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    xel_11/26/02b xel_11/26/02b Document Transcript

    • UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended Sept. 30, 2002 OR [] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Exact name of registrant as specified in its charter, State or other jurisdiction of incorporation or organization, Address of Commission principal executive offices and Registrant’s Telephone Number, IRS Employer File Number including area code Identification No. 000-31709 NORTHERN STATES POWER COMPANY 41-1967505 (a Minnesota Corporation) 414 Nicollet Mall, Minneapolis, Minn. 55401 Telephone (612) 330-5500 001-3140 NORTHERN STATES POWER COMPANY 39-0508315 (a Wisconsin Corporation) 1414 W. Hamilton Ave., Eau Claire, Wis. 54701 Telephone (715) 839-2625 001-3280 PUBLIC SERVICE COMPANY OF COLORADO 84-0296600 (a Colorado Corporation) 1225 17th Street, Denver, Colo. 80202 Telephone (303) 571-7511 001-3789 SOUTHWESTERN PUBLIC SERVICE COMPANY 75-0575400 (a New Mexico Corporation) Tyler at Sixth, Amarillo, Texas 79101 Telephone (303) 571-7511 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such o reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Northern States Power Co. (a Minnesota corporation), Northern States Power Co. (a Wisconsin corporation), Public Service Co. of Colorado and Southwestern Public Service Co. meet the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and are therefore filing this Form 10-Q with the reduced disclosure format specified in General Instruction H (2) to such Form 10-Q. Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. All outstanding common stock is owned beneficially and of record by Xcel Energy Inc., a Minnesota corporation. Shares outstanding at October 31, 2002:
    • Northern States Power Co. (a Minnesota Corporation) Common Stock, $0.01 par value 1,000,000 Shares Northern States Power Co. (a Wisconsin Corporation) Common Stock, $100 par value 933,000 Shares Public Service Co. of Colorado Common Stock, $0.01 par value 100 Shares Southwestern Public Service Co. Common Stock, $1 par value 100 Shares
    • Table of Contents PART I — FINANCIAL INFORMATION Item l. Financial Statements 3 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27 Item 4. Controls and Procedures 36 PART II — OTHER INFORMATION Item 1. Legal Proceedings 36 Item 6. Exhibits and Reports on Form 8-K 37 This combined Form 10-Q is separately filed by Northern States Power Co., a Minnesota corporation (NSP-Minnesota), Northern States Power Co., a Wisconsin corporation (NSP-Wisconsin), Public Service Co. of Colorado (PSCo) and Southwestern Public Service Co. (SPS). NSP-Minnesota, NSP-Wisconsin, PSCo and SPS are all wholly owned subsidiaries of Xcel Energy Inc. Xcel Energy is a registered holding company under the Public Utility Holding Company Act (PUHCA). Additional information on Xcel Energy is available on various filings with the SEC. Information contained in this report relating to any individual company is filed by such company on its own behalf. Each registrant makes representations only as to itself and makes no other representations whatsoever as to information relating to the other registrants. This report should be read in its entirety. No one section of the report deals with all aspects of the subject matter. 2
    • PART 1. FINANCIAL INFORMATION Item 1. Financial Statements NSP-MINNESOTA AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Thousands of Dollars) Three Months Ended Sept. 30 Nine Months Ended Sept. 30 2002 2001 2002 2001 Operating revenues: Electric utility $717,173 $765,607 $1,818,973 $2,034,081 Gas utility 31,186 51,691 308,504 497,361 Electric trading margin (3,059) — (1,917) — Other 6,836 9,408 18,800 36,552 Total operating revenues 752,136 826,706 2,144,360 2,567,994 Operating expenses: Electric fuel and purchased power 236,033 322,127 613,386 806,986 Cost of gas sold and transported 21,848 38,309 209,726 392,824 Other operating and maintenance expenses 190,189 200,243 600,291 622,279 Depreciation and amortization 89,285 82,536 262,274 249,130 Taxes (other than income taxes) 45,363 27,800 131,291 129,141 Special charges (see Note 2) — — 4,324 — Total operating expenses 582,718 671,015 1,821,292 2,200,360 Operating income 169,418 155,691 323,068 367,634 Other income (expense) — net 3,709 (1,250) 18,269 2,558 Interest charges and financing costs: Interest charges — net of amounts capitalized 30,805 21,199 65,423 65,537 Distributions on redeemable preferred securities of subsidiary trust 3,938 3,938 11,813 11,813 Total interest charges and financing costs 34,743 25,137 77,236 77,350 Income before income taxes 138,384 129,304 264,101 292,842 Income taxes 55,392 53,214 105,652 118,179 Net income $ 82,992 $ 76,090 $ 158,449 $ 174,663 See Notes to Consolidated Financial Statements 3
    • NSP-MINNESOTA CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Thousands of Dollars) Nine Months Ended Sept. 30 2002 2001 Operating activities: Net income $ 158,449 $ 174,663 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 270,556 259,607 Nuclear fuel amortization 37,208 31,843 Deferred income taxes (37,217) 7,532 Amortization of investment tax credits (6,236) (6,108) Allowance for equity funds used during construction (3,843) (4,676) Conservation incentive accrual adjustments (6,564) (32,218) Gain on sale of property (6,785) — Change in accounts receivable 35,017 71,010 Change in inventories (6,345) (3,803) Change in other current assets 50,586 63,376 Change in accounts payable (54,831) (74,001) Change in other current liabilities 34,986 (25,927) Change in other assets and liabilities (1,604) (26,442) Net cash provided by operating activities 463,377 434,856 Investing activities: Utility capital/construction expenditures (280,584) (300,169) Proceeds from sale of property 11,152 — Allowance for equity funds used during construction 3,843 4,676 Investments in external decommissioning fund (47,141) (42,559) Other investments — net (1,599) (10,164) Net cash used in investing activities (314,329) (348,216) Financing activities: Short-term borrowings — net (281,008) (140,804) Proceeds from issuance of long-term debt 624,690 — Repayment of long-term debt, including reacquisition premiums (778) (1,073) Capital contributions from parent 42,431 184,934 Dividends paid to parent (143,728) (123,292) Net cash provided by (used in) financing activities 241,607 (80,235) Net increase in cash and cash equivalents 390,655 6,405 Cash and cash equivalents at beginning of year 17,169 11,926 Cash and cash equivalents at end of year $ 407,824 $ 18,331 See Notes to Consolidated Financial Statements 4
    • NSP-MINNESOTA AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Thousands of Dollars) Sept. 30, Dec. 31, 2002 2001 ASSETS Current assets: Cash and cash equivalents $ 407,824 $ 17,169 Accounts receivable — net of allowance for bad debts: $5,146 and $5,452, respectively 212,640 227,007 Accounts receivable from affiliates 10,762 31,528 Accrued unbilled revenues 75,300 125,770 Materials and supplies inventories at average cost 108,734 103,934 Fuel inventory at average cost 33,201 31,945 Gas inventory at average cost 25,411 25,122 Derivative instruments valuation 1,762 204 Prepayments and other 45,823 48,285 Total current assets 921,457 610,964 Property, plant and equipment, at cost: Electric utility plant 6,761,235 6,582,337 Gas utility plant 707,656 695,338 Construction work in progress 387,414 316,468 Other 368,184 368,513 Total property, plant and equipment 8,224,489 7,962,656 Less accumulated depreciation (4,557,101) (4,310,214) Nuclear fuel — net of accumulated amortization: $1,047,063 and $1,009,855, respectively 53,295 96,315 Net property, plant and equipment 3,720,683 3,748,757 Other assets: Nuclear decommissioning fund investments 604,148 596,113 Other investments 23,901 22,542 Regulatory assets 229,433 226,088 Prepaid pension asset 244,857 188,287 Other 74,530 64,278 Total other assets 1,176,869 1,097,308 Total assets $ 5,819,009 $ 5,457,029 LIABILITIES AND EQUITY Current liabilities: Current portion of long-term debt $ 232,228 $ 153,134 Short-term debt 100,176 381,184 Accounts payable 181,103 235,930 Accounts payable to affiliates 42,566 42,550 Taxes accrued 209,764 168,491 Dividends payable to parent 51,859 44,332 Other 62,167 76,004 Total current liabilities 879,863 1,101,625 Deferred credits and other liabilities: Deferred income taxes 678,715 697,605 Deferred investment tax credits 75,964 82,598 Regulatory liabilities 482,822 468,051 Benefit obligations and other 137,357 133,771 Total deferred credits and other liabilities 1,374,858 1,382,025
    • Long-term debt 1,578,753 1,039,220 Mandatorily redeemable preferred securities of subsidiary trust 200,000 200,000 Common stock — authorized 5,000,000 shares of $0.01 par value, outstanding 1,000,000 shares 10 10 Premium on common stock 804,586 762,155 Retained earnings 997,629 990,435 Leveraged ESOP (16,680) (18,564) Accumulated other comprehensive income (10) 123 Total common stockholder’s equity 1,785,535 1,734,159 Commitments and contingencies (See Note 5) Total liabilities and equity $ 5,819,009 $ 5,457,029 See Notes to Consolidated Financial Statements 5
    • NSP-WISCONSIN STATEMENTS OF INCOME (UNAUDITED) (Thousands of Dollars) Three Months Ended Sept. 30 Nine Months Ended Sept. 30 2002 2001 2002 2001 Operating revenues: Electric utility $121,578 $122,897 $348,689 $340,732 Gas utility 8,113 9,089 67,352 96,615 Other 541 125 652 336 Total operating revenues 130,232 132,111 416,693 437,683 Operating expenses: Electric fuel and purchased power 54,971 65,533 159,617 185,049 Cost of gas sold and transported 4,201 6,381 46,958 76,325 Cost of sales — nonregulated and other 388 — 388 — Other operating and maintenance expenses 27,785 26,449 76,677 77,513 Depreciation and amortization 11,313 10,286 33,152 30,807 Taxes (other than income taxes) 4,012 4,031 12,229 12,065 Special charges (see Note 2) — — 511 — Total operating expenses 102,670 112,680 329,532 381,759 Operating income 27,562 19,431 87,161 55,924 Other income (expense) — net (514) 366 479 1,101 Interest charges 5,763 5,542 17,336 16,383 Income before income taxes 21,285 14,255 70,304 40,642 Income taxes 8,789 5,628 27,439 15,509 Net income $ 12,496 $ 8,627 $ 42,865 $ 25,133 See Notes to Financial Statements 6
    • NSP-WISCONSIN STATEMENTS OF CASH FLOWS (UNAUDITED) (Thousands of Dollars) Nine Months Ended Sept. 30 2002 2001 Operating activities: Net income $ 42,865 $ 25,133 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 34,052 31,577 Deferred income taxes 2,364 1,903 Amortization of investment tax credits (605) (614) Allowance for equity funds used during construction (406) (1,111) Undistributed equity in earnings of unconsolidated affiliates (147) (217) Change in accounts receivable 299 15,158 Change in inventories 256 (1,005) Change in other current assets 13,274 20,736 Change in accounts payable 13,703 (36,228) Change in other current liabilities 12,897 1,918 Change in other assets and liabilities (6,188) (6,762) Net cash provided by operating activities 112,364 50,488 Investing activities: Capital/construction expenditures (31,136) (45,842) Allowance for equity funds used during construction 406 1,111 Other investments — net (75) (98) Net cash used in investing activities (30,805) (44,829) Financing activities: Short-term borrowings from affiliate — net (34,300) (8,700) Capital contributions from parent 2,438 25,000 Dividends paid to parent (34,757) (21,959) Net cash used in financing activities (66,619) (5,659) Net increase in cash and cash equivalents 14,940 — Cash and cash equivalents at beginning of period 30 31 Cash and cash equivalents at end of period $ 14,970 $ 31 See Notes to Financial Statements 7
    • NSP-WISCONSIN BALANCE SHEETS (UNAUDITED) (Thousands of Dollars) Sept. 30, Dec. 31, 2002 2001 ASSETS Current assets: Cash and cash equivalents $ 14,970 $ 30 Accounts receivable — net of allowance for bad debts: $1,258 and $969, respectively 34,422 31,870 Accounts receivable from affiliates — 3,006 Accrued unbilled revenues 13,084 20,596 Materials and supplies inventories at average cost 7,040 5,885 Fuel inventory at average cost 4,376 5,854 Gas inventory. at average cost 3,378 3,311 Prepaid taxes 10,028 13,157 Prepayments and other 1,316 3,949 Total current assets 88,614 87,658 Property, plant and equipment, at cost: Electric utility plant 1,149,934 1,132,114 Gas utility plant 129,952 127,635 Other and construction work in progress 122,431 115,435 Total property, plant and equipment 1,402,317 1,375,184 Less accumulated depreciation (582,649) (553,467) Net property, plant and equipment 819,668 821,717 Other assets: Other investments 10,046 9,824 Regulatory assets 44,460 37,123 Prepaid pension asset 36,058 28,563 Other 7,757 7,373 Total other assets 98,321 82,883 Total assets $1,006,603 $ 992,258 LIABILITIES AND EQUITY Current liabilities: Current portion of long-term debt $ 34 $ 34 Short-term debt — notes payable to affiliate — 34,300 Accounts payable 13,846 14,482 Accounts payable to affiliates 14,339 — Dividends payable to parent 12,372 10,988 Other 34,708 22,515 Total current liabilities 75,299 82,319 Deferred credits and other liabilities: Deferred income taxes 123,110 119,895 Deferred investment tax credits 15,022 15,628 Regulatory liabilities 16,150 16,891 Benefit obligations and other 45,194 34,925 Total deferred credits and other liabilities 199,476 187,339 Long-term debt 313,119 313,054 Common stock — authorized 1,000,000 shares of $100 par value; outstanding 933,000 shares 93,300 93,300 Premium on common stock 62,210 59,771
    • Retained earnings 263,199 256,475 Total common stockholder’s equity 418,709 409,546 Commitments and contingent liabilities (see Note 5) Total liabilities and equity $1,006,603 $ 992,258 See Notes to Financial Statements 8
    • PUBLIC SERVICE CO. OF COLORADO AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Thousands of Dollars) Three Months Ended Sept. 30, Nine Months Ended Sept. 30, 2002 2001 2002 2001 Operating revenues: Electric utility $497,885 $627,106 $1,387,414 $1,826,923 Electric trading margin 2,276 6,559 (41) 36,683 Gas utility 89,430 153,857 521,858 986,391 Steam and other 4,535 4,354 17,513 23,422 Total operating revenues 594,126 791,876 1,926,744 2,873,419 Operating expenses: Electric fuel and purchased power 232,021 401,224 637,963 1,089,550 Cost of gas sold and transported 31,836 97,038 293,542 762,422 Cost of sales — steam and other 3,782 914 7,581 8,526 Other operating and maintenance expenses 111,801 124,269 334,580 337,512 Depreciation and amortization 61,480 59,088 190,138 175,369 Taxes (other than income taxes) 18,489 9,273 61,201 53,151 Special charges (see Note 2) 1 — 132 23,018 Total operating expenses 459,410 691,806 1,525,137 2,449,548 Operating income 134,716 100,070 401,607 423,871 Other income (expense) — net (2,428) (2,722) (2,540) 4,519 Interest charges and financing costs: Interest charges — net of amount capitalized 34,788 26,976 94,902 86,147 Distributions on redeemable preferred securities of subsidiary trust 3,686 3,800 11,058 11,400 Total interest charges and financing costs 38,474 30,776 105,960 97,547 Income before income taxes 93,814 66,572 293,107 330,843 Income taxes 26,847 18,625 97,087 109,205 Net income $ 66,967 $ 47,947 $ 196,020 $ 221,638 See Notes to Consolidated Financial Statements 9
    • PUBLIC SERVICE CO. OF COLORADO AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Thousands of Dollars) Nine Months Ended Sept. 30, 2002 2001 Operating activities: Net income $ 196,020 $ 221,638 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 196,764 181,566 Deferred income taxes 26,572 (27,891) Amortization of investment tax credits (3,211) (3,089) Allowance for equity funds used during construction 22 (526) Write-off of post-employment costs — 23,018 Unrealized gain on derivative financial instruments (85,411) — Change in accounts receivable 45,762 63,580 Change in inventories (21,090) (22,610) Change in other current assets 32,010 261,549 Change in accounts payable (60,217) (266,476) Change in other current liabilities 95,254 105,160 Change in other assets and liabilities 20,700 (17,909) Net cash provided by operating activities 443,175 518,010 Investing activities: Capital/construction expenditures (359,412) (299,708) Proceeds from disposition of property, plant and equipment 17,527 5,401 Allowance for equity funds used during construction (22) 526 Other investments — net (1,036) 1,781 Net cash used in investing activities (342,943) (292,000) Financing activities: Short-term borrowings — net (487,388) 105,075 Proceeds from issuance of long-term debt 594,000 100,000 Repayment of long-term debt, including reacquisition premiums (3,142) (241,248) Capital contributions from parent 54,749 — Dividends paid to parent (169,985) (166,922) Net cash used in financing activities (11,766) (203,095) Net (decrease) increase in cash and cash equivalents 88,466 22,915 Cash and cash equivalents at beginning of period 22,666 15,696 Cash and cash equivalents at end of period $ 111,132 $ 38,611 See Notes to Consolidated Financial Statements 10
    • PUBLIC SERVICE CO. OF COLORADO AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Thousands of Dollars) Sept. 30, Dec. 31, 2002 2001 ASSETS Current assets: Cash and cash equivalents $ 111,132 $ 22,666 Accounts receivable — net of allowance for bad debts of $12,731 and $14,510, respectively 140,588 209,913 Accounts receivable from affiliates 23,563 — Accrued unbilled revenues 215,694 269,167 Recoverable purchased gas and electric energy costs 43,346 16,763 Materials and supplies inventories at average cost 47,368 40,893 Fuel inventory at average cost 30,339 22,135 Gas inventory — replacement cost (below) in excess of LIFO: ($41,165) and $11,331, respectively 85,917 79,505 Derivative instruments valuation — at market 3,742 3,855 Prepayments and other 17,018 56,001 Total current assets 718,707 720,898 Property, plant and equipment, at cost: Electric utility 5,328,086 5,253,693 Gas utility 1,472,638 1,416,730 Construction work in progress 391,844 273,539 Other 624,209 586,261 Total property, plant and equipment 7,816,777 7,530,223 Less: accumulated depreciation (2,870,773) (2,746,687) Net property, plant and equipment 4,946,004 4,783,536 Other assets: Other investments 11,148 10,112 Regulatory assets 241,201 192,841 Prepaid pension asset 69,547 60,797 Other 31,235 72,694 Total other assets 353,131 336,444 Total assets $ 6,017,842 $ 5,840,878 LIABILITIES AND EQUITY Current liabilities: Current portion of long-term debt $ 267,089 $ 17,174 Short-term debt 88,074 562,812 Note payable to affiliate 15,915 28,565 Accounts payable 298,069 359,406 Accounts payable to affiliates 61,271 60,151 Taxes accrued 93,494 60,780 Dividends payable to parent 60,925 53,387 Derivative instruments valuation — at market 3,421 50,385 Other 203,786 141,245 Total current liabilities 1,092,044 1,333,905 Deferred credits and other liabilities: Deferred income taxes 555,163 564,268 Deferred investment tax credits 76,441 79,652 Regulatory liabilities 46,589 49,048 Other deferred credits 2,575 12,435 Customer advances for construction 93,932 85,582 Benefit obligations and other 76,623 66,835
    • Total deferred credits and other liabilities 851,323 857,820 Long-term debt 1,812,500 1,465,055 Mandatorily redeemable preferred securities of subsidiary trust 194,000 194,000 Common stock — authorized 100 shares of $0.01 par value, outstanding 100 shares — — Premium on common stock 1,644,833 1,590,084 Retained earnings 422,843 404,347 Accumulated other comprehensive income 299 (4,333) Total common stockholder’s equity 2,067,975 1,990,098 Commitments and contingent liabilities (see Note 5) Total liabilities and equity $ 6,017,842 $ 5,840,878 See Notes to Consolidated Financial Statements 11
    • SOUTHWESTERN PUBLIC SERVICE CO. STATEMENTS OF INCOME (UNAUDITED) (Thousands of Dollars) Three Months Ended Sept. 30 Nine Months Ended Sept. 30 2002 2001 2002 2001 Operating revenues — electric utility $291,857 $387,219 $770,466 $1,088,173 Operating expenses: Electric fuel and purchased power 158,324 226,687 414,699 679,005 Other operating and maintenance expenses 34,774 43,548 112,867 129,218 Depreciation and amortization 22,487 20,697 65,778 61,506 Taxes (other than income taxes) 13,884 10,608 39,861 35,684 Special charges (see Note 2) — — 5,114 — Total operating expenses 229,469 301,540 638,319 905,413 Operating income 62,388 85,679 132,147 182,760 Other income — net 2,075 1,965 4,174 8,255 Interest charges and financing costs: Interest charges — net of amounts capitalized 11,570 9,319 34,404 34,207 Distributions on redeemable preferred securities of subsidiary trust 1,963 1,963 5,888 5,888 Total interest charges and financing costs 13,533 11,282 40,292 40,095 Income before income taxes 50,930 76,362 96,029 150,920 Income taxes 19,189 28,653 36,111 56,860 Net income $ 31,741 $ 47,709 $ 59,918 $ 94,060 See Notes to Financial Statements 12
    • SOUTHWESTERN PUBLIC SERVICE CO. STATEMENTS OF CASH FLOWS (UNAUDITED) (Thousands of Dollars) Nine Months Ended Sept. 30, 2002 2001 Operating activities: Net income $ 59,918 $ 94,060 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 72,129 64,301 Deferred income taxes 14,743 (19,144) Amortization of investment tax credits (187) (188) Change in accounts receivable (10,764) (5,568) Change in inventories (4,978) (632) Change in other current assets 28,969 74,475 Change in accounts payable 4,527 (50,427) Change in other current liabilities (31,482) 27,418 Change in other assets and liabilities (14,938) (14,860) Net cash provided by operating activities 117,937 169,435 Investing activities: Capital/construction expenditures (38,198) (93,445) Costs/proceeds from disposition of property, plant and equipment 4,059 — Other investments — net (3,003) 119,942 Net cash (used in) provided by investing activities (37,142) 26,497 Financing activities: Short-term borrowings — net — (135,173) Repayment of long-term debt, including reacquisition premiums — 168 Capital contributions from parent 615 — Dividends paid to parent (68,912) (64,566) Net cash used in financing activities (68,297) (199,571) Net (decrease) increase in cash and cash equivalents 12,498 (3,639) Cash and cash equivalents at beginning of period 65,499 10,826 Cash and cash equivalents at end of period $ 77,997 $ 7,187 See Notes to Financial Statements 13
    • SOUTHWESTERN PUBLIC SERVICE CO. BALANCE SHEETS (UNAUDITED) (Thousands of Dollars) Sept. 30, Dec. 31, 2002 2001 ASSETS Current assets: Cash and cash equivalents $ 77,997 $ 65,499 Accounts receivable — net of allowance for bad debts of $1,162 and $1,785, respectively 53,366 61,688 Accounts receivable from affiliates 19,086 — Accrued unbilled revenues 51,886 75,924 Materials and supplies inventories at average cost 17,611 12,588 Fuel and gas inventories at average cost 1,345 1,390 Current portion of accumulated deferred income taxes — 10,068 Derivative instruments valuation — at market 562 — Prepayments and other 5,240 10,170 Total current assets 227,093 237,327 Property, plant and equipment, at cost: Electric utility 3,060,002 3,056,459 Other and construction work in progress 81,583 55,436 Total property, plant and equipment 3,141,585 3,111,895 Less: accumulated depreciation (1,334,529) (1,275,501) Net property, plant and equipment 1,807,056 1,836,394 Other assets: Other investments 14,348 11,345 Regulatory assets 105,989 96,613 Prepaid pension asset 99,078 82,503 Deferred charges and other 17,696 36,598 Total other assets 237,111 227,059 Total assets $ 2,271,260 $ 2,300,780 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 67,222 $ 72,204 Accounts payable to affiliates 11,400 1,891 Taxes accrued 40,347 35,274 Interest accrued 11,012 9,696 Dividends payable to parent 24,469 20,969 Current portion of accumulated deferred income taxes 7,004 — Derivative instruments valuation — at market 1,177 1,131 Other 23,229 68,105 Total current liabilities 185,860 209,270 Deferred credits and other liabilities: Deferred income taxes 393,781 392,907 Deferred investment tax credits 4,280 4,467 Regulatory liabilities 2,399 1,117 Derivative instruments valuation — at market 6,135 5,809 Benefit obligations and other 18,925 15,815 Total deferred credits and other liabilities 425,520 420,115 Long-term debt 725,591 725,375
    • Mandatorily redeemable preferred securities of subsidiary trust 100,000 100,000 Common stock — authorized 200 shares of $1.00 par value, outstanding 100 shares — — Premium on common stock 406,151 405,536 Retained earnings 432,423 444,917 Accumulated other comprehensive loss (4,285) (4,433) Total common stockholder’s equity 834,289 846,020 Commitments and contingent liabilities (see Note 5) Total liabilities and equity $ 2,271,260 $ 2,300,780 See Notes to Financial Statements 14
    • NOTES TO FINANCIAL STATEMENTS In the opinion of management, the accompanying unaudited consolidated and stand-alone financial statements contain all adjustments necessary to present fairly the financial position of NSP-Minnesota, NSP-Wisconsin, PSCo and SPS (collectively referred to as the Utility Subsidiaries of Xcel Energy) as of Sept. 30, 2002, and Dec. 31, 2001, the results of their operations for the three and nine months ended Sept. 30, 2002 and 2001, and their cash flows for the nine months ended Sept. 30, 2002 and 2001. Due to the seasonality of electric and gas sales of Xcel Energy’s Utility Subsidiaries, quarterly results are not necessarily an appropriate base from which to project annual results. The accounting policies of NSP-Minnesota, NSP-Wisconsin, PSCo and SPS are set forth in Note 1 to the financial statements in their respective Annual Reports on Form 10-K for the year ended Dec. 31, 2001. The following notes should be read in conjunction with such policies and other disclosures in the Form 10-K’s. Certain items in the 2001 income statement have been reclassified from amounts previously reported to conform to the 2002 presentation. These reclassifications had no effect on stockholders’ equity or net income as previously reported. The reclassifications were primarily to conform the presentation of all consolidated Xcel Energy subsidiaries to a standard corporate presentation. 1. Accounting Policies and Changes (NSP-Minnesota, NSP-Wisconsin, PSCo and SPS) Intangible Assets — During the first quarter of 2002, the Utility Subsidiaries of Xcel Energy adopted Statement of Financial Accounting Standard (SFAS) No. 142 — “Goodwill and Other Intangible Assets” (SFAS No. 142), which requires new accounting for intangible assets, including goodwill. Intangible assets with finite lives are being amortized over their economic useful lives and periodically reviewed for impairment. The Utility Subsidiaries of Xcel Energy have no intangible assets with indefinite lives, and no goodwill. In addition, NSP-Wisconsin, PSCo and SPS have no intangible assets with finite lives. With respect to NSP-Minnesota’s intangible assets that will continue to be amortized, aggregate amortization expense recognized in the nine months ended Sept. 30, 2002 was approximately $180,000. The annual aggregate amortization expense for each of the five succeeding years is expected to approximate $240,000. NSP-Minnesota’s intangible assets subject to amortization at Sept. 30, 2002, consisting primarily of deferred employment agreement costs, were as follows: Sept. 30, 2002 Dec. 31, 2001 Gross Carrying Accumulated Gross Carrying Accumulated (Millions of dollars) Amount Amortization Amount Amortization NSP-Minnesota $4.9 $0.5 $4.9 $0.3 Asset Valuation — On Jan. 1, 2002, the Utility Subsidiaries adopted SFAS No. 144 — “Accounting for the Impairment or Disposal of Long-Lived Assets,” which supercedes previous guidance for measurement of asset impairments. The Utility Subsidiaries did not recognize any asset impairments as a result of the adoption Trading Operations — In June 2002, the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board (FASB) reached a partial consensus on Issue No. 02-3 “Recognition and Reporting Gains and Losses on Energy Trading Contracts under EITF Issue No. 98-10, Accounting for Contracts Involved in Energy Trading and Risk Management Activities” (EITF No. 02-3). The EITF concluded that all gains and losses related to energy trading activities within the scope of EITF No. 98-10 (whether or not settled physically) must be shown net in the statement of income, effective for periods ending after July 15, 2002. Xcel Energy has reclassified revenues from trading activities for all comparable prior periods reported. Such energy trading activities recorded as a component of Electric and Gas Trading Costs which have been reclassified to offset Electric and Gas Trading Revenues to present Electric and Gas Trading Margin on a net basis were as indicated in the table below. These reclassifications had no impact on trading margins or reported net income. Quarter ended Sept. 30 Nine months ended Sept. 30 (Millions of dollars) 2002 2001 2002 2001 NSP-Minnesota $9 $— $ 26 $— PSCo 534 309 1,327 999 On Oct. 25, 2002, the EITF rescinded EITF No. 98-10. With the rescission of EITF No. 98-10, energy trading contracts that do not also meet the definition of a derivative under SFAS No. 133 — “Accounting for Derivative Instruments and
    • 15
    • Hedging Activities” (SFAS No. 133) must be accounted for as executory contracts. Contracts previously fair-valued under EITF No. 98- 10 that are not also derivatives under SFAS No. 133 must be restated to historical cost through a cumulative effect adjustment. Xcel Energy’s Utility Subsidiaries has not yet evaluated the effect of adopting this decision when required in 2003. 2. Special Charges (NSP-Minnesota, NSP-Wisconsin, PSCo and SPS) Regulatory Recovery Adjustment — In late 2001, SPS filed an application requesting recovery of costs incurred to comply with transition to retail competition legislation in Texas and New Mexico. During the first quarter of 2002, SPS entered into a settlement agreement with intervenors regarding the recovery of restructuring costs in Texas, subject to approval by the state regulatory commission. Based on the settlement agreement, SPS wrote off pretax restructuring costs of approximately $5 million. 2002 Restaffing — During the fourth quarter of 2001, Xcel Energy expensed pretax special charges of $39 million for expected staff consolidation costs for an estimated 500 employees in several utility operating and corporate support areas of Xcel Energy. Approximately $36 million of these restaffing costs were allocated to Xcel Energy’s Utility Subsidiaries consistent with service company cost allocation methodologies utilized under the requirements of the PUHCA. In the first quarter of 2002, the identification of affected employees was completed and additional pretax special charges of $9 million were expensed for the final costs of staff consolidations. Approximately $5 million of these restaffing costs were allocated to Xcel Energy’s Utility Subsidiaries. All 564 of accrued staff terminations have occurred. The following table summarizes the activity related to accrued special charges (reported in other current liabilities) for the first nine months of 2002. Accrued Dec. 31, 2001 Special Sept. 30, 2002 (Millions of dollars) Liability Charges Payments Liability Utility and corporate employee severance $ 37 $9 $(31) $ 15 Special charge activities for Utility Subsidiaries: NSP-Minnesota $5 $4 $ (6) $3 NSP-Wisconsin 2 1 (3) — PSCo. 2 — (2) — SPS 1 — (1) — Postemployment Benefits — PSCo’s earnings for the second quarter of 2001 were reduced due to a Colorado Supreme Court decision that resulted in a 2001 pretax write-off of $23 million of regulatory assets related to deferred postemployment benefit costs at PSCo. 3. Business Developments (NSP-Minnesota, NSP-Wisconsin, PSCo and SPS) TRANSLink Transmission Co., LLC (TRANSLink) — In September 2001, Xcel Energy and several other electric utilities applied to the Federal Energy Regulatory Commission (FERC) to integrate operations of their electric transmission systems into a single system through the formation of TRANSLink, a for-profit, independent transmission-only company. The utilities will participate in TRANSLink through a combination of divestiture, leases and operating agreements. The applicants are: Alliant Energy’s Iowa company (Interstate Power and Light Co.), Corn Belt Power Cooperative, MidAmerican Energy Co., Nebraska Public Power District, Omaha Public Power District and Xcel Energy. The participants believe TRANSLink is the most cost-effective option available to manage transmission and to comply with regulations issued by the FERC in 1999 (known as Order No. 2000) that require investor-owned electric utilities to transfer operational control of their transmission system to an independent regional transmission organization (RTO). Under the proposal, TRANSLink will be responsible for planning, managing and operating both local and regional transmission assets. TRANSLink will also construct and own new transmission system additions. TRANSLink will collect revenue for the use of Xcel Energy’s transmission assets through a FERC-approved, regulated cost-of-service tariff and will collect its administrative costs through transmission rate surcharges. Transmission service pricing will continue to be regulated by the FERC, but construction and permitting approvals will continue to rest with regulators in the states served by TRANSLink. The participants also have entered into a memorandum of understanding with the Midwest Independent Transmission System Operator, Inc. (MISO) in which they agree that TRANSLink will contract with the MISO for certain other required RTO functions and services. In May 2002, the partners formed TRANSLink Development Company, LLC., which is responsible for pursuing the actions necessary to complete the regulatory approval of TRANSLink Transmission Co., LLC. 16
    • In April 2002, the FERC gave conditional approval for the applicants to transfer ownership or operations of their transmission systems to TRANSLink and to form TRANSLink as an Independent Transmission Company operating under the umbrella RTO organization of MISO. The FERC conditioned TRANSLink’s approval on the resubmission of its tariff as a separate rate schedule to be administered by the MISO. TRANSLink Development Company made this rate filing in October 2002. Eleven intervenors had requested that the FERC clarify or reconsider elements of the TRANSLink decision. On Nov. 1, 2002, the FERC issued its order supporting the approval of the formation of TRANSLink. The FERC also clarified several issues covered in its April 2002 order. Several state approvals also would be required to implement the proposal, as well as SEC approval. Subject to receipt of required regulatory approvals, TRANSLink is expected to begin operations in the third quarter of 2003. 4. Restructuring and Regulation (NSP-Minnesota, NSP-Wisconsin, PSCo and SPS) Colorado Merger Agreements — Under the Stipulation and Agreement approved by the Colorado Public Utilities Commission (CPUC) in connection with the Xcel Energy merger, PSCo agreed to: 1) file a combined electric, gas and steam rate case in 2002 with new rates effective in January 2003, 2) extend its incentive cost adjustment (ICA) mechanism through Dec. 31, 2002 with an increase in the ICA base rate from $12.78 per megawatt hour to a rate based on the 2001 actual costs, 3) continue the Performance Based Regulatory Plan and the Quality Service Plan through 2006 with an electric department earnings cap of 10.5 percent return on equity for 2002, 4) reduce electric rates annually by $11 million for the period August 2000 to July 2002 and 5) cap merger costs associated with electric operations at $30 million and amortize such costs through 2002. Incentive Cost Adjustment - In early 2002, PSCo filed to increase rates under the ICA to recover the undercollection of electric supply costs through the period ended Dec. 31, 2001 (approximately $14.5 million, which went into effect on June 1, 2002) and to increase the ICA base rate for the recovery of 2002 costs which are projected to be substantially higher than the $12.78 per megawatt hour currently being recovered. PSCo’s actual ICA base costs for 2001 were approximately $19 per megawatt hour. PSCo proposed to increase the ICA base in 2002 to avoid the significant deferral of costs and a large rate increase in 2003, although the Stipulation and Agreement provided for a rate recovery period of April 1, 2003, to March 31, 2004. On May 10, 2002, the CPUC approved a Settlement Agreement between PSCo and other parties to increase the ICA base rate to $14.88 per megawatt hour, providing for recovery of the deferred 2001 costs and the projected higher 2002 costs over a 34 month period from June 1, 2002, to March 31, 2005. The prudency review and approval of actual costs incurred and recoverable under the ICA for 2001 and 2002 will be conducted in future rate proceedings by the CPUC. PSCo is currently projecting its costs for 2002 to be approximately $50 million to $60 million less than the ICA base allowed using the 2001 test year, resulting in an equal sharing of the difference between retail customers and PSCo. The mechanism for recovering fuel and energy costs for 2003 and later will be addressed in the pending 2002 rate case (discussed below). General Rate Case - In May 2002, Xcel Energy filed a combined general rate case with the CPUC to address increased costs for providing energy to Colorado customers. The net impact of the filings would increase electric revenue by approximately $220 million annually. This is based on $113 million for fuel and purchased power and $107 million for cost of electric service. In addition, PSCo also requested a decrease in natural gas revenue by approximately $13 million to reflect lower wholesale gas costs. PSCo also requested that its authorized rate of return on equity be set at 12 percent for electricity and 12.25 percent for natural gas. The current schedule for the rate case, as approved by the CPUC, is as follows: • November 2002 — intervenor testimony; • January 2003 — company rebuttal testimony; • February/March 2003 — hearings; and • April/May 2003 — rates effective. Gas Cost Prudence Review — In May 2002, the staff of the CPUC filed testimony in PSCo’s gas cost prudence review case, recommending $6.1 million in disallowances of gas costs for the July 2000 through June 2001 gas purchase year. Hearings were held in July 2002. A decision is expected in late 2002. 17
    • Texas Transition to Competition Cost Recovery Application — In December 2001, SPS filed an application with the Public Utility Commission of Texas (PUCT) to recover $20.3 million in costs related to transition to retail competition from the Texas retail customers. These costs were incurred to position SPS for retail competition, which was eventually delayed for SPS. The filing was amended in March 2002 to reduce the recoverable costs by $7.3 million, which were associated with over-earnings for the calendar year 1999. The PUCT approved SPS using the 1999 over-earnings to offset the claims for reimbursement of transition to competition costs. This reduced the requested net collection in Texas to $13.0 million. In April 2002, a unanimous settlement agreement was reached. Final approval by the PUCT was received in May 2002. The stipulation provides for the recovery of $5.9 million through an incremental cost recovery rider and the capitalization of $1.9 million for metering equipment. Based on the settlement agreement, SPS wrote off pretax restructuring costs of approximately $5 million in the first quarter of 2002. Recovery of the $5.9 million began in July 2002. Fuel Clause Adjustment Mechanisms — The PUCT’s regulations require periodic examination of SPS’ fuel and purchased power costs, the efficiency of the use of such fuel and purchase power, fuel acquisition and management policies and purchase power commitments. SPS is required to file an application for the PUCT to retrospectively review, at least every three years, the operations of a utility’s electricity generation and fuel management activities. In June 2002, SPS filed its fuel reconciliation for calendar years 2000 and 2001 in the amount of $608 million. A pre-hearing conference was held in October 2002 and discovery in this case is in process. Hearings are scheduled for March 2003. Minnesota Metro Emissions Reduction Program - In July 2002, NSP-Minnesota filed for approval by the MPUC, a proposal to invest in existing NSP-Minnesota generation facilities to reduce emissions under the terms of legislation adopted by the 2001 Minnesota Legislature. The proposal includes the installation of state-of-the-art pollution control equipment at the A. S. King plant and conversion from coal to natural gas at the High Bridge and Riverside plants. Under the proposal, major construction would start in 2005 and be completed in 2009. Under the terms of the statute, the filing concurrently seeks approval of a rate recovery mechanism for the costs of the proposal, estimated to be a total of $1.1 billion. The rate recovery would be through an annual automatic adjustment mechanism authorized by 2001 legislation, outside a general rate case, and is proposed to be effective at the expiration of the NSP-Minnesota merger rate freeze, which extends through 2005 unless certain exemptions are triggered. The rate recovery proposed by NSP-Minnesota would allow recovery of financing costs of capital expenditures prior to the in-service date of each plant. The proposal is pending comments by interested parties. Other regulatory approvals, such as environmental permitting, are needed before the proposal can be implemented. Renewable Cost Recovery Tariff - In April 2002, NSP-Minnesota also filed for MPUC authorization to recover in retail rates the costs of electric transmission facilities constructed to provide transmission service for renewable energy. The rate recovery would be through an automatic adjustment mechanism authorized by 2001 legislation, outside a general rate case, and is proposed to be effective Jan. 1, 2003. In July 2002, the Minnesota Department of Commerce filed comments supporting approval of the tariff mechanism, subject to certain modifications that are generally acceptable to Xcel Energy. Minnesota Financial and Service Quality Investigation — On Aug. 8, 2002, the MPUC asked for additional information related to the impact of NRG’s financial circumstances on NSP-Minnesota. Subsequent to that date, several newspaper articles alleged concerns about the reporting of service quality data and NSP-Minnesota’s overall maintenance practices. In an order dated Oct. 22, 2002, the MPUC opened an investigation into the accuracy of NSP-Minnesota’s reliability records and to allow for further review of its maintenance and other service quality measures. In addition, the order requires a number of reporting requirements regarding financial information and work with interested parties on various issues to ensure NSP-Minnesota’s commitments are fulfilled. The Minnesota Department of Commerce and Office of Attorney General have begun their investigation. There is no scheduled date for completion. Wisconsin Retail Electric Fuel Rates — In August 2002, NSP-Wisconsin filed an application with the Public Service Commission of Wisconsin (PSCW), requesting a decrease in Wisconsin retail electric rates for fuel costs. The amount of the proposed rate decrease is approximately $6.3 million on an annual basis. The reasons for the decrease include moderate weather, lower than forecast market power costs, and optimal plant availability. On Aug. 7, 2002, the PSCW issued an order approving the fuel rate credit. The rate credit went into effect on Aug. 12, 2002. 18
    • On Oct. 9, 2002, NSP-Wisconsin filed an application with the PSCW requesting another decrease in Wisconsin retail electric rates for fuel costs. The incremental amount of the second proposed rate decrease was approximately $5 million on an annual basis. The reasons for the additional decrease include continued moderate weather; lower than forecast market power costs, and optimal plant availability. On Oct. 16, 2002, the PSCW issued an order approving the revised fuel rate credit, effective Oct. 19, 2002. Michigan Transfer Pricing- On Oct. 3, 2002, the Michigan Public Service Commission denied NSP-Wisconsin’s request for a waiver of the section of the Michigan Electric Code of Conduct (Michigan Code) dealing with transfer pricing policy. The Michigan Code requires the price of goods and services provided by an affiliate to NSP-Wisconsin be at the lower of market price or cost plus 10 percent, and the price of goods and services provided by NSP-Wisconsin to an affiliate be at the higher of cost or market price. NSP-Wisconsin requested the waiver based on its belief that the Michigan Code conflicts with SEC requirements to price goods and services provided between affiliates at cost. In November 2002, NSP-Wisconsin filed a request for reconsideration of the Oct. 3, 2002 order. Federal Energy Regulatory Commission Standard Market Design Rulemaking — In July 2002 the FERC issued a Notice of Proposed Rulemaking on Standard Market Design rulemaking for regulated utilities. If implemented as proposed, the Rulemaking will substantially change how wholesale markets operate throughout the United States. The proposed rulemaking expands the FERC’s intent to unbundle transmission operations from integrated utilities and ensure robust competition in wholesale markets. The rule contemplates that all wholesale and retail customers will be on a single network transmission service tariff. The rule also contemplates the implementation of a bid-based system for buying and selling energy in wholesale markets. RTOs or Independent Transmission Providers will administer the market. RTOs will also be responsible for creating regional plans that identify opportunities to construct new transmission, generation or demand side programs to reduce transmission constraints and meet regional energy requirements. Finally, the Rule envisions the development of Regional Market Monitors responsible for ensuring that individual participants do not exercise unlawful market power. Comments to the rules are due in the fourth quarter of 2002 and first quarter of 2003. The FERC recently extended the comment period but anticipates that the final rules will be in place in 2003 and the contemplated market changes will take place in 2003 and 2004. Standards of Conduct Rulemaking — In October 2001, the FERC issued a Notice of Proposed Rulemaking proposing to adopt new standards of conduct rules applicable to all jurisdictional electric and natural gas transmission providers. The proposed rules would replace the current rules governing the electric transmission and wholesale electric functions of the Utility Subsidiaries and the rules governing the natural gas transportation and wholesale gas supply functions. The proposed rules would expand the definition of “affiliate” and further limit communications between transmission functions and supply functions, and could materially increase operating costs of the Utility Subsidiaries. In April 2002, the FERC staff issued a reaction paper, generally rejecting the comments of parties opposed to the proposed rules. Though final rules were expected by year-end 2002, they may be delayed while the FERC pursues development of its Standard Market Design Rulemaking. FERC Investigation — On May 8, 2002, the FERC ordered all sellers of wholesale electricity and/or ancillary services to the California Independent System Operator or Power Exchange, including PSCo, to respond to data requests, including requests for admissions with respect to certain trading strategies in which the companies may have engaged. The investigation is in response to memoranda prepared by Enron Corporation that detail certain trading strategies engaged in 2000 and 2001, which may have violated market rules. On May 22, 2002, Xcel Energy reported to the FERC that it had not engaged directly in any of the trading strategies identified in the May 8th inquiry. However, Xcel Energy also reported that at times during 2000 and 2001, its regulated operations did sell energy to another energy company that may then have re-sold the electricity for delivery into California as part of an overstated electricity load in schedules submitted to the California Independent System Operator. During that period, the regulated operations of Xcel Energy made sales to the other electricity provider of approximately 8,000 megawatt hours in the California intra-day market, which resulted in revenues to Xcel Energy of approximately $1.5 million. Xcel Energy cannot determine from its records what part of such sales were associated with overschedules. To supplement the May 8th request, on May 21, 2002, the FERC ordered all sellers of wholesale electricity and/or ancillary services in the United States portion of the Western Systems Coordinating Council during 2000 and 2001 to report whether they had engaged in activities referred to as “wash,” “round trip” or “sell/buyback” trading. On May 31, 2002, Xcel Energy reported to the FERC that it had not engaged in so-called “round trip” electricity trading identified in the May 21st inquiry. 19
