the advertising and as defined in the account definition. If a particular class includes an amount in excess of $3,000 applicable to a single payee, show separately the name of the payee and the aggregate amount applicable thereto.

DESCRIPTION	NAME OF PAYEE	AMOUNT
Ad Agency/Advertising/Printing	McClain Finlon Advertising Inc.	$	6,518
Advertising—Sponsorship	St. Paul Facilities Management		2,734
Advertising—Sponsorship	Minnesota Wild Hockey Club		1,121
Advertising	Pepsi Center		1,050
Advertising	Minntertainment Co.		500
Advertising	Nexus Energy Software, Inc.		187
Advertising	Bolger Concept to Print		163
Advertising	Direct Marketing Solutions		136
Printing	Hotchkiss, Inc.		132
Advertising	Saint Paul Festival & Heritage		127
Printing	DST Output, Inc.		120
Printing	Sprint Press		97
Advertising	St. Paul Area Chamber of Commerce		60
Advertising	South Dakota Community Foundation		60
Advertising	Vail Dunlap & Associates		50
Advertising	Taste of Minnesota		45
Advertising	Texas Panhandle Heritage		40
Advertising	Denver Civic Ventures		40
Advertising	United States Postmaster		38
Advertising	Advantage Publication		30
Advertising	RHL & Associates		25
Advertising	Penumbra Theater Company		25
Advertising	Intermedia Art		25
Advertising	Celebrations for Childen Inc.		25
Advertising	Minneapolis Downtown Council		22
Advertising	IPSOS Reid Limited Partnership		20
Advertising	Horation Alger Award		20
Advertising	Bolder Boulder		18
Printing	Merit Printing		16
Advertising	Adams Business Media		16
Advertising	Twin Cities Public Television		15
Advertising—Sponsorship	Grand Excursion Inc		15
Advertising	Blue Spark LLC		15
Advertising	Think Big Solutions		14
Advertising	National Association of Investors Corporation		14
Advertising	United Hospital Foundation		13
Advertising	Ad Strategies		13
Advertising	Minnesota Regional Chamber of Commerce		12
Advertising	Maris Group		12
Advertising	Wandel Press		11
Advertising	IEG Inc.		11

Advertising	St Joseph Home for Children	10
Advertising	Marketing Minneapolis LLC	10
Advertising	Graphic Source Inc.	10
Advertising	Denver Newspaper Agency	10
Advertising	Delay Foundation for Kids	10
Advertising	Colorado Garden Show	10
Advertising	Air & Waste Management Association	10
Advertising	Omega Lithograph Inc.	9
Advertising	Saint Paul Riverfront Corp.	8
Advertising	Goldstein's	8
Advertising	Energy Resource Center	8
Advertising	DW Mail LLC	8
Advertising	American Wind Energy Association	8
Printing	GA Wright Marketing Inc.	7
Advertising	YWCA of Minneapolis	6
Advertising—Sponsorship	Vail Place	6
Advertising	Spectra Images Inc.	6
Advertising	S Bee Johnson LLC	6
Advertising	Integrated Marketing	6
Advertising	Heinrich Inc.	6
Advertising	Twin City Habitat for Humanity	5
Advertising	Childrens Theatre Co.	5
Advertising	National Renewable Energy Laboratory	5
Advertising	National Council of Jewish Women	5
Advertising	Minnesota Orchestra	5
Advertising	MEDA	5
Advertising	Junior Achievement	5
Advertising	Jeremiah Program	5
Advertising—Sponsorship	Indianhead Council of Boy Scouts of America	5
Advertising	Friends of the Minneapolis	5
Advertising—Sponsorship	El Arco Iris Center for the Arts	5
Advertising	Como Zoo & Conservatory	5
Advertising	City of St Paul	5
Advertising	Business Wears	5
Advertising	Amherst H. Wilder Foundation	5
Advertising	Ordway Circle of Stars	4
Advertising	Minnesota Children's Museum	4
Advertising	Liaison Creative Services	4
Advertising	GLS Companies	4
Advertising	Executive Energy Forum	4
Advertising	Capital City Partnership	4
Advertising	Boys & Girls Club of the Twin Cities	4
Advertising	Viking Council	3
Advertising	Taste of the South	3

