What are the key assets being acquired and at what price?

Xcel Energy's subsidiary, Public Service Company of Colorado (PSCo), is acquiring the Rocky Mountain Energy Center (621 MW) and the Blue Spruce Energy Center (310 MW) for a total of $739 million. These are natural gas-fired power plants.

What is the expected financial impact of this acquisition on Xcel Energy?

Xcel Energy anticipates that the acquisition will be 'accretive' in 2011, meaning it is expected to increase the company's earnings per share, assuming reasonable regulatory cost recovery and access to capital markets on favorable terms.

What are the conditions for the acquisition to be completed?

The acquisition is subject to obtaining necessary state and federal regulatory approvals, including approval for cost recovery. The expected closing date is December 2010.

XEL/XELLL 8-K: Material Agreements

Q: How will this acquisition be financed?

The acquisition will be financed through a combination of PSCo issuing long-term debt and Xcel Energy issuing approximately $500 million in long-term debt and $400 million in equity. These funds will also help pay down short-term debt and cover a December 2010 debt maturity for Xcel Energy.

Summary

Xcel Energy Inc. (XEL), through its wholly-owned subsidiary Public Service Company of Colorado (PSCo), announced on April 2, 2010, an agreement to acquire the Rocky Mountain Energy Center and Blue Spruce Energy Center natural gas generation assets for $739 million. These assets, with a combined capacity of 931 MW, are currently supplying power to PSCo under existing power purchase agreements set to expire in 2013 and 2014. The acquisition, which originated from a 2007 resource plan and was the least-cost option for thermal resources, is anticipated to close in December 2010, subject to regulatory approvals and cost recovery. To finance the acquisition, PSCo plans to issue long-term debt, while Xcel Energy expects to issue approximately $500 million in long-term debt and $400 million in equity during 2010-2011. These funds will support an equity investment into PSCo, reduce Xcel Energy's short-term debt, and address a $359 million debt maturity in December 2010. Xcel Energy anticipates the acquisition will be accretive to earnings in 2011, provided regulatory recovery is approved and capital markets remain accessible on reasonable terms.

Key Highlights

1Public Service Company of Colorado (PSCo), a subsidiary of Xcel Energy, will acquire two natural gas generation assets (Rocky Mountain Energy Center and Blue Spruce Energy Center) for $739 million.
2The acquired assets have a combined capacity of 931 MW (621 MW and 310 MW respectively) and are expected to contribute to PSCo's energy needs post-2013/2014.
3The transaction is a result of a competitive bidding process from a 2007 resource plan and was identified as the least-cost option for thermal resources.
4The acquisition is expected to close in December 2010, contingent upon state and federal regulatory approvals, including cost recovery.
5Financing will involve a combination of PSCo issuing long-term debt and Xcel Energy issuing approximately $500 million in long-term debt and $400 million in equity between 2010 and 2011.
6Xcel Energy anticipates the acquisition to be earnings accretive starting in 2011, assuming favorable regulatory outcomes and capital market access.
7The filing also serves to announce a related News Release dated April 5, 2010, as an exhibit.

XCEL ENERGY INC 8-K Report, Material Agreement (Apr 5, 2010)

Summary

Key Highlights

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