    • On May 13, 2002, Xcel Energy reported that PSCo had engaged in a group of transactions in 1999 and 2000 with the trading arm of Reliant Resources in which PSCo bought a quantity of power from Reliant and simultaneously sold the same quantity back to Reliant. For doing this, PSCo normally received a small profit. PSCo made a total pretax profit of approximately $110,000 on these transactions. Also, PSCo engaged in one trade with Reliant in which PSCo simultaneously bought and sold power at the same price without realizing any profit. The purpose of this nonprofit transaction was in consideration of future for-profit transactions. PSCo engaged in these transactions with Reliant for the proper commercial objective of making a profit. It did not enter into these transactions to inflate volumes or revenues. In addition, the FERC is assessing whether to set for hearing the justness and reasonableness of rates charged in the Pacific Northwest from Dec. 25, 2000 through June 20, 2001. The FERC directed that an administrative law judge hold a hearing and make a preliminary assessment as to whether it should undertake such an investigation. On Sept. 25, 2001, an administrative law judge concluded that no further proceedings should be held. Various parties have sought rehearing of that order and have requested that the record be reopened in light of the disclosure of the Enron trading strategies. The proceeding is pending before the FERC. Golden Spread Complaints — Golden Spread Electric Power Cooperative, Inc. (quot;Golden Spreadquot;) and SPS are parties to a commitment and dispatch agreement pursuant to which SPS commits and dispatches the combined resources of both entities to meet their combined load requirements. Under this agreement, SPS purchases a significant amount of energy from Golden Spread at rates designed to share the savings between both parties. Golden Spread has filed a complaint at the FERC contending that SPS has underpaid it for the power it has supplied under the agreement by not providing it with an appropriate share of the savings that SPS has achieved. SPS in turn has filed a complaint at the FERC contending that Golden Spread has improperly inflated various cost components of the rate calculation. FERC has set both complaints for investigation and hearing, but has deferred the hearing pending settlement proceedings. The matter is now before a settlement judge. Even if SPS is required to pay more to Golden Spread for power purchased under this agreement, it believes that the amounts will likely be recoverable customers under applicable fuel clauses. FERC Transmission Inquiry — The FERC has begun a formal, non-public inquiry relating to the treatment by public utility companies of affiliates in generator interconnection and other transmission matters. In connection with the inquiry, the FERC has asked Xcel Energy’s Utility Subsidiaries for certain information and documents. Xcel Energy’s Utility Subsidiaries are complying with the request. Securities and Exchange Commission/Commodity Futures Trading Commission SEC and CFTC Subpoenas — Xcel Energy has received a subpoena from the SEC for documents concerning “round trip” trades, as defined in the SEC subpoena, in electricity and natural gas with Reliant Resources, Inc. for the period Jan. 1, 1999, to the present. The SEC subpoena is issued pursuant to a formal order of private investigation that does not name Xcel Energy. Based upon accounts in the public press, management believes that similar subpoenas in the same investigations have been served on other industry participants. Xcel Energy and PSCo are cooperating with the regulators and taking steps to assure satisfactory compliance with the subpoenas. Xcel Energy and PSCo have also received subpoenas from the Commodity Futures Trading Commission for documents and other information concerning these so-called “round trip” trades and other trading in electricity and natural gas for the period Jan. 1, 1999 to the present involving Xcel Energy or any of its subsidiaries. 5. Commitments and Contingent Liabilities (NSP-Minnesota, NSP-Wisconsin, PSCo and SPS) Lawsuits and claims arise in the normal course of business. Management, after consultation with legal counsel, has recorded an estimate of the probable cost of settlement or other disposition of them. Xcel Energy’s Utility Subsidiaries have been or are currently involved with the cleanup of contamination from certain hazardous substances at several sites. In many situations, Xcel Energy’s Utility Subsidiaries are pursuing, or intend to pursue, insurance claims and believe they will recover some portion of these costs through such claims. Additionally, where applicable, Xcel Energy’s Utility Subsidiaries are pursuing, or intend to pursue, recovery from other potentially responsible parties and through the rate regulatory process. To the extent any costs are not recovered through the options listed above, Xcel Energy’s Utility Subsidiaries would be required to recognize an expense for such unrecoverable amounts. The circumstances set forth in Notes 13 and 14 to the financial statements in NSP-Minnesota’s, NSP-Wisconsin’s, PSCo’s and SPS’ Annual Reports on Form 10-K for the year ended Dec. 31, 2001, appropriately represent, in all material respects, the current status of commitments and contingent liabilities, including those regarding public liability for claims resulting from any nuclear incident and are incorporated herein by reference. Following are unresolved contingencies, which are material to the financial position of Xcel Energy’s Utility Subsidiaries: • Tax Matters — Tax deductibility of corporate owned life insurance loan interest. Environmental Contingencies
    • PSCo Notice of Violation — On Nov. 3, 1999, the United States Department of Justice filed suit against a number of electric utilities for alleged violations of the Clean Air Act’s New Source Review (NSR) requirements related to alleged modifications of electric generating stations located in the South and Midwest. Subsequently, the United States Environmental Protection Agency (EPA) also issued requests for information pursuant to the Clean Air Act to numerous other electric utilities, including Xcel Energy, seeking to determine whether these utilities engaged in activities that may 20
    • have been in violation of the NSR requirements. In 2001, Xcel Energy responded to EPA’s initial information requests related to PSCo plants in Colorado. On July 1, 2002, PSCo received a Notice of Violation (NOV) from the United States Environmental Protection Agency (EPA) alleging violations of the New Source Review (NSR) requirements of the Clean Air Act at the Comanche and Pawnee Stations in Colorado. The NOV specifically alleges that various maintenance, repair and replacement projects undertaken at the plants in the mid- to late-1990s should have required a permit under the NSR process. PSCo believes it acted in full compliance with the Clean Air Act and NSR process. It believes that the projects identified in the NOV fit within the routine maintenance, repair and replacement exemption contained within the NSR regulations or are otherwise not subject to the NSR requirements. PSCo also believes that the projects would be expressly authorized under the EPA’s NSR policy announced by the EPA administrator on June 22, 2002. PSCo disagrees with the assertions contained in the NOV and intends to vigorously defend its position. If the EPA is successful in any subsequent litigation regarding the issues set forth in the NOV or any matter arising as a result of its information requests, it could require PSCo to install additional emission control equipment at the facilities and pay civil penalties. Civil penalties are limited to not more than $25,000 to $27,500 per day for each violation. The ultimate financial impact to PSCo is not determinable at this time. NSP-Minnesota NSR Information Request — As stated previously, on Nov. 3, 1999, the United States Department of Justice filed suit against a number of electric utilities for alleged violations of the NSR requirements related to alleged modifications of electric generating stations located in the South and Midwest. Subsequently, the EPA also issued requests for information pursuant to the Clean Air Act to numerous other electric utilities, including Xcel Energy, seeking to determine whether these utilities engaged in activities that may have been in violation of the NSR requirements. In 2001, Xcel Energy responded to EPA’s initial information requests related to NSP-Minnesota plants in Minnesota. On May 22, 2002, EPA issued a follow-up information request to Xcel Energy seeking additional information regarding NSR compliance at its plants in Minnesota. Xcel Energy is in the process of responding to the follow-up request. NSP-Wisconsin Ashland Manufactured Gas Plant Site — NSP-Wisconsin was named as one of three potentially responsible parties (PRP) for creosote and coal tar contamination at a site in Ashland, Wis. The Ashland site includes property owned by NSP-Wisconsin and two other properties: an adjacent city lakeshore park area and a small area of Lake Superior’s Chequemegon Bay adjoining the park. Estimates of the ultimate cost to remediate the Ashland site vary from $4 million to $93 million, depending on the final remediation option chosen by the EPA and the Wisconsin Department of Natural Resources (WDNR). The EPA and WDNR have not yet selected the final method of remediation to use at the site. In the interim, NSP-Wisconsin has recorded a liability for an estimate of its share of the cost of remediating the portion of the Ashland site that it owns, using information available to date, reasonably effective remedial methods and considering the results of ongoing negotiations with governmental authorities overseeing the remediation. On Sept. 5, 2002, the Ashland site was placed on the National Priorities List (NPL). The NPL is intended primarily to guide the EPA in determining which sites require further investigation. Resolution of Ashland remediation issues is not expected until 2003 or 2004. NSP-Wisconsin Plant Emissions — NSP-Wisconsin’s French Island plant generates electricity by burning a mixture of wood waste and refuse derived fuel. The fuel is derived from municipal solid waste furnished under a contract with La Crosse County, Wisconsin. In October 2000, the EPA reversed a prior decision and found that the plant was subject to the federal large combustor regulations. Those regulations became effective on Dec. 19, 2000. NSP-Wisconsin did not have adequate time to install the emission controls necessary to come into compliance with the large combustor regulations by the compliance date. As a result, on March 29, 2001, the EPA issued a finding of violation to the company. Although NSP-Wisconsin disputes the EPA decision, if successful, the EPA could impose fines up to $27,500 per day for each violation. On April 2, 2001, a conservation group sent NSP-Wisconsin a notice of intent to sue under the citizen suit provisions of the Clean Air Act. On July 27, 2001, the state of Wisconsin filed a lawsuit against NSP-Wisconsin in the Wisconsin Circuit Court for La Crosse County, contending that NSP-Wisconsin exceeded dioxin emission limits on numerous occasions between July 1995 and December 2000 at French Island. On Sept. 3, 2002, the Wisconsin Circuit Court approved a settlement between NSP-Wisconsin and the state of Wisconsin. Under terms of that settlement, NSP-Wisconsin paid a penalty of approximately $168,000 and agreed to contribute $300,000 to an environmental project near the plant. The settlement resolves all claims identified in the state’s complaint against NSP-Wisconsin. 21
    • On Aug. 15, 2001, NSP-Wisconsin received a Certificate of Authority to install control equipment necessary to bring the French Island plant into compliance with the large combustor regulations. NSP-Wisconsin began construction of the new air quality equipment on Oct. 1, 2001. NSP-Wisconsin has reached an agreement in principle with La Crosse County through which La Crosse County will pay for the extra emissions equipment required to comply with the EPA regulation. Installation of the control equipment has been completed and source tests on one unit confirm that the unit is now in compliance with the state and federal dioxin standards. NSP-Wisconsin will test the remaining unit during the fourth quarter of 2002. Legal Contingencies California Litigation — Public Utility District No. 1 of Snohomish County, Washington, has filed a suit against Xcel Energy in the United States District Court for the Central District of California contending that various of its trading strategies, as reported to the FERC in response to that agency’s investigation of trading strategies discussed above, violated the California Business and Professions Code. Public Utility District No. 1 of Snohomish County contends that the effect of those strategies was to increase amounts that it paid for wholesale power in the spot market in the Pacific Northwest. Xcel Energy and other defendants intend to request the case be dismissed in its entirety. A hearing on the motion to dismiss is scheduled for Dec. 19, 2002. In addition, the California Attorney General’s Office has informed PSCo that it may raise claims against PSCo under the California Business and Professions Code with respect to the rates that PSCo has charged for wholesale sales and PSCo’s reporting of those charges to the FERC. PSCo has had preliminary discussions with the California Attorney General’s Office, and has expressed the view that FERC is the appropriate forum for the concerns that it has raised. 6. Short-Term Borrowings and Financing Activities (NSP-Minnesota and PSCo) NSP-Minnesota At Sept. 30, 2002, NSP-Minnesota had approximately $100 million of short-term debt outstanding at a weighted average interest rate of 4.75 percent. In July 2002, NSP-Minnesota issued $185 million of unsecured bonds. The bonds have a fixed interest rate of 8 percent and mature in 2042. In August 2002, NSP-Minnesota issued $450 million of first mortgage bonds. These bonds carry a fixed interest rate of 8 percent and mature in 2012. In August 2002, in connection with its 364 day $300 million credit agreement renewal, NSP-Minnesota also issued $308 million of first mortgage bonds, due Aug. 15, 2003 to Wells Fargo Bank, N.A. pursuant to the credit agreement. The obligations under the credit agreement will be secured by this series of bonds. In August 2002, NSP-Minnesota closed on the conversion of several bonds totaling $196 million from variable rate to a fixed rate of 8.5 percent. The first call date on these bonds is Aug. 27, 2012. As part of the conversion, $69 million of the bonds were collateralized with first mortgage bonds. The remaining bonds were collateralized in 1997. PSCo At Sept. 30, 2002, PSCo had approximately $88 million of short-term debt outstanding at a weighted average interest rate of 2.82 percent. In September 2002, PSCo issued $600 million of first collateral trust bonds at a fixed interest rate of 7.875 percent and mature in 2012. In September 2002, PSCo issued and delivered $530 million of first collateral trust bonds to a certain bank to secure its payment obligations under its $530 million, 364 day credit facility and $48.75 million of first collateral trust bonds to an insurance company to secure insurance obligations related to its 5.1 percent pollution control bonds, series due Jan. 1, 2019. 7. Derivative Valuation and Financial Impacts (NSP-Minnesota, PSCo and SPS) Xcel Energy’s Utility Subsidiaries analyzes derivative financial instruments in accordance with SFAS No. 133. This statement requires that all derivative financial instruments be recorded on the balance sheet at fair value unless exempted. Changes in a derivative instrument’s fair value must be recognized currently in earnings unless the derivative
    • 22
    • has been designated in a qualifying hedging relationship. The application of hedge accounting allows a derivative instrument’s gains and losses to offset related results of the hedged item in the income statement, to the extent effective. SFAS No. 133 requires that the hedging relationship be highly effective and that a company formally designate a hedging relationship to apply hedge accounting. The components of SFAS No. 133 impacts on Other Comprehensive Income, included in stockholders’ equity, are detailed in the following table: Nine months ended Sept. 30, 2002 NSP- (Millions of dollars) Minnesota PSCo SPS Accumulated other comprehensive income (loss) related to SFAS No. 133 — Jan 1, 2002 $ 0.1 $(4.3) $(4.4) After-tax net unrealized (losses) gains related to derivatives accounted for as hedges — (5.1) 0.4 After-tax net realized (gains) losses on derivative transactions reclassified into earnings (0.1) 9.7 (0.3) Accumulated other comprehensive income (loss) related to SFAS No. 133 — Sept 30, 2002 $— $ 0.3 $(4.3) Nine months ended Sept. 30, 2001 NSP- (Millions of dollars) Minnesota PSCo SPS Net unrealized transition gain (loss) at adoption, Jan. 1, 2001 $— $ 1.6 $(2.6) After-tax net unrealized losses related to derivatives accounted for as hedges — (27.0) (2.2) After-tax net realized losses on derivative transactions reclassified into earnings — 26.2 0.4 Accumulated other comprehensive income (loss) related to SFAS No. 133 — Sept. 30, 2001 $— $ 0.8 $(4.4) PSCo recorded pretax losses in Electric Fuel and Purchased Power of $0.6 million and $1.2 million for the three months ended Sept. 30, 2002 and 2001, respectively, due to the effects of SFAS No. 133. PSCo recorded pretax gains in Electric Fuel and Purchased Power expense of $0.4 million and pretax losses of $1.0 million for the nine months ended Sept. 30, 2002 and 2001, respectively, due to the effects of SFAS No. 133. During these periods, there was no impact on earnings related to SFAS No. 133 for NSP-Minnesota and SPS. Normal Purchases or Normal Sales Xcel Energy’s Utility Subsidiaries enter into fixed price contracts for the purchase and sale of various commodities for use in their business operations. SFAS No. 133 requires a company to evaluate these contracts to determine whether the contracts are derivatives. Certain contracts that literally meet the definition of a derivative may be exempted from SFAS No. 133 as normal purchases or normal sales. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that meet the requirements of normal are documented as normal and exempted from the accounting and reporting requirements of SFAS No. 133. Xcel Energy’s Utility Subsidiaries evaluate all of their contracts when such contracts are entered into to determine if they are derivatives and, if so, if they qualify and meet the normal designation requirements under SFAS No. 133. None of the contracts entered into within the trading operations are considered normal under the provisions of SFAS No. 133. Normal purchases and normal sales contracts are accounted for as executory contracts as required under other generally accepted accounting principles. Cash Flow Hedges NSP-Minnesota, PSCo and SPS enter into derivative instruments to manage their respective exposure to changes in commodity prices. These derivative instruments take the form of fixed price, floating price or index sales or purchases 23
    • and options, such as puts, calls and swaps. These derivative instruments are designated as cash flow hedges for accounting purposes and the changes in the fair value of these instruments are recorded as a component of Other Comprehensive Income. At Sept. 30, 2002, NSP- Minnesota, PSCo and SPS had various commodity related contracts through the next 12 months. Earnings on these cash flow hedges are recorded as the hedged purchase or sales transaction is completed. This could include the physical sale of electric energy or the usage of natural gas to generate electric energy. As of Sept. 30, 2002, PSCo and SPS expect to reclassify into earnings through September 2003 net gains from Other Comprehensive Income of approximately $0.3 million and $0.4 million, respectively. NSP-Minnesota does not expect to reclassify any gains (losses) into earnings through September 2003. As required by SFAS No. 133, PSCo recorded losses of $0.6 million related to ineffectiveness on commodity cash flow hedges during the three months ended Sept. 30, 2002. There were no gains (losses) recorded during the three months ended Sept. 30, 2001. PSCo recorded gains of $0.4 million and losses of $1.0 million related to ineffectiveness on commodity cash flow hedges during the nine months ended Sept. 30, 2002 and 2001, respectively. PSCo recorded losses of $1.2 million for the three months ended Sept. 30, 2001 related to derivative financial instruments excluded from the assessment of effectiveness. There were no gains (losses) recorded during the nine months ended Sept. 30, 2001. In 2001, an immaterial amount related to cash flow hedges that were discontinued because the hedged transactions were no longer probable. SPS enters into interest rate swap instruments that effectively fix the interest payments on certain floating rate debt obligations. These derivative instruments are designated as cash flow hedges for accounting purposes and the change in the fair value of these instruments is recorded as a component of Other Comprehensive Income. SPS expects to reclassify into earnings through September 2003 net losses from Other Comprehensive Income of approximately $0.8 million. Hedge effectiveness is recorded based on the nature of the item being hedged. Hedging transactions for the sales of electric energy are recorded as a component of revenue, hedging transactions for fuel used in energy generation are recorded as a component of fuel costs and hedging transactions for interest rate swaps are recorded as a component of interest expense. Derivatives Not Qualifying for Hedge Accounting NSP-Minnesota and PSCo have trading operations that enter into derivative instruments. These derivative instruments are accounted for on a mark-to-market basis in their respective Consolidated Statements of Income. All financial derivative instruments are recorded at the amount of the gain or loss from the transaction within Operating Revenues on the Consolidated Statements of Income. 8. Pension Plan Funding and Costs (NSP-Minnesota, NSP-Wisconsin, PSCo and SPS) As disclosed in the 2001 Annual Report on Form 10-K, all of the Xcel Energy pension plans were fully funded and had no cash funding requirements as of Dec. 31, 2001. Investment performance on plan assets during 2002 has resulted in a deterioration of the funded status of the plans compared to 2001. Xcel Energy’s pension plans, in the aggregate, were still fully funded as of Sept. 30, 2002 and, with minimal investment volatility for the rest of 2002, are expected to remain fully funded at year-end. Depending on final 2002 investment performance, some smaller plans within the group may be underfunded at Dec. 31, 2002. However, no cash funding to any of Xcel Energy’s pension plans was required for 2002 or is expected for 2003 under ERISA regulations. The level of discretionary funding allowed for 2003 and 2004, if made, would not have a material impact on pension costs. Plan investment performance in the past several years has increased Xcel Energy pension costs due to the difference between assumed asset returns reflected in actuarially determined costs, and actual return levels. Annual 2002 pension costs recognized will be approximately $6 million more than comparable 2001 levels. Xcel Energy currently expects that costs to be recognized in 2003 may increase by approximately $40 million in relation to 2002 levels due to the impacts of lower-than-expected asset returns over the past few years. Depending on final 2002 pension plan investment performance, some of the smaller Xcel Energy plans may have to record a minimum pension liability at Dec. 31, 2002. Based on year-to-date 2002 investment performance, Xcel Energy is estimating that a minimum liability may occur (mainly at PSCo) and be in the range of $100 million to $150 million, with a corresponding reduction in shareholder’s equity (other comprehensive income) for the unrealized loss on pension assets. Recording a minimum pension liability, if necessary, would have no impact on PSCo or Xcel Energy earnings. 9. Segment Information (NSP-Minnesota, NSP-Wisconsin, PSCo and SPS) Xcel Energy’s Utility Subsidiaries each have two reportable segments, Electric Utility and Gas Utility, with the exception of SPS, which has only an Electric Utility reportable segment. Trading operations are not a reportable segment; electric trading results (net of trading costs) are included in the Electric Utility segment. (Thousands of dollars) NSP-Minnesota
    • Electric Gas All Consolidated Utility Utility Other Total Three months ended Sept. 30, 2002 Revenues from: External customers $713,946 $31,184 $6,836 $751,966 Internal customers 168 2 — 170 Total revenue 714,114 31,186 6,836 752,136 Segment net income $ 79,906 $ (5,181) $8,267 $ 82,992 Sept. 30, 2001 Revenues from: External customers $765,421 $51,689 $9,408 $826,518 Internal customers 186 2 — 188 Total revenue 765,607 51,691 9,408 826,706 Segment net income (loss) $ 80,381 $ (4,201) $ (90) $ 76,090 24
    • Electric Gas All Consolidated Utility Utility Other Total Nine months ended Sept. 30, 2002 Revenues from: External customers $1,816,593 $308,473 $18,800 $2,143,866 Internal customers 463 31 — 494 Total revenue 1,817,056 308,504 18,800 2,144,360 Segment net income $ 146,606 $ 3,041 $ 8,802 $ 158,449 Sept. 30, 2001 Revenues from: External customers $2,033,549 $497,215 $36,552 $2,567,316 Internal customers 532 146 — 678 Total revenue 2,034,081 497,361 36,552 2,567,994 Segment net income (loss) $ 161,171 $ 13,833 $ (341) $ 174,663 NSP-Wisconsin Electric Gas All Consolidated Utility Utility Other Total Three months ended Sept. 30, 2002 Revenues from: External customers $121,539 $ 8,213 $541 $130,293 Internal customers 39 (100) — (61) Total revenue 121,578 8,113 541 130,232 Segment net income $ 11,589 $ 865 $ 42 $ 12,496 Sept. 30, 2001 Revenues from: External customers $122,862 $ 8,566 $125 $131,553 Internal customers 35 523 — 558 Total revenue 122,897 9,089 125 132,111 Segment net income (loss) $ 10,643 $ (2,016) $— $ 8,627 Nine months ended Sept. 30, 2002 Revenues from: External customers $348,564 $66,752 $652 $415,968 Internal customers 125 600 — 725 Total revenue 348,689 67,352 652 416,693 Segment net income $ 36,916 $ 5,873 $ 76 $ 42,865 Sept. 30, 2001 Revenues from: External customers $340,604 $95,200 $336 $436,140 Internal customers 128 1,415 — 1,543 Total revenue 340,732 96,615 336 437,683 Segment net income $ 22,172 $ 2,961 $— $ 25,133
    • PSCo Electric Gas All Consolidated Utility Utility Other Total Three months ended Sept. 30, 2002 Revenues from: External customers $500,087 $ 89,425 $4,535 $594,047 Internal customers 74 5 — 79 Total revenue 500,161 89,430 4,535 594,126 Segment net income $ 48,644 $ 10,401 $7,922 $ 66,967 Sept. 30, 2001 Revenues from: External customers $633,634 $153,300 $4,354 $791,288 Internal customers 31 557 — 588 Total revenue 633,665 153,857 4,354 791,876 Segment net income $ 51,951 $ 5,868 $9,148 $ 47,947 25
    • Nine months ended Electric Gas All Consolidated Sept. 30, 2002 Utility Utility Other Total Revenues from: External customers $1,387,179 $521,826 $17,513 $1,926,518 Internal customers 194 32 — 226 Total revenue 1,387,373 521,858 17,513 1,926,744 Segment net income $ 140,208 $ 37,176 $18,636 $ 196,020 Sept. 30, 2001 Revenues from: External customers $1,863,509 $984,711 $23,422 $2,871,642 Internal customers 97 1,680 — 1,777 Total revenue 1,863,606 986,391 23,422 2,873,419 Segment net income $ 171,835 $ 27,503 $22,300 $ 221,638 SPS SPS operates in the regulated electric utility industry, providing wholesale and retail electric service in the states of Texas, New Mexico, Kansas and Oklahoma. Revenues from external customers were $291.9 million and $387.2 million for the three months ended Sept. 30, 2002 and 2001, respectively. Revenues from external customers were $770.5 million and $1,088.2 million for the nine months ended Sept. 30, 2002 and 2001, respectively. 10. Comprehensive Income (NSP-Minnesota, NSP-Wisconsin, PSCo, SPS) NSP-Minnesota The components of total comprehensive income are shown below: Three months ended Nine months ended (Thousands of dollars) Sept. 30, Sept. 30, 2002 2001 2002 2001 Net income $82,992 $76,090 $158,449 $174,663 Other comprehensive loss: After-tax net unrealized losses on derivatives accounted for as hedges (see Note 7) (575) — — — After-tax net realized losses (gains) on derivative transactions reclassified into earnings (see Note 7) 217 — (120) — Unrealized loss on marketable securities (6) — (11) — Other comprehensive loss (364) — (131) — Comprehensive income $82,628 $76,090 $158,318 $174,663 The accumulated comprehensive income in stockholder’s equity at Sept. 30, 2002, relates to valuation adjustments on derivative financial instruments and hedging activities and the mark-to-market components of our marketable securities. NSP-Wisconsin For NSP-Wisconsin, comprehensive income equals net income for the quarter and nine months ended Sept. 30, 2002 and 2001. 26
    • PSCo The components of total comprehensive income are shown below: Three months ended Nine months ended (Thousands of dollars) Sept. 30, Sept. 30, 2002 2001 2002 2001 Net income $ 66,967 $47,947 $196,020 $221,638 Other comprehensive income: Cumulative effect of accounting change-net unrealized transition gain upon adoption of SFAS No. 133 — — — 1,649 After-tax net unrealized losses on derivatives accounted for as hedges (see Note 7) (14,157) (9,504) (5,139) (26,998) After-tax net realized losses on derivative transactions reclassified into earnings (see Note 7) 14,766 10,429 9,771 26,176 Other comprehensive income 609 925 4,632 827 Comprehensive income $ 67,576 $48,872 $200,652 $222,465 The accumulated comprehensive income in stockholder’s equity at Sept. 30, 2002 and 2001, relates to valuation adjustments on derivative financial instruments and hedging activities and the mark-to-market component of our marketable securities. SPS The components of total comprehensive income are shown below: Three months ended Nine months ended (Thousands of dollars) Sept. 30 Sept. 30 2002 2001 2002 2001 Net income $31,741 $47,709 $59,918 $94,060 Other comprehensive (loss) income: Cumulative effect of accounting change-net unrealized transition loss upon adoption of SFAS No. 133 — — — (2,626) After-tax net unrealized (losses) gains on derivatives accounted for as hedges (see Note 7) (435) 184 450 (2,239) After-tax net realized (gains) losses on derivative transactions reclassified into earnings (see Note 7) (422) 162 (303) 406 Other comprehensive (loss) income (857) 346 147 (4,459) Comprehensive income $30,884 $48,055 $60,065 $89,601 The accumulated comprehensive loss in stockholder’s equity at Sept. 30, 2002 and 2001, relates to valuation adjustments on derivative financial instruments and hedging activities. Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS Except for the supplemental discussion of NRG credit impacts provided below, discussion of financial condition and liquidity for the Utility Subsidiaries of Xcel Energy are omitted per conditions set forth in general instructions H (1) (a) and (b) of Form 10-Q for wholly owned subsidiaries. It is replaced with management’s narrative analysis and the results of operations set forth in general instructions H (2) (a) of Form 10-Q for wholly owned subsidiaries (reduced disclosure format). Forward-Looking Information
    • The following discussion and analysis by management focuses on those factors that had a material effect on the financial condition and results of operations of Xcel Energy’s Utility Subsidiaries during the periods presented, or are expected to have a material impact in the future. It should be read in conjunction with the accompanying unaudited Financial Statements and Notes. Except for the historical statements contained in this report, the matters discussed in the following discussion and analysis are forward- looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements are intended to be identified in this document by the words “anticipate,” “estimate,” “expect,” “objective,” “outlook,” “possible,” “potential” and similar expressions. Actual results may vary materially. Factors that could cause actual results to differ materially include, but are not limited to: • general economic conditions, including their impact on capital expenditures and the ability of Xcel Energy’s Utility Subsidiaries to obtain financing on favorable terms; • business conditions in the energy industry; • competitive factors, including the extent and timing of the entry of additional competition in the markets served by the Utility Subsidiaries of Xcel Energy; 27
    • • unusual weather; • state and federal legislative and regulatory initiatives that affect cost and investment recovery, have an impact on rate structures and affect the speed and degree to which competition enters the electric and gas markets; • risks associated with the California and other western power markets; and • the other risk factors listed from time to time by the Utility Subsidiaries of Xcel Energy in reports filed with the Securities and Exchange Commission (SEC), including Exhibit 99.01 to this Report on Form 10-Q for the quarter ended Sept. 30, 2002. Market Risks The Utility Subsidiaries of Xcel Energy are exposed to market risks, including changes in commodity prices and interest rates as disclosed in Management’s Discussion and Analysis in their annual reports on Form 10-K for the year ended Dec. 31, 2001. Commodity price and interest rate risks for the Utility Subsidiaries of Xcel Energy are mitigated in most jurisdictions due to cost-based rate regulation. The energy market continues to evolve and change as market conditions and participants vary. Xcel Energy and its Utility Subsidiaries have responded to the change to the energy trading market environment and believe there has been no material change in its market risk exposures. Pending Accounting Changes SFAS No. 143 — In 2001, the Financial Accounting Standards Board issued SFAS No. 143 — “Accounting for Asset Retirement Obligations.” This statement will require NSP-Minnesota to record its future nuclear plant decommissioning obligations as a liability at fair value with a corresponding increase to the carrying value of the related long-lived asset. The liability will be increased to its present value each period, and the capitalized cost will be depreciated over the useful life of the related long-lived asset. If at the end of the asset’s life the recorded liability differs from the actual obligations paid, SFAS No. 143 requires that a gain or loss be recognized at that time. However, rate-regulated entities may recognize a regulatory asset or liability instead, if the criteria for such treatment are met. NSP-Minnesota currently follows industry practice by ratably accruing the costs for decommissioning over the approved cost recovery period and including the accruals in accumulated depreciation. At Dec. 31, 2001, NSP-Minnesota recorded and recovered in rates $623 million of decommissioning obligations and had estimated discounted decommissioning cost obligations to be $878 million as of that date. In current estimates for adoption of the standard on Jan. 1, 2003, the initial value of the liability, including cumulative interest expense through that date, would be approximately $506 million. The decrease in the estimated obligation is due to refinements of assumptions in the SFAS No. 143 calculation, including a higher discount rate and changes in the projected timing and costs for decommissioning (as filed with the MPUC in October 2002). Upon adoption, the capitalized asset would be $49 million, before offset by accumulated depreciation of $35 million. The resulting cumulative effect adjustment for unrecognized depreciation and accretion under the new standard would be approximately $8 million. Management expects that the transition amount would be recoverable in rates and, therefore, would recognize an additional regulatory asset or liability upon adoption of SFAS No. 143 rather than incur a cumulative effect charge against earnings. SFAS No. 143 also addresses accrued plant removal costs for a limited number of generation, transmission and distribution facilities for the Utility Subsidiaries. When identifiable, SFAS No. 143 requires certain removal costs be reclassified from accumulated depreciation to regulatory liabilities when these costs are recoverable in rates. However, the costs are not currently identifiable for the Utility Subsidiaries and the reclassification under SFAS No. 143 may not be practicable. Xcel Energy expects to adopt SFAS 143 as required on Jan. 1, 2003. SFAS No. 145 — In April 2002, the FASB issued SFAS No. 145 — “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections,” that supercedes previous guidance for the reporting of gains and losses from extinguishment of debt and accounting for leases, among other things. The impact of SFAS No. 145 is not expected to be material to any of the Utility Subsidiaries of Xcel Energy. SFAS No. 146 — In July 2002, the FASB issued SFAS No. 146 — “Accounting for Exit or Disposal Activities,” addressing recognition, measurement and reporting of costs associated with exit and disposal activities, including restructuring activities. The impact of SFAS No. 146 is not expected to be material to any of the Utility Subsidiaries of Xcel Energy. 28
    • EITF Nos. 02-03 and 98-10 — See Note 1 regarding pending changes related to trading operations and the rescission of EITF 98-10 provisions in 2003. NRG Credit Impacts on Liquidity and Capital Resources of Utility Subsidiaries Capital Sources — Short-Term Funding Sources — Since the fourth quarter of 2001, various rating agencies have downgraded credit ratings for Xcel Energy and its subsidiaries, including NRG Energy Inc. (NRG). While NRG’s liquidity and capital requirements have been the focus of the agencies’ concerns, there have been secondary impacts on the credit ratings and capital market access of Xcel Energy’s Utility Subsidiaries. These have not been passed on to ratepayers. Short-term borrowings as a source of short-term funding is affected by access to reasonably priced capital markets. This access is dependent in part on credit agency reviews. In the past year, credit ratings for Xcel Energy’s Utility Subsidiaries have been adversely affected by NRG’s credit contingencies, despite what management believes is a reasonable separation of NRG’s operations and credit risk from Xcel Energy’s utility operations and financing activities. As of Sept. 30, 2002, the following represents the credit ratings assigned to the Utility Subsidiaries: Company Credit Type Moody’s * Standard & Poor’s Fitch* NSP-Minnesota Senior Unsecured Debt Baa1 BBB- BBB NSP-Minnesota Senior Secured Debt A3 BBB+ BBB+ NSP-Minnesota Commercial Paper P2 A3 F2 NSP-Wisconsin Senior Unsecured Debt Baa1 BBB BBB NSP-Wisconsin Senior Secured Debt A3 BBB+ BBB+ PSCo Senior Unsecured Debt Baa2 BBB- BBB PSCo Senior Secured Debt Baa1 BBB+ BBB+ PSCo Commercial Paper P2 A3 F2 SPS Senior Unsecured Debt Baa1 BBB BBB SPS Commercial Paper P2 A3 F2 * Negative credit watch/negative outlook In June 2002, the access of Xcel Energy’s Utility Subsidiaries to commercial paper markets was reduced due to lowered credit ratings (shown above). Management believes these credit ratings are unduly low given the separation of NRG’s operations and credit risk from Xcel Energy’s utility operations and financing activities. However, until the ratings are raised, Xcel Energy’s Utility Subsidiaries continue to seek sources of financing (both short- and long-term) other than commercial paper. Xcel Energy’s Utility Subsidiaries used cash or existing credit facilities to repay outstanding commercial paper obligations in July 2002. As of Sept. 30, 2002, Xcel Energy’s Utility Subsidiaries had access to cash (including available capacity under existing credit lines) as follows: $609 million at NSP- Minnesota; $553 million at PSCo; $328 million at SPS and $15 million at NSP-Wisconsin. On Aug. 15, 2002 NSP-Minnesota obtained an amended and restated credit facility that replaced its $300 million, 364 day fully drawn credit facility. This credit line is structured as a senior revolving facility and is secured by a new series of bonds issued under its First Mortgage Trust Indenture. The new bonds are secured equally with all other bonds outstanding under the Trust Agreement. In September 2002, PSCo issued and delivered $530 million of first collateral trust bonds to a certain bank to secure its payment obligations under its $530 million, 364 day credit facility. Capital Requirements — Dividends The board of directors of Xcel Energy’s Utility Subsidiaries regularly reviews the respective dividend policies of the Utility Subsidiaries. Xcel Energy’s goal is to match future earnings growth with future dividend growth. Future changes to the dividend levels of Xcel Energy’s Utility Subsidiaries are subject to the evaluation and recommendation of the board of directors based on financial performance, cash requirements, and other factors to be considered. 29
    • NSP-MINNESOTA’S MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS NSP-Minnesota’s net income was approximately $158.4 million for the first nine months of 2002, compared with approximately $174.7 million for the first nine months of 2001. Most of the decrease is due to an unusual income item in 2001 related to conservation cost recovery. Conservation Incentive Recovery Operating income and income before income taxes in the first nine months of 2001 were increased by $41 million (before tax) due to the reversal of a MPUC decision. In June 1999, the MPUC denied NSP-Minnesota recovery of 1998 incentives associated with state-mandated programs for electric energy conservation. NSP-Minnesota recorded a $35 million charge in 1999 based on this action. NSP-Minnesota appealed the MPUC decision and in December 2000, the Minnesota Court of Appeals reversed the MPUC decision. In January 2001, the MPUC appealed the lower court decision to the Minnesota Supreme Court. On Feb. 23, 2001, the Minnesota Supreme Court declined to hear the MPUC’s appeal. During the second quarter of 2001, NSP-Minnesota filed with the MPUC a plan that carried out, among other things, the court’s decision. On June 28, 2001, the MPUC approved the plan and issued an order to that effect shortly thereafter. As a result, the previously recorded liabilities of approximately $41 million (including carrying charges) for potential refunds to customers were no longer required. The plan approved by the MPUC increased revenue by approximately $34 million and increased allowance for funds used during construction by approximately $7 million for the second quarter of 2001. Based on the new MPUC policy and less uncertainty regarding conservation incentives to be approved, conservation incentives for 2002 are now being recorded on a current basis. Electric Utility and Commodity Trading Margins Electric fuel and purchased power expense tend to vary with changing retail and wholesale sales requirements and unit cost changes in fuel and purchased power. Due to fuel cost recovery mechanisms for retail customers, most fluctuations in energy costs do not affect electric utility margin. Some electric commodity trading activity, after being initially recorded at NSP-Minnesota and PSCo, is redistributed to NSP-Minnesota, PSCo and SPS pursuant to the Joint Operating Agreement (JOA) approved by the FERC. Trading revenue and costs do not include the revenue and production costs associated with energy produced from NSP-Minnesota’s generation assets or energy and capacity purchased to serve native load. Margins from these generating assets for utility operations (excluding sales to retail and municipal customers) are included in short-term wholesale amounts, detailed below. The following table details electric utility, short-term wholesale and electric commodity trading revenue and margin: Electric Electric Short-term Commodity Consolidated (Millions of dollars) Utility Wholesale Trading Total Nine months ended Sept. 30, 2002 Electric utility revenue $1,748 $ 71 $— $1,819 Electric fuel and purchased power-utility (566) (47) — (613) Electric trading revenue-gross — — 24 24 Electric trading costs — — (26) (26) Gross margin before operating expenses $1,182 $ 24 $ (2) $1,204 Margin as a percentage of revenue 67.6% 33.8% (8.3)% 65.3% Nine months ended Sept. 30, 2001 Electric utility revenue $1,906 $ 128 $— $2,034 Electric fuel and purchased power-utility (713) (94) — (807) Electric trading revenue-gross — — — — Electric trading costs — — — — Gross margin before operating expenses $1,193 $ 34 $— $1,227
    • Margin as a percentage of revenue 62.6% 26.6% — 60.3% 30
    • Electric utility revenues decreased by $158 million, or 8.3 percent, in the first nine months of 2002, compared with the same period in 2001. This decrease is due largely to lower purchased power costs recovered through electric rates and the recovery of conservation incentives in 2001. Electric utility margins decreased by $11 million, or 0.9 percent, in the first nine months of 2002 when compared with 2001. The decrease in margins largely reflects lower shared trading margins recorded through the JOA and the recovery of conservation incentives in 2001. As discussed previously, the reversal of the MPUC decision to deny NSP-Minnesota recovery of conservation incentives increased retail revenue and margin by $34 million in the first nine months of 2001. These decreases in revenues and margin were partially offset by sales growth and lower property tax refund accruals. The margin decreases were further offset by lower capacity costs in 2002. Short-term wholesale margins decreased in the first nine months of 2002, compared with the first nine months of 2001, due to lower power pool prices and other market conditions. Gas Utility Margins The following table details the change in gas revenue and margin. The cost of gas tends to vary with changing sales requirements and unit cost of gas purchases. However, due to purchased gas cost recovery mechanisms for retail customers, fluctuations in the cost of gas have little effect on gas margin. Nine months ended Sept. 30, (Millions of dollars) 2002 2001 Gas revenue $ 309 $ 497 Cost of gas sold and transported (210) (393) Gas utility margin $ 99 $ 104 Gas revenue decreased by approximately $188 million, or 37.8 percent, in the first nine months of 2002, compared with the same period in 2001, primarily due to decreases in the cost of natural gas, which are largely passed on to customers and recovered through various rate adjustment clauses. Gas margin for the first nine months of 2002 decreased by $5 million, or 4.8 percent, compared with the first nine months of 2001, primarily due to less favorable weather and lower margins from transportation services. These decreases were partially offset by retail sales growth. Other Revenue Other revenue decreased in 2002 compared to 2001 due to the transfer of certain refuse-derived fuel operations to NRG. Non-Fuel Operating Expense and Other Items Other Operating and Maintenance Expense decreased by approximately $22.0 million, or 3.5 percent, for the first nine months of 2002, compared with the first nine months of 2001. The decreased costs reflect lower incentive compensation and employee benefit costs as well as lower staffing levels by corporate areas, partially offset by higher property insurance premiums. Depreciation and Amortization Expense increased by approximately $13.1 million, or 5.3 percent, for the first nine months of 2002, compared with the first nine months of 2001, primarily due to capital additions to utility plant. As discussed in Note 2 to the Financial Statements, during the fourth quarter of 2001 NSP-Minnesota expensed pretax special charges for planned staff consolidation costs. In the first quarter of 2002, additional pretax special charges of $4.3 million were expensed for the final costs of staff consolidations. The charges related to NSP-Minnesota’s allocation of severance costs for utility operations resulting from restaffing plans of several operating and corporate support areas of Xcel Energy. Other Income (Expense) — net increased by $15.7 million, due primarily to a gain on the sale of property by a subsidiary of NSP- Minnesota, First Midwest Auto Park, in March 2002. In addition, there was increased interest income due to a Minnesota income tax settlement and higher Allowance for Funds Used During Construction from the reversal of the MPUC decision related to recovery of conservation incentives discussed previously. Interest charges and financing costs were approximately the same for the first nine months of 2002, compared with the first nine months of 2001. 31
    • Income taxes declined in 2002 due to lower pretax income levels. Effective tax rates were approximately the same in both periods. NSP-WISCONSIN’S MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS NSP-Wisconsin’s net income was $42.9 million for the first nine months of 2002, compared with $25.1 million for the first nine months of 2001. Most of the increase is due to lower fuel and purchased power costs. Electric Utility Margins The following table details the change in electric revenue and margin. Electric production expenses tend to vary with the quantity of electricity required and changes in the unit costs of fuel and purchased power. The fuel and purchased power cost recovery mechanism of the Wisconsin jurisdiction does not allow for recovery of all expenses and, therefore, dramatic changes in costs or periods of extreme temperatures can impact earnings. Nine months ended Sept. 30, (Millions of dollars) 2002 2001 Total electric utility revenue $ 349 $ 341 Electric fuel and purchased power (160) (185) Electric utility margin $ 189 $ 156 Electric utility revenue increased by approximately $8 million, or 2.3 percent, in the first nine months of 2002, compared with the first nine months of 2001, primarily due to sales growth and higher fuel cost recovery through rates. Electric utility margin increased by approximately $33.4 million, or 21.2 percent, in the first nine months of 2002, compared with the first nine months of 2001. The increase is due to sales growth, higher fuel cost recovery through rates, and lower fuel and purchased power costs. Gas Utility Margins The following table details the change in gas revenue and margin. The cost of gas tends to vary with changing sales requirements and unit cost of gas purchases. However, due to purchase gas cost recovery mechanisms for retail customers, fluctuations in the cost of gas have little effect on gas margin. Nine months ended Sept. 30, (Millions of dollars) 2002 2001 Gas revenue $ 67 $ 96 Cost of gas purchased and transported (47) (76) Gas utility margin $ 20 $ 20 Gas revenue for the first nine months of 2002 decreased by approximately $29 million, or 30.2 percent, compared with the first nine months of 2001, primarily due to decreases in the cost of natural gas, which is largely recovered in Wisconsin through the purchased gas adjustment clause mechanism. Gas margin for the first nine months of 2002 was approximately the same as the first nine months of 2001. Non-Fuel Operating Expense and Other Items Other Operating and Maintenance Expense for the first nine months of 2002 decreased by $0.8 million, or 1.1 percent, compared with the first nine months of 2001, primarily due to lower incentive compensation and employee benefit costs, partially offset by higher property insurance premiums. Depreciation and Amortization Expense increased by $2.3 million, or 7.6 percent, for the first nine months of 2002, compared with the first nine months of 2001, primarily due to capital additions to utility plant and remaining life changes to production plant and data processing equipment.