23a

Advertising	Minnesota Zoo		3
Advertising	Decision Analyst Inc.		3
Advertising	Children's Hospital & Clinics		3
Advertising	American Red Cross		3
Miscellaneous Advertising	Various (101)		78

	TOTAL	$	13,966

23b

MISCELLANEOUS GENERAL EXPENSES—ACCOUNT 930.2
(thousands of dollars)

INSTRUCTIONS: Provide a listing of the amount included in Account 930.2, "Miscellaneous General Expenses" classifying such expenses according to their nature. Payments and expenses permitted by Section 321 (b)(2) of the Federal Election Campaign Act, as amended by Public Law 94-283 in 1976 (2 U.S.C. 441 (b)(2)) shall be separately classified.

DESCRIPTION	AMOUNT
Utility Association Dues	$	2,407
Board of Director Fees and Expenses		2,202
Shared Asset Costs (1)		11,019
Shareholder Relations Expenses		1,445

TOTAL	$	17,073

(1): Costs for capital assets utilized by more than one affiliate company

RENTS—ACCOUNT 931
(thousands of dollars)

INSTRUCTIONS: Provide a listing of the amount included in Account 931, "Rents", classifying such expenses by major groupings of property, as defined in the account definition of the Uniform System of Accounts.

TYPE OF PROPERTY	AMOUNT
Rents—Office Space	$	16,084

TOTAL	$	16,084

23c

TAXES OTHER THAN INCOME TAXES—ACCOUNT 408
(thousands of dollars)

INSTRUCTIONS: Provide an analysis of Account 408 "Taxes Other Than Income Taxes". Separate the analysis into two groups: (1) other than U.S. Government taxes, and (2) U.S. Government taxes. Specify each of the various kinds of taxes and show the amounts thereof. Provide a subtotal for each class of tax.

KIND OF TAX		AMOUNT
Other Than U.S. Government Taxes:
	State Unemployment Taxes	$	1,486
	Franchise Tax—Texas, Kansas, Delaware, Ohio and New Mexico		17
	Denver Occupational Tax		35
	Other—various		—

SUBTOTAL			1,538

U.S. Government Taxes:
	Social Security and Medicare Taxes		14,592
	Federal Unemployment Taxes		209

SUBTOTAL			14,801

TOTAL		$	16,339

DONATIONS—ACCOUNT 426.1
(thousands of dollars)

INSTRUCTIONS: Provide a listing of the amount included in Account 426.1, "Donations", classifying such expenses by its purpose. The aggregate number and amount of all items of less than $3,000 may be shown in lieu of details.

NAME OF RECIPIENT	PURPOSE OF DONATION	AMOUNT
American Wind Energy	Contribution to support community assistance	$	8
Arvada Center	Contribution to support community assistance		3
BackenCooperative Golf Tournament, Cancer Charity	Contribution to support community assistance		7
CACI	Contribution to support community assistance		8
Carousel Promotions	Contribution to support community assistance		10
Citizens for Sensible Energy Choices	Contribution to support community assistance		20
Colorado Wind and Distributed Energy Conference	Contribution to support community assistance		4
Council of State Government	Contribution to support community assistance		5
Metropolitan Milwaukee Assoc of Commerce	Contribution to support community assistance		4
Mid-America Regulatory Comference	Contribution to support community assistance		5
Milestone Growth Fund Inc	Contribution to support community assistance		3
Minneapolis Downtown Council	Contribution to support community assistance		27
Minneapolis Regional Chamber of Commerce	Contribution to support community assistance		4
Minnesota Chamber of Commerce	Contribution to support community assistance		3
Minnesota Environmental Initiative	Contribution to support community assistance		10
Minnesota State Society	Contribution to support community assistance		4
Minnesota Women Lawyers	Contribution to support community assistance		4
Mueller Communication-Energy Symposium	Contribution to support community assistance		3
New Mexico Broadcaster Assoc	Contribution to support community assistance		9
Nuclear Energy Institute	Contribution to support community assistance		15
Southwest Sale Promotions	Contribution to support community assistance		16
The Shaka Franklin Foundation	Contribution to support community assistance		3
United States Dept of Commerce	Contribution to support community assistance		5
Urban League of Metro Denver	Contribution to support community assistance		5
Western Systems Power Pool	Contribution to support community assistance		6
Wisconsin Chamber of Commerce	Contribution to support community assistance		6
Wisconsin Environmental Initiative	Contribution to support community assistance		5
Wisconsin Public Utility Institute	Contribution to support community assistance		6
Xcel Energy Foundation	Contribution to support community assistance		3,197
Colorado School of Mines	Contribution to support education		5
Latin American Educational Foundation	Contribution to support education		5
Scholarship America	Contribution to support education		67
University of Wisconsin	Contribution to support education		4
Komen Foundation	Contribution to support health		4
Junior Achievement	Contribution to support young people		13
Wisconsin FFA Foundation	Contribution to support young people		6
Other (152)			37