    • As discussed in Note 2 to the Financial Statements, during the fourth quarter of 2001, NSP-Wisconsin expensed pretax special charges for planned staff consolidation costs. In the first quarter of 2002, additional pretax special charges were 32
    • expensed for the final costs of staff consolidations. The charges related to NSP-Wisconsin’s allocation of severance costs for utility operations resulting from restaffing plans of several operating and corporate support areas of Xcel Energy. Other Income (Expense) — net decreased by $0.6 million due primarily to lower Allowance for Funds Used During Construction (related to lower construction expenditures) and a write down to market value on office property located in downtown Eau Claire, Wisc. Partially offsetting these items were higher interest income on economic development investments. Interest expense increased by $1.0 million, or 5.8 percent, for the first nine months of 2002, compared with the same period in 2001, due largely to regulatory amortization of an interest refund in 2001 that did not recur in 2002 and lower Allowance for Funds Used During Construction (related to lower construction expenditures). Income taxes increased in 2002 due to higher pretax income levels. The effective rate was approximately the same in both periods. PSCo’S MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS PSCo’s net income was approximately $196.0 million for the first nine months of 2002, compared with approximately $221.6 million for the first nine months of 2001. The decrease is largely due to lower margins from trading and wholesale sales. Electric Utility and Commodity Trading Margins Electric production expenses tend to vary with changing retail and wholesale sales requirements and unit cost changes in fuel and purchased power. Due to fuel clause cost recovery mechanisms for retail customers in Colorado, most fluctuations in energy costs do not materially affect electric margin. Electric margins reflect the impact of sharing energy costs and savings relative to a target cost per delivered kilowatt hour and certain trading margins under the Incentive Cost Adjustment (ICA) mechanism. In addition to the ICA, PSCo has other adjustment clauses that allow certain costs to be passed through to retail customers. The Qualifying Facilities Capacity Cost Adjustment (QFCCA) provides for recovery of purchased capacity costs from certain Qualifying Facilities projects not otherwise reflected in base electric rates. The fuel clause cost recovery does not allow for complete recovery of all variable production expenses and higher costs can adversely affect earnings. Some electric commodity trading activity, after being initially recorded at PSCo and NSP-Minnesota, is redistributed to NSP-Minnesota, PSCo and SPS pursuant to the JOA approved by the FERC. Trading revenue and costs do not include the revenue and production costs associated with energy produced from PSCo’s generation assets or energy and capacity purchased to serve native load. Margins from these generating assets for utility operations are included in short-term wholesale amounts, discussed later. Trading margins reflect the impact of sharing certain trading margins under the ICA. Trading margins, as discussed in Note 1, are reported net in the statement of income. The following table details electric utility, short-term wholesale and electric trading revenue and margin. Electric Electric Short-term Commodity Consolidated (Millions of dollars) Utility Wholesale Trading Total Nine months ended Sept. 30, 2002 Electric utility revenue $1,331 $ 56 $ — $ 1,387 Electric fuel and purchased power-utility (582) (56) — (638) Electric trading revenue-gross — — 1,327 1,327 Electric trading costs — — (1,327) (1,327) Gross margin before operating expenses $ 749 $— $ — $ 749 Margin as a percentage of revenue 56.3% — — 27.6% Nine months ended Sept. 30, 2001 Electric utility revenue $1,283 $ 544 $ — $ 1,827 Electric fuel and purchased power-utility (657) (433) — (1,090) Electric trading revenue-gross — — 1,036 1,036 Electric trading costs — — (999) (999) Gross margin before operating expenses $ 626 $ 111 $ 37 $ 774 Margin as a percentage of revenue 48.8% 20.4% 3.6% 27.0% 33
    • Electric utility revenue increased by $48 million, or 3.7 percent, in the first nine months of 2002, compared with the first nine months of 2001. Electric utility margin increased by approximately $123 million, or 19.6 percent, in the first nine months of 2002, compared with the first nine months of 2001. The higher electric margins reflect lower unrecovered costs, due in part to resetting the base-cost recovery factor through the ICA in January 2002. Electric revenues and margin also increased due to sales growth. Short-term wholesale margins and electric commodity trading margins decreased substantially in the first nine months of 2002, compared with the first nine months of 2001. The decrease is due to lower power pool prices, lower capacity revenues and other market conditions. Gas Utility Margins The following table details the change in gas revenue and margin. The cost of gas tends to vary with changing sales requirements and unit cost of gas purchases. PSCo has a Gas Cost Adjustment mechanism for natural gas sales, which recognizes the majority of the effects of changes in the cost of gas purchased for resale and adjusts revenues to reflect such changes in costs on a timely basis. Therefore, fluctuations in the cost of gas have little effect on gas margin. Nine months ended Sept. 30, (Millions of dollars) 2002 2001 Gas revenue $ 522 $ 986 Cost of gas purchased and transported (294) (762) Gas utility margin $ 228 $ 224 Gas revenue for the first nine months of 2002 decreased by approximately $464.5 million, or 47.1 percent, compared with the first nine months of 2001, largely due to lower gas costs recovered through rates. Gas margin for the first nine months of 2002 increased by approximately $4.3 million, or 1.9 percent, compared with the first nine months of 2001, primarily due to higher rates from a 2000 rate case, effective Feb. 1, 2001. Non-Fuel Operating Expense and Other Items Other Operation and Maintenance Expense decreased by approximately $2.9 million, or 0.9 percent, for the first nine months of 2002, compared with the first nine months of 2001. The change is primarily due to reduced bad debt reserves, lower incentive compensation and employee benefit costs as well as lower staffing levels by corporate areas, offset by higher generation maintenance overhaul costs and higher property insurance premiums. Depreciation and Amortization Expense increased by approximately $14.8 million, or 8.4 percent, for the first nine months of 2002, compared with the first nine months of 2001, primarily due to increased amortization costs of software and increased depreciation resulting from capital additions to utility plant. Taxes other than income taxes increased by approximately $8.1 million, or 15.1 percent, for the first nine months of 2002, compared with the first nine months of 2001, primarily due to an $8 million property tax refund received in 2001 for calendar year 2000. Special charges decreased in 2002 compared to 2001 as discussed in Note 2. Charges in 2002 related to first quarter restaffing costs. The second quarter of 2001 included special charges related to a Colorado Supreme Court decision that resulted in a pretax write-off of $23 million of a regulatory asset related to deferred post employment benefit costs at PSCo. Other Income (Expense) — net for the first nine months of 2001 included an $11 million pretax gain on the sale of the Boulder Hydro facility recorded in March 2001. Income taxes declined in 2002 due to lower pretax income levels. Effective tax rates were approximately the same in both periods. 34
    • SPS’ MANAGEMENT’S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS SPS’ net income was approximately $59.9 million for the first nine months of 2002, compared with approximately $94.1 million for the first nine months of 2001. Most of the decrease is due to lower electric margins. Electric Utility Margins The following table details the change in electric revenue and margin. Electric production expenses tend to vary with changing retail and wholesale sales requirements and unit cost changes in fuel and purchased power. Fuel and purchased power costs are recoverable in SPS’ Texas jurisdiction through a fixed fuel factor, which is included in rates. In the New Mexico retail jurisdiction, SPS was authorized by the NMPRC to implement a monthly adjustment factor to recover fuel and purchased energy costs through a fuel clause. This change was effective with the February 2002 billing cycle. In all other jurisdictions, SPS currently recovers substantially all increases and refunds substantially all decreases in fuel and purchased power costs pursuant to monthly adjustment clauses. Due to these fuel clause recovery mechanisms for retail customers and the ability to vary wholesale prices with changing market conditions, most fluctuations in energy costs do not affect electric margin. However, the fuel clause cost recovery does not allow for complete recovery of all variable production expenses and, therefore, higher costs can adversely affect earnings. Electric Electric Short-term Commodity Consolidated (Millions of dollars) Utility Wholesale Trading Total Nine months ended Sept. 30, 2002 Electric utility revenue $ 767 $ 4 $— $ 771 Electric fuel and purchased power-utility (411) (4) — (415) Electric trading revenue-gross — — — — Electric trading costs — — — — Gross margin before operating expenses $ 356 $— $— $ 356 Margin as a percentage of revenue 46.4% — — 46.2% Nine months ended Sept. 30, 2001 Electric utility revenue $1,086 $ 2 $— $1,088 Electric fuel and purchased power-utility (678) (1) — (679) Electric trading revenue-gross — — — — Electric trading costs — — — — Gross margin before operating expenses $ 408 $ 1 $— $ 409 Margin as a percentage of revenue 37.6% 50.0% — 37.6% Electric revenue decreased by approximately $317 million, or 29.1 percent, for the first nine months of 2002, compared with the first nine months of 2001. Electric margin decreased by approximately $53 million, or 13 percent, for the first nine months of 2002, compared with the first nine months of 2001. Electric revenues decreased largely due to decreased recovery of fuel and purchased power costs driven by declining fuel costs in 2002. Electric revenue and margin also declined due to lower shared trading margins recorded through the JOA and lower capacity sales. Non-Fuel Operating Expense and Other Costs Other Operation and Maintenance Expense increased by approximately $16.4 million, or 12.7 percent, for the first nine months of 2002, compared with the first nine months of 2001. The change is largely due to higher plant maintenance costs and higher plant insurance premiums, partially offset by lower incentive compensation and employee benefit costs. Depreciation and Amortization Expense increased by approximately $4.3 million, or 7 percent, for the first nine months of 2002, compared with the first nine months of 2001, primarily due to increased amortization costs of software and capital additions to utility plant. Special charges were incurred in 2002, mainly due to a Texas regulatory recovery adjustment and also due to an allocation of utility operations restaffing costs, as discussed in Note 2. Interest expense was approximately the same in both periods
    • Income taxes decreased in 2002 due to lower pretax income levels. Effective tax rates were approximately the same in both periods. 35
    • Item 4. CONTROLS AND PROCEDURES Xcel Energy’s Utility Subsidiaries maintain a set of disclosure controls and procedures designed to ensure that information required to be disclosed in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. Within the 90-day period prior to the filing of this report, an evaluation was carried out under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures. Based on that evaluation, the CEO and CFO have concluded that the Company’s disclosure controls and procedures are effective. Subsequent to the date of their evaluation, there have been no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls. Part II. OTHER INFORMATION Item 1. Legal Proceedings In the normal course of business, various lawsuits and claims have arisen against the Utility Subsidiaries of Xcel Energy. Management, after consultation with legal counsel, has recorded an estimate of the probable cost of settlement or other disposition for such matters. See Notes 4 and 5 of the Financial Statements in this Form 10-Q for further discussion of legal proceedings, including Regulatory Matters and Commitments and Contingent Liabilities, which are hereby incorporated by reference. Reference also is made to Item 3 of NSP-Minnesota’s, NSP-Wisconsin’s, PSCo’s and SPS’ 2001 Form 10-K and Item I of Part II of their Form 10-Q for the quarter ended June 30, 2002, for a description of certain legal proceedings presently pending. There are no new significant cases to report against the Utility Subsidiaries of Xcel Energy and there have been no notable changes in the previously reported proceedings, except as set forth below. NSP-Minnesota Light Rail Lawsuit — In February 2001, NSP-Minnesota filed a lawsuit in the federal district court in Minneapolis seeking reimbursement of costs for relocating electric utility lines to allow for construction of a light rail transit (LRT) line in downtown Minneapolis. In May 2001, the Minnesota Department of Transportation and the Metropolitan Council (Defendants) obtained a preliminary injunction requiring NSP-Minnesota to move certain facilities. NSP-Minnesota has complied with the preliminary injunction and utility line relocation has commenced. NSP-Minnesota is capitalizing its costs incurred as construction work in progress. In September 2002, the court granted Defendants’ motions for summary judgment and dismissed NSP-Minnesota’s claims. NSP-Minnesota reserves its right to appeal. In collateral matters regarding LRT construction, NSP-Minnesota commenced a mandamus action in state court seeking an order requiring Defendants to commence condemnation proceedings concerning an underground substation, access to which is blocked by LRT. In October 2002, the court dismissed NSP-Minnesota’s petition. NSP-Minnesota also has commenced an action in state court alleging that LRT construction violates the Minnesota Environmental Rights Act and a separate action in federal district court alleging that the Federal Transit Administration’s failure to evaluate certain environmental effects of LRT violates the National Environmental Policy Act. NSP-Wisconsin Stray Voltage — On March 1, 2002, NSP-Wisconsin was served with a lawsuit commenced by James and Grace Gumz and Michael and Susan Gumz in Marathon County Circuit Court, Wisconsin, alleging that electricity supplied by NSP-Wisconsin harmed their dairy herd and caused them personal injury. The Gumz’s complaint alleges negligence, strict liability, nuisance, trespass, and statutory violations and seeks compensatory, punitive and treble damages. Plaintiffs allege compensatory damages of $1,691,940 and pre-verdict interest of $1,836,099 for total damages of $3,528,039. Trial has been set for March 2004. On Nov. 13, 2001, Ralph Schmidt, Karline Schmidt, August C. Heeg Jr., and Joanne Heeg filed a complaint in Clark County, Wisconsin against a subsidiary of Xcel Energy. NSP-Wisconsin has been substituted as the proper party defendant, and plaintiffs will be amending their complaints to separate the Schmidt and Heeg claims into separate lawsuits. Both sets of plaintiffs allege that electricity provided by NSP-Wisconsin harmed their dairy herd resulting in decreased milk production, lost profits and income, property damage and injury to their dairy herd and seek compensatory, punitive, and treble damages. The Heeg plaintiffs allege compensatory damages of $1.9 million and pre-verdict interest of $6.1 million, for total damages of $8.0 million. The Schmidt plaintiffs allege compensatory damages of $1.0 million and pre-verdict interest of $1.2 million, for total damages of $2.2 million. No trial date has been set. 36
    • Estate of Dean E. Von Gunten v. Janice Streeter and Xcel Energy — On Sept. 20, 2002, the Estate of Dean Von Gunten filed suit in U.S. district Court, Western District of Michigan, against Janice Streeter and Xcel Energy. The complaint alleges that Ms. Streeter’s negligence in the operation of an Xcel Energy vehicle resulted in the death of plaintiff’s decedent, who was the driver of a snowmobile that collided with Xcel Energy’s vehicle. The complaint does not specify damages. Xcel Energy has answered the complaint, denying liability. Plaintiffs have agreed to substitute NSP Wisconsin as a defendant in place of Xcel Energy. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits The following Exhibits are filed with this report: 4.01 Supplemental Indenture dated Aug. 15, 2002, between PSCo and U.S. Bank Trust National Association, as trustee, creating $48,750,000 principal amount of First Mortgage Bonds, Collateral Series G, due 2019. 4.02 Supplemental Indenture dated as of Sept. 15, 2002, between PSCo and U.S. Bank Trust National Association, as trustee, creating $530,000,000 principal amount of First Mortgage Bonds, Collateral Series I, due 2003. 4.03 Supplemental Indenture dated as of Aug. 15, 2002, between PSCo and U.S. Bank Trust National Association, as trustee, creating $48,750,000 principal amount of First Collateral Trust Bonds, Series No. 7, due 2019. 4.04 Supplemental Indenture dated as of Sept. 15, 2002, between PSCo and U.S. Bank Trust National Association, as trustee, creating $530,000,000 principal amount of First Collateral Trust Bonds, Series No. 9, due 2003. 4.05 Supplemental Indenture dated as of June 1, 2002, between NSP-Minnesota and BNY Midwest Trust Company, as successor trustee, creating $308,000,000 principal amount of First Mortgage Bonds, Series due 2003. 4.06 Supplemental Indenture dated as of July 1, 2002, between NSP-Minnesota and BNY Midwest Trust Company, as successor trustee, creating $69,000,000 principal amount of First Mortgage Bonds, Pollution Control Series S. 4.07 Supplemental Indenture dated Sept. 1, 2002, between Public Service Company of Colorado and U.S. Bank Trust National Association, as Trustee, creating $600,000,000 principal amount of 7.875% First Collateral Trust Bonds, Series No. 8 due 2012. (Incorporated by reference to PSCo’s Current Report on Form 8-K, dated Sept. 18, 2002.) 4.08 Supplemental Indenture dated Sept. 18, 2002, between Public Service Company of Colorado and U.S. Bank Trust National Association, as Trustee, creating $600,000,000 principal amount of 7.875% First Mortgage Bonds, Series H due 2012. (Incorporated by reference to PSCo’s Current Report on Form 8-K, dated Sept. 18, 2002.) 4.09 Supplemental Indenture dated Aug. 1, 2002, between Northern States Power Company and BNY Midwest Trust Company, as Trustee, creating $450,000,000 principal amount of 8.00% First Mortgage Bonds, Series A due Aug. 28, 2012. (Incorporated by reference to NSP-Minnesota’s Current Report on Form 8-K, dated Aug. 22, 2002.) 99.01 Statement pursuant to Private Securities Litigation Reform Act. 99.02 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 — NSP-Minnesota. 99.03 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 — NSP-Wisconsin. 99.04 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 — PSCo. 99.05 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 — SPS. 37
    • (b) Reports on Form 8-K The following reports on Form 8-K were filed either during the three months ended Sept. 30, 2002, or between Sept. 30, 2002, and the date of this report: NSP-Minnesota, NSP-Wisconsin, PSCo and SPS July 1, 2002, (filed July 8, 2002) Item 5. Other Events. Re: PSCo receipt of Notice of Violation from the Environmental Protection Agency. July 8, 2002, (filed July 10, 2002) Item 5 and 7. Other Events and Exhibits. Re: NSP-MN Underwriting Agreement. July 16, 2002, (filed July 18, 2002) Item 5 and 7. Other Events and Exhibits. Re: NSP-MN Underwriting Agreement overallotment exercise. July 25, 2002, (filed Aug. 1, 2002) Item 5 and 7. Other Events and Exhibits. Re: Rating Agency actions and other events. Aug. 21, 2002, (filed Aug. 22, 2002) Item 5 and 7. Other Events and Exhibits. Re: Announcement of new chief financial officer. Aug. 22, 2002, (filed Aug. 23, 2002) Item 5 and 7. Other Events and Exhibits. Re: NSP-MN Offering Memorandum for potential purchasers (private placement) of long-term debt. Aug. 22, 2002, (filed Aug. 26, 2002) Item 5 and 7. Other Events and Exhibits. Re: NSP-MN Purchase Agreement with several purchasers (private placement) of debt securities. Sept. 18, 2002 (filed Sept. 27, 2002) Item 5 and 7. Other Events and Exhibits. Re: PSCo Purchase Agreement with several purchasers (private placement) of debt securities. 38
    • NORTHERN STATES POWER CO. (A MINNESOTA CORPORATION) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on Nov. 14, 2002. Northern States Power Co. (a Minnesota corporation) (Registrant) /s/ DAVID E. RIPKA David E. Ripka Vice President and Controller /s/ RICHARD C, KELLY Richard C. Kelly Vice President and Chief Financial Officer 39
    • NORTHERN STATES POWER CO. (A MINNESOTA CORPORATION) CERTIFICATIONS I, Wayne H. Brunetti, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Northern States Power Co. (A Minnesota Corporation); 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and 6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: Nov. 14, 2002 /s/ WAYNE H. BRUNETTI Wayne H. Brunetti Chairman, President and Chief Executive Officer 40
    • I, Richard C. Kelly, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Northern States Power Co. (A Minnesota Corporation); 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and 6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: Nov. 14, 2002 /s/ RICHARD C. KELLY Richard C. Kelly Vice President and Chief Financial Officer 41
    • NORTHERN STATES POWER CO. (A WISCONSIN CORPORATION) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on Nov. 14, 2002. Northern States Power Co. (a Wisconsin corporation) (Registrant) /s/ DAVID E. RIPKA David E. Ripka Vice President and Controller /s/ RICHARD C. KELLY Richard C. Kelly Vice President and Chief Financial Officer 42
    • NORTHERN STATES POWER CO. (A WISCONSIN CORPORATION) CERTIFICATIONS I, Wayne H. Brunetti, certify that: 5. I have reviewed this quarterly report on Form 10-Q of Northern States Power Co. (A Wisconsin Corporation); 6. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 7. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 8. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: d) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; e) evaluated in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and f) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 6. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): c) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and d) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and 7. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: Nov. 14, 2002 /s/ WAYNE H. BRUNETTI Wayne H. Brunetti Chairman, President and Chief Executive Officer 43
    • I, Richard C. Kelly, certify that: 5. I have reviewed this quarterly report on Form 10-Q of Northern States Power Co. (A Wisconsin Corporation); 6. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 7. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 8. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 6. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): c) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and d) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and 7. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: Nov. 14, 2002 /s/ RICHARD C. KELLY Richard C. Kelly Vice President and Chief Financial Officer 44
    • PUBLIC SERVICE CO. OF COLORADO SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on Nov. 14, 2002. Public Service Co. of Colorado (Registrant) /s/ DAVID E. RIPKA David E. Ripka Vice President and Controller /s/ RICHARD C. KELLY Richard C. Kelly Vice President and Chief Financial Officer 45
    • PUBLIC SERVICE CO. OF COLORADO CERTIFICATIONS I, Wayne H. Brunetti, certify that: 9. I have reviewed this quarterly report on Form 10-Q of Public Service Co. of Colorado; 10. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 11. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 12. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: g) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; h) evaluated in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and i) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 7. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): e) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and f) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and 8. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: Nov. 14, 2002 /s/ WAYNE H. BRUNETTI Wayne H. Brunetti Chairman, President and Chief Executive Officer 46
    • I, Richard C. Kelly, certify that: 9. I have reviewed this quarterly report on Form 10-Q of Public Service Co. of Colorado; 10. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 11. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 12. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 7. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): e) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and f) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and 8. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: Nov. 14, 2002 /s/ RICHARD C. KELLY Richard C. Kelly Vice President and Chief Financial Officer 47
    • SOUTHWESTERN PUBLIC SERVICE CO. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on Nov. 14, 2002. Southwestern Public Service Co. (Registrant) /s/ DAVID E. RIPKA David E. Ripka Vice President and Controller /s/ RICHARD C. KELLY Richard C. Kelly Vice President and Chief Financial Officer 48
    • SOUTHWESTERN PUBLIC SERVICE CO. CERTIFICATIONS I, Gary L. Gibson, certify that: 13. I have reviewed this quarterly report on Form 10-Q of Southwestern Public Service Co; 14. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 15. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 16. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: j) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; k) evaluated in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and l) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 8. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): g) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and h) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and 9. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: Nov. 14, 2002 /s/ GARY L. GIBSON Gary L. Gibson President and Chairman 49
    • I, Richard C. Kelly, certify that: 13. I have reviewed this quarterly report on Form 10-Q of Southwestern Public Service Co; 14. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 15. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 16. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 8. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): g) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and h) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and 9. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: Nov. 14, 2002 /s/ RICHARD C. KELLY Richard C. Kelly Vice President and Chief Financial Officer 50
    • EXHIBIT 4.01 SUPPLEMENTAL INDENTURE (DATED AS OF AUGUST 15, 2002) -------- PUBLIC SERVICE COMPANY OF COLORADO TO U.S. BANK TRUST NATIONAL ASSOCIATION, AS TRUSTEE -------- CREATING AN ISSUE OF FIRST MORTGAGE BONDS, COLLATERAL SERIES G -------- (SUPPLEMENTAL TO INDENTURE DATED AS OF DECEMBER 1, 1939, AS AMENDED)
    • SUPPLEMENTAL INDENTURE, dated as of August 15, 2002, between PUBLIC SERVICE COMPANY OF COLORADO, a corporation organized and existing under the laws of the State of Colorado (the quot;Companyquot;), party of the first part, and U.S. BANK TRUST NATIONAL ASSOCIATION (FORMERLY FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION), a national banking association, as successor trustee (the quot;Trusteequot;) to Morgan Guaranty Trust Company of New York (formerly Guaranty Trust Company of New York), party of the second part. WHEREAS, the Company heretofore executed and delivered to the Trustee its Indenture, dated as of December 1, 1939 (the quot;Principal Indenturequot;), to secure its First Mortgage Bonds from time to time issued thereunder; and WHEREAS, the Company has heretofore executed and delivered to the Trustee the Supplemental Indentures referred to in Schedule A hereto for certain purposes, including the creation of series of bonds, the subjection to the lien of the Principal Indenture of property acquired after the execution and delivery thereof, the amendment of certain provisions of the Principal Indenture and the appointment of the successor Trustee; and WHEREAS, the Principal Indenture as supplemented and amended by all Supplemental Indentures heretofore executed by the Company and the Trustee is hereinafter referred to as the quot;Indenturequot;, and, unless the context requires otherwise, references herein to Articles and Sections of the Indenture shall be to Articles and Sections of the Principal Indenture as so amended; and WHEREAS, the Company proposes to create a new series of First Mortgage Bonds to be designated as First Mortgage Bonds, Collateral Series G (the quot;Collateral Series G Bondsquot;), to be issued and delivered to the trustee under the 1993 Mortgage (as hereinafter defined) as the basis for the authentication and delivery under the 1993 Mortgage of a series of securities, all as hereinafter provided, and to vary in certain respects the covenants and provisions contained in Article V of the Indenture, to the extent that such covenants and provisions apply to the Collateral Series G Bonds; and WHEREAS, the Company, pursuant to the provisions of the Indenture, has, by appropriate corporate action, duly resolved and determined to execute this Supplemental Indenture for the purpose of providing for the creation of the Collateral Series G Bonds and of specifying the form, provisions and particulars thereof, as in the Indenture provided or permitted and of giving to the Collateral Series G Bonds the protection and security of the Indenture; and WHEREAS, the Company has acquired the additional property hereinafter described, and the Company desires that such additional property so acquired be specifically subject to the lien of the Indenture; and WHEREAS, the Company represents that all acts and proceedings required by law and by the charter and by-laws of the Company, including all action requisite on the part of its shareholders, directors and officers, necessary to make the Collateral Series G Bonds, when executed by the Company, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal obligations of the Company, and to constitute the
    • Principal Indenture and all indentures supplemental thereto, including this Supplemental Indenture, valid, binding and legal instruments for the security of the bonds of all series, including the Collateral Series G Bonds, in accordance with the terms of such bonds and such instruments, have been done, performed and fulfilled, and the execution and delivery hereof have been in all respects duly authorized; NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: That Public Service Company of Colorado, the Company named in the Indenture, in consideration of the premises and of One Dollar to it duly paid by the Trustee at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, and in pursuance of the direction and authority of the Board of Directors of the Company given at a meeting thereof duly called and held, and in order to create the Collateral Series G Bonds and to specify the form, terms and provisions thereof, and to make definite and certain the lien of the Indenture upon the premises hereinafter described and to subject said premises directly to the lien of the Indenture, and to secure the payment of the principal of and premium, if any, and interest, if any, on all bonds from time to time outstanding under the Indenture, including the Collateral Series G Bonds, according to the terms of said bonds, and to secure the performance and observance of all of the covenants and conditions contained in the Indenture, has executed and delivered this Supplemental Indenture and has granted, bargained, sold, warranted, aliened, remised, released, conveyed, assigned, transferred, mortgaged, pledged, set over and confirmed, and by these presents does grant, bargain, sell, warrant, alien, remise, release, convey, assign, transfer, mortgage, pledge, set over and confirm unto U.S. Bank Trust National Association, as Trustee, and its successor or successors in the trust and its and their assigns forever, the property described in Schedule B hereto (which is described in such manner as to fall within and under the headings or parts or classifications set forth in the Granting Clauses of the Principal Indenture); TO HAVE AND TO HOLD the same and all and singular the properties, rights, privileges and franchises described in the Principal Indenture and in the several Supplemental Indentures hereinabove referred to and in this Supplemental Indenture and owned by the Company on the date of the execution and delivery hereof (other than property of a character expressly excepted from the lien of the Indenture as therein set forth) unto the Trustee and its successor or successors and assigns forever; SUBJECT, HOWEVER, to permitted encumbrances as defined in the Indenture; IN TRUST, NEVERTHELESS, upon the terms and trusts set forth in the Indenture, for the equal and proportionate benefit and security of all present and future holders of the bonds and coupons issued and to be issued under the Indenture, including the Collateral Series G Bonds, without preference, priority or distinction as to lien (except as any sinking, amortization, improvement or other fund established in accordance with the provisions of the Indenture or any indenture supplemental thereto may afford additional security for the bonds of any particular series) of any of said bonds over any others thereof by reason of series, priority in the time of the issue or negotiation thereof, or otherwise howsoever, except as provided in Section 2 of Article IV of the Indenture. 2
    • ARTICLE ONE CREATION AND DESCRIPTION OF THE COLLATERAL SERIES G BONDS SECTION 1. A new series of bonds to be issued under and secured by the Indenture is hereby created, the bonds of such new series to be designated First Mortgage Bonds, Collateral Series G. The Collateral Series G Bonds shall be limited to an aggregate principal amount of Forty Eight Million Seven Hundred and Fifty Thousand dollars ($48,750,000), excluding any Collateral Series G Bonds which may be authenticated and exchanged for or in lieu of or in substitution for or on transfer of other Collateral Series G Bonds pursuant to any provisions of the Indenture. The Collateral Series G Bonds shall mature on January 1, 2019. The Collateral Series G Bonds shall not bear interest. The principal of each Collateral Series G Bond shall be payable, upon presentation thereof, at the office or agency of the Company in the city in which the principal corporate trust office of the 1993 Mortgage Trustee (as hereinafter defined) is located, in any coin or currency of the United States of America which at the time of payment shall be legal tender for the payment of public and private debts. The Collateral Series G Bonds shall be issued and delivered by the Company to U.S. Bank Trust National Association, as successor trustee under the Indenture, dated as of October 1, 1993, as supplemented (the quot;1993 Mortgagequot;), of the Company to such successor trustee (the quot;1993 Mortgage Trusteequot;), as the basis for the authentication and delivery under the 1993 Mortgage of a series of securities. As provided in the 1993 Mortgage, the Collateral Series G Bonds will be registered in the name of the 1993 Mortgage Trustee or its nominee and will be owned and held by the 1993 Mortgage Trustee, subject to the provisions of the 1993 Mortgage, for the benefit of the holders of all securities from time to time outstanding under the 1993 Mortgage, and the Company shall have no interest therein. Any payment or deemed payment by the Company under the 1993 Mortgage of the principal of the securities which shall have been authenticated and delivered under the 1993 Mortgage on the basis of the issuance and delivery to the 1993 Mortgage Trustee of Collateral Series G Bonds (other than by the application of the proceeds of a payment in respect of such Collateral Series G Bonds) shall, to the extent thereof, be deemed to satisfy and discharge the obligation of the Company, if any, to make a payment of principal of such Collateral Series G Bonds which is then due. The Trustee may conclusively presume that the obligation of the Company to pay the principal of the Collateral Series G Bonds as the same shall become due and payable shall have been fully satisfied and discharged unless and until it shall have received a written notice from the 1993 Mortgage Trustee, signed by an authorized officer thereof, stating that the principal of specified Collateral Series G Bonds has become due and payable and has not been fully paid, and specifying the amount of funds required to make such payment. Each Collateral Series G Bond shall be dated as of the date of its authentication. 3
    • The Collateral Series G Bonds shall be issued as fully registered bonds only, in denominations of $1,000 and multiples thereof. The Collateral Series G Bonds shall be registerable and exchangeable at the office or agency of the Company in the city in which the principal corporate trust office of the 1993 Mortgage Trustee is located, in the manner and upon the terms set forth in Section 5 of Article II of the Indenture; provided, however, that the Collateral Series G Bonds shall not be transferrable except to a successor trustee under the 1993 Mortgage. No service charge shall be made for any exchange or transfer of any Collateral Series G Bond. SECTION 2. The text of the Collateral Series G Bonds shall be substantially in the form attached hereto as Exhibit A. SECTION 3. The Collateral Series G Bonds may be executed by the Company and delivered to the Trustee and, upon compliance with all applicable provisions and requirements of the Indenture in respect thereof, shall be authenticated by the Trustee and delivered (without awaiting the filing or recording of this Supplemental Indenture) in accordance with the written order or orders of the Company. ARTICLE TWO REDEMPTION OF THE COLLATERAL SERIES G BONDS SECTION 1. Each Collateral Series G Bond shall be redeemable at the option of the Company in whole at any time, or in part from time to time, prior to maturity, at a redemption price equal to 100% of the principal amount thereof to be redeemed. SECTION 2. The provisions of Sections 3, 4, 5, 6 and 7 of Article V of the Indenture shall be applicable to the Collateral Series G Bonds, except that (a) no publication of notice of redemption of the Collateral Series G Bonds shall be required and (b) if less than all the Collateral Series G Bonds are to be redeemed, the Collateral Series G Bonds to be redeemed shall be selected in the principal amounts designated to the Trustee by the Company, and except as such provisions may otherwise be inconsistent with the provisions of this Article Two. SECTION 3. The holder of each and every Collateral Series G Bond hereby agrees to accept payment thereof prior to maturity on the terms and conditions provided for in this Article Two. ARTICLE THREE ACKNOWLEDGMENT OF RIGHT TO VOTE OR CONSENT WITH RESPECT TO CERTAIN AMENDMENTS TO INDENTURE The Company hereby acknowledges the right of the holders of the Collateral Series G Bonds to vote or consent with respect to any or all of the modifications to the Indenture referred to in Article Three of the Supplemental Indenture, dated as of March 1, 1980, irrespective of the fact that the Bonds of the Second 1987 Series are no longer 4
    • outstanding; provided, however, that such acknowledgment shall not impair (a) the right of the Company to make such modifications without the consent or other action of the holders of the Bonds of the 2020 Series or the bonds of any other series subsequently created under the Indenture with respect to which the Company has expressly reserved such right or (b) the right of the Company to reserve the right to make such modifications without the consent or other action of the holders of bonds of one or more, or any or all, series created subsequent to the creation of the Collateral Series G Bonds. ARTICLE FOUR THE TRUSTEE The Trustee accepts the trusts created by this Supplemental Indenture upon the terms and conditions set forth in the Indenture and this Supplemental Indenture. The recitals in this Supplemental Indenture are made by the Company only and not by the Trustee. Each and every term and condition contained in Article XII of the Indenture shall apply to this Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Supplemental Indenture. ARTICLE FIVE MISCELLANEOUS PROVISIONS SECTION 1. Subject to the variations contained in Article Two of this Supplemental Indenture, the Indenture is in all respects ratified and confirmed and the Principal Indenture, this Supplemental Indenture and all other indentures supplemental to the Principal Indenture shall be read, taken and construed as one and the same instrument. Neither the execution of this Supplemental Indenture nor anything herein contained shall be construed to impair the lien of the Indenture on any of the properties subject thereto, and such lien shall remain in full force and effect as security for all bonds now outstanding or hereafter issued under the Indenture. All covenants and provisions of the Indenture shall continue in full force and effect and this Supplemental Indenture shall form part of the Indenture. SECTION 2. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Supplemental Indenture, shall not be a Business Day (as defined in the 1993 Mortgage), such payment may be made or act performed or right exercised on the next succeeding Business Day with the same force and effect as if done on the nominal date provided in this Supplemental Indenture. SECTION 3. The terms defined in the Indenture shall, for all purposes of this Supplemental Indenture, have the meaning specified in the Indenture except as set forth in Section 4 of this Article or otherwise set forth in this Supplemental Indenture or unless the context clearly indicates some other meaning to be intended. 5
    • SECTION 4. Any term defined in Section 303 of the Trust Indenture Act of 1939, as amended, and not otherwise defined in the Indenture shall, with respect to this Supplemental Indenture and the Collateral Series G Bonds, have the meaning assigned to such term in Section 303 as in force on the date of the execution of this Supplemental Indenture. SECTION 5. This Supplemental Indenture may be executed in any number of counterparts, and all of said counterparts executed and delivered, each as an original, shall constitute but one and the same instrument. 6
    • IN WITNESS WHEREOF, Public Service Company of Colorado, party hereto of the first part, has caused its corporate name to be hereunto affixed, and this instrument to be signed by its President, an Executive Vice President, a Senior Vice President or a Vice President, and its corporate seal to be hereunto affixed and attested by its Secretary or an Assistant Secretary for and in its behalf; and U.S. Bank Trust National Association, the party hereto of the second part, in evidence of its acceptance of the trust hereby created, has caused its corporate name to be hereunto affixed, and this instrument to be signed and its corporate seal to be affixed by one of its Vice Presidents and attested by one of its Assistant Secretaries, for and in its behalf, all as of the day and year first above written. PUBLIC SERVICE COMPANY OF COLORADO By:/s/ Paul E. Pender ------------------ Name: Paul E. Pender Title: Vice President and Treasurer ATTEST: /s/ Nancy Haley ---------------- Name: Nancy Haley Title: Assistant Secretary U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee By: /s/ Ignazio Tamburello ---------------------- Name: Ignazio Tamburello Title: Assistant Vice President ATTEST: /s/ Adam Berman ---------------- Name: Adam Berman Title: Trust Officer 7
    • STATE OF MINNESOTA ) ) ss.: CITY OF MINNEAPOLIS ) On this 9th day of September, 2002, before me, Sharon M. Quellhorst, a duly authorized Notary Public in and for said City and in the State aforesaid, personally appeared Paul E. Pender and Nancy Haley to me known to be a Vice President and Treasurer and the Assistant Secretary, respectively, of PUBLIC SERVICE COMPANY OF COLORADO, a corporation organized and existing under the laws of the State of Colorado, one of the corporations that executed the within and foregoing instrument; and the said Vice President and Treasurer and Assistant Secretary severally acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that they were authorized to execute said instrument and that the seal affixed thereto is the corporate seal of said corporation. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year first above written. /s/ Sharon M. Quelhorst Name: Sharon M. Quellhorst Notary Public, State of Minnesota Commission Expires: January 31, 2005 8
    • STATE OF NEW YORK ) ) ss.: CITY AND COUNTY OF NEW YORK ) On this 10th day of September, 2002, before me, Rouba Fakih, a duly authorized Notary Public in and for said City and County in the State aforesaid, personally appeared Ignazio Tamburello and Adam Berman to me known to be an Assistant Vice President and a Trust Officer, respectively, of U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking association, one of the corporations that executed the within and foregoing instrument; and the said Assistant Vice President and Assistant Secretary severally acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that they were authorized to execute said instrument and that the seal affixed thereto is the corporate seal of said corporation. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year first above written. /s/ Rouba Fakih --------------- Name: Rouba Fakih Notary Public, State of New York Commission Expires February 20, 2003 9
    • EXHIBIT A FORM OF COLLATERAL SERIES G BOND THIS BOND IS NOT TRANSFERABLE EXCEPT TO A SUCCESSOR TRUSTEE UNDER THE INDENTURE, DATED AS OF OCTOBER 1, 1993, AS SUPPLEMENTED, BETWEEN PUBLIC SERVICE COMPANY OF COLORADO AND U.S. BANK TRUST NATIONAL ASSOCIATION (FORMERLY FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION), AS SUCCESSOR TRUSTEE THEREUNDER. PUBLIC SERVICE COMPANY OF COLORADO FIRST MORTGAGE BOND, Collateral Series G DUE 2019 REGISTERED REGISTERED No. 1 $48,750,000 FOR VALUE RECEIVED, PUBLIC SERVICE COMPANY OF COLORADO, a corporation organized and existing under the laws of the State of Colorado (hereinafter sometimes called the quot;Companyquot;), promises to pay to U.S. Bank Trust National Association (formerly known as First Trust of New York, National Association), as successor trustee (the quot;1993 Mortgage Trusteequot;) under the Indenture, dated as of October 1, 1993 (the quot;1993 Mortgagequot;), of the Company, or registered assigns, Forty Eight Million Seven Hundred Fifty Thousand Dollars on January 1, 2019, at the office or agency of the Company in the city in which the principal corporate trust office of the 1993 Mortgage Trustee is located. This bond shall not bear interest. The principal of this bond shall be payable in any coin or currency of the United States of America which at the time of payment shall be legal tender for the payment of public and private debts. Any payment or deemed payment by the Company under the 1993 Mortgage of the principal of securities which shall have been authenticated and delivered under the 1993 Mortgage on the basis of the issuance and delivery to the 1993 Mortgage Trustee of this bond (the quot;1993 Mortgage Securitiesquot;) (other than by the application of the proceeds of a payment in respect of this bond) shall, to the extent thereof, be deemed to satisfy and discharge the obligation of the Company, if any, to make a payment of principal of this bond which is then due. This bond is one of an issue of bonds of the Company, issued and to be issued in one or more series under and equally and ratably secured (except as any sinking, amortization, improvement or other fund, established in accordance with the provisions of the indenture hereinafter mentioned, may afford additional security for the bonds of any particular series) by a certain indenture, dated as of December 1, 1939, made by the Company to U.S. BANK TRUST EXHIBIT A-1