	TOTAL	$	3,546

OTHER DEDUCTIONS—ACCOUNT 426.4 and 426.5
(thousands of dollars)

INSTRUCTIONS: Provide a listing of the amount include in Account 426.5, "Other Deductions", classifying such expenses according to their nature.

Account 426.4, Expenditures for Certain Civic, Political & Related Activities

DESCRIPTION	NAME OF PAYEE	AMOUNT
Federal Lobbying	Various	$	2,487
State Lobbying	Various		2,384
Federal PAC	Various		51
Chamber of Commerce Dues	Various		155
Payments to political party, candidate for public office, committee, etc.			—

	TOTAL	$	5,077

Account 426.5 Other Deductions

DESCRIPTION	NAME OF PAYEE	AMOUNT
NRG Bankruptcy and Reorganization (billed to Holding Company)	Various	$	546
Life Insurance Premiums for Corporate Officers and to fund non-qualified deferred compensation programs	Various		2,075
Social Dues and Expenses	Various		376
Penalties or fines	Various		7

	TOTAL	$	3,004

SCHEDULE XVIII—NOTES TO STATEMENT OF INCOME

INSTRUCTIONS: The space below is provided for important notes regarding the statement of income or any account thereof. Furnish particulars as to any significant increases and services rendered or expenses incurred during the year. Notes related to financial statements shown elsewhere in this report may be indicated here by reference.

Account 921 —	The increased cost is due to an accounting process change for the IBM bill and is offset in account 922.
Account 922 —	Costs for Aviation Services, Information Technology, Supply Chain Purchasing and Facilities are initially recorded in income statement clearing accounts (408, 920-926) according to the nature of the cost. At month-end these costs are transferred to the balance sheet clearing accounts (184) and account 922 is credited. The increased credit amount is due to an accounting process change for the IBM bill and is offset in account 921.
Account 923 —	The increased cost is due to additional computer support and consulting for business systems applications, and engineering support for plant rehabilitation projects.
Account 925 —	The decrease in cost is due to recording insurance expense directly in affiliate companies' prepaid insurance balance sheet accounts.
Account 931 —	Costs for Facilities are initially recorded in income statement clearing accounts (418, 920-926) according to the nature of the cost. At month-end, these costs are billed out of the Service Co. based on labor distribution and charged to Account 931.

Also see Notes to Financial Statements on pages 14-14f for additional Notes to Statement of Income.