    • NATIONAL ASSOCIATION (formerly First Trust of New York, National Association), as successor trustee (hereinafter called the quot;Trusteequot;) to Morgan Guaranty Trust Company of New York (formerly Guaranty Trust Company of New York), as amended and supplemented by several indentures supplemental thereto, including the Supplemental Indenture dated as of August 15, 2002 (said Indenture as amended and supplemented by said indentures supplemental thereto being hereinafter called the quot;Indenturequot;), to which Indenture reference is hereby made for a description of the property mortgaged, the nature and extent of the security, the rights and limitations of rights of the Company, the Trustee, and the holders of said bonds, under the Indenture, and the terms and conditions upon which said bonds are secured, to all of the provisions of which Indenture and of all indentures supplemental thereto in respect of such security, including the provisions of the Indenture permitting the issue of bonds of any series for property which, under the restrictions and limitations therein specified, may be subject to liens prior to the lien of the Indenture, the holder, by accepting this bond, assents. To the extent permitted by and as provided in the Indenture, the rights and obligations of the Company and of the holders of said bonds (including those pertaining to any sinking or other fund) may be changed and modified, with the consent of the Company, by the holders of at least 75% in aggregate principal amount of the bonds then outstanding (excluding bonds disqualified from voting by reason of the Company’s interest therein as provided in the Indenture); provided, however, that without the consent of the holder hereof no such modification or alteration shall be made which will extend the time of payment of the principal of this bond or reduce the principal amount hereof or effect any other modification of the terms of payment of such principal or will reduce the percentage of bonds required for the aforesaid actions under the Indenture. The Company has reserved the right to amend the Indenture without any consent or other action by holders of any series of bonds created after October 31, 1975 (including this series) so as to change 75% in the foregoing sentence to 60% and to change certain procedures relating to bondholders’ meetings. This bond is one of a series of bonds designated as the First Mortgage Bonds, Collateral Series G, of the Company. This bond shall be redeemable at the option of the Company in whole at any time, or in part from time to time, prior to maturity, at a redemption price equal to 100% of the principal amount thereof to be redeemed. The principal of this bond may be declared or may become due before the maturity hereof, on the conditions, in the manner and at the times set forth in the Indenture, upon the happening of an event of default as therein provided. This bond is not transferable except to a successor trustee under the 1993 Mortgage, any such transfer to be made at the office or agency of the Company in the city in which the principal corporate trust office of the 1993 Mortgage Trustee is located, upon surrender and cancellation of this bond, and thereupon a new bond of this series of a like principal amount will be issued to the transferee in exchange therefor, as provided in the Indenture. The Company, the Trustee, any paying agent and any registrar may deem and treat the person in whose name this bond is registered as the absolute owner hereof for the purpose of receiving payment and for all other purposes. This bond, alone or with other bonds of this series, may in like manner be exchanged at such office or agency for one or more new bonds of this series of the same aggregate principal amount, all as provided in the Indenture. No service charge shall be made to any holder of any bond of this series for any exchange or transfer of bonds. EXHIBIT A-2
    • No recourse under or upon any covenant or obligation of the Indenture, or of any bonds thereby secured, or for any claim based thereon, or otherwise in any manner in respect thereof, shall be had against any incorporator, subscriber to the capital stock, shareholder, officer or director, as such, of the Company, whether former, present or future, either directly, or indirectly through the Company or the Trustee, by the enforcement of any subscription to capital stock, assessment or otherwise, or by any legal or equitable proceeding by virtue of any statute or otherwise (including, without limiting the generality of the foregoing, any proceeding to enforce any claimed liability of shareholders of the Company based upon any theory of disregarding the corporate entity of the Company or upon any theory that the Company was acting as the agent or instrumentality of the shareholders), any and all such liability of incorporators, shareholders, subscribers, officers and directors, as such, being released by the holder hereof, by the acceptance of this bond, and being likewise waived and released by the terms of the Indenture under which this bond is issued. This bond shall not be valid or become obligatory for any purpose until the certificate of authentication endorsed hereon shall have been signed by U.S. Bank Trust National Association, or its successor, as Trustee under the Indenture. IN WITNESS WHEREOF, Public Service Company of Colorado has caused this bond to be signed in its name by a Vice President and its corporate seal to be affixed hereto and attested by its Secretary or an Assistant Secretary. Dated: PUBLIC SERVICE COMPANY OF COLORADO By: ------------------------------ Vice President and Treasurer ATTEST: ------------------------------ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the securities of the series designated therein referred to in the within-mentioned Supplemental Indenture. Dated: U.S. BANK TRUST NATIONAL ASSOCIATION, AS TRUSTEE By: ------------------------------ Authorized Officer EXHIBIT A-3
    • SCHEDULE A SUPPLEMENTAL INDENTURES <TABLE> <CAPTION> DATE OF SERIES OF BONDS PRINCIPAL PRINCIPAL SUPPLEMENTAL --------------- AMOUNT ISSUED AMOUNT INDENTURE ------------- OUTSTANDING --------- ----------- <S> <C> <C> <C> March 14, 1941 None -- -- May 14, 1941 None -- -- April 28, 1942 None -- -- April 14, 1943 None -- -- April 27, 1944 None -- -- April 18, 1945 None -- -- April 23, 1946 None -- -- April 9, 1947 None -- -- June 1, 1947* 2-7/8% Series due 1977 $ 40,000,000 None April 1, 1948 None -- -- May 20, 1948 None -- -- October 1, 1948 3-1/8% Series due 1978 10,000,000 None April 20, 1949 None -- -- April 24, 1950 None -- -- April 18, 1951 None -- -- October 1, 1951 3-1/4% Series due 1981 15,000,000 None April 21, 1952 None -- -- December 1, 1952 None -- -- April 15, 1953 None -- -- April 19, 1954 None -- -- October 1, 1954* 3-1/8% Series due 1984 20,000,000 None April 18, 1955 None -- -- April 24, 1956 None -- -- May 1, 1957* 4-3/8% Series due 1987 30,000,000 None April 10, 1958 None -- -- May 1, 1959 4-5/8% Series due 1989 20,000,000 None April 18, 1960 None -- -- April 19, 1961 None -- -- October 1, 1961 4-1/2% Series due 1991 30,000,000 None March 1, 1962 4-5/8% Series due 1992 8,800,000 None June 1, 1964 4-1/2% Series due 1994 35,000,000 None May 1, 1966 5-3/8% Series due 1996 35,000,000 None July 1, 1967* 5-7/8% Series due 1997 35,000,000 None July 1, 1968* 6-3/4% Series due 1998 25,000,000 None April 25, 1969 None -- -- </TABLE> SCHEDULE A-1
    • <TABLE> <CAPTION> DATE OF SERIES OF BONDS PRINCIPAL PRINCIPAL SUPPLEMENTAL --------------- AMOUNT ISSUED AMOUNT INDENTURE ------------- OUTSTANDING --------- ----------- <S> <C> <C> <C> None -- -- April 21, 1970 September 1, 1970 8-3/4% Series due 2000 35,000,000 None February 1, 1971 7-1/4% Series due 2001 40,000,000 None August 1, 1972 7-1/2% Series due 2002 50,000,000 None June 1, 1973 7-5/8% Series due 2003 50,000,000 None March 1, 1974 Pollution Control Series A 24,000,000 None December 1, 1974 Pollution Control Series B 50,000,000 None October 1, 1975 9-3/8% Series due 2005 50,000,000 None April 28, 1976 None -- -- April 28, 1977 None -- -- November 1, 1977* 8-1/4% Series due 2007 50,000,000 None April 28, 1978 None -- -- October 1, 1978 9-1/4% Series due 2008 50,000,000 None October 1, 1979* Pollution Control Series C 50,000,000 None March 1, 1980* 15% Series due 1987 50,000,000 None April 28, 1981 None -- -- November 1, 1981* Pollution Control Series D 27,380,000 None December 1, 1981* 16-1/4% Series due 2011 50,000,000 None April 29, 1982 None -- -- May 1, 1983* Pollution Control Series E 42,000,000 None April 30, 1984 None -- -- March 1, 1985* 13% Series due 2015 50,000,000 None November 1, 1986* Pollution Control Series F 27,250,000 None May 1, 1987* 8.95% Series due 1992 75,000,000 None July 1, 1990* 9-7/8% Series due 2020 75,000,000 None December 1, 1990* Secured Medium-Term Notes, Series A 191,500,000** 15,000,000 March 1, 1992* 8-1/8% Series due 2004 and 100,000,000 100,000,000 8-3/4% Series due 2022 150,000,000 146,340,000 April 1, 1993* Pollution Control Series G 79,500,000 79,500,000 June 1, 1993* Pollution Control Series H 50,000,000 50,000,000 November 1, 1993* Collateral Series A 134,500,000 134,500,000 January 1, 1994* Collateral Series B due 2001 and 102,667,000 None Collateral Series B due 2024 110,000,000 110,000,000 September 2, 1994 None -- -- (Appointment of Successor Trustee) May 1, 1996 Collateral Series C 125,000,000 125,000,000 </TABLE> SCHEDULE A-2
    • <TABLE> <CAPTION> DATE OF SERIES OF BONDS PRINCIPAL PRINCIPAL SUPPLEMENTAL --------------- AMOUNT ISSUED AMOUNT INDENTURE ------------- OUTSTANDING --------- ----------- <S> <C> <C> <C> Collateral Series D 250,000,000 None November 1, 1996 February 1, 1997 Collateral Series E 150,000,000 None April 1, 1998 Collateral Series F 250,000,000 250,000,000 </TABLE> -------------------- * Contains amendatory provisions ** $200,000,000 authorized SCHEDULE A-3
    • SCHEDULE B DESCRIPTION OF PROPERTY PART FIRST. (PLANTS) The following electric generating plants, gas generating plants, gas holders, steam plant, ice plant, pressure pipe lines, gravity pipe lines, reservoir sites, power sites, gas regulating stations, substations and other properties of the Company, including all dams, power houses, transmission lines, buildings, forebays, reservoirs, races, raceways, pipes, head works, structures and works, and the lands of the Company on which the same are situated, and all the Company’s lands, easements, rights, rights-of-way, water rights, rights to the use of water, including all of the Company’s right, title and interest in and to any and all decrees therefor, flowage rights, flooding rights, permits, franchises, consents, privileges, licenses, poles, towers, wires, switch racks, insulators, pipes, machinery, engines, boilers, gas benches, condensers and scrubbers, exhausters, blowers and pumps, motors, gas boosters, air condensers, water pumps, governors, purifiers, tar separators, washers, automobiles, trucks, office furniture and fixtures, regulators, meters, tools, appliances, equipment, appurtenances and supplies forming a part of or appertaining to said plants, holders, sites, stations or other properties, or any of them, or used or enjoyed, or capable of being used or enjoyed in conjunction or connection therewith, all situated in the State of Colorado and the counties thereof, more particularly described as follows: ADAMS COUNTY 1. SATRIANO TRACT That part of the NW1/4 NE1/4 of Section 11, Township 3 South, Range 68 West of the 6th P.M., being more particularly described as follows: Beginning at a point which is South 89 degrees 58’ East 20 feet and North 395.6 feet from the Southwest corner of the NW1/4 NE1/4 of said Section; thence North 196.92 feet; thence North 88 degrees 36.9’ East, 165.65 feet; thence North 0 degrees 17’ West, 109.93 feet; thence North 77 degrees 44.6’ East 29.52 feet along the center line of the United Irrigation Ditch; thence South 438.11 feet; thence North 89 degrees 58’ West 43.9 feet; thence North 115 feet; thence North 89 degrees 58’ West 150 feet to the point of beginning, County of Adams, State of Colorado. (for informational purposes only) 6200 North Franklin Street 2. ROSA TRACT Parcels of land more particularly described as follows: Parcel I: SCHEDULE B-1
    • A portion of the N1/2 of NE1/4 of NE1/4 of Section 11, Township 3 South, Range 68 West of the 6th P.M., described as follows: Beginning at the Northwest Corner of said Tract, thence South 145 feet, thence East 110 feet, thence North 145 feet, thence West 110 feet to the Point of Beginning except the North 20 feet for road purposes. County of Denver, State of Colorado. Parcel II: That portion of the N1/2 of the NE1/4 of the NE1/4 of Section 11, Township 3 South, Range West of the 6th P.M., described as follows: Beginning at a point 110 feet East of the Northwest corner of said tract; thence South 145 feet; thence East 90 feet; thence North 145 feet; thence West 90 feet to the True Point of Beginning, except the North 20 feet for road purposes. County of Adams, State of Colorado. LA PLATA COUNTY 3. COTTONWOOD GULCH GAS QUALITY CONTROL PLANT Tract A of Cottonwood Gulch, Minor Exemption Subdivision, Project No. 99-165, according to the plat thereof filed for record September 27, 1999 as Reception No. 775147. MORGAN COUNTY 4. BADGER CREEK METER STATION A parcel of land lying in the Northeast one-quarter Section 36, Township 3 North, Range 58 West of the Sixth Principal Meridian, County of Morgan, State of Colorado, more particularly described as follows: Basis of bearings: the North line of the Northeast one-quarter of Section 36, Township 3 North, Range 58 West of the Sixth Principal Meridian, being monumented at the North one-quarter corner by a 1-1/2quot; iron pipe and at the Northeast corner of said Section by a 3-1/2quot; aluminum cap -- L.S. #23501, being assumed to bear N89 degrees 32’14quot;E. Commencing at the North one-quarter corner of said Section 36; thence N89 degrees 32’14quot;E along the North line of said Northeast one quarter, a distance of 520.00 feet to the Point of Beginning; Thence the following four (4) courses: 1. N89 degrees 32’14quot;E, along said North line, a distance of 100.00 feet to a point on the westerly line of that parcel of land owned by Colorado Interstate Gas Company; SCHEDULE B-2
    • 2. S00 degrees 01’46quot;W, along said westerly parcel line, a distance of 500.00 feet; 3. S89 degrees 32’14quot;W, a distance of 100.00 feet. 4. N00 degrees 01’46quot;E, a distance of 500.00 feet to the Point of Beginning, Less right-of-way for Morgan County Road N, Containing a calculated area of 50,000 square feet or 1.148 acres. SUMMIT COUNTY 5. HIGH TOR METER STATION A portion of the Braddock Placer M.S. 13465, Section 18, Township 6 South, Range 77 West of the Sixth Principal Meridian, located in the Town of Breckenridge, County of Summit, State of Colorado, being more particularly described as follows: Basis of bearings: The westerly line of the Delaware Flats Annexation Plat Phase 3, as recorded under reception number 241384, Summit County records, being monumented at Corner 15 by a 2quot;x6quot; stone with no visible markings, and monumented at Corner 16 by a 9quot;x7quot; stone with no visible markings and steel pipe 3quot; diameter 3’ high adjacent to said stone, with a line between bearing N07 degrees 18’12quot;E. Commencing at said Corner 15, thence N77 degrees 51’25quot;E a distance of 1539.38 feet to a No. 4 rebar with a red plastic cap L.S.. 9939, said point being the Point of Beginning, thence the following four (4) courses: 1) N77 degrees 06’29quot;W a distance of 49.95 feet to a recovered cross on rock; 2) N12 degrees 42’36quot;E a distance of 49.89 feet to a No. 4 rebar with a red plastic cap L.S. 9939; 3) S77 degrees 06’29quot;E a distance of 49.95 feet to a No. 4 rebar with a red plastic cap L.S. 9939; 4) S12 degrees 42’36quot;W a distance of 49.89 feet to the Point of Beginning, Containing 2492 sq. ft., or 0.057 acres PUEBLO COUNTY 6. SOUTH PUEBLO GAS REGULATOR STATION SCHEDULE B-3
    • A tract or parcel of land No. 3 Rev XA of the Dept. of Highways’ Proj. No. FI 002-3(12), containing 0.076 acres (3,327 sq. ft.), more or less in the SE 1/4 of the SE 1/4 of Sec. 14, T.21 S., R. 65 W., of the Sixth P.M. in Pueblo County, Colorado, said tract or parcel being more particularly described as follows: Commencing at the SE Corner of Sec. 14, T.21 S., R. 65 W.; thence along the South line of said Sec. 14, S. 88 degrees , 36’ W., a distance of 272.1 feet to the Point of Beginning: 1. Thence continuing along said South line, S. 88 degrees , 36’ W., a distance of 50.0 feet; 2. Thence N. 01 degrees , 24’ W., a distance of 50.0 feet; 3. Thence N. 88 degrees , 36’ E., a distance of 83.1 feet; 4. Thence S. 32 degrees , 05’ W., a distance of 60.0 feet, more or less, to the Point of Beginning. The above described tract contains 0.076 acres (3,327 sq. ft.), more or less. PART SECOND. (SUBSTATIONS) The following electric substations and substation sites of the Company, including all buildings, structures, towers, poles, lines, and all equipment, appliances and devices for transforming, converting and distributing electric energy, and all the right, title and interest of the Company in and to the land on which the same are situated, and all of the Company’s lands, easements, rights-of-way, rights, franchises, privileges, machinery, equipment, appliances, devices, appurtenances and supplies forming a part of said substations or any of them, or used or enjoyed, or capable of being used or enjoyed, in conjunction or connection with any thereof, all situated in the State of Colorado and the counties thereof, more particularly described as follows: ADAMS COUNTY 7. TOWER 4 SUBSTATION SITE A portion of a parcel of land described in Book 4550, Page 465, Adams County Clerk and Recorder’s Office, located in the Northwest Quarter of Section 27, Township 3 South, Range 66 West of the 6th Principal Meridian, Adams County, Colorado, being more particularly described as follows: COMMENCING at the North Quarter Corner of said Section 27, whence the Northwest Corner of said Section 27 bears S88 degrees 53’04quot;W a distance of 2638.04 feet; THENCE S00 degrees 08’03quot;E along the easterly line of the Northwest Quarter of said Section 27 a distance of 60.01 feet; SCHEDULE B-4
    • THENCE S88 degrees 53’04quot;W along the southerly right-of-way line of East 38th Avenue as described in Book 2800, Page 680 a distance of 882.04 feet to the POINT OF BEGINNING; THENCE S01 degrees 05’34quot;E a distance of 440.00 feet; THENCE S88 degrees 53’04quot;W a distance of 399.02 feet non-tangent with the following described curve; THENCE along the westerly line of said parcel of land described in Book 4550, Page 465, on the arc of a curve to the right, having a central angle of 03 degrees 28’41quot;, a radius of 530.00 feet, a chord bearing N02 degrees 49’55quot;W a distance of 32.17 feet, and an arc distance of 32.17 feet; THENCE N01 degrees 05’34quot;W continuing along the westerly line of said parcel, tangent with the last described curve a distance of 407.84 feet; THENCE N88 degrees 53’04quot;E along the southerly right-of-way line said East 35th Avenue a distance of 400.00 feet to the POINT OF BEGINNING. Containing 4.040 acres (175,989 sq. ft.) more or less. 8. NEW WASHINGTON SUBSTATION A parcel of land decribed in Book Number 5210, Page 0031, Reception Number C0355049, recorded in the Adam County Clerk and Recorder’s Office on January 15, 1998, being more particularly described as follows: Lot 1, Block 1, Washington Electric Substation, Filing No. 1, County of Adams, State of Colorado. 9. HOSMER TRUST TRACT A portion of the Southwest Quarter of Section 34, Township 1 South, Range 64 West of the 6th Principal Meridian, Adams County, Colorado, being more particularly described as follows: BEGINNING at the Northwest Corner of said Southwest Quarter of Section 34, whence the Southwest Corner of said Southwest Quarter of Section 34 bears S01 degrees 18’37quot;E a distance of 2636.70 feet; THENCE S89 degrees 47’30quot;E along the northerly line of said Southwest Quarter of Section 34 a distance of 1030.01 feet; THENCE S01 degrees 18quot;37quot;E a distance of 1631.67 feet; SCHEDULE B-5
    • THENCE N89 degrees 47’30quot;W a distance of 1030.01 feet; THENCE N01 degrees 18’37quot;W along said westerly line of Southwest Quarter of Section 34 a distance of 1631.67 feet to the POINT OF BEGINNING. Containing 38.568 Acres, more or less. ALAMOSA COUNTY 10. MOSCA SUBSTATION: ADDITIONAL LAND A parcel of land more particularly described as follows: That part of the NE1/4 of Section 28, Township 40 North, Range 10 East of the N.M.P.M., described as beginning at a point on the North-South centerline of said Section 28 and a point on the South right-of-way line of County Lane 8 North (as fenced) from which the N1/4 corner bears N00’38’22quot;E, 25.91 feet; thence N88 degrees 33’59quot;E, along said right-of-way line 225.00 feet; thence S00 degrees 38’42quot;, 30.90 feet; thence N88 degrees 32’09quot;E, 25.16 feet; thence S00 degrees 38’22quot;W, 322.06 feet; thence N89 degrees 53’58quot;W, 250.00 feet to a point on said North-South centerline; thence N00 degrees 38’22quot;E, 346.25 feet to the true Point Of Beginning. Alamosa County, State of Colorado DENVER COUNTY 11. BELLEVIEW - QUEBEC SUBSTATION SITE A parcel of land located in a portion of Lot 1, Block 1 of the 165 Subdivision Filing No. 1, recorded in Plat Book 29 at Page 86, and a portion of the Southeast 1/4 of Section 8, Township 5 South, Range 67 West of the 6th P.M., being more particularly described as follows: Basis of bearings: the South line of the Southeast 1/4 of Section 8 is assumed to bear North 90 degrees 00 minutes 00 seconds East; COMMENCING at the South Quarter Corner of Section 8; THENCE North 28 degrees 57 minutes 12 seconds East, a distance of 2099.82 feet to the POINT OF BEGINNING; THENCE North 89 degrees 59 minutes 47 seconds East, a distance of 361.50 feet; THENCE South 00 degrees 00 minutes 00 seconds West, a distance of 136.32 feet to a point on the North line of Lot 1, Block 1 of the 165 Subdivision Filing No. 1; SCHEDULE B-6
    • THENCE South 00 degrees 00 minutes 00 seconds West, a distance of 48.06 feet; THENCE South 46 degrees 57 minutes 20 seconds West, a distance of 87.86 feet; THENCE North 90 degrees 00 minutes 00 seconds West, a distance of 212.55 feet; THENCE North 34 degrees 59 minutes 47 seconds West, a distance of 131.87 feet to a point on the North line of Lot 1, Block 1, of the 165 Subdivision Filing No. 1; THENCE North 34 degrees 59 minutes 47 seconds West, a distance of 15.89 feet; thence North 00 degrees 00 minutes 00 seconds East, a distance of 123.29 feet to the POINT OF BEGINNING, City and County of Denver, State of Colorado. DOUGLAS COUNTY 12. COLONY (SURREY RIDGE) SUBSTATION Parcels of land more particularly described as follows: Parcel A: A parcel of land in Section 24, Township 6 South, Range 67 West of the sixth principal meridian, Douglas County, Colorado, being more particularly described as follows: COMMENCING at the Northwest corner of said Section 24, whence the West Quarter Corner of said Section 24 bears South 00 degrees 06 minutes 11 seconds East a distance of 2667.01 feet; THENCE South 58 degrees 06 minutes 25 seconds East a distance of 54.13 feet to the POINT OF BEGINNING; THENCE North 89 degrees 48 minutes 35 seconds East a distance of 233.36 feet; THENCE South 45 degrees 08 minutes 18 seconds East a distance of 65.90 feet; THENCE South 00 degrees 05 minutes 10 seconds East a distance of 212.74 feet; THENCE South 44 degrees 54 minutes 50 seconds West a distance of 65.94 feet; THENCE South 89 degrees 54 minutes 50 seconds West a distance of 233.37 feet; THENCE North 00 degrees 05 minutes 10 seconds West a distance of 305.50 feet to the POINT OF BEGINNING; SCHEDULE B-7
    • Parcel D: A parcel of land being sixty (60.00’) feet in width, thirty (30.00’) feet on each side of the following described centerline, located in the Southeast Quarter of Section 14, Northeast Quarter of Section 23 and the Northwest quarter of Section 24 all in Township 6 South, Range 67 West of the Sixth Principal Meridian, Douglas County, Colorado, being more particularly described as follows: COMMENCING at the Northeast corner of said Southeast Quarter of Section 14, whence the Southeast Corner of said Section 14 bears South 01 degrees 04 minutes 04 seconds East a distance of 2664.06 feet; THENCE South 39 degrees 51 minutes 34 seconds West along a line non-tangent with the following described curve a distance of 652.76 feet to the southerly line of a parcel of land recorded in book 264, page 426 on July 1, 1974 in the Douglas County Clerk and Recorders Office, being the POINT OF BEGINNING; THENCE the following five (5) courses along existing dirt road or trail centerline; 1. Southwesterly along the Arapahoe County of a curve to the right, having a central angle of 12 degrees 16 minutes 59 seconds, a radius of 860.00 feet, a chord bearing of South 28 degrees 24 minutes 25 seconds West, a distance of 184.02 feet, and an arc distance of 184.37 feet; 2. THENCE South 34 degrees 32 minutes 55 seconds West tangent with the last and following described curves a distance of 185.60 feet; 3. THENCE along the arc of a curve to the left, having a central angle of 1 degrees 05 minutes 24 seconds, a radius of 800.00 feet, a chord bearing South 34 degrees 00 minutes 12 seconds West a distance of 15.22 feet, and an arc distance of 15.22 feet; 4. THENCE South 33 degrees 27 minutes 30 seconds West tangent with the last described curve a distance of 230.99 feet; 5. THENCE South 33 degrees 05 minutes 19 seconds West tangent with the following described curve a distance of 63.86 feet; THENCE along the arc of a curve to the left, having a central angle of 17 degrees 08 minutes 04 seconds, a radius of 200.00 feet, a chord bearing South 24 degrees 31 minutes 17 seconds West a distance of 59.59 feet, and an arc distance of 59.81 feet; THENCE South 15 degrees 57 minutes 15 seconds West tangent with the last and following described curves a distance of 108.55 feet; SCHEDULE B-8
    • THENCE along the arc of a curve to the left, having a central angle of 75 degrees 23 minutes 51 seconds, a radius of 150.00 feet, a chord bearing South 21 degrees 44 minutes 40 seconds East a distance of 183.45 feet, and an arc distance of 197.39 feet; THENCE the following eight (8) courses along said existing dirt road or trail centerline: 1. South 59 degrees 26 minutes 36 seconds East tangent with the last described curve a distance of 35.15 feet; 2. THENCE South 68 degrees 40 minutes 34 seconds East a distance of 43.72 feet; 3. THENCE North 84 degrees 29 minutes 06 seconds East a distance of 73.85 feet; 4. THENCE South 57 degrees 01 minutes 00 seconds East a distance of 68.34 feet; 5. THENCE South 28 degrees 47 minutes 04 seconds East tangent with the following described curve a distance of 31.85 feet; 6. THENCE along the arc of a curve to the right, having a central angle of 30 degrees 53 minutes 10 seconds, a radius of 200.00 feet, a chord bearing South 13 degrees 20 minutes 29 seconds East a distance of 106.51 feet, and an arc distance of 107.81 feet; 7. THENCE along the arc of a curve to the left, tangent with the last described curve, having a central angle of 15 degrees 45 minutes 50 seconds, a radius of 200.00 feet, a chord bearing of South 05 degrees 46 minutes 48 seconds East a distance of 54.85 feet, and an arc distance of 55.03 feet; 8. THENCE South 13 degrees 39 minutes 43 seconds East tangent with the last described curve a distance of 21.80 feet; THENCE South 18 degrees 42 minutes 28 seconds East tangent with the following described curve a distance of 100.70 feet; THENCE along the arc of a curve to the left, having a central angle foot 9 degrees 31 minutes 51 seconds, a radius of 200.00 feet, a chord bearing South 23 degrees 28 minutes 23 seconds East a distance of 33.23 feet, and an arc distance of 33.27 feet; THENCE South 28 degrees 14 minutes 18 seconds East tangent with the last and following described curves a distance of 164.18 feet; THENCE along the arc of a curve to the left, having a central angle of 12 degrees 32 minutes 57 seconds, a radius of 200.00 feet, a chord bearing South 34 degrees 30 minutes 47 seconds East a distance of 43.72 feet, and an arc distance of 43.80 feet; THENCE South 40 degrees 47 minutes 15 seconds East tangent with the last and following described curves a distance of 41.82 feet; SCHEDULE B-9
    • THENCE along the arc of a curve to the right, having a central angle of 17 degrees 47 minutes 53 seconds, a radius 200.00 feet, a chord bearing South 31 degrees 53 minutes 19 seconds East a distance of 61.88 feet, and an arc distance of 62.13 feet; THENCE South 22 degrees 59 minutes 22 seconds East tangent with the last and following described curves a distance of 713.97 feet; THENCE along the arc of a curve to the left, having a central angle of 67 degrees 06 minutes 49 seconds, a radius of 100.00 feet, a chord bearing of South 56 degrees 32 minutes 47 seconds East a distance of 110.55 feet and an arc distance of 117.14 feet; THENCE North 89 degrees 53 minutes 49 seconds East tangent with the last described curve a distance of 32.70 feet to the point of termination, whence the Southeast corner of said Section 14 bears North 20 degrees 59 minutes 42 seconds West a distance of 128.66 feet; Sidelines are shortened or lengthened to intersect the southerly line of said parcel of land recorded in book 264, page 426, and the westerly line of the Surrey Ridge Substation boundary. Parcel E: A parcel of land located in Sections 24 and 23, Township 6 South, Range 67 West of the Sixth Principal Meridian, Douglas County, Colorado, being more particularly described as follows: COMMENCING at the Northwest corner of said Section 24, whence the West Quarter Corner of said Section 24 bears South 00 degrees 06 minutes 11 seconds East, a distance of 2667.01 feet; THENCE South 11 degrees 21 minutes 30 seconds East a distance of 340.73 feet to the southerly line of Surrey Ridge Substation Site, being the POINT OF BEGINNING; THENCE North 89 degrees 54 minutes 50 seconds East along said southerly line of Surrey Ridge Substation site a distance of 185.92 feet; THENCE South 24 degrees 09 minutes 27 seconds West, a distance of 185.11 feet; THENCE South 03 degrees 23 minutes 27 seconds East a distance of 1233.70 feet; THENCE South 17 degrees 16 minutes 47 seconds West a distance of 919.76 feet; THENCE South 38 degrees 14 minutes 15 seconds West a distance of 1281.45 feet; THENCE South 07 degrees 51 minutes 01 seconds West a distance of 1498.69 feet; SCHEDULE B-10
    • THENCE South 89 degrees 32 minutes 01 seconds West along the northerly line of a parcel of land described in Reception Number 105224, Document Number 1630, recorded in the Douglas County Clerk and Recorders Office on March 23, 1959 a distance of 101.06 feet; THENCE North 07 degrees 51 minutes 01 seconds East a distance of 1540.46 feet; THENCE North 38 degrees 14 minutes 15 seconds East a distance of 1290.11 feet; THENCE North 17 degrees 16 minutes 47 seconds East a distance of 883.02 feet; THENCE North 03 degrees 23 minutes 27 seconds West a distance of 1390.31 feet to the POINT OF BEGINNING. Parcel F: A parcel of land lying in Section 13, Section 14, Section 23 and Section 24 all in Township 6 South, Range 67 West of the Sixth Principal Meridian, Douglas County, Colorado, being more particularly described as follows: COMMENCING at the Northwest Corner of said Section 24, whence the West Quarter Corner of said Section 24 bears South 00 degrees 06 minutes 11 seconds East a distance of 2667.01 feet; THENCE South 89 degrees 14 minutes 28 seconds West along the northerly line of the Northeast quarter of said Section 23 a distance of 27.78 feet to the POINT OF BEGINNING; THENCE North 75 degrees 40 minutes 59 seconds East a distance of 184.77 feet; THENCE South 87 degrees 37 minutes 41 seconds East a distance of 152.52 feet; THENCE South 46 degrees 56 minutes 28 seconds East a distance of 121.54 feet; THENCE South 06 degrees 45 minutes 06 seconds East a distance of 281.45 feet; THENCE South 46 degrees 47 minutes 03 seconds West a distance of 166.26 feet; THENCE North 74 degrees 24 minutes 57 seconds West a distance of 329.96 feet; THENCE North 02 degrees 21 minutes 14 seconds West a distance of 348.59 feet to the POINT OF BEGINNING; Excepting therefrom the following described parcel of land: SCHEDULE B-11
    • COMMENCING at the Northwest Corner of said Section 24, whence the West Quarter Corner of said Section 24 bears South 00 degrees 06 minutes 11 seconds East a distance of 2667.01 feet; THENCE South 58 degrees 06 minutes 25 seconds East a distance of 54.13 feet to the POINT OF BEGINNING; THENCE North 89 degrees 48 minutes 35 seconds East a distance of 233.36 feet; WELD COUNTY 13. NEW GILCREST SUBSTATION A parcel of land located in the Southwest one-quarter of Section 10, Township 4 North, Range 66 West of the Sixth Principal Meridian, County of Weld, State of Colorado, being more particularly described as follows: Basis of bearings: The South one-quarter line of Section 10, Township 4 North, Range 66 West of the Sixth Principal Meridian, bearing N89 degrees 26’15quot;E. Commencing at the Southwest corner of said Section 10; thence N34 degrees 06’30quot;E a distance of 80.25 feet to the Point Of Beginning; thence N00 degrees 00’00quot;E parallel with and 45 feet East of the West line of the Southwest one-quarter of said Section 10 a distance of 304.02 feet; thence N89 degrees 26’15quot;E parallel with the South line of the Southwest one-quarter of said Section 10 a distance of 325.02 feet; thence S00 degrees 00’00quot;E parallel with the West line of the Southwest one-quarter of said Section 10 a distance of 325.02 feet to a point 45 feet North of the South line of the Southwest one-quarter of said Section 10; thence S89 degrees 26’15quot;W parallel with the South line of the Southwest one-quarter of said Section 10 a distance of 304.02 feet; thence N45 degrees 16’52quot;W a distance of 29.55 feet to the Point Of Beginning. Said parcel of land containing 105,409.60 square feet or 2.419 acres more or less. PART THIRD. (MISCELLANEOUS PROPERTY) The following residences, garages, warehouses, buildings, structures, works and sites and the Company’s lands on which the same are situated, and all easements, rights, rights of way, permits, franchises, consents, privileges, licenses, machinery, equipment, furniture and fixtures, appurtenances and supplies forming a part of said residences, garages, warehouses, buildings, structures, works and sites, or any of them, or used or enjoyed or capable of being used or enjoyed in connection or conjunction therewith, situated in the State of Colorado and the Counties thereof, more particularly described as follows: JEFFERSON COUNTY SCHEDULE B-12
    • 14. GROUND EQUIPMENT COMPANY TRACT That part of Section 22, Township 2 South, Range 70 West of the 6th Principal Meridian, lying between Colorado State Highway No. 72 and the Denver and Rio Grande Western Railroad, County of Jefferson, State of Colorado, more particularly described as follows: Commencing at the West one-quarter of said Section 22; thence South 0 degrees 25’48quot; East along the West line of said Section 22, a distance of 721.74 feet to a point on the North right of way of the Denver and Rio Grande Western Railroad; thence along North right of way as follows: South 80 degrees 28’31quot; East a distance of 2033.16 feet to a point of circular curve; thence along the arc of said curve to the left having a radius of 2764.79 feet and a central angle of 13 degrees 14’ a distance of 638.57 feet to the end of said curve, thence North 86 degrees 17’29quot; East, a distance of 729.07 feet to the true Point of Beginning, being Southeast corner of the parcel to be described, and also the Southeast corner of the exterior boundary as described in Deed recorded in Book 1813 at Page 365; thence departing said railroad right of way line, North 01 degrees 03’14quot; West, a distance of 1023.73 feet to a point on the southerly right of way of Colorado State Highway No. 72; thence North 83 degrees 39’30quot; West along said southerly right of way, a distance of 414.42 feet; thence South 01 degrees 03’14quot; East, a distance of 1096.13 feet to a point on the North right of way of said railroad; thence North 86 degrees 17’29quot; East along said railroad right of way, a distance of 411.41 feet to the Point of Beginning, except any portion of the above described property conveyed by Deed to the Denver Northwestern and Pacific Railway Company recorded June 25, 1907 in Book 121 at Page 290, of the Jefferson County Records, and, Except portion conveyed to D. L. Billings Co. Inc., trustee, by Deed recorded June 3, 1982 at Reception No. 82037261. Also known as Lots 16, 17, 18, part of Lot 15 and part of Lot 19, Block A, Lot 15, part of Lot 13 and part of Lot 14, Block D, together with that portion of Bronco Lane adjacent to said Lots, all in Northwest Industrial, County of Jefferson, State of Colorado. SCHEDULE B-13
    • EXHIBIT 4.02 SUPPLEMENTAL INDENTURE (DATED AS OF SEPTEMBER 15, 2002) -------- PUBLIC SERVICE COMPANY OF COLORADO TO U.S. BANK TRUST NATIONAL ASSOCIATION, AS TRUSTEE -------- CREATING AN ISSUE OF FIRST MORTGAGE BONDS, COLLATERAL SERIES I -------- (SUPPLEMENTAL TO INDENTURE DATED AS OF DECEMBER 1, 1939, AS AMENDED)
    • SUPPLEMENTAL INDENTURE, dated as of September 15, 2002, between PUBLIC SERVICE COMPANY OF COLORADO, a corporation organized and existing under the laws of the State of Colorado (the quot;Companyquot;), party of the first part, and U.S. BANK TRUST NATIONAL ASSOCIATION (FORMERLY FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION), a national banking association, as successor trustee (the quot;Trusteequot;) to Morgan Guaranty Trust Company of New York (formerly Guaranty Trust Company of New York), party of the second part. WHEREAS, the Company heretofore executed and delivered to the Trustee its Indenture, dated as of December 1, 1939 (the quot;Principal Indenturequot;), to secure its First Mortgage Bonds from time to time issued thereunder; and WHEREAS, the Company has heretofore executed and delivered to the Trustee the Supplemental Indentures referred to in Schedule A hereto for certain purposes, including the creation of series of bonds, the subjection to the lien of the Principal Indenture of property acquired after the execution and delivery thereof, the amendment of certain provisions of the Principal Indenture and the appointment of the successor Trustee; and WHEREAS, the Principal Indenture as supplemented and amended by all Supplemental Indentures heretofore executed by the Company and the Trustee is hereinafter referred to as the quot;Indenturequot;, and, unless the context requires otherwise, references herein to Articles and Sections of the Indenture shall be to Articles and Sections of the Principal Indenture as so amended; and WHEREAS, the Company proposes to create a new series of First Mortgage Bonds to be designated as First Mortgage Bonds, Collateral Series I (the quot;Collateral Series I Bondsquot;), to be issued and delivered to the trustee under the 1993 Mortgage (as hereinafter defined) as the basis for the authentication and delivery under the 1993 Mortgage of a series of securities, all as hereinafter provided, and to vary in certain respects the covenants and provisions contained in Article V of the Indenture, to the extent that such covenants and provisions apply to the Collateral Series I Bonds; and WHEREAS, the Company, pursuant to the provisions of the Indenture, has, by appropriate corporate action, duly resolved and determined to execute this Supplemental Indenture for the purpose of providing for the creation of the Collateral Series I Bonds and of specifying the form, provisions and particulars thereof, as in the Indenture provided or permitted and of giving to the Collateral Series I Bonds the protection and security of the Indenture; and WHEREAS, the Company represents that all acts and proceedings required by law and by the charter and by-laws of the Company, including all action requisite on the part of its shareholders, directors and officers, necessary to make the Collateral Series I Bonds, when executed by the Company, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal obligations of the Company, and to constitute the Principal Indenture and all indentures supplemental thereto, including this Supplemental Indenture, valid, binding and legal instruments for the security of the bonds of all series, including the Collateral Series I Bonds, in accordance with the terms of such bonds and
    • such instruments, have been done, performed and fulfilled, and the execution and delivery hereof have been in all respects duly authorized; NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: That Public Service Company of Colorado, the Company named in the Indenture, in consideration of the premises and of One Dollar to it duly paid by the Trustee at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, and in pursuance of the direction and authority of the Board of Directors of the Company given at a meeting thereof duly called and held, and in order to create the Collateral Series I Bonds and to specify the form, terms and provisions thereof, and to secure the payment of the principal of and premium, if any, and interest, if any, on all bonds from time to time outstanding under the Indenture, including the Collateral Series I Bonds, according to the terms of said bonds, and to secure the performance and observance of all of the covenants and conditions contained in the Indenture, has executed and delivered this Supplemental Indenture and has granted, bargained, sold, warranted, aliened, remised, released, conveyed, assigned, transferred, mortgaged, pledged, set over and confirmed unto U.S. Bank Trust National Association, as Trustee, and its successor or successors in the trust and its and their assigns forever; TO HAVE AND TO HOLD all and singular the properties, rights, privileges and franchises described in the Principal Indenture and in the several Supplemental Indentures hereinabove referred to and owned by the Company on the date of the execution and delivery hereof (other than property of a character expressly excepted from the lien of the Indenture as therein set forth) unto the Trustee and its successor or successors and assigns forever; SUBJECT, HOWEVER, to permitted encumbrances as defined in the Indenture; IN TRUST, NEVERTHELESS, upon the terms and trusts set forth in the Indenture, for the equal and proportionate benefit and security of all present and future holders of the bonds and coupons issued and to be issued under the Indenture, including the Collateral Series I Bonds, without preference, priority or distinction as to lien (except as any sinking, amortization, improvement or other fund established in accordance with the provisions of the Indenture or any indenture supplemental thereto may afford additional security for the bonds of any particular series) of any of said bonds over any others thereof by reason of series, priority in the time of the issue or negotiation thereof, or otherwise howsoever, except as provided in Section 2 of Article IV of the Indenture. ARTICLE ONE CREATION AND DESCRIPTION OF THE COLLATERAL SERIES I BONDS SECTION 1. A new series of bonds to be issued under and secured by the Indenture is hereby created, the bonds of such new series to be designated First Mortgage Bonds, Collateral Series I. The Collateral Series I Bonds shall be limited to an aggregate principal amount of Five Hundred Thirty Million dollars ($530,000,000), excluding any Collateral Series I 2
    • Bonds which may be authenticated and exchanged for or in lieu of or in substitution for or on transfer of other Collateral Series I Bonds pursuant to any provisions of the Indenture. The Collateral Series I Bonds shall mature on June 27, 2003. The Collateral Series I Bonds shall not bear interest. The principal of each Collateral Series I Bond shall be payable, upon presentation thereof, at the office or agency of the Company in the city in which the principal corporate trust office of the 1993 Mortgage Trustee (as hereinafter defined) is located, in any coin or currency of the United States of America which at the time of payment shall be legal tender for the payment of public and private debts. The Collateral Series I Bonds shall be issued and delivered by the Company to U.S. Bank Trust National Association, as successor trustee under the Indenture, dated as of October 1, 1993, as supplemented (the quot;1993 Mortgagequot;), of the Company to such successor trustee (the quot;1993 Mortgage Trusteequot;), as the basis for the authentication and delivery under the 1993 Mortgage of a series of securities. As provided in the 1993 Mortgage, the Collateral Series I Bonds will be registered in the name of the 1993 Mortgage Trustee or its nominee and will be owned and held by the 1993 Mortgage Trustee, subject to the provisions of the 1993 Mortgage, for the benefit of the holders of all securities from time to time outstanding under the 1993 Mortgage, and the Company shall have no interest therein. Any payment or deemed payment by the Company under the 1993 Mortgage of the principal of the securities which shall have been authenticated and delivered under the 1993 Mortgage on the basis of the issuance and delivery to the 1993 Mortgage Trustee of Collateral Series I Bonds (other than by the application of the proceeds of a payment in respect of such Collateral Series I Bonds) shall, to the extent thereof, be deemed to satisfy and discharge the obligation of the Company, if any, to make a payment of principal of such Collateral Series I Bonds which is then due. The Trustee may conclusively presume that the obligation of the Company to pay the principal of the Collateral Series I Bonds as the same shall become due and payable shall have been fully satisfied and discharged unless and until it shall have received a written notice from the 1993 Mortgage Trustee, signed by an authorized officer thereof, stating that the principal of specified Collateral Series I Bonds has become due and payable and has not been fully paid, and specifying the amount of funds required to make such payment. Each Collateral Series I Bond shall be dated as of the date of its authentication. The Collateral Series I Bonds shall be issued as fully registered bonds only, in denominations of $1,000 and multiples thereof. The Collateral Series I Bonds shall be registerable and exchangeable at the office or agency of the Company in the city in which the principal corporate trust office of the 1993 Mortgage Trustee is located, in the manner and upon the terms set forth in Section 5 of Article II of the Indenture; provided, however, that the Collateral Series I Bonds shall not be transferrable except to a successor trustee under the 1993 Mortgage. No service charge shall be made for any exchange or transfer of any Collateral Series I Bond. 3
    • SECTION 2. The text of the Collateral Series I Bonds shall be substantially in the form attached hereto as Exhibit A. SECTION 3. The Collateral Series I Bonds may be executed by the Company and delivered to the Trustee and, upon compliance with all applicable provisions and requirements of the Indenture in respect thereof, shall be authenticated by the Trustee and delivered (without awaiting the filing or recording of this Supplemental Indenture) in accordance with the written order or orders of the Company. ARTICLE TWO REDEMPTION OF THE COLLATERAL SERIES I BONDS SECTION 1. Each Collateral Series I Bond shall be redeemable at the option of the Company in whole at any time, or in part from time to time, prior to maturity, at a redemption price equal to 100% of the principal amount thereof to be redeemed. SECTION 2. The provisions of Sections 3, 4, 5, 6 and 7 of Article V of the Indenture shall be applicable to the Collateral Series I Bonds, except that (a) no publication of notice of redemption of the Collateral Series I Bonds shall be required and (b) if less than all the Collateral Series I Bonds are to be redeemed, the Collateral Series I Bonds to be redeemed shall be selected in the principal amounts designated to the Trustee by the Company, and except as such provisions may otherwise be inconsistent with the provisions of this Article Two. SECTION 3. The holder of each and every Collateral Series I Bond hereby agrees to accept payment thereof prior to maturity on the terms and conditions provided for in this Article Two. ARTICLE THREE ACKNOWLEDGMENT OF RIGHT TO VOTE OR CONSENT WITH RESPECT TO CERTAIN AMENDMENTS TO INDENTURE The Company hereby acknowledges the right of the holders of the Collateral Series I Bonds to vote or consent with respect to any or all of the modifications to the Indenture referred to in Article Three of the Supplemental Indenture, dated as of March 1, 1980, irrespective of the fact that the Bonds of the Second 1987 Series are no longer outstanding; provided, however, that such acknowledgment shall not impair (a) the right of the Company to make such modifications without the consent or other action of the holders of the Bonds of the 2020 Series or the bonds of any other series subsequently created under the Indenture with respect to which the Company has expressly reserved such right or (b) the right of the Company to reserve the right to make such modifications without the consent or other action of the holders of bonds of one or more, or any or all, series created subsequent to the creation of the Collateral Series I Bonds. 4