ORGANIZATION CHART (SUMMARY LEVEL)

Organization Chart				Service Function
Chairman, CEO				Executive Management Services
	Audit Services			Internal Audit
	Investor Relations			Investor Relations
	Financial Operations—Vice-President, CFO			Accounting, Fin Reporting, Taxes
		Accounting		Accounting, Fin Reporting, Taxes
		Finance and Treasury		Finance and Treasury
	General Counsel			Legal
		Claims Services		Claims Services
	President, COO			Corp Strategy & Business Development
		Business Systems—Vice-President, CIO		Information Technology
		Shared Services—Vice-President, CAO		Executive Management Services
			Shared Services-Controller	Business Unit Acctg & Budgeting
			Human Resources	Human Resources
			Communications	Corporate and Employee Communications
			Supply Chain	Supply Chain and S. Chain Special Programs
			Facilities and Real Estate	Facilities and Real Estate
			Aviation	Aviation
			Payroll	Payroll
			Accounts Payable	Payment & Reporting
		Energy Supply—President		Business Unit Acctg & Budgeting
			Energy Supply Asset Management—Vice- President	Business Unit Acctg & Budgeting
			Energy Supply Business Resources	Energy Supply Business Resources
			Energy Supply Engineering & Environmental	Energy Supply Engineering & Environmental
		Customer & Field Oprations—President		Business Unit Acctg & Budgeting
			C&FO—Finance—Vice-President	Business Unit Acctg & Budgeting
			C&FO Engineering/Design	Energy Delivery Engineering/Design
			C&FO Construction, Oper. & Maint.	Energy Delivery Constr, Oper & Maint
			Fleet	Fleet
			C&FO Marketing	Energy Delivery Marketing
			Marketing and Sales	Marketing and Sales
			Customer Service	Customer Service
			Receipts Processing	Receipts Processing
	Commercial Enterprises—President			Corp Strategy & Business Development
		Regulatory and Governmental Affairs—Vice-President		Rates and Regulation
			Regulatory Administration	Rates and Regulation
			Government Affairs	Government Affairs
		Regulated Trading & Marketing		Energy Mkts Reg Trading & Mktg
			Energy Markets Fuel Procurement	Energy Markets Fuel Procurement
		Energy Markets Accounting & Finance		Business Unit Acctg & Budgeting

METHODS OF ALLOCATION

Revenue Ratio—Based on the sum of the monthly revenue amounts for the prior year ending December 31, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is for all applicable Operating Companies and affiliate companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

Revenue Ratio with intercompany dividends assigned to Xcel Energy Inc.—Based on the sum of the monthly revenue amounts for the prior year ending December 31, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is for all applicable Operating Companies and affiliate companies. Xcel Energy Inc. will be assigned the amount of intercompany dividends. This ratio will be determined annually, or at such time as may be required due to significant changes.

Employee Ratio—Based on the number of employees at the end of the prior year ending December 31, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is for all applicable Operating Companies and affiliate companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

Employee Ratio with number of common officers assigned to Xcel Energy Inc.—Based on the number of employees at the end of the prior year ending December 31, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is for all applicable Operating Companies and affiliate companies. Xcel Energy Inc. will be assigned the number of common officers. This ratio will be determined annually, or at such time as may be required due to significant changes.

Total Assets Ratio—Based on the total assets as of December 31 for the prior year, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is for all applicable Operating Companies and affiliate companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

Square Footage Ratio—Based on the total square footage as of December 31 for the prior year, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is for all applicable Operating Companies and affiliate companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

Invoice Transaction Ratio—Based on the sum of the monthly number of invoice transactions processed for the prior year ending December 31, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is for all applicable Operating Companies and affiliate companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

Customer Bills Ratio—Based on the average of the monthly total number of customer bills issued during the prior year ending December 31, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is for all applicable Operating Companies and affiliate companies. This ratio will be determined annually, or at such a time as may be required due to significant changes.

MWh Generation Ratio—Based on the sum of the monthly electric MWh generated during the prior year ending December 31, the numerator of which is for an applicable Operating Company and the denominator of which is for all applicable Operating Companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

Total MWh Sales Ratio—Based on the sum of the monthly electric MWh hours sold during the prior year ending December 31, the numerator of which is for an applicable Operating Company and the denominator of which is for all applicable Operating Companies. This includes sales to ultimate customers, wholesale customers, and non-requirement sales for resale. This ratio will be determined annually, or at such time as may be required due to significant changes.