    • ARTICLE FOUR THE TRUSTEE The Trustee accepts the trusts created by this Supplemental Indenture upon the terms and conditions set forth in the Indenture and this Supplemental Indenture. The recitals in this Supplemental Indenture are made by the Company only and not by the Trustee. Each and every term and condition contained in Article XII of the Indenture shall apply to this Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Supplemental Indenture. ARTICLE FIVE MISCELLANEOUS PROVISIONS SECTION 1. Subject to the variations contained in Article Two of this Supplemental Indenture, the Indenture is in all respects ratified and confirmed and the Principal Indenture, this Supplemental Indenture and all other indentures supplemental to the Principal Indenture shall be read, taken and construed as one and the same instrument. Neither the execution of this Supplemental Indenture nor anything herein contained shall be construed to impair the lien of the Indenture on any of the properties subject thereto, and such lien shall remain in full force and effect as security for all bonds now outstanding or hereafter issued under the Indenture. All covenants and provisions of the Indenture shall continue in full force and effect and this Supplemental Indenture shall form part of the Indenture. SECTION 2. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Supplemental Indenture, shall not be a Business Day (as defined in the 1993 Mortgage), such payment may be made or act performed or right exercised on the next succeeding Business Day with the same force and effect as if done on the nominal date provided in this Supplemental Indenture. SECTION 3. The terms defined in the Indenture shall, for all purposes of this Supplemental Indenture, have the meaning specified in the Indenture except as set forth in Section 4 of this Article or otherwise set forth in this Supplemental Indenture or unless the context clearly indicates some other meaning to be intended. SECTION 4. Any term defined in Section 303 of the Trust Indenture Act of 1939, as amended, and not otherwise defined in the Indenture shall, with respect to this Supplemental Indenture and the Collateral Series I Bonds, have the meaning assigned to such term in Section 303 as in force on the date of the execution of this Supplemental Indenture. SECTION 5. This Supplemental Indenture may be executed in any number of counterparts, and all of said counterparts executed and delivered, each as an original, shall constitute but one and the same instrument. 5
    • IN WITNESS WHEREOF, Public Service Company of Colorado, party hereto of the first part, has caused its corporate name to be hereunto affixed, and this instrument to be signed by its President, an Executive Vice President, a Senior Vice President or a Vice President, and its corporate seal to be hereunto affixed and attested by its Secretary or an Assistant Secretary for and in its behalf; and U.S. Bank Trust National Association, the party hereto of the second part, in evidence of its acceptance of the trust hereby created, has caused its corporate name to be hereunto affixed, and this instrument to be signed and its corporate seal to be affixed by one of its Assistant Vice Presidents and attested by one of its Trust Officers, for and in its behalf, all as of the day and year first above written. PUBLIC SERVICE COMPANY OF COLORADO By: /s/ Paul E. Pender ------------------- Name: Paul E. Pender Title: Vice President and Treasurer ATTEST: /s/ Anne Ziebell ---------------- Name: Anne Ziebell Title: Assistant Secretary STATE OF MINNESOTA ) ) ss.: CITY OF MINNEAPOLIS ) On this 20th day of September, 2002, before me, Sharon M. Quellhorst, a duly authorized Notary Public in and for said City in the State aforesaid, personally appeared Paul E. Pender and Anne Ziebell to me known to be a Vice President and Treasurer and the Assistant Secretary, respectively, of PUBLIC SERVICE COMPANY OF COLORADO, a corporation organized and existing under the laws of the State of Colorado, one of the corporations that executed the within and foregoing instrument; and the said Vice President and Treasurer and Assistant Secretary severally acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that they were authorized to execute said instrument and that the seal affixed thereto is the corporate seal of said corporation. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year first above written. /s/ Sharon M. Quellhorst ------------------------ Name: Sharon M. Quellhorst Notary Public, State of Colorado Commission Expires: January 31, 2005 6
    • U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee By: /s/ Ignazio Tamburello ---------------------- Name: Ignazio Tamburello Title: Assistant Vice President ATTEST: /s/ Adam Berman --------------- Name: Adam Berman Title: Trust Officer STATE OF NEW YORK ) ) ss.: CITY AND COUNTY OF NEW YORK ) On this 20th day of September, 2002, before me, Doris Ware, a duly authorized Notary Public in and for said City and County in the State aforesaid, personally appeared Ignazio Tamburello and Adam Berman to me known to be an Assistant Vice President and a Trust Officer, respectively, of U.S. BANK TRUST NATIONAL Association, a national banking association, one of the corporations that executed the within and foregoing instrument; and the said Assistant Vice President and Trust Officer severally acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that they were authorized to execute said instrument and that the seal affixed thereto is the corporate seal of said corporation. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year first above written. /s/ Doris Ware -------------- Name: Doris Ware Notary Public, State of New York Commission Expires: November 9, 2005 7
    • EXHIBIT A FORM OF COLLATERAL SERIES I BOND THIS BOND IS NOT TRANSFERABLE EXCEPT TO A SUCCESSOR TRUSTEE UNDER THE INDENTURE, DATED AS OF OCTOBER 1, 1993, AS SUPPLEMENTED, BETWEEN PUBLIC SERVICE COMPANY OF COLORADO AND U.S. BANK TRUST NATIONAL ASSOCIATION (FORMERLY FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION), AS SUCCESSOR TRUSTEE THEREUNDER. PUBLIC SERVICE COMPANY OF COLORADO FIRST MORTGAGE BOND, Collateral Series I DUE 2003 REGISTERED REGISTERED No. 1 $530,000,000 FOR VALUE RECEIVED, PUBLIC SERVICE COMPANY OF COLORADO, a corporation organized and existing under the laws of the State of Colorado (hereinafter sometimes called the quot;Companyquot;), promises to pay to U.S. Bank Trust National Association (formerly known as First Trust of New York, National Association), as successor trustee (the quot;1993 Mortgage Trusteequot;) under the Indenture, dated as of October 1, 1993 (the quot;1993 Mortgagequot;), of the Company, or registered assigns, Five Hundred Thirty Million Dollars on June 27, 2003, at the office or agency of the Company in the city in which the principal corporate trust office of the 1993 Mortgage Trustee is located. This bond shall not bear interest. The principal of this bond shall be payable in any coin or currency of the United States of America which at the time of payment shall be legal tender for the payment of public and private debts. Any payment or deemed payment by the Company under the 1993 Mortgage of the principal of securities which shall have been authenticated and delivered under the 1993 Mortgage on the basis of the issuance and delivery to the 1993 Mortgage Trustee of this bond (the quot;1993 Mortgage Securitiesquot;) (other than by the application of the proceeds of a payment in respect of this bond) shall, to the extent thereof, be deemed to satisfy and discharge the obligation of the Company, if any, to make a payment of principal of this bond which is then due. This bond is one of an issue of bonds of the Company, issued and to be issued in one or more series under and equally and ratably secured (except as any sinking, amortization, improvement or other fund, established in accordance with the provisions of the indenture hereinafter mentioned, may afford additional security for the bonds of any particular series) by a certain indenture, dated as of December 1, 1939, made by the Company to U.S. BANK TRUST EXHIBIT A-1
    • NATIONAL ASSOCIATION (formerly First Trust of New York, National Association), as successor trustee (hereinafter called the quot;Trusteequot;) to Morgan Guaranty Trust Company of New York (formerly Guaranty Trust Company of New York), as amended and supplemented by several indentures supplemental thereto, including the Supplemental Indenture dated as of September 15, 2002 (said Indenture as amended and supplemented by said indentures supplemental thereto being hereinafter called the quot;Indenturequot;), to which Indenture reference is hereby made for a description of the property mortgaged, the nature and extent of the security, the rights and limitations of rights of the Company, the Trustee, and the holders of said bonds, under the Indenture, and the terms and conditions upon which said bonds are secured, to all of the provisions of which Indenture and of all indentures supplemental thereto in respect of such security, including the provisions of the Indenture permitting the issue of bonds of any series for property which, under the restrictions and limitations therein specified, may be subject to liens prior to the lien of the Indenture, the holder, by accepting this bond, assents. To the extent permitted by and as provided in the Indenture, the rights and obligations of the Company and of the holders of said bonds (including those pertaining to any sinking or other fund) may be changed and modified, with the consent of the Company, by the holders of at least 75% in aggregate principal amount of the bonds then outstanding (excluding bonds disqualified from voting by reason of the Company’s interest therein as provided in the Indenture); provided, however, that without the consent of the holder hereof no such modification or alteration shall be made which will extend the time of payment of the principal of this bond or reduce the principal amount hereof or effect any other modification of the terms of payment of such principal or will reduce the percentage of bonds required for the aforesaid actions under the Indenture. The Company has reserved the right to amend the Indenture without any consent or other action by holders of any series of bonds created after October 31, 1975 (including this series) so as to change 75% in the foregoing sentence to 60% and to change certain procedures relating to bondholders’ meetings. This bond is one of a series of bonds designated as the First Mortgage Bonds, Collateral Series I, of the Company. This bond shall be redeemable at the option of the Company in whole at any time, or in part from time to time, prior to maturity, at a redemption price equal to 100% of the principal amount thereof to be redeemed. The principal of this bond may be declared or may become due before the maturity hereof, on the conditions, in the manner and at the times set forth in the Indenture, upon the happening of an event of default as therein provided. This bond is not transferable except to a successor trustee under the 1993 Mortgage, any such transfer to be made at the office or agency of the Company in the city in which the principal corporate trust office of the 1993 Mortgage Trustee is located, upon surrender and cancellation of this bond, and thereupon a new bond of this series of a like principal amount will be issued to the transferee in exchange therefor, as provided in the Indenture. The Company, the Trustee, any paying agent and any registrar may deem and treat the person in whose name this bond is registered as the absolute owner hereof for the purpose of receiving payment and for all other purposes. This bond, alone or with other bonds of this series, may in like manner be exchanged at such office or agency for one or more new bonds of this series of the same aggregate principal amount, all as provided in the Indenture. No service charge shall be made to any holder of any bond of this series for any exchange or transfer of bonds. EXHIBIT A-2
    • No recourse under or upon any covenant or obligation of the Indenture, or of any bonds thereby secured, or for any claim based thereon, or otherwise in any manner in respect thereof, shall be had against any incorporator, subscriber to the capital stock, shareholder, officer or director, as such, of the Company, whether former, present or future, either directly, or indirectly through the Company or the Trustee, by the enforcement of any subscription to capital stock, assessment or otherwise, or by any legal or equitable proceeding by virtue of any statute or otherwise (including, without limiting the generality of the foregoing, any proceeding to enforce any claimed liability of shareholders of the Company based upon any theory of disregarding the corporate entity of the Company or upon any theory that the Company was acting as the agent or instrumentality of the shareholders), any and all such liability of incorporators, shareholders, subscribers, officers and directors, as such, being released by the holder hereof, by the acceptance of this bond, and being likewise waived and released by the terms of the Indenture under which this bond is issued. This bond shall not be valid or become obligatory for any purpose until the certificate of authentication endorsed hereon shall have been signed by U.S. Bank Trust National Association, or its successor, as Trustee under the Indenture. IN WITNESS WHEREOF, Public Service Company of Colorado has caused this bond to be signed in its name by a Vice President and its corporate seal to be affixed hereto and attested by its Secretary or an Assistant Secretary. Dated: PUBLIC SERVICE COMPANY OF COLORADO By: ------------------------------ Vice President and Treasurer ATTEST: ------------------------------ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the securities of the series designated therein referred to in the within-mentioned Supplemental Indenture. Dated: U.S. BANK TRUST NATIONAL ASSOCIATION, AS TRUSTEE By: ------------------------------ Authorized Officer EXHIBIT A-3
    • SCHEDULE A SUPPLEMENTAL INDENTURES <TABLE> <CAPTION> DATE OF SERIES OF BONDS PRINCIPAL PRINCIPAL SUPPLEMENTAL --------------- AMOUNT ISSUED AMOUNT INDENTURE ------------- OUTSTANDING --------- ----------- <S> <C> <C> <C> March 14, 1941 None -- -- May 14, 1941 None -- -- April 28, 1942 None -- -- April 14, 1943 None -- -- April 27, 1944 None -- -- April 18, 1945 None -- -- April 23, 1946 None -- -- April 9, 1947 None -- -- June 1, 1947* 2-7/8% Series due 1977 $ 40,000,000 None April 1, 1948 None -- -- May 20, 1948 None -- -- October 1, 1948 3-1/8% Series due 1978 10,000,000 None April 20, 1949 None -- -- April 24, 1950 None -- -- April 18, 1951 None -- -- October 1, 1951 3-1/4% Series due 1981 15,000,000 None April 21, 1952 None -- -- December 1, 1952 None -- -- April 15, 1953 None -- -- April 19, 1954 None -- -- October 1, 1954* 3-1/8% Series due 1984 20,000,000 None April 18, 1955 None -- -- April 24, 1956 None -- -- May 1, 1957* 4-3/8% Series due 1987 30,000,000 None April 10, 1958 None -- -- May 1, 1959 4-5/8% Series due 1989 20,000,000 None April 18, 1960 None -- -- April 19, 1961 None -- -- October 1, 1961 4-1/2% Series due 1991 30,000,000 None March 1, 1962 4-5/8% Series due 1992 8,800,000 None June 1, 1964 4-1/2% Series due 1994 35,000,000 None May 1, 1966 5-3/8% Series due 1996 35,000,000 None July 1, 1967* 5-7/8% Series due 1997 35,000,000 None July 1, 1968* 6-3/4% Series due 1998 25,000,000 None April 25, 1969 None -- -- </TABLE> SCHEDULE A-1
    • <TABLE> <CAPTION> DATE OF SERIES OF BONDS PRINCIPAL PRINCIPAL SUPPLEMENTAL --------------- AMOUNT ISSUED AMOUNT INDENTURE ------------- OUTSTANDING --------- ----------- <S> <C> <C> <C> April 21, 1970 None -- -- September 1, 1970 8-3/4% Series due 2000 35,000,000 None February 1, 1971 7-1/4% Series due 2001 40,000,000 None August 1, 1972 7-1/2% Series due 2002 50,000,000 None June 1, 1973 7-5/8% Series due 2003 50,000,000 None March 1, 1974 Pollution Control Series A 24,000,000 None December 1, 1974 Pollution Control Series B 50,000,000 None October 1, 1975 9-3/8% Series due 2005 50,000,000 None April 28, 1976 None -- -- April 28, 1977 None -- -- November 1, 1977* 8-1/4% Series due 2007 50,000,000 None April 28, 1978 None -- -- October 1, 1978 9-1/4% Series due 2008 50,000,000 None October 1, 1979* Pollution Control Series C 50,000,000 None March 1, 1980* 15% Series due 1987 50,000,000 None April 28, 1981 None -- -- November 1, 1981* Pollution Control Series D 27,380,000 None December 1, 1981* 16-1/4% Series due 2011 50,000,000 None April 29, 1982 None -- -- May 1, 1983* Pollution Control Series E 42,000,000 None April 30, 1984 None -- -- March 1, 1985* 13% Series due 2015 50,000,000 None November 1, 1986* Pollution Control Series F 27,250,000 None May 1, 1987* 8.95% Series due 1992 75,000,000 None July 1, 1990* 9-7/8% Series due 2020 75,000,000 None December 1, 1990* Secured Medium-Term Notes, Series A 191,500,000** 15,000,000 March 1, 1992* 8-1/8% Series due 2004 and 100,000,000 100,000,000 8-3/4% Series due 2022 150,000,000 146,340,000 April 1, 1993* Pollution Control Series G 79,500,000 79,500,000 June 1, 1993* Pollution Control Series H 50,000,000 50,000,000 November 1, 1993* Collateral Series A 134,500,000 134,500,000 January 1, 1994* Collateral Series B due 2001 and 102,667,000 None Collateral Series B due 2024 110,000,000 110,000,000 September 2, 1994 None -- -- (Appointment of Successor Trustee) May 1, 1996 Collateral Series C 125,000,000 125,000,000 </TABLE> SCHEDULE A-2
    • <TABLE> <CAPTION> DATE OF SERIES OF BONDS PRINCIPAL PRINCIPAL SUPPLEMENTAL --------------- AMOUNT ISSUED AMOUNT INDENTURE ------------- OUTSTANDING --------- ----------- <S> <C> <C> <C> November 1, 1996 Collateral Series D 250,000,000 175,000,000 February 1, 1997 Collateral Series E 150,000,000 None April 1, 1998 Collateral Series F 250,000,000 250,000,000 August 15, 2002 Collateral Series G 48,750,000 48,750,000 September 1, 2002 Collateral Series H 600,000,000 600,000,000 </TABLE> ---------------- * Contains amendatory provisions ** $200,000,000 authorized SCHEDULE A-3
    • EXHIBIT 4.03 PUBLIC SERVICE COMPANY OF COLORADO TO U.S. BANK TRUST NATIONAL ASSOCIATION, AS TRUSTEE --------------------- SUPPLEMENTAL INDENTURE NO. 8 Dated as of August 15, 2002 Supplemental to the Indenture dated as of October 1, 1993 --------------------- Establishing the Securities of Series No. 7, designated First Collateral Trust Bonds, Series No. 7 (Ambac Collateral Bonds)
    • SUPPLEMENTAL INDENTURE NO. 8, dated as of August 15, 2002, between PUBLIC SERVICE COMPANY OF COLORADO, a corporation duly organized and existing under the laws of the State of Colorado (hereinafter sometimes called the quot;Companyquot;), and U.S. BANK TRUST NATIONAL ASSOCIATION (FORMERLY FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION), a national banking association, as successor trustee (hereinafter sometimes called the quot;Trusteequot;) to Morgan Guaranty Trust Company of New York under the Indenture, dated as of October 1, 1993 (hereinafter called the quot;Original Indenturequot;), as previously supplemented and as further supplemented by this Supplemental Indenture No. 8. The Original Indenture and any and all indentures and all other instruments supplemental thereto are hereinafter sometimes collectively called the quot;Indenturequot;. RECITALS OF THE COMPANY The Original Indenture was authorized, executed and delivered by the Company to provide for the issuance from time to time of its Securities (such term and all other capitalized terms used herein without definition having the meanings assigned to them in the Original Indenture), to be issued in one or more series as contemplated therein, and to provide security for the payment of the principal of and premium, if any, and interest, if any, on the Securities. The Company has heretofore executed and delivered to the Trustee the Supplemental Indentures referred to in Schedule A hereto for the purpose of establishing a series of bonds and appointing the successor Trustee. The Company has heretofore entered into two separate Financing Agreements, each dated as of January 1, 1999, with each of Adams County, Colorado and Pueblo County, Colorado (the quot;Countiesquot;) pursuant to which each of the Counties in effect loaned the proceeds of the Pollution Control Refunding Revenue Bonds (collectively, the quot;Series 1999 Bondsquot;) issued pursuant to separate Indentures of Trust between each County and U.S. Bank National Association, as Trustee, dated as of January 1, 1999 (the quot;Series 1999 Bond Indenturesquot;) to the Company for the purpose of refunding certain outstanding series of pollution control bonds and the Company executed and delivered a note to each of the Counties in the amount of the respective proceeds (the quot;1999 Series Notesquot;). The payment of principal of and interest on the 1999 Series Notes are applied solely to the payment of the related Series 1999 Bonds. In connection with the issuance of the Series 1999 Bonds, Ambac Assurance Corporation (quot;Ambacquot;) issued municipal bond insurance policies (the quot;Policiesquot;) to each of the Counties relating to the Series 1999 Bonds. The Company entered into an Insurance Agreement (the quot;Insurance Agreementquot;), dated as of January 21, 1999, with Ambac as part of the consideration for the delivery by Ambac of the Policies, pursuant to which the Company is absolutely and unconditionally obligated, among other matters, to reimburse Ambac for all amounts advanced by Ambac under the Policies. As additional consideration for Ambac issuing the Policies, the Company agreed not to issue any secured debt in an amount above a specified threshold until the Company issues similar secured debt to Ambac (the quot;Ambac Secured Debtquot;). The Company now desires to issue the Ambac Secured Debt by establishing a series of Securities to be designated quot;First Collateral Trust Bonds, Series No. 7 (Ambac Collateral Bonds)quot;, such series of Securities to be hereinafter sometimes called quot;Series No. 7quot;. The Company has duly authorized the execution and delivery of this Supplemental Indenture No. 8 to establish the Securities of Series No. 7 and has duly authorized the issuance of such Securities; and all acts necessary to make this Supplemental Indenture No. 8 a valid agreement of the Company, and to make the Securities of Series No. 7 valid obligations of the Company, have been performed.
    • GRANTING CLAUSES NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE NO. 8 WITNESSETH, that, in consideration of the premises, and in order to secure the payment of the principal of and premium, if any, and interest, if any, on all Securities from time to time Outstanding and the performance of the covenants contained therein and in the Indenture and to declare the terms and conditions on which such Securities are secured, the Company hereby grants, bargains, sells, releases, conveys, assigns, transfers, mortgages, pledges, sets over and confirms to the Trustee, and grants to the Trustee a security interest in, the following: GRANTING CLAUSE FIRST All right, title and interest of the Company, as of the date of the execution and delivery of this Supplemental Indenture No. 8, in and to property (other than Excepted Property), real, personal and mixed and wherever situated, in any case used or to be used in or in connection with the Electric Utility Business (whether or not such use is the sole use of such property), including without limitation (a) all lands and interests in land described or referred to in Schedule B hereto; (b) all other lands, easements, servitudes, licenses, permits, rights of way and other rights and interests in or relating to real property used or to be used in or in connection with the Electric Utility Business or relating to the occupancy or use of such real property, subject however, to the exceptions and exclusions set forth in clause (a) of Granting Clause First of the Original Indenture; (c) all plants, generators, turbines, engines, boilers, fuel handling and transportation facilities, air and water pollution control and sewage and solid waste disposal facilities and other machinery and facilities for the generation of electric energy; (d) all switchyards, lines, towers, substations, transformers and other machinery and facilities for the transmission of electric energy; (e) all lines, poles, conduits, conductors, meters, regulators and other machinery and facilities for the distribution of electric energy; (f) all buildings, offices, warehouses and other structures used or to be used in or in connection with the Electric Utility Business; (g) all pipes, cables, insulators, ducts, tools, computers and other data processing and/or storage equipment and other equipment, apparatus and facilities used or to be used in or in connection with the Electric Utility Business; (h) any or all of the foregoing properties in the process of construction; and (i) all other property, of whatever kind and nature, ancillary to or otherwise used or to be used in conjunction with any or all of the foregoing or otherwise, directly or indirectly, in furtherance of the Electric Utility Business; GRANTING CLAUSE SECOND Subject to the applicable exceptions permitted by Section 810(c), Section 1303 and Section 1305 of the Original Indenture, all property (other than Excepted Property) of the kind and nature described in Granting Clause First which may be hereafter acquired by the Company, it being the intention of the Company that all such property acquired by the Company after the date of the execution and delivery of this Supplemental Indenture No. 8 shall be as fully embraced within and subjected to the Lien hereof as if such property were owned by the Company as of the date of the execution and delivery of this Supplemental Indenture No. 8; 2
    • GRANTING CLAUSE FOURTH All other property of whatever kind and nature subjected or required to be subjected to the Lien of the Indenture by any of the provisions thereof; EXCEPTED PROPERTY Expressly excepting and excluding, however, from the Lien and operation of the Indenture all Excepted Property of the Company, whether now owned or hereafter acquired; TO HAVE AND TO HOLD all such property, real, personal and mixed, unto the Trustee, its successors in trust and their assigns forever; SUBJECT, HOWEVER, to (a) Liens existing at the date of the execution and delivery of the Original Indenture (including, but not limited to, the Lien of the PSCO 1939 Mortgage), (b) as to property acquired by the Company after the date of the execution and delivery of the Original Indenture, Liens existing or placed thereon at the time of the acquisition thereof (including, but not limited to, the Lien of any Class A Mortgage and purchase money Liens), (c) Retained Interests and (d) any other Permitted Liens, it being understood that, with respect to any property which was at the date of execution and delivery of the Original Indenture or thereafter became or hereafter becomes subject to the Lien of any Class A Mortgage, the Lien of the Indenture shall at all times be junior, subject and subordinate to the Lien of such Class A Mortgage; IN TRUST, NEVERTHELESS, for the equal and proportionate benefit and security of the Holders from time to time of all Outstanding Securities without any priority of any such Security over any other such Security; PROVIDED, HOWEVER, that the right, title and interest of the Trustee in and to the Mortgaged Property shall cease, terminate and become void in accordance with, and subject to the conditions set forth in, Article Nine of the Original Indenture, and if, thereafter, the principal of and premium, if any, and interest, if any, on the Securities shall have been paid to the Holders thereof, or shall have been paid to the Company pursuant to Section 603 of the Original Indenture, then and in that case the Indenture shall terminate, and the Trustee shall execute and deliver to the Company such instruments as the Company shall require to evidence such termination; otherwise the Indenture, and the estate and rights thereby granted shall be and remain in full force and effect; and THE PARTIES HEREBY FURTHER COVENANT AND AGREE as follows: ARTICLE ONE SECURITIES OF SERIES NO. 7 There are hereby established the Securities of Series No. 7. The Securities of Series No. 7 are to be issued to Ambac pursuant to the Insurance Agreement as part of the consideration for the delivery by Ambac of the Policies. The Securities of Series No. 7 shall have the terms and characteristics set forth below (the lettered subdivisions set forth below corresponding to the lettered subdivisions of Section 301 of the Original Indenture): (a) the title of the Securities of such series shall be quot;First Collateral Trust Bonds, Series No. 7 (Ambac Collateral Bonds)quot;; provided, however, that, at any time after the 3
    • PSCO 1939 Mortgage shall have been satisfied and discharged, the Company shall have the right, without any consent or other action by the Holders of such Securities, to change such title in such manner as shall be deemed by the Company to be appropriate to reflect such satisfaction and discharge, such change to be evidenced in an Officer’s Certificate; (b) the Securities of Series No. 7 shall be initially authenticated and delivered in the aggregate principal amount of $48,750,000; (c) interest on the Securities of Series No. 7 shall be payable to the Persons in whose names such Securities are registered at the close of business on the Regular Record Date for such interest, except as otherwise expressly provided in the form of such Securities attached as Exhibit A hereto; (d) the principal of the Securities of Series No. 7 shall be payable on January 1, 2019, the Stated Maturity. (e) the Securities of Series No. 7 shall bear interest at a rate of 5.10% per annum; interest shall accrue on the Securities of Series No. 7 from September 10, 2002, or the most recent date to which interest has been paid or duly provided for; the Interest Payment Dates for such Securities shall be January 1 and July 1 in each year, commencing January 1, 2003, and the Regular Record Dates with respect to the Interest Payment Dates for such Securities shall be December 15 and June 15 in each year, respectively (whether or not a Business Day); (f) the Corporate Trust Office of U.S. Bank Trust National Association in New York, New York shall be the place at which (i) the principal of, premium, if any, and interest, if any, on the Securities of Series No. 7 shall be payable, (ii) registration of transfer of such Securities may be effected, (iii) exchanges of such Securities may be effected and (iv) notices and demands to or upon the Company in respect of such Securities and the Indenture may be served; and U.S. Bank Trust National Association shall be the Security Registrar for such Securities; provided, however, that the Company reserves the right to change, by one or more Officer’s Certificates, any such place or the Security Registrar; and provided, further, that the Company reserves the right to designate, by one or more Officer’s Certificates, its principal office in Denver, Colorado as any such place or itself as the Security Registrar; (g) the Securities of Series No. 7 shall be redeemable as follows: At the time that any Series 1999 Bonds are redeemed pursuant to the Series 1999 Bond Indentures, Securities of Series No. 7 in a principal amount equal to the principal amount of Series 1999 Bonds so redeemed shall be subject to redemption by the Company at a Redemption Price equal to the price at which such Series 1999 Bonds are redeemed; (h) not applicable; (i) not applicable; (j) not applicable; (k) not applicable; (l) not applicable; 4
    • (m) not applicable; (n) not applicable; (o) not applicable; (p) not applicable; (q) the Securities of Series No. 7 are to be registered in the name of Ambac Assurance Corporation. Such Securities shall not be transferable, nor shall any purported transfer be registered except to a successor to Ambac under the Insurance Agreement upon delivery to the Trustee of a Company Request requesting such transfer. (r) not applicable; (s) no service charge shall be made for the exchange of the Securities of Series No. 7; provided, however, that the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the exchange; (t) not applicable; (u) (i) If the Company shall have caused the Company’s indebtedness in respect of any Securities of Series No. 7 to have been satisfied and discharged prior to the Maturity of such Securities, as provided in Section 901 of the Original Indenture, the Company shall, promptly after the date of such satisfaction and discharge, give a notice to each Person who was a Holder of any of such Securities on such date stating (A)(1) the aggregate principal amount of such Securities and (2) the aggregate amount of any money (other than amounts, if any, deposited in respect of accrued interest on such Securities) and the aggregate principal amount of, the rate or rates of interest on, and the aggregate fair market value of, any Eligible Obligations deposited pursuant to Section 901 of the Original Indenture with respect to such Securities and (B) that the Company will provide (and the Company shall promptly so provide) to such Person, or any beneficial owner of such Securities holding through such Person (upon written request to the Company sent to an address specified in such notice), such other information as such Person or beneficial owner, as the case may be, reasonably may request in order to enable it to determine the federal income tax consequences to it resulting from the satisfaction and discharge of the Company’s indebtedness in respect of such Securities. Thereafter, the Company shall, within forty-five (45) days after the end of each calendar year, give to each Person who at any time during such calendar year was a Holder of such Securities a notice containing (X) such information as may be necessary to enable such Person to report its income, gain or loss for federal income tax purposes with respect to such Securities or the assets held on deposit in respect thereof during such calendar year or the portion thereof during which such Person was a Holder of such Securities, as the case may be (such information to be set forth for such calendar year as a whole and for each month during such year) and (Y) a statement to the effect that the Company will provide (and the Company shall promptly so provide) to such Person, or any beneficial owner of such Securities holding through such Person (upon written request to the Company sent to an address specified in such notice), such other information as 5
    • such Person or beneficial owner, as the case may be, reasonably may request in order to enable it to determine its income, gain or loss for federal income tax purposes with respect to such Securities or such assets for such year or portion thereof, as the case may be. The obligation of the Company to provide or cause to be provided information for purposes of income tax reporting by any Person as described in the first two sentences of this paragraph shall be deemed to have been satisfied to the extent that the Company has provided or caused to be provided substantially comparable information pursuant to any requirements of the Internal Revenue Code of 1986, as amended from time to time (the quot;Codequot;) and United States Treasury regulations thereunder. (ii) Notwithstanding the provisions of subparagraph (i) above, the Company shall not be required to give any notice specified in such subparagraph or to otherwise furnish any of the information contemplated therein if the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such Securities will not recognize income, gain or loss for federal income tax purposes as a result of the satisfaction and discharge of the Company’s indebtedness in respect of such Securities and such Holders will be subject to federal income taxation on the same amounts and in the same manner and at the same times as if such satisfaction and discharge had not occurred. (iii) Anything in this clause (u) to the contrary notwithstanding, the Company shall not be required to give any notice specified in subparagraph (i) or to otherwise furnish the information contemplated therein or to deliver any Opinion of Counsel contemplated by subparagraph (ii) if the Company shall have caused Securities of Series No. 7 to be deemed to have been paid for purposes of the Indenture, as provided in Section 901 of the Original Indenture, but shall not have effected the satisfaction and discharge of its indebtedness in respect of such Securities pursuant to such Section. (v) Any payment by the Company of principal of, premium, if any, or interest on the Series 1999 Notes or pursuant to the Insurance Agreement with respect to the Series 1999 Bonds shall, to the extent thereof, be deemed to satisfy and discharge the obligation of the Company, if any, to make the payment of principal of, premium, if any, or interest on the Securities of Series No. 7 which is then due; provided, however, if any such payment by the Company on the Series 1999 Notes or pursuant to the Insurance Agreement is determined to be a preferential transfer and is recovered from the registered owner of the Series 1999 Notes or from Ambac pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court of competent jurisdiction as a result, then the obligation of the Company to make such payment of principal of, premium, if any, or interest on the Series 1999 Notes or pursuant to the Insurance Agreement shall no longer be deemed satisfied and discharged for purposes of the Securities of Series No. 7. The Trustee may conclusively presume that the obligation of the Company to pay principal of, premium, if any, and interest on the Securities of Series No. 7 as the same shall have become due and payable shall have been fully satisfied and discharged unless and until it shall have received a written notice from the Holder hereof stating that the principal, premium, if any, or interest of Securities of Series No. 7 has become due and payable and specifying the amount of funds required to make such payment. 6
    • Notwithstanding anything to the contrary contained herein, the aggregate amount of principal of, premium, if any, and interest on the Securities of Series No. 7 shall not exceed the aggregate amount of the reimbursement obligations of the Company under the Insurance Agreement. (w) The Securities of Series No. 7 shall be substantially in the form attached hereto as Exhibit A and shall have such further terms as are set forth in such form. ARTICLE TWO MISCELLANEOUS PROVISIONS This Supplemental Indenture No. 8 is a supplement to the Original Indenture. As previously supplemented and further supplemented by this Supplemental Indenture No. 8, the Original Indenture is in all respects ratified, approved and confirmed, and the Original Indenture, all previous supplements thereto and this Supplemental Indenture No. 8 shall together constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture No. 8 to be duly executed as of the day and year first above written. PUBLIC SERVICE COMPANY OF COLORADO By: /s/ Paul E. Pender --------------------------------------- Name: Paul E. Pender Title: Vice President and Treasurer U.S. BANK TRUST NATIONAL ASSOCIATION, Trustee By: /s/ Ignazio Tamburello --------------------------------------- Name: Ignazio Tamburello Title: Assistant Vice President 7
    • STATE OF MINNESOTA ) ) ss.: CITY OF MINNEAPOLIS ) On the 9th day of September, 2002, before me personally came Paul E. Pender to me known, who, being by me duly sworn, did depose and say that he is a Vice President and Treasurer of Public Service Company of Colorado, one of the corporations described in and which executed the foregoing instrument; and that he signed his name thereto by authority of the Board of Directors of said corporation. /s/ Sharon M. Quellhorst ------------------------------------- Name: Sharon M. Quellhorst Notary Public, State of Minnesota Commission Expires: January 31, 2005 8
    • STATE OF NEW YORK ) ) ss.: CITY AND COUNTY OF NEW YORK ) On the 10th day of September, 2002, before me personally came Ignazio Tamburello, to me known, who, being by me duly sworn, did depose and say that she is an Assistant Vice President of U.S. Bank Trust National Association, the banking association described in and which executed the foregoing instrument; and that she signed her name thereto by authority of the Board of Directors of said banking association. /s/ Rouba Fakih ------------------------------------ Name: Rouba Fakih Notary Public, State of New York Commission Expires February 20, 2003 9
    • EXHIBIT A FORM OF SECURITY (See legend at the end of this Security for restrictions on transfer and change of form) PUBLIC SERVICE COMPANY OF COLORADO First Collateral Trust Bond, Series No. 7 (Ambac Collateral Bonds) Original Interest Accrual Date September 10, 2002 Interest Rate: 5.10% Stated Maturity: January 1, 2019 Interest Payment Dates: January 1 and July 1 Regular Record Dates: December 15 and June 15 This Security is not a Discount Security within the meaning of the within-mentioned Indenture ----------------------------------------- Principal Amount Registered No. 1 $48,750,000 PUBLIC SERVICE COMPANY OF COLORADO, a corporation duly organized and existing under the laws of the State of Colorado (herein called the quot;Company,quot; which term includes any successor corporation under the Indenture referred to below), for value received, hereby promises to pay to AMBAC ASSURANCE CORPORATION, or registered assigns, the principal sum of Forty-Eight Million Seven Hundred and Fifty Thousand Dollars on the Stated Maturity specified above, and to pay interest thereon from the Original Interest Accrual Date specified above or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on the Interest Payment Dates specified above in each year, commencing with the Interest Payment Date next succeeding the Original Interest Accrual Date specified above, and at Maturity, at the Interest Rate per annum specified above, until the principal hereof is paid or duly provided for. The interest so payable, and paid or duly provided for, on any Interest Payment Date shall, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date specified above (whether or not a Business Day) next preceding such Interest Payment Date. Notwithstanding the foregoing, interest payable at Maturity shall be paid to the Person to whom principal shall be paid. Except as otherwise provided in said Indenture, any such interest not so paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice of which shall be given to Holders of Securities EXHIBIT A-1
    • of this series not less than 15 days prior to such Special Record Date, or be paid in such other manner as permitted by the Indenture. Payment of the principal of this Security and interest hereon at Maturity shall be made upon presentation of this Security at the Corporate Trust Office of U.S. Bank Trust National Association, in New York, New York or at such other office or agency as may be designated for such purpose by the Company from time to time. Payment of interest on this Security (other than interest at Maturity) shall be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register, except that if such Person shall be a securities depositary, such payment may be made by such other means in lieu of check as shall be agreed upon by the Company, the Trustee and such Person. Payment of the principal of and interest on this Security, as aforesaid, shall be made in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts. This Security is one of a duly authorized issue of securities of the Company (herein called the quot;Securitiesquot;), issued and issuable in one or more series under and equally secured by an Indenture, dated as of October 1, 1993 (such Indenture as originally executed and delivered and as supplemented or amended from time to time thereafter, together with any constituent instruments establishing the terms of particular Securities, being herein called the quot;Indenturequot;), between the Company and U.S. Bank Trust National Association (formerly First Trust of New York, National Association) as successor trustee (herein called the quot;Trustee,quot; which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the property mortgaged, pledged and held in trust, the nature and extent of the security and the respective rights, limitations of rights, duties and immunities of the Company, the Trustee and the Holders of the Securities thereunder and of the terms and conditions upon which the Securities are, and are to be, authenticated and delivered and secured. The acceptance of this Security shall be deemed to constitute the consent and agreement by the Holder hereof to all of the terms and provisions of the Indenture. This Security is one of the series designated above. This Security has been issued pursuant to the requirements of, and as security for the payment by the Company of its reimbursement obligations under, that certain Insurance Agreement, dated as of January 21, 1999, between the Company and Ambac Assurance Corporation (quot;Ambacquot;) in connection with the issuance by Ambac of municipal bond insurance policies relating to $27,250,000 in aggregate principal amount of Pollution Control Revenue Refunding Bonds (Public Service Company of Colorado Project) Series 1999 (the quot;Adams County Bondsquot;), issued by Adams County, Colorado pursuant to a Trust Indenture, dated as of January 1, 1999, between Adams County, Colorado and the Trustee (the quot;Adams County Indenturequot;) and $21,500,000 in aggregate principal amount of Pollution Control Revenue Refunding Bonds (Public Service Company of Colorado Project) Series 1999 (the quot;Pueblo County Bondsquot;; the Adams County Bonds and the Pueblo County Bonds are referred to herein as the quot;Series 1999 Bondsquot;), issued by Pueblo County, Colorado pursuant to a Trust Indenture, dated as of January 1, 1999, between Pueblo County, Colorado and the Trustee (the quot;Pueblo County Indenturequot;; the Adams County Indenture and the Pueblo County Indenture are referred to herein as the quot;Series 1999 Bond Indenturesquot;). In connection with the issuance of the Series 1999 Bonds, the Company entered into separate Financing Agreements, dated as of January 1, 1999, pursuant to which the Company executed and delivered a note to each of the Counties in the amount of the respective proceeds of the Series 1999 Bonds (the quot;Series 1999 Notesquot;). The payment of principal of and interest on the 1999 Series Notes are applied solely to the payment of the related Series 1999 Bonds. Any payment by the Company of principal of, premium, if any, or interest on the Series 1999 Notes or pursuant to the Insurance Agreement with respect to the Series 1999 Bonds shall, to the extent thereof, be deemed to satisfy and discharge the obligation of the Company, if any, to make the payment of EXHIBIT A-2
    • principal of, premium, if any, or interest on the Securities of Series No. 7 which is then due; provided, however, if any such payment by the Company on the Series 1999 Notes or pursuant to the Insurance Agreement is determined to be a preferential transfer and is recovered from the registered owner of the Series 1999 Notes or from Ambac pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court of competent jurisdiction as a result, then the obligation of the Company to make such payment of principal of, premium, if any, or interest on the Series 1999 Notes or pursuant to the Insurance Agreement shall no longer be deemed satisfied and discharged for purposes of the Securities of Series No. 7. The Trustee may conclusively presume that the obligation of the Company to pay principal of, premium, if any, and interest on the Securities of Series No. 7 as the same shall have become due and payable shall have been fully satisfied and discharged unless and until it shall have received a written notice from the Holder hereof stating that the principal, premium, if any, or interest of this Security has become due and payable and specifying the amount of funds required to make such payment. Notwithstanding anything to the contrary contained herein, the aggregate amount of principal of, premium, if any, and interest on the Securities of Series No. 7 shall not exceed the aggregate amount of the reimbursement obligations of the Company under the Insurance Agreement. If any Interest Payment Date or the Stated Maturity shall not be a Business Day (as hereinafter defined), payment of the amounts due on this Security on such date may be made on the next succeeding Business Day; and, if such payment is made or duly provided for on such Business Day, no interest shall accrue on such amounts for the period from and after such Interest Payment Date or Stated Maturity, as the case may be, to such Business Day. This Security is subject to redemption by the Company at the time that any Series 1999 Bonds are redeemed pursuant to the Series 1999 Bond Indentures in a principal amount equal to the principal amount of Series 1999 Bonds so redeemed at a Redemption Price equal to the price at which such Series 1999 Bonds are redeemed. If an Event of Default shall occur and be continuing, the principal of this Security may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the Trustee to enter into one or more supplemental indentures for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the Indenture with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities of all series then Outstanding under the Indenture, considered as one class; provided, however, that if there shall be Securities of more than one series Outstanding under the Indenture and if a proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such series, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all series so directly affected, considered as one class, shall be required; and provided, further, that if the Securities of any series shall have been issued in more than one Tranche and if the proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such Tranches, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all Tranches so directly affected, considered as one class, shall be required; and provided, further, that the Indenture permits the Trustee to enter into one or more supplemental indentures for limited purposes without the consent of any Holders of Securities. The Indenture also contains provisions permitting the Holders of a majority in principal amount of the Securities then Outstanding, on behalf of the Holders of all Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or EXHIBIT A-3
    • waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. As provided in the Indenture and subject to certain limitations therein set forth, this Security or any portion of the principal amount hereof will be deemed to have been paid for all purposes of the Indenture and to be no longer Outstanding thereunder, and, at the election of the Company, the Company’s entire indebtedness in respect thereof will be satisfied and discharged, if there has been irrevocably deposited with the Trustee or any Paying Agent (other than the Company), in trust, money in an amount which will be sufficient and/or Eligible Obligations, the principal of and interest on which when due, without regard to any reinvestment thereof, will provide moneys which, together with moneys so deposited, will be sufficient, to pay when due the principal of and interest on this Security when due. This Security is not transferable except to a successor to Ambac Assurance Corporation under the Insurance Agreement upon delivery to the Trustee of a Company Request requesting such transfer. Before any transfer of this Security will be recognized or given effect by the Company or the Trustee, the Holder shall note the amounts of all principal prepayments hereon, and shall notify the Company and the Trustee of the name and address of the transferee and shall afford the Company and the Trustee the opportunity of verifying the notation as to prepayment of principal. By the acceptance hereof the Holder of this Security and each transferee shall be deemed to have agreed to indemnify and hold harmless the Company and the Trustee against all losses, claims, damages or liability arising out of any failure on the part of the Holder or of any such transferee to comply with the requirements of the preceding sentence. Any such transfer is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office of U.S. Bank Trust National Association, in New York, New York or such other office or agency as may be designated by the Company from time to time, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series of authorized denominations and of like tenor and aggregate principal amount, will be issued to the designated transferee or transferees. Each registered owner hereof by his acceptance hereof waives any right to exchange any unpaid portion of this Bond for another Bond under Section 10.01 of the Indenture. This Bond has not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in contravention of said Act and is not transferable except to a successor to Ambac under the Insurance Agreement. No service charge shall be made for any such registration of transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the absolute owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York. EXHIBIT A-4
    • As used herein quot;Business Dayquot; means any day, other than a Saturday or Sunday, which is not a day on which banking institutions or trust companies in The City of New York, New York or other city in which is located any office or agency maintained for the payment of principal or interest on this Security, are authorized or required by law, regulation or executive order to remain closed. All other terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. As provided in the Indenture, no recourse shall be had for the payment of the principal of or interest on any Securities, or any part thereof, or for any claim based thereon or otherwise in respect thereof, or of the indebtedness represented thereby, or upon any obligation, covenant or agreement under the Indenture, against, and no personal liability whatsoever shall attach to, or be incurred by, any incorporator, shareholder, officer or director, as such, past, present or future of the Company or of any predecessor or successor corporation (either directly or through the Company or a predecessor or successor corporation), whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that the Indenture and all the Securities are solely corporate obligations and that any such personal liability is hereby expressly waived and released as a condition of, and as part of the consideration for, the execution of the Indenture and the issuance of the Securities. Unless the certificate of authentication hereon has been executed by the Trustee or an Authenticating Agent by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. EXHIBIT A-5
    • IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed and its corporate seal to be hereunto affixed and attested. PUBLIC SERVICE COMPANY OF COLORADO By: ---------------------------------------- Vice President and Treasurer Attest: --------------------------- Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. Dated: ---------------------------- U.S. BANK TRUST OR U.S. BANK TRUST NATIONAL ASSOCIATION, NATIONAL ASSOCIATION, as Trustee as Trustee By: By: ------------------------------- ------------------------------ Authorized Officer AS AUTHENTICATING AGENT By: ------------------------------ Authorized Officer THIS SECURITY MAY NOT BE TRANSFERRED OR EXCHANGED, NOR MAY ANY PURPORTED TRANSFER BE REGISTERED, EXCEPT TO A SUCCESSOR TO AMBAC ASSURANCE CORPORATION UNDER THE INSURANCE AGREEMENT REFERRED TO HEREIN. THE HOLDER OF THIS BOND BY ITS ACCEPTANCE HEREOF AGREES TO RESTRICTIONS ON TRANSFER, TO WAIVERS OF CERTAIN RIGHTS OF EXCHANGE, AND TO INDEMNIFICATION PROVISIONS AS SET FORTH BELOW. IN ADDITION, THE BOND REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND SUCH BOND MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE WITH APPLICABLE SECURITIES LAWS. ------------- EXHIBIT A-6
    • FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto -------------------------------------------------------------------------------- [please insert social security or other identifying number of assignee] -------------------------------------------------------------------------------- [please print or typewrite name and address of assignee] -------------------------------------------------------------------------------- the within Security of PUBLIC SERVICE COMPANY OF COLORADO and does hereby irrevocably constitute and appoint __________________________________ , Attorney, to transfer said Security on the books of the within-mentioned Company, with full power of substitution in the premises. Dated: --------------------- ------------------------------------------------------ Notice: The signature to this assignment must correspond with the name as written upon the face of the Security in every particular without alteration or enlargement or any change whatsoever. EXHIBIT A-7
    • SCHEDULE A SUPPLEMENTAL INDENTURES <TABLE> <CAPTION> DATE OF SERIES OF BONDS PRINCIPAL PRINCIPAL SUPPLEMENTAL --------------- AMOUNT ISSUED AMOUNT INDENTURE ------------- OUTSTANDING --------- ------------ <S> <C> <C> <C> November 1, 1993 Series No. 1 $134,500,000 $134,500,000 January 1, 1994 Series No. 2 due 2001 $102,667,000 None and Series No. 2 due 2024 $110,000,000 $110,000,000 September 2, 1994 None None None (Appointment of Successor Trustee) May 1, 1996 Series No. 3 $125,000,000 $125,000,000 November 1, 1996 Series No. 4 $250,000,000 $175,000,000 February 1, 1997 Series No. 5 $150,000,000 None April 1, 1998 Series No. 6 $250,000,000 $250,000,000 </TABLE> SCHEDULE A-1
    • SCHEDULE B DESCRIPTION OF PROPERTY The following properties are situated in the State of Colorado and the counties thereof: ADAMS COUNTY 1. SATRIANO TRACT That part of the NW1/4 NE1/4 of Section 11, Township 3 South, Range 68 West of the 6th P.M., being more particularly described as follows: Beginning at a point which is South 89 degrees 58’ East 20 feet and North 395.6 feet from the Southwest corner of the NW1/4 NE1/4 of said Section; thence North 196.92 feet; thence North 88 degrees 36.9’ East, 165.65 feet; thence North 0 degrees 17’ West, 109.93 feet; thence North 77 degrees 44.6’ East 29.52 feet along the center line of The United Irrigation Ditch; thence South 438.11 feet; thence North 89 degrees 58’ West 43.9 feet; thence North 115 feet; thence North 89 degrees 58’ West 150 feet to the point of beginning, County of Adams, State of Colorado. (for informational purposes only) 6200 North Franklin Street 2. ROSA TRACT Parcels of land more particularly described as follows: Parcel I: A portion of the N1/2 of NE1/4 of NE1/4 of Section 11, Township 3 South, Range 68 West of the 6th P.M., described as follows: Beginning at the Northwest Corner of said Tract, thence South 145 feet, thence East 110 feet, thence North 145 feet, thence West 110 feet to the Point of Beginning except the North 20 feet for road purposes. County of Denver, State of Colorado. Parcel II: That portion of the N1/2 of the NE1/4 of the NE1/4 of Section 11, Township 3 South, Range West of the 6th P.M., described as follows: SCHEDULE B-1
    • Beginning at a point 110 feet East of the Northwest corner of said tract; thence South 145 feet; thence East 90 feet; thence North 145 feet; thence West 90 feet to the True Point of Beginning, except the North 20 feet for road purposes. County of Adams, State of Colorado. 3. TOWER 4 SUBSTATION SITE A portion of a parcel of land described in Book 4550, Page 465, Adams County Clerk and Recorder’s Office, located in the Northwest Quarter of Section 27, Township 3 South, Range 66 West of the 6th Principal Meridian, Adams County, Colorado, being more particularly described as follows: COMMENCING at the North Quarter Corner of said Section 27, whence the Northwest Corner of said Section 27 bears S88 degrees 53’04quot;W a distance of 2638.04 feet; THENCE S00 degrees 08’03quot;E along the easterly line of the Northwest Quarter of said Section 27 a distance of 60.01 feet; THENCE S88 degrees 53’04quot;W along the southerly right-of-way line of East 38th Avenue as described in Book 2800, Page 680 a distance of 882.04 feet to the POINT OF BEGINNING; THENCE S01 degrees 05’34quot;E a distance of 440.00 feet; THENCE S88 degrees 53’04quot;W a distance of 399.02 feet non-tangent with the following described curve; THENCE along the westerly line of said parcel of land described in Book 4550, Page 465, on the arc of a curve to the right, having a central angle of 03 degrees 28’41quot;, a radius of 530.00 feet, a chord bearing N02 degrees 49’55quot;W a distance of 32.17 feet, and an arc distance of 32.17 feet; THENCE N01 degrees 05’34quot;W continuing along the westerly line of said parcel, tangent with the last described curve a distance of 407.84 feet; THENCE N88 degrees 53’04quot;E along the southerly right-of-way line said East 35th Avenue a distance of 400.00 feet to the POINT OF BEGINNING. Containing 4.040 acres (175,989 sq. ft.) more or less. 4. NEW WASHINGTON SUBSTATION A parcel of land decribed in Book Number 5210, Page 0031, Reception Number C0355049, recorded in the Adam County Clerk and Recorder’s Office on January 15, 1998, being more particularly described as follows: Lot 1, Block 1, Washington Electric Substation, Filing No. 1, County of Adams, State of Colorado. 5. HOSMER TRUST TRACT SCHEDULE B-2
    • A portion of the Southwest Quarter of Section 34, Township 1 South, Range 64 West of the 6th Principal Meridian, Adams County, Colorado, being more particularly described as follows: BEGINNING at the Northwest Corner of said Southwest Quarter of Section 34, whence the Southwest Corner of said Southwest Quarter of Section 34 bears S01 degrees 18’37quot;E a distance of 2636.70 feet; THENCE S89 degrees 47’30quot;E along the northerly line of said Southwest Quarter of Section 34 a distance of 1030.01 feet; THENCE S01 degrees 18quot;37quot;E a distance of 1631.67 feet; THENCE N89 degrees 47’30quot;W a distance of 1030.01 feet; THENCE N01 degrees 18’37quot;W along said westerly line of Southwest Quarter of Section 34 a distance of 1631.67 feet to the POINT OF BEGINNING. Containing 38.568 Acres, more or less. ALAMOSA COUNTY 6. MOSCA SUBSTATION: ADDITIONAL LAND A parcel of land more particularly described as follows: That part of the NE1/4 of Section 28, Township 40 North, Range 10 East of the N.M.P.M., described as beginning at a point on the North-South centerline of said Section 28 and a point on the South right-of-way line of County Lane 8 North (as fenced) from which the N1/4 corner bears N00’38’22quot;E, 25.91 feet; thence N88 degrees 33’59quot;E, along said right-of-way line 225.00 feet; thence S00 degrees 38’42quot;, 30.90 feet; thence N88 degrees 32’09quot;E, 25.16 feet; thence S00 degrees 38’22quot;W, 322.06 feet; thence N89 degrees 53’58quot;W, 250.00 feet to a point on said North-South centerline; thence N00 degrees 38’22quot;E, 346.25 feet to the true Point Of Beginning. Alamosa County, State of Colorado DENVER COUNTY 7. BELLEVIEW - QUEBEC SUBSTATION SITE A parcel of land located in a portion of Lot 1, Block 1 of the 165 Subdivision Filing No. 1, recorded in Plat Book 29 at Page 86, and a portion of the Southeast 1/4 of Section 8, Township 5 South, Range 67 West of the 6th P.M., being more particularly described as follows: Basis of bearings: the South line of the Southeast 1/4 of Section 8 is assumed to bear North 90 degrees 00 minutes 00 seconds East; COMMENCING at the South Quarter Corner of Section 8; THENCE North 28 degrees 57 minutes 12 seconds East, a distance of 2099.82 feet to the POINT OF BEGINNING; THENCE North 89 degrees 59 minutes 47 seconds East, a distance of 361.50 feet; SCHEDULE B-3
    • THENCE South 00 degrees 00 minutes 00 seconds West, a distance of 136.32 feet to a point on the North line of Lot 1, Block 1 of the 165 Subdivision Filing No. 1; THENCE South 00 degrees 00 minutes 00 seconds West, a distance of 48.06 feet; THENCE South 46 degrees 57 minutes 20 seconds West, a distance of 87.86 feet; THENCE North 90 degrees 00 minutes 00 seconds West, a distance of 212.55 feet; THENCE North 34 degrees 59 minutes 47 seconds West, a distance of 131.87 feet to a point on the North line of Lot 1, Block 1, of the 165 Subdivision Filing No. 1; THENCE North 34 degrees 59 minutes 47 seconds West, a distance of 15.89 feet; thence North 00 degrees 00 minutes 00 seconds East, a distance of 123.29 feet to the POINT OF BEGINNING, City and County of Denver, State of Colorado. DOUGLAS COUNTY 8. COLONY (SURREY RIDGE) SUBSTATION Parcels of land more particularly described as follows: Parcel A: A parcel of land in Section 24, Township 6 South, Range 67 West of the sixth principal meridian, Douglas County, Colorado, being more particularly described as follows: COMMENCING at the Northwest corner of said Section 24, whence the West Quarter Corner of said Section 24 bears South 00 degrees 06 minutes 11 seconds East a distance of 2667.01 feet; THENCE South 58 degrees 06 minutes 25 seconds East a distance of 54.13 feet to the POINT OF BEGINNING; THENCE North 89 degrees 48 minutes 35 seconds East a distance of 233.36 feet; THENCE South 45 degrees 08 minutes 18 seconds East a distance of 65.90 feet; THENCE South 00 degrees 05 minutes 10 seconds East a distance of 212.74 feet; THENCE South 44 degrees 54 minutes 50 seconds West a distance of 65.94 feet; THENCE South 89 degrees 54 minutes 50 seconds West a distance of 233.37 feet; THENCE North 00 degrees 05 minutes 10 seconds West a distance of 305.50 feet to the POINT OF BEGINNING; Parcel D: SCHEDULE B-4
    • A parcel of land being sixty (60.00’) feet in width, thirty (30.00’) feet on each side of the following described centerline, located in the Southeast Quarter of Section 14, Northeast Quarter of Section 23 and the Northwest quarter of Section 24 all in Township 6 South, Range 67 West of the Sixth Principal Meridian, Douglas County, Colorado, being more particularly described as follows: COMMENCING at the Northeast corner of said Southeast Quarter of Section 14, whence the Southeast Corner of said Section 14 bears South 01 degrees 04 minutes 04 seconds East a distance of 2664.06 feet; THENCE South 39 degrees 51 minutes 34 seconds West along a line non-tangent with the following described curve a distance of 652.76 feet to the southerly line of a parcel of land recorded in book 264, page 426 on July 1, 1974 in the Douglas County Clerk and Recorders Office, being the POINT OF BEGINNING; THENCE the following five (5) courses along existing dirt road or trail centerline; 1. Southwesterly along the Arapahoe County of a curve to the right, having a central angle of 12 degrees 16 minutes 59 seconds, a radius of 860.00 feet, a chord bearing of South 28 degrees 24 minutes 25 seconds West, a distance of 184.02 feet, and an arc distance of 184.37 feet; 2. THENCE South 34 degrees 32 minutes 55 seconds West tangent with the last and following described curves a distance of 185.60 feet; 3. THENCE along the arc of a curve to the left, having a central angle of 1 degrees 05 minutes 24 seconds, a radius of 800.00 feet, a chord bearing South 34 degrees 00 minutes 12 seconds West a distance of 15.22 feet, and an arc distance of 15.22 feet; 4. THENCE South 33 degrees 27 minutes 30 seconds West tangent with the last described curve a distance of 230.99 feet; 5. THENCE South 33 degrees 05 minutes 19 seconds West tangent with the following described curve a distance of 63.86 feet; THENCE along the arc of a curve to the left, having a central angle of 17 degrees 08 minutes 04 seconds, a radius of 200.00 feet, a chord bearing South 24 degrees 31 minutes 17 seconds West a distance of 59.59 feet, and an arc distance of 59.81 feet; THENCE South 15 degrees 57 minutes 15 seconds West tangent with the last and following described curves a distance of 108.55 feet; THENCE along the arc of a curve to the left, having a central angle of 75 degrees 23 minutes 51 seconds, a radius of 150.00 feet, a chord bearing South 21 degrees 44 minutes 40 seconds East a distance of 183.45 feet, and an arc distance of 197.39 feet; THENCE the following eight (8) courses along said existing dirt road or trail centerline: 1. South 59 degrees 26 minutes 36 seconds East tangent with the last described curve a distance of 35.15 feet; SCHEDULE B-5
    • 2. THENCE South 68 degrees 40 minutes 34 seconds East a distance of 43.72 feet; 3. THENCE North 84 degrees 29 minutes 06 seconds East a distance of 73.85 feet; 4. THENCE South 57 degrees 01 minutes 00 seconds East a distance of 68.34 feet; 5. THENCE South 28 degrees 47 minutes 04 seconds East tangent with the following described curve a distance of 31.85 feet; 6. THENCE along the arc of a curve to the right, having a central angle of 30 degrees 53 minutes 10 seconds, a radius of 200.00 feet, a chord bearing South 13 degrees 20 minutes 29 seconds East a distance of 106.51 feet, and an arc distance of 107.81 feet; 7. THENCE along the arc of a curve to the left, tangent with the last described curve, having a central angle of 15 degrees 45 minutes 50 seconds, a radius of 200.00 feet, a chord bearing of South 05 degrees 46 minutes 48 seconds East a distance of 54.85 feet, and an arc distance of 55.03 feet; 8. THENCE South 13 degrees 39 minutes 43 seconds East tangent with the last described curve a distance of 21.80 feet; THENCE South 18 degrees 42 minutes 28 seconds East tangent with the following described curve a distance of 100.70 feet; THENCE along the arc of a curve to the left, having a central angle foot 9 degrees 31 minutes 51 seconds, a radius of 200.00 feet, a chord bearing South 23 degrees 28 minutes 23 seconds East a distance of 33.23 feet, and an arc distance of 33.27 feet; THENCE South 28 degrees 14 minutes 18 seconds East tangent with the last and following described curves a distance of 164.18 feet; THENCE along the arc of a curve to the left, having a central angle of 12 degrees 32 minutes 57 seconds, a radius of 200.00 feet, a chord bearing South 34 degrees 30 minutes 47 seconds East a distance of 43.72 feet, and an arc distance of 43.80 feet; THENCE South 40 degrees 47 minutes 15 seconds East tangent with the last and following described curves a distance of 41.82 feet; THENCE along the arc of a curve to the right, having a central angle of 17 degrees 47 minutes 53 seconds, a radius 200.00 feet, a chord bearing South 31 degrees 53 minutes 19 seconds East a distance of 61.88 feet, and an arc distance of 62.13 feet; THENCE South 22 degrees 59 minutes 22 seconds East tangent with the last and following described curves a distance of 713.97 feet; THENCE along the arc of a curve to the left, having a central angle of 67 degrees 06 minutes 49 seconds, a radius of 100.00 feet, a chord bearing of South 56 degrees 32 minutes 47 seconds East a distance of 110.55 feet and an arc distance of 117.14 feet; SCHEDULE B-6
    • THENCE North 89 degrees 53 minutes 49 seconds East tangent with the last described curve a distance of 32.70 feet to the point of termination, whence the Southeast corner of said Section 14 bears North 20 degrees 59 minutes 42 seconds West a distance of 128.66 feet; Sidelines are shortened or lengthened to intersect the southerly line of said parcel of land recorded in book 264, page 426, and the westerly line of the Surrey Ridge Substation boundary. Parcel E: A parcel of land located in Sections 24 and 23, Township 6 South, Range 67 West of the Sixth Principal Meridian, Douglas County, Colorado, being more particularly described as follows: COMMENCING at the Northwest corner of said Section 24, whence the West Quarter Corner of said Section 24 bears South 00 degrees 06 minutes 11 seconds East, a distance of 2667.01 feet; THENCE South 11 degrees 21 minutes 30 seconds East a distance of 340.73 feet to the southerly line of Surrey Ridge Substation Site, being the POINT OF BEGINNING; THENCE North 89 degrees 54 minutes 50 seconds East along said southerly line of Surrey Ridge Substation site a distance of 185.92 feet; THENCE South 24 degrees 09 minutes 27 seconds West, a distance of 185.11 feet; THENCE South 03 degrees 23 minutes 27 seconds East a distance of 1233.70 feet; THENCE South 17 degrees 16 minutes 47 seconds West a distance of 919.76 feet; THENCE South 38 degrees 14 minutes 15 seconds West a distance of 1281.45 feet; THENCE South 07 degrees 51 minutes 01 seconds West a distance of 1498.69 feet; THENCE South 89 degrees 32 minutes 01 seconds West along the northerly line of a parcel of land described in Reception Number 105224, Document Number 1630, recorded in the Douglas County Clerk and Recorders Office on March 23, 1959 a distance of 101.06 feet; THENCE North 07 degrees 51 minutes 01 seconds East a distance of 1540.46 feet; THENCE North 38 degrees 14 minutes 15 seconds East a distance of 1290.11 feet; THENCE North 17 degrees 16 minutes 47 seconds East a distance of 883.02 feet; THENCE North 03 degrees 23 minutes 27 seconds West a distance of 1390.31 feet to the POINT OF BEGINNING. Parcel F: A parcel of land lying in Section 13, Section 14, Section 23 and Section 24 all in Township 6 South, Range 67 West of the Sixth Principal Meridian, Douglas County, Colorado, being more particularly described as follows: SCHEDULE B-7
    • COMMENCING at the Northwest Corner of said Section 24, whence the West Quarter Corner of said Section 24 bears South 00 degrees 06 minutes 11 seconds East a distance of 2667.01 feet; THENCE South 89 degrees 14 minutes 28 seconds West along the northerly line of the Northeast quarter of said Section 23 a distance of 27.78 feet to the POINT OF BEGINNING; THENCE North 75 degrees 40 minutes 59 seconds East a distance of 184.77 feet; THENCE South 87 degrees 37 minutes 41 seconds East a distance of 152.52 feet; THENCE South 46 degrees 56 minutes 28 seconds East a distance of 121.54 feet; THENCE South 06 degrees 45 minutes 06 seconds East a distance of 281.45 feet; THENCE South 46 degrees 47 minutes 03 seconds West a distance of 166.26 feet; THENCE North 74 degrees 24 minutes 57 seconds West a distance of 329.96 feet; THENCE North 02 degrees 21 minutes 14 seconds West a distance of 348.59 feet to the POINT OF BEGINNING; Excepting therefrom the following described parcel of land: COMMENCING at the Northwest Corner of said Section 24, whence the West Quarter Corner of said Section 24 bears South 00 degrees 06 minutes 11 seconds East a distance of 2667.01 feet; THENCE South 58 degrees 06 minutes 25 seconds East a distance of 54.13 feet to the POINT OF BEGINNING; THENCE North 89 degrees 48 minutes 35 seconds East a distance of 233.36 feet; WELD COUNTY 9. NEW GILCREST SUBSTATION A parcel of land located in the Southwest one-quarter of Section 10, Township 4 North, Range 66 West of the Sixth Principal Meridian, County of Weld, State of Colorado, being more particularly described as follows: Basis of bearings: The South one-quarter line of Section 10, Township 4 North, Range 66 West of the Sixth Principal Meridian, bearing N89 degrees 26’15quot;E. Commencing at the Southwest corner of said Section 10; thence N34 degrees 06’30quot;E a distance of 80.25 feet to the Point Of Beginning; thence N00 degrees 00’00quot;E parallel with and 45 feet East of the West line of the Southwest one-quarter of said Section 10 a distance of 304.02 feet; thence N89 degrees 26’15quot;E parallel with the South line of the Southwest one-quarter of said Section 10 a distance of 325.02 feet; thence S00 degrees 00’00quot;E parallel with the West line of the Southwest one-quarter of said Section 10 a distance of 325.02 feet to a point 45 feet North of the South line of the Southwest one-quarter of said Section 10; thence S89 degrees 26’15quot;W parallel with the South line of the Southwest one-quarter of said Section 10 a distance of 304.02 feet; thence N45 degrees 16’52quot;W a distance of 29.55 feet to the Point Of Beginning. SCHEDULE B-8
    • Said parcel of land containing 105,409.60 square feet or 2.419 acres more or less. SCHEDULE B-9
    • EXHIBIT 4.04 PUBLIC SERVICE COMPANY OF COLORADO TO U.S. BANK TRUST NATIONAL ASSOCIATION, AS TRUSTEE --------------------- SUPPLEMENTAL INDENTURE NO. 10 Dated as of September 15, 2002 Supplemental to the Indenture dated as of October 1, 1993 --------------------- Establishing the Securities of Series No. 9, designated First Collateral Trust Bonds, Series No. 9 (Bank of America Collateral Bonds)
    • SUPPLEMENTAL INDENTURE NO. 10, dated as of September 15, 2002, between PUBLIC SERVICE COMPANY OF COLORADO, a corporation duly organized and existing under the laws of the State of Colorado (hereinafter sometimes called the quot;Companyquot;), and U.S. BANK TRUST NATIONAL ASSOCIATION (FORMERLY FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION), a national banking association, as successor trustee (hereinafter sometimes called the quot;Trusteequot;) to Morgan Guaranty Trust Company of New York under the Indenture, dated as of October 1, 1993 (hereinafter called the quot;Original Indenturequot;), as previously supplemented and as further supplemented by this Supplemental Indenture No. 10. The Original Indenture and any and all indentures and all other instruments supplemental thereto are hereinafter sometimes collectively called the quot;Indenturequot;. RECITALS OF THE COMPANY The Original Indenture was authorized, executed and delivered by the Company to provide for the issuance from time to time of its Securities (such term and all other capitalized terms used herein without definition having the meanings assigned to them in the Original Indenture), to be issued in one or more series as contemplated therein, and to provide security for the payment of the principal of and premium, if any, and interest, if any, on the Securities. The Company has heretofore executed and delivered to the Trustee the Supplemental Indentures referred to in Schedule A hereto for the purpose of establishing a series of bonds and appointing the successor Trustee. The Company has heretofore entered into a Second Amended and Restated 364-Day Credit Agreement (the quot;Credit Agreementquot;), dated as of June 28, 2002, with Bank of America, N.A., as Administrative Agent (the quot;Administrative Agentquot;) and the several financial institutions and other persons from time to time party thereto (collectively, the quot;Lendersquot;), pursuant to which the Lenders have agreed to make advances and grant certain other financial accommodations to the Company up to an aggregate amount of Five Hundred Thirty Million dollars ($530,000,000) (the quot;Loansquot;). The Credit Agreement was amended by that certain First Amendment to Second Amended and Restated 364-Day Credit Agreement, dated as of September 6, 2002 (the quot;First Amendmentquot;), between the Company and the Administrative Agent, pursuant to which certain provisions in the Credit Agreement were modified, including, without limitation, the addition of a covenant requiring the Company to cause the principal amount of the Company’s obligations under the Credit Agreement to be ratably secured with all indebtedness of the Company under the Indenture, as a condition to, and as consideration for, the obligation of the Lenders to continue to make the Loans in accordance with the terms of the Credit Agreement. Pursuant to its obligations under the First Amendment, the Company now desires to establish a series of Securities to be designated quot;First Collateral Trust Bonds, Series No. 9 (Bank of America Collateral Bonds)quot;, such series of Securities to be hereinafter sometimes called quot;Series No. 9quot;. The Company has duly authorized the execution and delivery of this Supplemental Indenture No. 10 to establish the Securities of Series No. 9 and has duly authorized the issuance of such Securities; and all acts necessary to make this Supplemental Indenture No. 10 a valid agreement of the Company, and to make the Securities of Series No. 9 valid obligations of the Company, have been performed. GRANTING CLAUSES NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE NO. 10 WITNESSETH, that, in consideration of the premises, including, without limitation, the consent of the Lenders to continue to make Loans available to the Company in accordance with the terms of the Credit Agreement, and in
    • order to secure the payment of the principal of and premium, if any, and interest, if any, on all Securities from time to time Outstanding and the performance of the covenants contained therein and in the Indenture and to declare the terms and conditions on which such Securities are secured, the Company hereby grants, bargains, sells, releases, conveys, assigns, transfers, mortgages, pledges, sets over and confirms to the Trustee, and grants to the Trustee a security interest in, the following: GRANTING CLAUSE FIRST All right, title and interest of the Company, as of the date of the execution and delivery of this Supplemental Indenture No. 10, in and to property (other than Excepted Property), real, personal and mixed and wherever situated, in any case used or to be used in or in connection with the Electric Utility Business (whether or not such use is the sole use of such property), including without limitation (a) all lands, easements, servitudes, licenses, permits, rights of way and other rights and interests in or relating to real property used or to be used in or in connection with the Electric Utility Business or relating to the occupancy or use of such real property, subject however, to the exceptions and exclusions set forth in clause (a) of Granting Clause First of the Original Indenture; (b) all plants, generators, turbines, engines, boilers, fuel handling and transportation facilities, air and water pollution control and sewage and solid waste disposal facilities and other machinery and facilities for the generation of electric energy; (c) all switchyards, lines, towers, substations, transformers and other machinery and facilities for the transmission of electric energy; (d) all lines, poles, conduits, conductors, meters, regulators and other machinery and facilities for the distribution of electric energy; (e) all buildings, offices, warehouses and other structures used or to be used in or in connection with the Electric Utility Business; (f) all pipes, cables, insulators, ducts, tools, computers and other data processing and/or storage equipment and other equipment, apparatus and facilities used or to be used in or in connection with the Electric Utility Business; (g) any or all of the foregoing properties in the process of construction; and (h) all other property, of whatever kind and nature, ancillary to or otherwise used or to be used in conjunction with any or all of the foregoing or otherwise, directly or indirectly, in furtherance of the Electric Utility Business; GRANTING CLAUSE SECOND Subject to the applicable exceptions permitted by Section 810(c), Section 1303 and Section 1305 of the Original Indenture, all property (other than Excepted Property) of the kind and nature described in Granting Clause First which may be hereafter acquired by the Company, it being the intention of the Company that all such property acquired by the Company after the date of the execution and delivery of this Supplemental Indenture No. 10 shall be as fully embraced within and subjected to the Lien hereof as if such property were owned by the Company as of the date of the execution and delivery of this Supplemental Indenture No. 10; GRANTING CLAUSE FOURTH All other property of whatever kind and nature subjected or required to be subjected to the Lien of the Indenture by any of the provisions thereof; 2
    • EXCEPTED PROPERTY Expressly excepting and excluding, however, from the Lien and operation of the Indenture all Excepted Property of the Company, whether now owned or hereafter acquired; TO HAVE AND TO HOLD all such property, real, personal and mixed, unto the Trustee, its successors in trust and their assigns forever; SUBJECT, HOWEVER, to (a) Liens existing at the date of the execution and delivery of the Original Indenture (including, but not limited to, the Lien of the PSCO 1939 Mortgage), (b) as to property acquired by the Company after the date of the execution and delivery of the Original Indenture, Liens existing or placed thereon at the time of the acquisition thereof (including, but not limited to, the Lien of any Class A Mortgage and purchase money Liens), (c) Retained Interests and (d) any other Permitted Liens, it being understood that, with respect to any property which was at the date of execution and delivery of the Original Indenture or thereafter became or hereafter becomes subject to the Lien of any Class A Mortgage, the Lien of the Indenture shall at all times be junior, subject and subordinate to the Lien of such Class A Mortgage; IN TRUST, NEVERTHELESS, for the equal and proportionate benefit and security of the Holders from time to time of all Outstanding Securities without any priority of any such Security over any other such Security; PROVIDED, HOWEVER, that the right, title and interest of the Trustee in and to the Mortgaged Property shall cease, terminate and become void in accordance with, and subject to the conditions set forth in, Article Nine of the Original Indenture, and if, thereafter, the principal of and premium, if any, and interest, if any, on the Securities shall have been paid to the Holders thereof, or shall have been paid to the Company pursuant to Section 603 of the Original Indenture, then and in that case the Indenture shall terminate, and the Trustee shall execute and deliver to the Company such instruments as the Company shall require to evidence such termination; otherwise the Indenture, and the estate and rights thereby granted shall be and remain in full force and effect; and THE PARTIES HEREBY FURTHER COVENANT AND AGREE as follows: ARTICLE ONE SECURITIES OF SERIES NO. 9 There are hereby established the Securities of Series No. 9. The Securities of Series No. 9 shall have the terms and characteristics set forth below (the lettered subdivisions set forth below corresponding to the lettered subdivisions of Section 301 of the Original Indenture): (a) the title of the Securities of such series shall be quot;First Collateral Trust Bonds, Series No. 9 (Bank of America Collateral Bonds)quot;; provided, however, that, at any time after the PSCO 1939 Mortgage shall have been satisfied and discharged, the Company shall have the right, without any consent or other action by the Holders of such Securities, to change such title in such manner as shall be deemed by the Company to be appropriate to reflect such satisfaction and discharge, such change to be evidenced in an Officer’s Certificate; 3
    • (b) the Securities of Series No. 9 shall be initially authenticated and delivered in the aggregate principal amount of $530,000,000; (c) not applicable; (d) the principal of the Securities of Series No. 9 shall be payable on June 27, 2003, the Stated Maturity. (e) the Securities of Series No. 9 shall not bear interest; (f) the Corporate Trust Office of U.S. Bank Trust National Association in New York, New York shall be the place at which (i) the principal of, premium, if any, and interest, if any, on the Securities of Series No. 9 shall be payable, (ii) registration of transfer of such Securities may be effected, (iii) exchanges of such Securities may be effected and (iv) notices and demands to or upon the Company in respect of such Securities and the Indenture may be served; and U.S. Bank Trust National Association shall be the Security Registrar for such Securities; provided, however, that the Company reserves the right to change, by one or more Officer’s Certificates, any such place or the Security Registrar; and provided, further, that the Company reserves the right to designate, by one or more Officer’s Certificates, its principal office in Denver, Colorado as any such place or itself as the Security Registrar; (g) the Securities of Series No. 9 shall not be redeemable prior to maturity, other than as set forth in the Indenture; (h) not applicable; (i) not applicable; (j) not applicable; (k) not applicable; (l) not applicable; (m) not applicable; (n) not applicable; (o) not applicable; (p) not applicable; (q) the Securities of Series No. 9 are to be registered in the name of Bank of America, N.A., as Administrative Agent. Such Securities shall not be transferable, nor shall any purported transfer be registered except to a successor to the Administrative Agent under the Credit Agreement upon delivery to the Trustee of a Company Request requesting such transfer. (r) not applicable; 4
    • (s) no service charge shall be made for the transfer or exchange of the Securities of Series No. 9; provided, however, that the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange; (t) not applicable; (u) (i) If the Company shall have caused the Company’s indebtedness in respect of any Securities of Series No. 9 to have been satisfied and discharged prior to the Maturity of such Securities, as provided in Section 901 of the Original Indenture, the Company shall, promptly after the date of such satisfaction and discharge, give a notice to each Person who was a Holder of any of such Securities on such date stating (A)(1) the aggregate principal amount of such Securities and (2) the aggregate amount of any money (other than amounts, if any, deposited in respect of accrued interest on such Securities) and the aggregate principal amount of, the rate or rates of interest on, and the aggregate fair market value of, any Eligible Obligations deposited pursuant to Section 901 of the Original Indenture with respect to such Securities and (B) that the Company will provide (and the Company shall promptly so provide) to such Person, or any beneficial owner of such Securities holding through such Person (upon written request to the Company sent to an address specified in such notice), such other information as such Person or beneficial owner, as the case may be, reasonably may request in order to enable it to determine the federal income tax consequences to it resulting from the satisfaction and discharge of the Company’s indebtedness in respect of such Securities. Thereafter, the Company shall, within forty-five (45) days after the end of each calendar year, give to each Person who at any time during such calendar year was a Holder of such Securities a notice containing (X) such information as may be necessary to enable such Person to report its income, gain or loss for federal income tax purposes with respect to such Securities or the assets held on deposit in respect thereof during such calendar year or the portion thereof during which such Person was a Holder of such Securities, as the case may be (such information to be set forth for such calendar year as a whole and for each month during such year) and (Y) a statement to the effect that the Company will provide (and the Company shall promptly so provide) to such Person, or any beneficial owner of such Securities holding through such Person (upon written request to the Company sent to an address specified in such notice), such other information as such Person or beneficial owner, as the case may be, reasonably may request in order to enable it to determine its income, gain or loss for federal income tax purposes with respect to such Securities or such assets for such year or portion thereof, as the case may be. The obligation of the Company to provide or cause to be provided information for purposes of income tax reporting by any Person as described in the first two sentences of this paragraph shall be deemed to have been satisfied to the extent that the Company has provided or caused to be provided substantially comparable information pursuant to any requirements of the Internal Revenue Code of 1986, as amended from time to time (the quot;Codequot;) and United States Treasury regulations thereunder. (ii) Notwithstanding the provisions of subparagraph (i) above, the Company shall not be required to give any notice specified in such subparagraph or to 5
    • otherwise furnish any of the information contemplated therein if the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such Securities will not recognize income, gain or loss for federal income tax purposes as a result of the satisfaction and discharge of the Company’s indebtedness in respect of such Securities and such Holders will be subject to federal income taxation on the same amounts and in the same manner and at the same times as if such satisfaction and discharge had not occurred. (iii) Anything in this clause (u) to the contrary notwithstanding, the Company shall not be required to give any notice specified in subparagraph (i) or to otherwise furnish the information contemplated therein or to deliver any Opinion of Counsel contemplated by subparagraph (ii) if the Company shall have caused Securities of Series No. 9 to be deemed to have been paid for purposes of the Indenture, as provided in Section 901 of the Original Indenture, but shall not have effected the satisfaction and discharge of its indebtedness in respect of such Securities pursuant to such Section. (v) If the Company terminates or reduces the aggregate amount of unutilized commitments of the Lenders to provide advances under the Credit Agreement pursuant to Section 2.04 thereof, such termination or reduction shall, to the extent thereof, be deemed to satisfy and discharge the obligation of the Company, if any, to make payment of principal on the Securities of Series No. 9. Upon payment of the Company’s obligations under the Credit Agreement in full, termination of the Credit Agreement and termination of all commitments and other obligations of the Administrative Agent and the Lenders to the Company, the aggregate amount of principal of the Securities of Series No. 9 shall be deemed satisfied and discharged. On the date which is thirty (30) days after the Maturity of the Securities of Series No. 9, the Trustee may conclusively presume that the obligation of the Company to pay principal on the Securities of Series No. 9 as the same shall have become due and payable shall have been fully satisfied and discharged unless and until the Trustee shall have received a written notice prior to such date from the Holder hereof stating that the principal of Securities of Series No. 9 has become due and payable and specifying the amount of funds required to make such payment. Notwithstanding anything to the contrary contained herein, the aggregate amount of principal actually due on the Securities of Series No. 9 shall not exceed the aggregate amount of the obligations of the Company under the Credit Agreement. (w) The Securities of Series No. 9 shall be subject to certain voting restrictions set forth in the Issuance Agreement to be entered into between the Company and Bank of America, N.A., as Administrative Agent. A copy of the Issuance Agreement will be on file at the office of the Trustee and will be available upon request. (x) The Securities of Series No. 9 shall be substantially in the form attached hereto as Exhibit A and shall have such further terms as are set forth in such form. 6
    • ARTICLE TWO MISCELLANEOUS PROVISIONS (a) This Supplemental Indenture No. 10 is a supplement to the Original Indenture. As previously supplemented and further supplemented by this Supplemental Indenture No. 10, the Original Indenture is in all respects ratified, approved and confirmed, and the Original Indenture, all previous supplements thereto and this Supplemental Indenture No. 10 shall together constitute one and the same instrument. (b) This Securities of Series No. 9 have been issued by the Company to the Administrative Agent to (i) secure the payment of the Company’s obligations to make payments to any person under the Credit Agreement and (ii) provide to such persons the benefits of the security provided for this Security pursuant to the Indenture. 7
    • IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture No. 10 to be duly executed as of the day and year first above written. PUBLIC SERVICE COMPANY OF COLORADO By: /s/ Paul E. Pender --------------------------------------- Name: Paul E. Pender Title: Vice President and Treasurer STATE OF MINNESOTA ) ) ss.: CITY OF MINNEAPOLIS ) On the 20th day of September, 2002, before me personally came Paul E. Pender to me known, who, being by me duly sworn, did depose and say that he is a Vice President and Treasurer of Public Service Company of Colorado, one of the corporations described in and which executed the foregoing instrument; and that he signed his name thereto by authority of the Board of Directors of said corporation. /s/ Sharon M. Quellhorst ----------------------------------------- Name: Sharon M. Quellhorst Notary Public, State of Minnesota Commission Expires: January 31, 2005 8
    • U.S. BANK TRUST NATIONAL ASSOCIATION, Trustee By: /s/ Ignazio Tamburello --------------------------------- Name: Ignazio Tamburello Title: Assistant Vice President STATE OF NEW YORK ) ) ss.: CITY AND COUNTY OF NEW YORK ) On the 20th day of September, 2002, before me personally came Ignazio Tamburello, to me known, who, being by me duly sworn, did depose and say that he is an Assistant Vice President of U.S. Bank Trust National Association, the banking association described in and which executed the foregoing instrument; and that he signed his name thereto by authority of the Board of Directors of said banking association. /s/ Doris Ware -------------------------------------- Name: Doris Ware Notary Public, State of New York Commission Expires: November 9, 2005 9
    • EXHIBIT A FORM OF SECURITY (See legend at the end of this Security for restrictions on transfer and change of form) PUBLIC SERVICE COMPANY OF COLORADO First Collateral Trust Bond, Series No. 9 (Bank of America Collateral Bonds) Issue Date: [September __], 2002 Stated Maturity: June 27, 2003 This Security is not a Discount Security within the meaning of the within-mentioned Indenture ----------------------------------------- Principal Amount Registered No. 1 $530,000,000 PUBLIC SERVICE COMPANY OF COLORADO, a corporation duly organized and existing under the laws of the State of Colorado (herein called the quot;Company,quot; which term includes any successor corporation under the Indenture referred to below), for value received, hereby promises to pay to BANK OF AMERICA, N.A., as Administrative Agent, or registered assigns, the principal sum of Five Hundred Thirty Million Dollars on the Stated Maturity specified above. This Security shall not bear interest. Payment of the principal of this Security at Maturity shall be made upon presentation of this Security at the Corporate Trust Office of U.S. Bank Trust National Association, in New York, New York or at such other office or agency as may be designated for such purpose by the Company from time to time. Payment of the principal of this Security, as aforesaid, shall be made in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts. This Security is one of a duly authorized issue of securities of the Company (herein called the quot;Securitiesquot;), issued and issuable in one or more series under and equally secured by an Indenture, dated as of October 1, 1993 (such Indenture as originally executed and delivered and as supplemented or amended from time to time thereafter, together with any constituent instruments establishing the terms of particular Securities, being herein called the quot;Indenturequot;), between the Company and U.S. Bank Trust National Association (formerly First Trust of New York, National Association) as successor trustee (herein called the quot;Trustee,quot; which term includes any successor trustee under the Indenture), to which EXHIBIT A-1
    • Indenture and all indentures supplemental thereto reference is hereby made for a description of the property mortgaged, pledged and held in trust, the nature and extent of the security and the respective rights, limitations of rights, duties and immunities of the Company, the Trustee and the Holders of the Securities thereunder and of the terms and conditions upon which the Securities are, and are to be, authenticated and delivered and secured. The acceptance of this Security shall be deemed to constitute the consent and agreement by the Holder hereof to all of the terms and provisions of the Indenture. This Security is one of the series designated above. This Security has been issued pursuant to the requirements of, and as a condition to, and as consideration for, the obligations of the Lenders to continue to make the Loans under, and in accordance with the terms of, that certain Second Amended and Restated 364-Day Credit Agreement (the quot;Credit Agreementquot;), dated as of June 28, 2002, among the Company, Bank of America, N.A., as Administrative Agent (the quot;Administrative Agentquot;) and the several financial institutions and other persons from time to time party thereto (collectively, the quot;Lendersquot;), as amended by the First Amendment to Second Amended and Restated 364-Day Credit Agreement, dated as of September 6, 2002, between the Company and the Administrative Agent. If the Company terminates or reduces the aggregate amount of unutilized commitments of the Lenders to provide advances under the Credit Agreement pursuant to Section 2.04 thereof, such termination or reduction shall, to the extent thereof, be deemed to satisfy and discharge the obligation of the Company, if any, to make the payment of principal on the Securities of Series No. 9. Upon payment of the Company’s obligations under the Credit Agreement in full, termination of the Credit Agreement and termination of all commitments and other obligations of the Administrative Agent and the Lenders to the Company, the aggregate amount of principal of the Securities of Series No. 9 shall be deemed satisfied and discharged. On the date which is thirty (30) days after the Maturity of the Securities of Series No. 9, the Trustee may conclusively presume that the obligation of the Company to pay principal on the Securities of Series No. 9 as the same shall have become due and payable shall have been fully satisfied and discharged unless and until the Trustee shall have received a written notice prior to such date from the Holder hereof stating that the principal of Securities of Series No. 9 has become due and payable and specifying the amount of funds required to make such payment. Notwithstanding anything to the contrary contained herein, the aggregate amount of principal actually due on the Securities of Series No. 9 shall not exceed the aggregate amount of the obligations of the Company under the Credit Agreement. If the Stated Maturity shall not be a Business Day (as hereinafter defined), payment of the amounts due on this Security on such date may be made on the next succeeding Business Day. This Security is not subject to redemption prior to the Stated Maturity thereof, other than as set forth in the Indenture. If an Event of Default shall occur and be continuing, the principal of this Security may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the Trustee to enter into one or more supplemental indentures for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the Indenture with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities of all series then Outstanding under the Indenture, considered as one class; provided, however, that if there shall be Securities of more than one EXHIBIT A-2
    • series Outstanding under the Indenture and if a proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such series, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all series so directly affected, considered as one class, shall be required; and provided, further, that if the Securities of any series shall have been issued in more than one Tranche and if the proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such Tranches, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all Tranches so directly affected, considered as one class, shall be required; and provided, further, that the Indenture permits the Trustee to enter into one or more supplemental indentures for limited purposes without the consent of any Holders of Securities. The Indenture also contains provisions permitting the Holders of a majority in principal amount of the Securities then Outstanding, on behalf of the Holders of all Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. As provided in the Indenture and subject to certain limitations therein set forth, this Security or any portion of the principal amount hereof will be deemed to have been paid for all purposes of the Indenture and to be no longer Outstanding thereunder, and, at the election of the Company, the Company’s entire indebtedness in respect thereof will be satisfied and discharged, if there has been irrevocably deposited with the Trustee or any Paying Agent (other than the Company), in trust, money in an amount which will be sufficient and/or Eligible Obligations, the principal of and interest on which when due, without regard to any reinvestment thereof, will provide moneys which, together with moneys so deposited, will be sufficient, to pay when due the principal of and interest on this Security when due. This Security is not transferable except to a successor to the Administrative Agent under the Credit Agreement upon delivery to the Trustee of a Company Request requesting such transfer. Before any transfer of this Security will be recognized or given effect by the Company or the Trustee, the Holder shall note the amounts of all principal prepayments hereon, and shall notify the Company and the Trustee of the name and address of the transferee and shall afford the Company and the Trustee the opportunity of verifying the notation as to prepayment of principal. By the acceptance hereof the Holder of this Security and each transferee shall be deemed to have agreed to indemnify and hold harmless the Company and the Trustee against all losses, claims, damages or liability arising out of any failure on the part of the Holder or of any such transferee to comply with the requirements of the preceding sentence. Any such transfer is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office of U.S. Bank Trust National Association, in New York, New York or such other office or agency as may be designated by the Company from time to time, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series of authorized denominations and of like tenor and aggregate principal amount, will be issued to the designated transferee or transferees. This Bond has not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in contravention of said Act and is not transferable except to a successor to the Administrative Agent under the Credit Agreement. EXHIBIT A-3
    • No service charge shall be made for any such registration of transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the absolute owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York. As used herein quot;Business Dayquot; means any day, other than a Saturday or Sunday, which is not a day on which banking institutions or trust companies in The City of New York, New York or other city in which is located any office or agency maintained for the payment of principal or interest on this Security, are authorized or required by law, regulation or executive order to remain closed. All other terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. As provided in the Indenture, no recourse shall be had for the payment of the principal of or interest on any Securities, or any part thereof, or for any claim based thereon or otherwise in respect thereof, or of the indebtedness represented thereby, or upon any obligation, covenant or agreement under the Indenture, against, and no personal liability whatsoever shall attach to, or be incurred by, any incorporator, shareholder, officer or director, as such, past, present or future of the Company or of any predecessor or successor corporation (either directly or through the Company or a predecessor or successor corporation), whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that the Indenture and all the Securities are solely corporate obligations and that any such personal liability is hereby expressly waived and released as a condition of, and as part of the consideration for, the execution of the Indenture and the issuance of the Securities. Unless the certificate of authentication hereon has been executed by the Trustee or an Authenticating Agent by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. EXHIBIT A-4
    • IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed and its corporate seal to be hereunto affixed and attested. PUBLIC SERVICE COMPANY OF COLORADO By: --------------------------------------- Vice President and Treasurer Attest: ---------------------------- Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. Dated: ----------------------------- U.S. BANK TRUST OR U.S. BANK TRUST NATIONAL ASSOCIATION, NATIONAL ASSOCIATION, as Trustee as Trustee By: By: -------------------------------- --------------------------------- Authorized Officer AS AUTHENTICATING AGENT By: --------------------------------- Authorized Officer THIS SECURITY MAY NOT BE TRANSFERRED OR EXCHANGED, NOR MAY ANY PURPORTED TRANSFER BE REGISTERED, EXCEPT TO A SUCCESSOR TO THE ADMINISTRATIVE AGENT UNDER THE CREDIT AGREEMENT REFERRED TO HEREIN. THE HOLDER OF THIS BOND BY ITS ACCEPTANCE HEREOF AGREES TO RESTRICTIONS ON TRANSFER, RESTRICTIONS ON VOTING, TO WAIVERS OF CERTAIN RIGHTS OF EXCHANGE, AND TO INDEMNIFICATION PROVISIONS AS SET FORTH BELOW. IN ADDITION, THE BOND REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND SUCH BOND MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE WITH APPLICABLE SECURITIES LAWS. THIS SECURITY IS SUBJECT TO CERTAIN VOTING RESTRICTIONS SET FORTH IN THAT ISSUANCE AGREEMENT, DATED AS OF SEPTEMBER 26, 2002, BY AND BETWEEN THE COMPANY AND BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT. A COPY OF THE ISSUANCE AGREEMENT IS ON FILE AT THE OFFICE OF THE TRUSTEE AND IS AVAILABLE UPON REQUEST. ------------------- EXHIBIT A-5
    • FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto -------------------------------------------------------------------------------- [please insert social security or other identifying number of assignee] -------------------------------------------------------------------------------- [please print or typewrite name and address of assignee] -------------------------------------------------------------------------------- the within Security of PUBLIC SERVICE COMPANY OF COLORADO and does hereby irrevocably constitute and appoint __________________________________ , Attorney, to transfer said Security on the books of the within-mentioned Company, with full power of substitution in the premises. Dated: ---------------------- ------------------------------------------------------ Notice: The signature to this assignment must correspond with the name as written upon the face of the Security in every particular without alteration or enlargement or any change whatsoever. EXHIBIT A-6
    • SCHEDULE A SUPPLEMENTAL INDENTURES <TABLE> <CAPTION> DATE OF SERIES OF BONDS PRINCIPAL PRINCIPAL SUPPLEMENTAL --------------- AMOUNT ISSUED AMOUNT INDENTURE ------------- OUTSTANDING --------- ----------- <S> <C> <C> <C> November 1, 1993 Series No. 1 $134,500,000 $134,500,000 January 1, 1994 Series No. 2 due 2001 $102,667,000 None and Series No. 2 due 2024 $110,000,000 $110,000,000 September 2, 1994 None None None (Appointment of Successor Trustee) May 1, 1996 Series No. 3 $125,000,000 $125,000,000 November 1, 1996 Series No. 4 $250,000,000 $175,000,000 February 1, 1997 Series No. 5 $150,000,000 None April 1, 1998 Series No. 6 $250,000,000 $250,000,000 August 15, 2002 Series No. 7 $48,750,000 $48,750,000 September 1, 2002 Series No. 8 $600,000,000 $600,000,000 </TABLE> SCHEDULE A-1
    • Exhibit 4.05 -------------------------------------------------------------------------------- SUPPLEMENTAL TRUST INDENTURE FROM NORTHERN STATES POWER COMPANY TO BNY MIDWEST TRUST COMPANY TRUSTEE DATED AS OF JUNE 1, 2002 SUPPLEMENTAL TO TRUST INDENTURE DATED FEBRUARY 1, 1937 AND SUPPLEMENTAL AND RESTATED TRUST INDENTURE DATED MAY 1, 1988 --------------------------------------------------------------------------------
    • TABLE OF CONTENTS <TABLE> <CAPTION> Page <S> <C> <C> ARTICLE I. SPECIFIC SUBJECTION OF ADDITIONAL PROPERTY TO THE LIEN OF THE ORIGINAL INDENTURE.......................8 SECTION 1.01.............................................................................................8 ARTICLE II. FORM AND EXECUTION OF BONDS..........................................................................10 SECTION 2.01............................................................................................10 SECTION 2.02............................................................................................11 SECTION 2.02............................................................................................11 SECTION 2.04............................................................................................11 SECTION 2.05............................................................................................11 SECTION 2.06............................................................................................11 ARTICLE III. APPOINTMENT OF AUTHENTICATING AGENT.................................................................12 SECTION 3.01............................................................................................12 SECTION 3.02............................................................................................12 SECTION 3.03............................................................................................13 SECTION 3.04............................................................................................13 ARTICLE IV. FINANCING STATEMENT TO COMPLY WITH THE UNIFORM COMMERCIAL CODE.......................................13 SECTION 4.02............................................................................................13 SECTION 4.03............................................................................................13 SECTION 4.04............................................................................................14 SECTION 4.05............................................................................................14 SECTION 4.06............................................................................................17 ARTICLE V. AMENDMENTS TO INDENTURE...............................................................................17 SECTION 5.01............................................................................................17 ARTICLE VI. MISCELLANEOUS........................................................................................18 SECTION 6.01............................................................................................18 SECTION 6.02............................................................................................18 SECTION 6.03............................................................................................18 SECTION 6.04............................................................................................18 SECTION 6.05............................................................................................19 SECTION 6.06............................................................................................19 Schedule A......................................................................................................A-1 </TABLE>
    • SUPPLEMENTAL TRUST INDENTURE, made as of the 1ST day of June, 2002, but effective as of August 12, 2002, by and between NORTHERN STATES POWER COMPANY (formerly Northern Power Corporation), a corporation duly organized and existing under and by virtue of the laws of the State of Minnesota, having its principal office in the City of Minneapolis in said State (the quot;Companyquot;), party of the first part, and BNY MIDWEST TRUST COMPANY, a corporation duly organized and existing under and by virtue of the laws of the State of Illinois, having its principal office in the City of Chicago in said State and the successor to Harris Trust and Savings Bank, as Trustee (the quot;Trusteequot;), party of the second part; WITNESSETH: WHEREAS, a predecessor in interest to the Company, Xcel Energy Inc. (formerly Northern States Power Company), a corporation duly organized and existing under and by virtue of the laws of the State of Minnesota (the quot;Predecessor Companyquot;), heretofore has executed and delivered to the Trustee its Trust Indenture (the quot;1937 Indenturequot;), made as of February 1, 1937, whereby the Predecessor Company granted, bargained, sold, warranted, released, conveyed, assigned, transferred, mortgaged, pledged, set over, and confirmed to the Trustee, and to its respective successors in trust, all property, real, personal, and mixed then owned or thereafter acquired or to be acquired by the Predecessor Company (except as therein excepted from the lien thereof) and subject to the rights reserved by the Predecessor Company in and by the provisions of the 1937 Indenture, to be held by said Trustee in trust in accordance with provisions of the 1937 Indenture for the equal pro rata benefit and security of all and every of the bonds issued thereunder in accordance with the provisions thereof; and WHEREAS, the Predecessor Company heretofore has executed and delivered to the Trustee a Supplemental Trust Indenture, made as of June 1, 1942, whereby the Predecessor Company conveyed, assigned, transferred, mortgaged, pledged, set over, and confirmed to the Trustee, and its respective successors in said trust, additional property acquired by it subsequent to the date of the 1937 Indenture; and WHEREAS, the Predecessor Company heretofore has executed and delivered to the Trustee the following additional Supplemental Trust Indentures which, in addition to conveying, assigning, transferring, mortgaging, pledging, setting over, and confirming to the Trustee, and its respective successors in said trust, additional property acquired by it subsequent to the preparation of the next preceding Supplemental Trust Indenture and adding to the covenants, conditions, and agreements of the 1937 Indenture certain additional covenants, conditions, and agreements to be observed by the Predecessor Company, created the following series of First Mortgage Bonds: <TABLE> <CAPTION> DATE OF SUPPLEMENTAL TRUST INDENTURE DESIGNATION OF SERIES ------------------------------------ ------------------------------------- <S> <C> February 1, 1944 Series due February 1, 1974 (retired) October 1, 1945 Series due October 1, 1975 (retired) July 1, 1948 Series due July 1, 1978 (retired) August 1, 1949 Series due August 1, 1979 (retired) June 1, 1952 Series due June 1, 1982 (retired) </TABLE>
    • <TABLE> <CAPTION> DATE OF SUPPLEMENTAL TRUST INDENTURE DESIGNATION OF SERIES ------------------------------------ ------------------------------------- <S> <C> October 1, 1954 Series due October 1, 1984 (retired) September 1, 1956 Series due 1986 (retired) August 1, 1957 Series due August 1, 1987 (redeemed) July 1, 1958 Series due July 1, 1988 (retired) December 1, 1960 Series due December 1, 1990 (retired) August 1, 1961 Series due August 1, 1991 (retired) June 1, 1962 Series due June 1, 1992 (retired) September 1, 1963 Series due September 1, 1993 (retired) August 1, 1966 Series due August 1, 1996 (redeemed) June 1, 1967 Series due June 1, 1995 (redeemed) October 1, 1967 Series due October 1, 1997 (redeemed) May 1, 1968 Series due May 1, 1998 (redeemed) October 1, 1969 Series due October 1, 1999 (redeemed) February 1, 1971 Series due March 1, 2001 (redeemed) May 1, 1971 Series due June 1, 2001 (redeemed) February 1, 1972 Series due March 1, 2002 (redeemed) January 1, 1973 Series due February 1, 2003 (redeemed) January 1, 1974 Series due January 1, 2004 (redeemed) September 1, 1974 Pollution Control Series A (redeemed) April 1, 1975 Pollution Control Series B (redeemed) May 1, 1975 Series due May 1, 2005 (redeemed) March 1, 1976 Pollution Control Series C (retired) June 1, 1981 Pollution Control Series D, E and F (redeemed) December 1, 1981 Series due December 1, 2011 (redeemed) May 1, 1983 Series due May 1, 2013 (redeemed) December 1, 1983 Pollution Control Series G (redeemed) September 1, 1984 Pollution Control Series H (redeemed) December 1, 1984 Resource Recovery Series I (redeemed) May 1, 1985 Series due June 1, 2015 (redeemed) September 1, 1985 Pollution Control Series J, K and L July 1, 1989 Series due July 1, 2019 (redeemed) June 1, 1990 Series due June 1, 2020 (redeemed) October 1, 1992 Series due October 1, 1997 (retired) April 1, 1993 Series due April 1, 2003 December 1, 1993 Series due December 1, 2000, and December 1, 2005 February 1, 1994 Series due February 1, 1999 October 1, 1994 Series due October 1, 2001 June 1, 1995 Series due July 1, 2025 April 1, 1997 Pollution Control Series M (redeemed), N, O and P March 1, 1998 Series due March 1, 2023 and March 1, 2028 May 1, 1999 Resource Recovery Series Q June 1, 2000 Resource Recovery Series R; and </TABLE> 2
    • WHEREAS, on August 18, 2000 New Centuries Energies, Inc. was merged with and into the Predecessor Company and the Predecessor Company changed its corporate name from Northern States Power Company to Xcel Energy Inc.; and WHEREAS, pursuant to an Assignment and Assumption Agreement dated as of August 18, 2000 between the Predecessor Company and the Company, substantially all the assets of the Predecessor Company (other than the stock of the Predecessor Company’s subsidiaries) were conveyed to, and substantially all the liabilities of the Predecessor Company, including liabilities created under the Indenture, were assumed by, the Company (the quot;Assignmentquot;); and WHEREAS, pursuant to the Supplemental Trust Indenture dated as of August 1, 2000 among the Predecessor Company, the Company and Harris Trust and Savings Bank, as Trustee, the requirements and conditions precedent set forth in the Original Indenture and the Restated Indenture (each as hereinafter defined) with respect to the Assignment were satisfied; and WHEREAS, the 1937 Indenture and all of the foregoing Supplemental Trust Indentures are referred to herein collectively as the quot;Original Indenture;quot; and WHEREAS, the Predecessor Company heretofore has executed and delivered to the Trustee a Supplemental and Restated Trust Indenture, dated May 1, 1988 (the quot;Restated Indenturequot;), which, in addition to conveying, assigning, transferring, mortgaging, pledging, setting over, and confirming to the Trustee, and its respective successors in said trust, additional property acquired by it subsequent to the preparation of the next preceding Supplemental Trust Indenture, amended and restated the Original Indenture; and WHEREAS, the Restated Indenture will not become effective and operative until all bonds of each series issued under the Original Indenture prior to May 1, 1988 shall have been retired through payment or redemption (including those bonds quot;deemed to be paidquot; within the meaning of that term as used in Article XVII of the 1937 Indenture) or until, subject to certain exceptions, the holders of the requisite principal amount of such bonds shall have consented to the amendments contained in the Restated Indenture (such date being herein called the quot;Effective Datequot;); and WHEREAS, the Original Indenture and the Restated Indenture are referred to herein collectively as the quot;Indenturequot;; and WHEREAS, pursuant to the Agreement of Resignation, Appointment and Acceptance dated as of May 1, 2002 among the Company, BNY Midwest Trust Company, as successor trustee, and Harris Trust and Savings Bank, the Trustee accepted the rights, powers, duties and obligations of the trustee under the Indenture effective as of May 9, 2002; and WHEREAS, the Indenture provides that bonds may be issued thereunder in one or more series, each series to have such distinctive designation as the Board of Directors of the Company may select for such series; and WHEREAS, the Company is entering into a Credit Agreement dated as of August 15, 2002 among the Company, Wells Fargo Bank, National Association, as Lead Arranger and Administrative Agent (the quot;Administrative Agentquot;), and the other banks party thereto 3
    • (collectively, the quot;Banksquot;), pursuant to which the Company can borrow up to 300,000,000 at any one time outstanding; and WHEREAS, in order to secure the Company’s Obligations under and as defined in the Credit Agreement, the Company desires to provide for the issuance under the Indenture to the Administrative Agent, for the benefit of itself, the Co-Agents and the Banks, of a new series of bonds to be designated quot;First Mortgage Bonds, Series due August 15, 2003 (the quot;Bondsquot;); and WHEREAS, the Bonds to be issued as registered bonds without coupons in denominations of a multiple of $1000, and the bonds of said series to be substantially in the form and of the tenor following, to-wit: (Form of Bonds) NORTHERN STATES POWER COMPANY (Incorporated under the laws of the State of Minnesota) First Mortgage Bond Series due August 15, 2003 No. _________ $__________ THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS. PURSUANT TO A SECURITY AGREEMENT (THE quot;PLEDGE AGREEMENTquot;) DATED AUGUST 15, 2002 BETWEEN THE COMPANY (AS DEFINED BELOW) AND THE ADMINISTRATIVE AGENT (AS DEFINED BELOW), THIS BOND AND ALL PROCEEDS THEREOF HAVE BEEN PLEDGED TO SECURE CERTAIN OBLIGATIONS OF THE COMPANY. THE PLEDGE AGREEMENT SETS FORTH VARIOUS PROVISIONS REGARDING (AMONG OTHER THINGS) THE PAYMENT OF AND VOTING RIGHTS WITH RESPECT TO THIS BOND. THE COMPANY AND (BY THEIR ACCEPTANCE THEREOF) EACH HOLDER OF THIS BOND AGREE THAT THE RIGHTS OF THE PARTIES WITH RESPECT TO THIS BOND SHALL IN ALL RESPECTS BE SUBJECT TO SUCH LIMITATIONS AND OTHER PROVISIONS OF THE PLEDGE AGREEMENT. NORTHERN STATES POWER COMPANY, a corporation organized and existing under the laws of the State of Minnesota (the quot;Companyquot;), for value received, hereby promises to pay to Wells Fargo Bank, National Association, as Administrative Agent (the quot;Administrative Agentquot;), on behalf of itself and the Banks (as defined below), or registered assigns, at the office of the Trustee in Chicago, Illinois, or, at the option of the registered owner, at the agency of the Company in the Borough of Manhattan, City and State of New York, on August 15, 2003 (the quot;Stated Maturity Datequot;) or upon earlier declaration of acceleration the sum of _________________________ Dollars ($___________). Interest shall be payable on this bond from the date hereof on the Stated Maturity Date or upon earlier declaration of acceleration at the office of the Trustee in Chicago, Illinois, or, at the option of the registered owner, the agency of the Company in the Borough of Manhattan, City and State of New York, at a rate equal to the 4
    • rate of interest publicly announced from time to time by the Administrative Agent as its quot;primequot; or quot;basequot; rate or, if the Administrative Agent ceases to announce a rate so designated, any similar rate designated by the Administrative Agent, plus in either case 200 basis points. This bond shall bear interest from the date hereof. Payment of the principal and interest on this bond shall be made in the lawful money of the United States. This bond is issued to the Administrative Agent by the Company pursuant to the Company’s obligations under the Credit Agreement, dated as of August 15, 2002 (as amended, supplemented, restated or otherwise modified from time to time, the quot;Credit Agreementquot;), among the Company, the Administrative Agent, and the other banks party thereto from time to time (collectively, the quot;Banksquot;). This bond shall be held by the Administrative Agent subject to the terms of the Credit Agreement and the Security Agreement dated as of August 15, 2002 between the Company and the Administrative Agent. It shall be an additional term and condition of the bonds of this series that, in the event (i) an Event of Default under and as defined in the Credit Agreement has occurred under Section 7.1(a) of the Credit Agreement by reason of a failure by the Company to make a payment of principal or interest when the same shall be due and payable pursuant to the Credit Agreement or (ii) the Notes (as defined in the Credit Agreement) are declared due and payable pursuant to Section 7.2 of the Credit Agreement, then the occurrence of either such event shall be deemed to be a completed default, for purposes of Section 1(a) of Article XIII of the Original Indenture prior to the Effective Date (as defined below), and a Completed Default, for purposes of Section 13.01(a) of the Indenture on and after the Effective Date, and the definitions of completed default and Completed Default in the Original Indenture and the Indenture, respectively, are modified accordingly for purposes of the bonds of this series. The Trustee may conclusively presume that the obligation of the Company to pay the principal of and interest on this bond shall have been fully satisfied and discharged unless and until it shall have received a written notice from the Administrative Agent, signed by an authorized officer of the Administrative Agent and attested by the Secretary or an Assistant Secretary of the Administrative Agent, stating that the payment of principal of or interest on this bond has not been fully paid when due and specifying the amount of funds required to make such payment. This bond has been issued by the Company to the Administrative Agent to (i) provide for the payment of the Company’s obligations to make payments to any person under the Credit Agreement and (ii) provide to such persons the benefits of the security provided for this bond pursuant to the Indenture. This bond is one of a duly authorized issue of bonds of the Company, of the series and designation indicated on the face hereof, which issue of bonds consists, or may consist, of several series of varying denominations, dates, and tenor, all issued and to be issued under and equally secured (except insofar as a sinking fund, or similar fund, established in accordance with the provisions of the Indenture may afford additional security for the bonds of any specific series) by a Trust Indenture dated February 1, 1937 (the quot;1937 Indenturequot;), as supplemented by 49 supplemental trust indentures (collectively, the quot;Supplemental Indenturesquot; and together with the 1937 Indenture, the quot;Original Indenturequot;), a Supplemental and Restated Trust Indenture 5
    • dated May 1, 1988 (the quot;Restated Indenturequot;) and a new supplemental trust indenture for the bonds of this series (the quot;New Supplemental Indenturequot;), executed by the Company to BNY Midwest Trust Company, as successor to Harris Trust and Savings Bank, as Trustee (the quot;Trusteequot;). The 1937 Indenture, as supplemented by the Supplemental Indentures, the Restated Indenture and the New Supplemental Indenture herein are referred to collectively as the quot;Indenturequot;. Reference hereby is made to the Indenture for a description of the property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the bonds as to such security, and the terms and conditions upon which the bonds may be issued under the Indenture and are secured. The principal hereof may be declared or may become due on the conditions, in the manner and at the time set forth in the Indenture, upon the happening of a default as in the Indenture, including the New Supplemental Indenture, provided. With the consent of the Company and to the extent permitted by and as provided in the Indenture, the rights and obligations of the Company and of the holders of the bonds, and the terms and provisions of the Indenture and of any instruments supplemental thereto may be modified or altered by affirmative vote of the holders of at least 80% in principal amount of the bonds then outstanding under the Indenture and any instruments supplemental thereto (excluding bonds challenged and disqualified from voting by reason of the Company’s interest therein as provided in the Indenture); provided that without the consent of all holders of all bonds affected no such modification or alteration shall permit the extension of the maturity of the principal of any bond or the reduction in the rate of interest thereon or any other modification in the terms of payment of such principal or interest. The foregoing 80% requirement will be reduced to 66 2/3% when all bonds of each series issued under the Indenture prior to May 1, 1985, shall have been retired or all the holders thereof shall have consented to such reduction. The Restated Indenture amends and restates the 1937 Indenture and the Supplemental Indentures. The Restated Indenture will become effective and operative (the quot;Effective Datequot;) when all bonds of each series issued under the Indenture prior to May 1, 1988 shall have been retired through payment or redemption (including those bonds quot;deemed to be paidquot; within the meaning of that term as used in Article XVII of the 1937 Indenture) or until, subject to certain exceptions, the holders of the requisite principal amount of such bonds shall have consented to the amendments contained in the Restated Indenture. Holders of the bonds of this series and of each subsequent series of bonds issued under the Indenture likewise will be bound by the amendments contained in the Restated Indenture when they become effective and operative. Reference is made to the Restated Indenture for a complete description of the amendments contained therein to the 1937 Indenture and to the Supplemental Indentures. The Company and the Trustee may deem and treat the person in whose name this bond is registered as the absolute owner hereof for the purpose of receiving payment and for all other purposes and shall not be affected by any notice to the contrary. Bonds of this series are not redeemable by the Company prior to the Stated Maturity Date for any reason, and are not subject to a sinking fund. This bond is transferable as prescribed in the Indenture by the registered owner hereof in person, or by his duly authorized attorney, at the office of the Trustee in Chicago, Illinois, or at the option of the registered owner at the agency of the Company in the Borough of Manhattan, 6
    • City and State of New York, or elsewhere if authorized by the Company, upon surrender and cancellation of this bond, and thereupon a new bond or bonds of the same series and of a like aggregate principal amount will be issued to the transferee in exchange therefor as provided in the Indenture, upon payment of taxes or other governmental charges, if any, that may be imposed in relation thereto. Bonds of this series are interchangeable as to denominations in the manner and upon the conditions prescribed in the Indenture. No charge shall be made by the Company for any exchange or transfer of bonds of this series, other than for taxes or other governmental charges, if any, that may be imposed in relation thereto. No recourse shall be had for the payment of the principal of or the interest on this bond, or any part thereof, or of any claim based hereon or in respect hereof or of said Indenture, against any incorporator, or any past, present, or future shareholder, officer or director of the Company or of any predecessor or successor corporation, either directly or through the Company, or through any such predecessor or successor corporation, or through any receiver or a trustee in bankruptcy, whether by virtue of any constitution, statute, or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released, as more fully provided in the Indenture. This bond shall not be valid or become obligatory for any purpose unless and until the certificate of authentication hereon shall have been signed by or on behalf of BNY Midwest Trust Company, as Trustee under the Indenture, or its successor thereunder. IN WITNESS WHEREOF, NORTHERN STATES POWER COMPANY has caused this bond to be executed in its name by its President or a Vice President and its corporate seal, or a facsimile thereof, to be hereto affixed and attested by its Secretary or an Assistant Secretary. Dated as of _________________ NORTHERN STATES POWER COMPANY Attest: By: ------------------------------- --------------------------------- Secretary President 7
    • (Form of Trustee’s Certificate) This bond is one of the bonds of the series designated thereon, described in the within-mentioned Indenture. BNY MIDWEST TRUST COMPANY, As Trustee, By:________________________________ Authorized Officer and WHEREAS, the Company is desirous of conveying, assigning, transferring, mortgaging, pledging, setting over, and confirming to the Trustee and to its respective successors in trust, additional property acquired by it subsequent to the date of the preparation of the Supplemental Trust Indenture dated as of August 1, 2000; and WHEREAS, the Indenture provides in substance that the Company and the Trustee may enter into indentures supplemental thereto for the purposes, among others, of creating and setting forth the particulars of any new series of bonds and of providing the terms and conditions of the issue of the bonds of any series not expressly provided for in the Indenture and of conveying, assigning, transferring, mortgaging, pledging, setting over, and confirming to the Trustee additional property of the Company, and for any other purpose not inconsistent with the terms of the Indenture; and WHEREAS, the execution and delivery of this Supplemental Trust Indenture has been duly authorized by a resolution adopted by the Board of Directors of the Company; and WHEREAS, the Trustee has duly determined to execute this Supplemental Trust Indenture and to be bound, insofar as it may lawfully do so, by the provisions hereof; Now THEREFORE, Northern States Power Company, in consideration of the premises and of one dollar duly paid to it by the Trustee at or before the ensealing and delivery of these presents, the receipt of which is hereby acknowledged, and other good and valuable considerations, does hereby covenant and agree to and with BNY Midwest Trust Company, as Trustee, and its successors in the trust under the Indenture for the benefit of those who hold or shall hold the bonds, or any of them, issued or to be issued thereunder as follows: ARTICLE I. SPECIFIC SUBJECTION OF ADDITIONAL PROPERTY TO THE LIEN OF THE ORIGINAL INDENTURE. SECTION 1.01. The Company in order to better secure the payment, of both the principal and interest, of all bonds of the Company at any time outstanding under the Indenture according to their tenor and effect and the performance of and compliance with the covenants and conditions contained in the Indenture, has granted, bargained, sold, warranted, released, conveyed, assigned, transferred, mortgaged, pledged, set over, and confirmed and by these 8
    • presents does grant, bargain, sell, warrant, release, convey, assign, transfer, mortgage, pledge, set over, and confirm to the Trustee and to its respective successors in said trust forever, subject to the rights reserved by the Company in and by the provisions of the Indenture, all of the property described and mentioned or enumerated in a schedule annexed hereto and marked Schedule A, reference to said schedule being made hereby with the same force and effect as if the same were incorporated herein at length; together with all and singular the tenements, hereditaments, and appurtenances belonging and in any way appertaining to the aforesaid property or any part thereof with the reversion and reversions, remainder and remainders, tolls, rents and revenues, issues, income, products, and profits thereof; Also, in order to subject the personal property and chattels of the Company to the lien of the Indenture and to conform with the provisions of the Uniform Commercial Code, all fossil, nuclear, hydro, and other electric generating plants, including buildings and other structures, turbines, generators, exciters, boilers, reactors, nuclear fuel, other boiler plant equipment, condensing equipment and all other generating equipment; substations; electric transmission and distribution systems, including structures, poles, towers, fixtures, conduits, insulators, wires, cables, transformers, services and meters; steam heating mains and equipment; gas transmission and distribution systems, including structures, storage facilities, mains, compressor stations, purifier stations, pressure holders, governors, services, and meters; telephone plant and related distribution systems; trucks and trailers; office, shop, and other buildings and structures, furniture and equipment; apparatus and equipment of all other kinds and descriptions; materials and supplies; all municipal and other franchises, leaseholds, licenses, permits, privileges, patents and patent rights; all shares of stock, bonds, evidences of indebtedness, contracts, claims, accounts receivable, choses in action and other intangibles, all books of account and other corporate records; Excluding, however, all merchandise and appliances heretofore or hereafter acquired for the purpose of sale to customers and others; All the estate, right, title, interest, and claim, whatsoever, at law as well as in equity, which the Company now has or hereafter may acquire in and to the aforesaid property and every part and parcel thereof subject, however, to the right of the Company, until the happening of a completed default as defined in Section 1 of Article XIII of the Original Indenture prior to the Effective Date and upon the occurrence and continuation of a Completed Default as defined in the Indenture on and after the Effective Date, to retain in its possession all shares of stock, notes, evidences of indebtedness, other securities and cash not expressly required by the provisions hereof to be deposited with the Trustee, to retain in its possession all contracts, bills and accounts receivable, motor cars, any stock of goods, wares and merchandise, equipment or supplies acquired for the purpose of consumption in the operation, construction, or repair of any of the properties of the Company, and to sell, exchange, pledge, hypothecate, or otherwise dispose of any or all of such property so retained in its possession free from the lien of the Indenture, without permission or hindrance on the part of the Trustee, or any of the bondholders. No person in any dealings with the Company in respect of any such property shall be charged with any notice or knowledge of any such completed default (prior to the Effective Date) or Completed Default (after the Effective Date) under the Indenture while the Company is in possession of such property. Nothing contained herein or in the Indenture shall be deemed or construed to 9
    • require the deposit with, or delivery to, the Trustee of any of such property, except such as is specifically required to be deposited with the Trustee by some express provision of the Indenture; To have and to hold all said property, real, personal, and mixed, granted, bargained, sold, warranted, released, conveyed, assigned, transferred, mortgaged, pledged, set over, or confirmed by the Company as aforesaid, or intended so to be, to the Trustee and its successors and assigns forever, subject, however, to permitted liens as defined in Section 5 of Article I of the 1937 Indenture prior to the Effective Date and to Permitted Encumbrances on and after the Effective Date and to the further reservations, covenants, conditions, uses, and trusts set forth in the Indenture; in trust nevertheless for the same purposes and upon the same conditions as are set forth in the Indenture. ARTICLE II. FORM AND EXECUTION OF BONDS SECTION 2.01. There hereby is created, for issuance under the Indenture, a series of bonds designated Series due August 15, 2003 in the aggregate principal amount of $308,000,000, which shall bear the descriptive title quot;First Mortgage Bonds, Series due August 15, 2003quot; (the quot;Bondsquot;), and the form thereof shall contain suitable provisions with respect to the matters hereafter specified in this Section. The Bonds shall be issued as registered bonds without coupons in denominations of a multiple of $1,000 and shall be substantially of the tenor and purport hereinbefore recited. The principal amount of the Bonds shall be payable on August 15, 2003 (the quot;Stated Maturity Datequot;) or upon earlier declaration of acceleration. Interest shall be payable on the Bonds on the Stated Maturity Date or upon earlier declaration of acceleration at a rate equal to the rate of interest publicly announced from time to time by the Administrative Agent as its quot;primequot; or quot;basequot; rate or, if the Administrative Agent ceases to announce a rate so designated, any similar rate designated by the Administrative Agent, plus in either case 200 basis points. The Bonds shall bear interest from August 15, 2002. Principal and interest on the Bonds shall be payable at the office of the Trustee in Chicago, Illinois, or, at the option of the registered owner, at the agency of the Company in the Borough of Manhattan, City and State of New York. Payment of the principal and interest on the Bonds shall be made in the lawful money of the United States. The Bonds are being issued to the Administrative Agent by the Company pursuant to the Company’s obligations under the Credit Agreement and shall be held by the Administrative Agent subject to the terms of the Credit Agreement and the Security Agreement dated as of August 15, 2002 between the Company and the Administrative Agent. It shall be an additional term and condition of the Bonds that, in the event (i) an Event of Default under and as defined in the Credit Agreement has occurred under Section 7.1(a) of the Credit Agreement by reason of a failure by the Company to make a payment of principal or interest when the same shall be due and payable pursuant to the Credit Agreement or (ii) the Notes (as defined in the Credit Agreement) are declared due and payable pursuant to Section 7.2 of the Credit Agreement, then the occurrence of either such event shall be deemed to be a completed default, for purposes of Section 1(a) of Article XIII of the Original Indenture prior to the Effective Date, and a Completed Default, for purposes of Section 13.01(a) of the Indenture on and after the Effective Date, and the definitions of completed default and Completed Default 10