Customers Ratio—Based on the average of the monthly total electric customers (and/or gas customers, or residential, business and large commercial and industrial customers where applicable) for the prior year ending December 31, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is for all applicable Operating Companies and affiliate companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

Labor Dollars Ratio—Based on the XES department (performing center) labor dollars charged to Operating companies and other affiliates for the month. The numerator of which is the labor dollars charged to an Operating Company or affiliate company and the denominator of which is for all Operating Companies and affiliate companies charged by the department for the month.

Delivery Services Gross Plant Ratio—Based on transmission and distribution gross plant for the Delivery Business unit, both electric and gas for the prior year ending December 31, the numerator of which is an applicable Operating Company and the denominator of which is for all applicable Operating Companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

Meters Ratio—Based on the number of meters at the end of the prior year ending December 31, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is for all applicable Operating Companies and affiliate companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

Customer Contacts Ratio—Based on the total annual number of customer contacts at the end of the prior year ending December 31, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is for all applicable Operating Companies and affiliate companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

Accounts Payable Transactions Ratio—Based on the total annual number of accounts payable transactions by system application at the end of the prior year ending December 31, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is for all applicable Operating Companies and affiliate companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

Inventory Transactions Ratio—Based on the total annual number of inventory transactions by system application at the end of the prior year ending December 31, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is for all applicable Operating Companies and affiliate companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

Work Management Transactions Ratio—Based on the total annual number of work management transactions by system application at the end of the prior year ending December 31, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is

29a

for all applicable Operating Companies and affiliate companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

Purchasing Transactions Ratio—Based on the total annual number of purchasing transactions by system application at the end of the prior year ending December 31, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is for all applicable Operating Companies and affiliate companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

Total Plant Ratio—Based on total property, plant and equipment at the end of the prior year ending December 31, the numerator of which is an applicable Operating Company and the denominator of which is for all applicable Operating Companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

Total Phones Ratio—Based on the number of phones at the end of the prior year ending December 31, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is for all applicable Operating Companies and affiliate companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

Total Radios Ratio—Based on the number of radios at the end of the prior year ending December 31, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is for all applicable Operating Companies and affiliate companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

Total Computers Ratio—Based on the number of computers at the end of the prior year ending December 31, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is for all applicable Operating Companies and affiliate companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

Total Software Application's Users Ratio—Based on the number of users of a specific software application at the end of the prior year ending December 31, the numerator of which is for an applicable Operating Company or affiliate company and the denominator of which is for all applicable Operating Companies and affiliate companies. This ratio will be determined annually, or at such time as may be required due to significant changes.

29b

ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED

For the Period Ended December 31, 2004

The following annual statement was supplied to each associate company in support of the amount of compensation for use of capital billed during 2004:

In accordance with Instruction 01-12 of the Securities and Exchange Commission's Uniform System of Accounts for Mutual Service Companies and Subsidiary Service Companies, Xcel Energy Services Inc. (XES) submits the following information on the billing of interest on borrowed funds to associated companies for the year 2004:

A.: Amount of interest billed to associate companies is contained on page 16, Analysis of Billing.
B.: Amount of interest XES pays Xcel Energy Inc. is based on Xcel Energy's weighted cost of debt adjusted for their commitment (facilities) fees. Interest is billed to associate companies based on each company's Accounts Receivable balance weighted with other significant Service Company assets in which the benefits can be directly assigned to specific companies. Companies with outstanding Accounts Receivable balances greater than 30 days and more than $1,000 are charged a 1% penalty on the outstanding balance in addition to their monthly interest expense. The penalty amounts reduce the monthly interest amount allocated based on total Accounts Receivable balances.

SIGNATURE CLAUSE

Pursuant to the requirements of the Public Utility Holding Company Act of 1935 and the rules and regulations of the Securities and Exchange Commission issued thereunder, the undersigned company has duly caused this report to be signed on its behalf by the undersigned officer thereunto duly authorized.

		Xcel Energy Services Inc. (Name of Reporting Company)
		By: /s/ TERESA S. MADDEN (Signature of Signing Officer)
		Teresa S. Madden, Vice President and Controller (Printed Name and Title of Signing Officer)

Date: April 29, 2005

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