    • in the Original Indenture and the Indenture, respectively, are modified accordingly for purposes of the Bonds. The Bonds have been issued by the Company to the Administrative Agent to (i) provide for the payment of the Company’s obligations to make payments to any person under the Credit Agreement and (ii) provide to such persons the benefits of the security provided for the Bonds pursuant to the Indenture. SECTION 2.02. The Bonds are not redeemable by the Company prior to the Stated Maturity Date for any reason and are not subject to a sinking fund. SECTION 2.03. The registered owner of any Bond or Bonds, at his option may surrender the same with other Bonds of such series at the office of the Trustee in Chicago, Illinois, or at the agency of the Company in the Borough of Manhattan, City and State of New York, or elsewhere if authorized by the Company, for cancellation, in exchange for other Bonds of such series of higher or lower authorized denominations, but of the same aggregate principal amount, bearing interest from its date, and upon receipt of any payment required under the provisions of Section 2.04 hereof. Thereupon the Company shall execute and deliver to the Trustee and the Trustee shall authenticate and deliver such other registered bonds to such registered owner at its office or at any other place specified as aforesaid. SECTION 2.04. No charge shall be made by the Company for any exchange or transfer of Bonds, other than for taxes or other governmental charges, if any, that may be imposed in relation thereto. SECTION 2.05. The Bonds, shall be executed on behalf of the Company by the manual signature of its President or one of its Vice Presidents or with the facsimile signature of its President, and its corporate seal shall be thereunto affixed, or printed, lithographed, or engraved thereon, in facsimile, and attested by the manual signature of its Secretary or one of its Assistant Secretaries or with the facsimile signature of its Secretary. In case any of the officers who shall have signed any Bonds or attested the seal thereon or whose facsimile signature shall be borne by the Bonds shall cease to be such officers of the Company before the Bonds so signed and sealed actually shall have been authenticated by the Trustee or delivered by the Company, such Bonds nevertheless may be issued, authenticated, and delivered with the same force and effect as though the person or persons who signed such Bonds and attested the seal thereon or whose facsimile signature is borne by the Bonds had not ceased to be such officer or officers of the Company. Any Bond issuable hereunder may be signed or attested by manual or facsimile signature in behalf of the Company by such person as at the actual date of the execution of such Bond shall be the proper officer of the Company, although at the date of such Bond such person shall not have been an officer of the Company. SECTION 2.06. The registered holder of all of the Bonds shall be the Administrative Agent. 11
    • ARTICLE III. APPOINTMENT OF AUTHENTICATING AGENT. SECTION 3.01. The Trustee shall, if requested in writing so to do by the Company, promptly appoint an agent or agents of the Trustee who shall have authority to authenticate registered Bonds, in the name and on behalf of the Trustee. Such appointment by the Trustee shall be evidenced by a certificate of a vice-president of the Trustee delivered to the Company prior to the effectiveness of such appointment. SECTION 3.02. (a) Any such authenticating agent shall be acceptable to the Company and at all times shall be a corporation which is organized and doing business under the laws of the United States or of any State, is authorized under such laws to act as authenticating agent, has a combined capital and surplus of at least $10,000,000, and is subject to supervision or examination by Federal or State authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 3.02 the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. (b) Any corporation into which any authenticating agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion, or consolidation to which any authenticating agent shall be a party, or any corporation succeeding to the corporate agency business of any authenticating agent, shall continue to be the authenticating agent without the execution or filing of any paper or any further act on the part of the Trustee or the authenticating agent. (c) Any authenticating agent at any time may resign by giving written notice of resignation to the Trustee and to the Company. The Trustee may at any time, and upon written request of the Company to the Trustee shall, terminate the agency of any authenticating agent by giving written notice of termination to such authenticating agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time any authenticating agent shall cease to be eligible in accordance with the provisions of this Section 3.02, the Trustee, unless otherwise requested in writing by the Company, promptly shall appoint a successor authenticating agent, which shall be acceptable to the Company. Any successor authenticating agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers, duties, and responsibilities of its predecessor hereunder, with like effect as if originally named. No successor authenticating agent shall be appointed unless eligible under the provisions of this Section 3.02. (d) The Company agrees to pay to any authenticating agent, appointed in accordance with the provisions of this Section 3.02, reasonable compensation for its services. 12
    • SECTION 3.03. If an appointment is made pursuant to this Article III, the registered Bonds, shall have endorsed thereon, in addition to the Trustee’s Certificate, an alternate Trustee’s Certificate in the following form: This bond is one of the bonds of the Series designated thereon, described in the within-mentioned Indenture. BNY MIDWEST TRUST COMPANY, as Trustee, By _________________________________ Authenticating Agent, By _________________________________ Authorized Officer. SECTION 3.04. No provision of this Article III shall require the Trustee to have at any time more than one such authenticating agent for any one State or to appoint any such authenticating agent in the State in which the Trustee has its principal place of business. ARTICLE IV. FINANCING STATEMENT TO COMPLY WITH THE UNIFORM COMMERCIAL CODE. SECTION 4.01. The name and address of the debtor and secured party are set forth below: Debtor: Northern States Power Company 414 Nicollet Mall Minneapolis, Minnesota 55401 Secured Party: BNY Midwest Trust Company, Trustee 2 North LaSalle Street Suite 1020 Chicago, Illinois 60602 NOTE: Northern States Power Company, the debtor above named, is quot;a transmitting utilityquot; under the Uniform Commercial Code as adopted in Minnesota, North Dakota and South Dakota. SECTION 4.02. Reference to Article I hereof is made for a description of the property of the debtor covered by this Financing Statement with the same force and effect as if incorporated in this Section at length. SECTION 4.03. The maturity dates and respective principal amounts of obligations of the debtor secured and presently to be secured by the Indenture, reference to all of which for the 13
    • terms and conditions thereof is hereby made with the same force and effect as if incorporated herein at length, are as follows. <TABLE> <CAPTION> FIRST MORTGAGE BONDS PRINCIPAL AMOUNT ---------------------------------------- ---------------------------- <S> <C> Series due April 1, 2003 $80,000,000 Series due December 1, 2005 $70,000,000 Pollution Control Series J $5,450,000 Pollution Control Series K $3,400,000 Pollution Control Series L $4,850,000 Series due July 1, 2025 $250,000,000 Pollution Control Series N $27,900,000 Pollution Control Series O $50,000,000 Pollution Control Series P $50,000,000 Series due March 1, 2028 $150,000,000 Series due March 1, 2003 $100,000,000 Resource Recovery Series Q $15,170,000 Resource Recovery Series R $19,615,000 Series Due August 15, 2003 $308,000,000 </TABLE> SECTION 4.04. This Financing Statement is hereby adopted for all of the First Mortgage Bonds of the series mentioned above secured by said Indenture. SECTION 4.05. The 1937 Indenture and the prior Supplemental Trust Indentures, as set forth below, have been filed or recorded in each and every office in the States of Minnesota, North Dakota, and South Dakota designated by law for the filing or recording thereof in respect of all property of the Company subject thereto: Original Indenture Dated February 1, 1937 Supplemental Indenture Dated June 1, 1942 Supplemental Indenture Dated February 1, 1944 Supplemental Indenture Dated October 1, 1945 Supplemental Indenture Dated July 1, 1948 Supplemental Indenture Dated August 1, 1949 Supplemental Indenture Dated June 1, 1952 14
    • Supplemental Indenture Dated October 1, 1954 Supplemental Indenture Dated September 1, 1956 Supplemental Indenture Dated August 1, 1957 Supplemental Indenture Dated July 1, 1958 Supplemental Indenture Dated December 1, 1960 Supplemental Indenture Dated August 1, 1961 Supplemental Indenture Dated June 1, 1962 Supplemental Indenture Dated September 1, 1963 Supplemental Indenture Dated August 1, 1966 Supplemental Indenture Dated June 1, 1967 Supplemental Indenture Dated October 1, 1967 Supplemental Indenture Dated May 1, 1968 Supplemental Indenture Dated October 1, 1969 Supplemental Indenture Dated February 1, 1971 Supplemental Indenture Dated May 1, 1971 Supplemental Indenture Dated February 1, 1972 15
    • Supplemental Indenture Dated January 1, 1973 Supplemental Indenture Dated January 1, 1974 Supplemental Indenture Dated September 1, 1974 Supplemental Indenture Dated April 1, 1975 Supplemental Indenture Dated May 1, 1975 Supplemental Indenture Dated March 1, 1976 Supplemental Indenture Dated June 1, 1981 Supplemental Indenture Dated December 1, 1981 Supplemental Indenture Dated May 1, 1983 Supplemental Indenture Dated December 1, 1983 Supplemental Indenture Dated September 1, 1984 Supplemental Indenture Dated December 1, 1984 Supplemental Indenture Dated May 1, 1985 Supplemental Indenture Dated September 1, 1985 Supplemental and Restated Indenture Dated May 1, 1988 Supplemental Indenture Dated July 1, 1989 16
    • Supplemental Indenture Dated June 1, 1990 Supplemental Indenture Dated October 1, 1992 Supplemental Indenture Dated April 1, 1993 Supplemental Indenture Dated December 1, 1993 Supplemental Indenture Dated February 1, 1994 Supplemental Indenture Dated October 1, 1994 Supplemental Indenture Dated June 1, 1995 Supplemental Indenture Dated April 1, 1997 Supplemental Indenture Dated March 1, 1998 Supplemental Indenture Dated May 1, 1999 Supplemental Indenture Dated June 1, 2000 Supplemental Indenture Dated August 1, 2000 SECTION 4.06. The property covered by this Financing Statement also shall secure additional series of First Mortgage Bonds of the debtor which may be issued from time to time in the future in accordance with the provisions of the Indenture. ARTICLE V. AMENDMENTS TO INDENTURE. SECTION 5.01. Each holder or registered owner of a bond of any series originally authenticated by the Trustee and originally issued by the Company subsequent to May 1, 1985 and of any coupon pertaining to any such bond, by the acquisition, holding or ownership of such bond and coupon, thereby consents and agrees to, and shall be bound by, the provisions of Article VI of the Supplemental Indenture dated May 1, 1985. Each holder or registered owner of 17
    • a bond of any series (including the Bonds) originally authenticated by the Trustee and originally issued by the Company subsequent to May 1, 1988 and of any coupon pertaining to such bond, by the acquisition, holding or ownership of such bond and coupon, thereby consents and agrees to, and shall be bound by, the provisions of the Supplemental and Restated Trust Indenture dated May 1, 1988 upon the Effective Date. ARTICLE VI. MISCELLANEOUS. SECTION 6.01. The recitals of fact herein, except the recital that the Trustee has duly determined to execute this Supplemental Trust Indenture and be bound, insofar as it may lawfully so do, by the provisions hereof and in the bonds shall be taken as statements of the Company and shall not be construed as made by the Trustee. The Trustee makes no representations as to value of any of the property subjected to the lien of the Indenture, or any part thereof, or as to the title of the Company thereto, or as to the security afforded thereby and hereby, or as to the validity of this Supplemental Trust Indenture or of the bonds issued under the Indenture by virtue hereof (except the Trustee’s certificate), and the Trustee shall incur no responsibility in respect of such matters. SECTION 6.02. This Supplemental Trust Indenture shall be construed in connection with and as a part of the 1937 Indenture, as supplemented by the Supplemental Trust Indentures dated June 1, 1942, February 1, 1944, October 1, 1945, July 1, 1948, August 1, 1949, June 1, 1952, October 1, 1954, September 1, 1956, August 1, 1957, July 1, 1958, December 1, 1960, August 1, 1961, June 1, 1962, September 1, 1963, August 1, 1966, June 1, 1967, October 1, 1967, May 1, 1968, October 1, 1969, February 1, 1971, May 1, 1971, February 1, 1972, January 1, 1973, January 1, 1974, September 1, 1974, April 1, 1975, May 1, 1975, March 1, 1976, June 1, 1981, December 1, 1981, May 1, 1983, December 1, 1983, September 1, 1984, December 1, 1984, May 1, 1985, September 1, 1985, the Supplemental and Restated Trust Indenture dated May 1, 1988 and the Supplemental Trust Indentures dated July 1, 1989, June 1, 1990, October 1, 1992, April 1, 1993, December 1, 1993, February 1, 1994, October 1, 1994, June 1, 1995, April 1, 1997, March 1, 1997, March 1, 1998, May 1, 1999, June 1, 2000 and August 1, 2000. SECTION 6.03. (a) If any provision of the Indenture or this Supplemental Trust Indenture limits, qualifies, or conflicts with another provision of the Indenture required to be included in indentures qualified under the Trust Indenture Act of 1939 (as enacted prior to the date of this Supplemental Trust Indenture) by any of the provisions of Sections 310 to 317, inclusive, of the said Act, such required provisions shall control. (b) In case any one or more of the provisions contained in this Supplemental Trust Indenture or in the bonds issued hereunder should be invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained herein and therein shall not in any way be affected, impaired, prejudiced, or disturbed thereby. SECTION 6.04. Wherever in this Supplemental Trust Indenture the word quot;Indenturequot; is used without the prefix, quot;1937,quot; quot;Originalquot; or quot;Supplementalquot;, such word was used intentionally to include in its meaning both the 1937 Indenture and all indentures supplemental thereto. 18
    • SECTION 6.05. Wherever in this Supplemental Trust Indenture either of the parties hereto is named or referred to, this shall be deemed to include the successors or assigns of such party, and all the covenants and agreements in this Supplemental Trust Indenture contained by or on behalf of the Company or by or on behalf of the Trustee shall bind and inure to the benefit of the respective successors and assigns of such parties, whether so expressed or not. SECTION 6.06. (a) This Supplemental Trust Indenture may be executed simultaneously in several counterparts, and all said counterparts executed and delivered, each as an original, shall constitute but one and the same instrument. (b) The Table of Contents and the descriptive headings of the several Articles of this Supplemental Trust Indenture were formulated, used, and inserted in this Supplemental Trust Indenture for convenience only and shall not be deemed to affect the meaning or construction of any of the provisions hereof. The principal amount of obligations to be issued forthwith under the Indenture is $308,000,000. 19
    • IN WITNESS WHEREOF, on this ____ day of August, 2002, NORTHERN STATES POWER COMPANY, a Minnesota corporation, party of the first part, has caused its corporate name and seal to be hereunto affixed, and this Supplemental Trust Indenture dated as of June 1, 2002, to be signed by its President or a Vice President, and attested by its Secretary or an Assistant Secretary, for and in its behalf, and BNY MIDWEST TRUST COMPANY, an Illinois corporation, as Trustee, party of the second part, to evidence its acceptance of the trust hereby created, has caused its corporate name and seal to be hereunto affixed, and this Supplemental Trust Indenture dated as of June 1, 2002, to be signed by its President, a Vice President, or an Assistant Vice President, and attested by its Secretary, an Assistant Secretary, or an Assistant Vice President for and in its behalf. NORTHERN STATES POWER COMPANY ------------------------------------- By: Paul E. Pender Its: Vice President and Treasurer Attest: ------------------------------------ Nancy Haley Assistant Secretary Executed by Northern States Power Company in presence of: ------------------------------------ (CORPORATE SEAL) Mary Schell, Witness ------------------------------------ Elizabeth Blohm, Witness 20
    • BNY MIDWEST TRUST COMPANY, as Trustee ------------------------------------- By: J. Bartolini Its:Vice President Attest: ------------------------------------ M. Callahan Assistant Vice President Executed by BNY Midwest Trust Company in presence of: ------------------------------------ K. Gibson, Witness (CORPORATE SEAL) ------------------------------------ A. Hernandez, Witness 21
    • STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) On this ____ day of August, A.D. 2002, before me, Sharon Quellhorst, a Notary Public in and for said County in the State aforesaid, personally appeared Paul E. Pender and Nancy Haley, to me personally known, and to me known to be Vice President and Treasurer and Assistant Secretary, respectively, of Northern States Power Company, one of the corporations described in and which executed the within and foregoing instrument, and who, being by me severally duly sworn, each did say that he, the said Paul E. Pender is Vice President and Treasurer, and she, the said Nancy Haley, is Assistant Secretary, of said Northern States Power Company, a corporation; that the seal affixed to the within and foregoing instrument is the corporate seal of said corporation, and that said instrument was executed in behalf of said corporation by authority of its board of directors; and said Paul E. Pender and Nancy Haley each acknowledged said instrument to be the free act and deed of said corporation and that such corporation executed the same. WITNESS my hand and notarial seal this ____ day of August, A.D. 2002. ______________________________________ (NOTARY SEAL) Sharon Quellhorst Notary Public My commission expires January 31, 2005 22
    • STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) Paul E. Pender and Nancy Haley, being severally duly sworn, each deposes and says that he, the said Paul E. Pender, is Vice President and Treasurer, and she, the said Nancy Haley, is Assistant Secretary, of Northern States Power Company, the corporation described in and which executed the within and foregoing Supplemental Trust Indenture, as mortgagor; and each for himself or herself further says that said Supplemental Trust Indenture was executed in good faith, and not for the purpose of hindering, delaying, or defrauding any creditor of the said mortgagor. ---------------------------------- ------------------------------------ Paul E. Pender Nancy Haley Subscribed and sworn to before me this ____ day of August, A.D. 2002. ______________________________________ (NOTARY SEAL) Sharon Quellhorst Notary Public My commission expires January 31, 2005 23
    • STATE OF ILLINOIS ) ) ss. COUNTY OF COOK ) On this ____ day of August, A.D. 2002, before me, L. Garcia, a Notary Public in and for said County in the State aforesaid, personally appeared J. Bartolini and M. Callahan, to me personally known, and to me known to be Vice President and Assistant Vice President, respectively, of BNY Midwest Trust Company, one of the corporations described in and which executed the within and foregoing instrument, and who, being by me severally duly sworn, each, did say that she, the said J. Bartolini is Vice President, and she, the said M. Callahan, is Assistant Vice President, of said BNY Midwest Trust Company, a corporation; that the seal affixed to the within and foregoing instrument is the corporate seal of said corporation, and that said instrument was executed in behalf of said corporation by authority of its board of directors; and said J. Bartolini and M. Callahan each acknowledged said instrument to be the free act and deed of said corporation and that such corporation executed the same. WITNESS my hand and notarial seal this ____ day of August, A.D. 2002. ______________________________________ (NOTARY SEAL) L. Garcia Notary Public My commission expires July 8, 2006 24
    • STATE OF ILLINOIS ) ) ss. COUNTY OF COOK ) J. Bartolini and M. Callahan, being severally duly sworn, each for herself deposes and says that she, the said J. Bartolini, is Vice President, and she, the said M. Callahan, is Assistant Vice President, of BNY Midwest Trust Company, the corporation described in and which executed the within and foregoing Supplemental Trust Indenture, as mortgagee, and each for herself further says that said Supplemental Trust Indenture was executed in good faith, and not for the purpose of hindering, delaying, or defrauding any creditor of the mortgagor. --------------------------------- ------------------------------------ J. Bartolini M. Callahan Subscribed and sworn to before me this ____ day of August, A.D. 2002. ______________________________________ (NOTARY SEAL) L. Garcia Notary Public My commission expires July 8, 2006 25
    • SCHEDULE A The property referred to in Article I of the foregoing Supplemental Trust Indenture from Northern States Power Company to BNY Midwest Trust Company, Trustee, made as of June 1, 2002, includes the following property hereinafter more specifically described. Such description, however, is not intended to limit or impair the scope or intention of the general description contained in the granting clauses or elsewhere in the Original Indenture. PROPERTIES IN THE STATE OF MINNESOTA LYON COUNTY The following described real property, situate, lying and being in the County of Lyon, to wit: Lyon County Substation The South 833 feet of the West 833 feet of the Southwest Quarter (SW1/4) of Section Twenty-eight (28), Township One Hundred Twelve (112), Range Forty (40).
    • This instrument was drafted by Northern States Power Company, 414 Nicollet Mall, Minneapolis, Minnesota 55401. Tax statements for the real property described in this instrument should be sent to Northern States Power Company, 414 Nicollet Mall, Minneapolis, Minnesota 55401.
    • Exhibit 4.06 SUPPLEMENTAL TRUST INDENTURE FROM NORTHERN STATES POWER COMPANY TO BNY MIDWEST TRUST COMPANY TRUSTEE ------------ DATED JULY 1, 2002 ------------ SUPPLEMENTAL TO TRUST INDENTURE DATED FEBRUARY 1, 1937 AND SUPPLEMENTAL AND RESTATED TRUST INDENTURE DATED MAY 1, 1988
    • <TABLE> <CAPTION> PAGE <S> <C> <C> ARTICLE I. SPECIFIC SUBJECTION OF ADDITIONAL PROPERTY TO THE LIEN OF THE ORIGINAL INDENTURE...............9 Section 1.01. ......................................................................................9 ARTICLE II. PROVISIONS OF BONDS OF POLLUTION CONTROL SERIES S.............................................11 Section 2.01. .....................................................................................11 Section 2.02. .....................................................................................11 Section 2.03. .....................................................................................12 Section 2.04. .....................................................................................13 Section 2.05. .....................................................................................13 ARTICLE III. FINANCING STATEMENT TO COMPLY WITH THE UNIFORM COMMERCIAL CODE................................13 Section 3.01. .....................................................................................13 Section 3.02. .....................................................................................13 Section 3.03. .....................................................................................13 Section 3.04. .....................................................................................14 Section 3.05. .....................................................................................14 Section 3.06. .....................................................................................17 ARTICLE IV. AMENDMENTS TO INDENTURE.......................................................................17 Section 4.01. .....................................................................................17 ARTICLE V. MISCELLANEOUS.................................................................................18 Section 5.01. .....................................................................................18 Section 5.02. .....................................................................................18 Section 5.03. .....................................................................................18 Section 5.04. .....................................................................................19 Section 5.05. .....................................................................................19 Section 5.06. .....................................................................................19 Schedule A ....................................................................................A-1 </TABLE> -i-
    • SUPPLEMENTAL TRUST INDENTURE, MADE AS OF THE 1ST DAY OF JULY, 2002, BY AND BETWEEN NORTHERN STATES POWER COMPANY (formerly Northern Power Corporation), a corporation duly organized and existing under and by virtue of the laws of the State of Minnesota, having its principal office in the City of Minneapolis, Minnesota (the quot;Companyquot;), party of the first part, and BNY MIDWEST TRUST COMPANY, a corporation duly organized and existing under and by virtue of the laws of the State of Illinois, having its principal office in the City of Chicago, Illinois, successor to Harris Trust and Savings Bank, as Trustee (the quot;Trusteequot;), party of the second part; WITNESSETH: WHEREAS, a predecessor in interest to the Company, Xcel Energy Inc. (formerly Northern States Power Company), a corporation duly organized and existing under and by virtue of the laws of the State of Minnesota (the quot;Predecessor Companyquot;), has heretofore executed and delivered to the Trustee its Trust Indenture (the quot;1937 Indenturequot;), made as of February 1, 1937, whereby the Predecessor Company granted, bargained, sold, warranted, released, conveyed, assigned, transferred, mortgaged, pledged, set over and confirmed to the Trustee and to its respective successors in trust, all property, real, personal and mixed then owned or thereafter acquired or to be acquired by the Predecessor Company (except as therein excepted from the lien thereof) and subject to the rights reserved by the Predecessor Company in and by the provisions of the 1937 Indenture, to be held by said Trustee in trust in accordance with the provisions of the 1937 Indenture for the equal pro rata benefit and security of all and each of the bonds issued and to be issued thereunder in accordance with the provisions thereof; and WHEREAS, the Predecessor Company heretofore has executed and delivered to the Trustee a Supplemental Trust Indenture, made as of June 1, 1942, whereby the Predecessor Company conveyed, assigned, transferred, mortgaged, pledged, set over, and confirmed to the Trustee, and its respective successors in said trust, additional property acquired by it subsequent to the date of the 1937 Indenture; and WHEREAS, the Predecessor Company heretofore has executed and delivered to the Trustee the following additional Supplemental Trust Indentures which, in addition to conveying, assigning, transferring, mortgaging, pledging, setting over, and confirming to the Trustee, and its respective successors in said trust, additional property acquired by it subsequent to the preparation of the next preceding Supplemental Trust Indenture and adding to the covenants, conditions, and agreements of the 1937 Indenture certain additional covenants, conditions, and agreements to be observed by the Predecessor Company, created the following series of First Mortgage Bonds: <TABLE> <CAPTION> DATE OF SUPPLEMENTAL TRUST INDENTURE DESIGNATION OF SERIES ------------------ --------------------- <S> <C> <C> February 1, 1944 Series due February 1, 1974 (retired) October 1, 1945 Series due October 1, 1975 (retired) July 1, 1948 Series due July 1, 1978 (retired) August 1, 1949 Series due August 1, 1979 (retired) </TABLE>
    • <TABLE> <CAPTION> DATE OF SUPPLEMENTAL TRUST INDENTURE DESIGNATION OF SERIES ------------------ --------------------- <S> <C> <C> June 1, 1952 Series due June 1, 1982 (retired) October 1, 1954 Series due October 1, 1984 (retired) September 1, 1956 Series due 1986 (retired) August 1, 1957 Series due August 1, 1987 (redeemed) July 1, 1958 Series due July 1, 1988 (retired) December 1, 1960 Series due December 1, 1990 (retired) August 1, 1961 Series due August 1, 1991 (retired) June 1, 1962 Series due June 1, 1992 (retired) September 1, 1963 Series due September 1, 1993 (retired) August 1, 1966 Series due August 1, 1996 (redeemed) June 1, 1967 Series due June 1, 1995 (redeemed) October 1, 1967 Series due October 1, 1997 (redeemed) May 1, 1968 Series due May 1, 1998 (redeemed) October 1, 1969 Series due October 1, 1999 (redeemed) February 1, 1971 Series due March 1, 2001 (redeemed) May 1, 1971 Series due June 1, 2001 (redeemed) February 1, 1972 Series due March 1, 2002 (redeemed) January 1, 1973 Series due February 1, 2003 (redeemed) January 1, 1974 Series due January 1, 2004 (redeemed) September 1, 1974 Pollution Control Series A (redeemed) April 1, 1975 Pollution Control Series B (redeemed) May 1, 1975 Series due May 1, 2005 (redeemed) March 1, 1976 Pollution Control Series C (retired) June 1, 1981 Pollution Control Series D, E and F (redeemed) December 1, 1981 Series due December 1, 2011 (redeemed) May 1, 1983 Series due May 1, 2013 (redeemed) December 1, 1983 Pollution Control Series G (redeemed) September 1, 1984 Pollution Control Series H (redeemed) December 1, 1984 Resource Recovery Series I (redeemed) May 1, 1985 Series due June 1, 2015 (redeemed) September 1, 1985 Pollution Control Series J, K and L July 1, 1989 Series due July 1, 2019 (redeemed) June 1, 1990 Series due June 1, 2020 (redeemed) October 1, 1992 Series due October 1, 1997 (retired) April 1, 1993 Series due April 1, 2003 December 1, 1993 Series due December 1, 2000 (retired), and December 1, 2005 February 1, 1994 Series due February 1, 1999 (retired) October 1, 1994 Series due October 1, 2001 (retired) June 1, 1995 Series due July 1, 2025 April 1, 1997 Pollution Control Series M (redeemed), N, O and P March 1, 1998 Series due March 1, 2003, and March 1, 2028 May 1, 1999 Resource Recovery Series Q June 1, 2000 Resource Recovery Series R June 1, 2002 Series due August 15, 2003; and </TABLE> 2
    • WHEREAS, on August 18, 2000 New Centuries Energies, Inc. was merged with and into the Predecessor Company and the Predecessor Company changed its corporate name from Northern States Power Company to Xcel Energy Inc.; and WHEREAS, pursuant to an Assignment and Assumption Agreement dated as of August 18, 2000 between the Predecessor Company and the Company, substantially all the assets of the Predecessor Company (other than the stock of the Predecessor Company’s subsidiaries) were conveyed to, and substantially all the liabilities of the Predecessor Company, including liabilities created under the Indenture, were assumed by, the Company (the quot;Assignmentquot;); and WHEREAS, pursuant to the Supplemental Trust Indenture dated as of August 1, 2000 among the Predecessor Company, the Company and Harris Trust and Savings Bank, as Trustee, the requirements and conditions precedent set forth in the Original Indenture and the Restated Indenture (each as hereinafter defined) with respect to the Assignment were satisfied; and WHEREAS, the 1937 Indenture and all of the foregoing Supplemental Trust Indentures are referred to herein collectively as the quot;Original Indenturequot;; and WHEREAS, the Predecessor Company heretofore has executed and delivered to the Trustee a Supplemental and Restated Trust Indenture, dated May 1, 1988 (the quot;Restated Indenturequot;), which, in addition to conveying, assigning, transferring, mortgaging, pledging, setting over, and confirming to the Trustee, and its respective successors in said trust, additional property acquired by it subsequent to the preparation of the next preceding Supplemental Trust Indenture, amended and restated the Original Indenture; and WHEREAS, the Restated Indenture will not become effective and operative until all bonds of each series issued under the Original Indenture prior to May 1, 1988 shall have been retired through payment or redemption (including those bonds quot;deemed to be paidquot; within the meaning of that term as used in Article XVII of the 1937 Indenture) or until, subject to certain exceptions, the holders of the requisite principal amount of such bonds shall have consented to the amendments contained in the Restated Indenture (such date being herein called the quot;Effective Datequot;); and WHEREAS, the Original Indenture and the Restated Indenture are referred to herein collectively as the quot;Indenturequot;; and WHEREAS, pursuant to the Agreement of Resignation, Appointment and Acceptance dated as of May 1, 2002 among the Company, BNY Midwest Trust Company, as successor trustee, and Harris Trust and Savings Bank, the Trustee accepted the rights, powers, duties and obligations of the trustee under the Indenture effective as of May 9, 2002; and 3
    • WHEREAS, the Indenture provides that bonds may be issued thereunder in one or more series, each series to have such distinctive designation as the Board of Directors of the Company may select for such series; and WHEREAS, the City of Becker, in the County of Sherburne, a municipal corporation existing under the Constitution and laws of the State of Minnesota (the quot;Cityquot;) has issued $69,000,000 principal amount of its Pollution Control Revenue Refunding Bonds (Northern States Power Company - Sherburne County Generating Station Units 1 and 2 Project), Series 2000-A (the quot;Pollution Control Revenue Bondsquot;) pursuant to the provisions of the Indenture of Trust, dated as of March 1, 2000, as supplemented by Supplemental Indenture No. 1, dated as of August 1, 2002, and Supplemental Indenture No. 2, dated as of August 20, 2002 (as supplemented, the quot;Pollution Control Indenturequot;), between the City and Wells Fargo Bank Minnesota, National Association, as Trustee (said Trustee or any successor trustee under the Pollution Control Indenture being hereinafter referred to as the quot;Pollution Control Trusteequot;); and WHEREAS, the net proceeds of the Pollution Control Revenue Bonds were loaned by the City to the Company pursuant to the provisions of a Loan Agreement dated as of March 1, 2000, between the City and the Company (as amended, the quot;Agreementquot;), to provide a portion of the funds to refinance the acquisition, construction and equipping of certain air and water pollution control facilities relating to the first and second electric generating units located in the City at the Company’s Sherburne County Generating Station, owned jointly by the Company and Southern Minnesota Municipal Power Agency; and WHEREAS, payments by the Company under and pursuant to the Agreement have been assigned by the City to the Pollution Control Trustee in order to secure the payment of the Pollution Control Revenue Bonds; and WHEREAS, in order to further secure the payment of the Pollution Control Revenue Bonds, the Company desires to provide for the issuance under the Indenture to the Pollution Control Trustee of a new series of bonds designated quot;First Mortgage Bonds, Pollution Control Series Squot; (sometimes called quot;Bonds of Pollution Control Series Squot;), in a principal amount equal to the principal amount of the Pollution Control Revenue Bonds, and with corresponding terms and maturity, the Bonds of Pollution Control Series S to be issued as registered bonds without coupons in denominations of a multiple of $5,000; and WHEREAS, the Bonds of Pollution Control Series S are to be substantially in the form and tenor following, to-wit: (Form of Bonds of Pollution Control Series S) This Bond has not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in contravention of said Act and is not transferable except to a successor Trustee under the Indenture of Trust dated as of March 1, 2000, as amended, from the City of Becker, Minnesota (the quot;Cityquot;), to Wells Fargo Bank Minnesota, National Association, as Trustee. 4
    • NORTHERN STATES POWER COMPANY (Incorporated under the laws of the State of Minnesota) First Mortgage Bond Pollution Control Series S No._________ $69,000,000 Northern States Power Company, a corporation organized and existing under and by virtue of the laws of the State of Minnesota (herein called the quot;Companyquot;), for value received, hereby promises to pay to Wells Fargo Bank Minnesota, National Association, Minneapolis, Minnesota, as Trustee under the Indenture of Trust dated as of March 1, 2000, as supplemented by Supplemental Indenture No. 1, dated as of August 1, 2002, and Supplemental Indenture No. 2, dated as of August 20, 2002 (as supplemented, the quot;Pollution Control Indenturequot;) from the City of Becker, Minnesota (the quot;Cityquot;), to Wells Fargo Bank Minnesota, National Association, Minneapolis, Minnesota, or any successor trustee under the Pollution Control Indenture (the quot;Pollution Control Trusteequot;) and at the office of BNY Midwest Trust Company, Chicago, Illinois, successor to Harris Trust and Savings Bank, as trustee (the quot;Trusteequot;) the sum of Sixty-Nine Million Dollars in lawful money of the United States of America on the Demand Redemption Date, as hereinafter defined, and to pay on the Demand Redemption Date to the Pollution Control Trustee, interest hereon from the Initial Interest Accrual Date, as hereinafter defined, to the Demand Redemption Date at the same rate or rates per annum then and thereafter from time to time borne by the Pollution Control Revenue Refunding Bonds (Northern States Power Company - Sherburne County Generating Station Units 1 and 2 Project), Series 2000-A (the quot;Pollution Control Revenue Bondsquot;), in like money, said interest being payable at the office of the Trustee in Chicago, Illinois, subject to the provisions hereinafter set forth in the event of a rescission of a Redemption Demand, as hereinafter defined. This bond is one of a duly authorized issue of bonds of the Company, known as its First Mortgage Bonds, unlimited in aggregate principal amount, which issue of bonds consists, or may consist of several series of varying denominations, dates and tenors, all issued and to be issued under and equally secured (except in so far as a sinking fund, or similar fund, established in accordance with the provisions of the Indenture may afford additional security for the bonds of any specific series) by a Trust Indenture dated February 1, 1937 (the quot;1937 Indenturequot;), as supplemented by 50 supplemental trust indentures (the quot;Supplemental Indenturesquot;), a Supplemental and Restated Trust Indenture dated May 1, 1988 (the quot;Restated Indenturequot;) and a new supplemental trust indenture for the bonds of this series (the quot;New Supplemental Indenturequot;), executed by the Company to the Trustee. The 1937 Indenture, as supplemented by the Supplemental Indentures, the Restated Indenture and the New Supplemental Indenture, is referred to as the quot;Indenturequot;. Reference is hereby made to the Indenture for a description of the property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the bonds as to such security, and the terms and conditions upon which the bonds may be issued under the Indenture and are secured. The principal hereof may be declared or may become due on the conditions, in the manner and at the time set forth in the Indenture, upon the happening of a default as in the Indenture provided. 5
    • With the consent of the Company and to the extent permitted by and as provided in the Indenture, the rights and obligations of the Company and/or the holders of the bonds, and/or the terms and provisions of the Indenture and/or of any instruments supplemental thereto may be modified or altered by affirmative vote of the holders of at least 80% in principal amount of the bonds then outstanding under the Indenture and any instruments supplemental thereto (excluding bonds disqualified from voting by reason of the Company’s interest therein as provided in the Indenture); provided that without the consent of all holders of all bonds affected no such modification or alteration shall permit the extension of the maturity of the principal of any bond or the reduction in the rate of interest thereon or any other modification in the terms of payment of such principal or interest. The foregoing 80% requirement will be reduced to 66-2/3% when all bonds of each series issued under the Indenture prior to May 1, 1985, shall have been retired or all the holders thereof shall have consented to such reduction. The Restated Indenture amends and restates the 1937 Indenture and the Supplemental Indentures. The Restated Indenture will become effective and operative (the quot;Effective Datequot;) when all Bonds of each series issued under the Indenture prior to May 1, 1988 shall have been retired through payment or redemption (including those bonds quot;deemed to be paidquot; within the meaning of that term as used in Article XVII of the 1937 Indenture) or until, subject to certain exceptions, the holders of the requisite principal amount of such bonds shall have consented to the amendments contained in the Restated Indenture. Holders of the bonds of this series and of each subsequent series of bonds issued under the Indenture likewise will be bound by the amendments contained in the Restated Indenture when they become effective and operative. Reference is made to the Restated Indenture for a complete description of the amendments contained therein to the 1937 Indenture and to the Supplemental Indentures. This bond is one of a series of bonds of the Company issued under the Indenture and designated as First Mortgage Bonds, Pollution Control Series S. The bonds of this Series have been issued to the Pollution Control Trustee under the Pollution Control Indenture to secure payment of the Pollution Control Revenue Bonds issued by the City under the Pollution Control Indenture, the proceeds of which have been or are to be loaned to the Company pursuant to the provisions of the Loan Agreement dated as of March 1, 2000 (the quot;Agreementquot;) between the Company and the City. The maturity of the obligation represented by the bonds of this Series is April 1, 2030. The date of maturity of the obligation represented by the bonds of this Series is hereinafter referred to as the Final Maturity Date. The bonds of this Series shall bear interest from the Initial Interest Accrual Date, as hereinafter defined, at the same rate or rates per annum then and thereafter from time to time borne by the Pollution Control Revenue Bonds. Except as provided in the next succeeding paragraph, in the event of a default under Section 8.01 of the Agreement or in the event of a default in the payment of the principal of, premium, if any, or interest (and such default in the payment of interest continues for the full grace period, if any, permitted by the Pollution Control Indenture and the Pollution Control Revenue Bonds) on the Pollution Control Revenue Bonds, whether at maturity, by acceleration, by sinking fund, redemption or otherwise, as and when the same becomes due, the bonds of this Series shall be redeemable in whole upon receipt by the Trustee of a written demand (hereinafter called a quot;Redemption Demandquot;) from the Pollution Control Trustee stating that there has been such a default, stating that it is acting pursuant to the authorization granted by Section 8.03 of the Pollution Control Indenture, specifying the last date to which interest on the Pollution Control 6
    • Revenue Bonds has been paid (such date being hereinafter referred to as the quot;Initial Interest Accrual Datequot;) and demanding redemption of the bonds of this Series. The Trustee shall, within 10 days after receiving such Redemption Demand, mail a copy thereof to the Company marked to indicate the date of its receipt by the Trustee. Promptly upon receipt by the Company of such copy of a Redemption Demand, the Company shall fix a date on which it will redeem the bonds of this Series so demanded to be redeemed (hereinafter called the quot;Demand Redemption Datequot;). Notice of the date fixed as and for the Demand Redemption Date shall be mailed by the Company to the trustee at least 30 days prior to such Demand Redemption Date. The date to be fixed by the Company as and for the Demand Redemption Date may be any date up to and including the earlier of (i) the 120th day after receipt by the Trustee of the Redemption Demand or (ii) the Final Maturity Date, provided that if the Trustee shall not have received such notice fixing the Demand Redemption Date within 90 days after receipt by it of the Redemption Demand, the Demand Redemption Date shall be deemed to be the earlier of (i) the 120th day after receipt by the Trustee of the Redemption Demand or (ii) the Final Maturity Date. The Trustee shall mail notice of the Demand Redemption Date (such notice being hereafter called the quot;Demand Redemption Noticequot;) to the Pollution Control Trustee not more than 10 nor less than five days prior to the Demand Redemption Date. Notwithstanding the foregoing, if a default to which this paragraph is applicable is existing on the Final Maturity Date, such date shall be deemed to be the Demand Redemption Date without further action (including actions specified in this paragraph) by the Pollution Control Trustee, the Trustee or the Company. The bonds of this Series shall be redeemed by the Company on the Demand Redemption Date, upon surrender thereof by the Pollution Control Trustee to the Trustee, at a redemption price equal to the principal amount thereof, plus accrued interest thereon at the rate per annum set forth in the first paragraph of this Bond, from the Initial Interest Accrual Date to the Demand Redemption Date. If a Redemption Demand is rescinded by the Pollution Control Trustee by written notice to the Trustee prior to the Demand Redemption Date, no Demand Redemption Notice shall be given, or, if already given, shall be automatically annulled, and interest on the bonds of this Series shall cease to accrue, all interest accrued thereon shall be automatically rescinded and cancelled and the Company shall not be obligated to make any payments of principal of or interest on the bonds of this Series; but no such rescission shall extend to or affect any subsequent default or impair any right consequent thereon. In the event that all of the bonds outstanding under the Indenture shall have become immediately due and payable, whether by declaration or otherwise, and such acceleration shall not have been annulled, the bonds of this Series shall bear interest at the rate per annum set forth in the first paragraph of this Bond, from the Initial Interest Accrual Date, as specified in a written notice to the Trustee from the Pollution Control Trustee, and the principal of and interest on the bonds of this Series from the Initial Interest Accrual Date shall be payable in accordance with the provisions of the Indenture. Upon payment of the principal of and premium, if any, and interest on the Pollution Control Revenue Bonds, whether at maturity or prior to maturity by redemption or otherwise, and the surrender thereof to and cancellation thereof by the Pollution Control Trustee (other than any Pollution Control Revenue Bond that was cancelled by the Pollution Control Trustee and for which one or more other Pollution Control Revenue Bonds were delivered and authenticated pursuant to the Pollution Control Indenture in lieu of or in exchange or substitution for such cancelled Pollution Control Revenue Bond), or upon provision for the payment thereof having 7
    • been made in accordance with the Pollution Control Indenture, bonds of this Series in a principal amount equal to the principal amount of the Pollution Control Revenue Bonds so surrendered and cancelled or for the provision for which payment has been made shall be deemed fully paid and the obligations of the Company thereunder shall be terminated, and such bonds of this Series shall be surrendered by the Pollution Control Trustee to the Trustee and shall be cancelled by the Trustee. No recourse shall be had for the payment of, or interest, if any, on this bond, or any part thereof, or of any claim based hereon or in respect hereof or of the Indenture, against any incorporator, or any past, present or future stockholder, officer or director of the Company or of any predecessor or successor corporation, either directly or through the Company, or through any such predecessor or successor corporation, or through any receiver or a trustee in bankruptcy, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released, as more fully provided in the Indenture. The bond shall not be valid or become obligatory for any purpose unless and until the certificate of authentication hereon shall have been signed by or on behalf of BNY Midwest Trust Company, as Trustee under the Indenture, or its successor thereunder. IN WITNESS WHEREOF, NORTHERN STATES POWER COMPANY has caused this instrument to be signed in its name by its President or a Vice President, and its corporate seal, or a facsimile thereof, to be hereto affixed and attested by its Secretary or an Assistant Secretary. Dated: NORTHERN STATES POWER COMPANY ------------------------------ Attest: By: ------------------------------ -------------------------------- Secretary President (Form of Trustee’s Certificate) This bond is one of the bonds of the Series designated thereon, described in the within-mentioned Indenture. BNY MIDWEST TRUST COMPANY, As Trustee, By: -------------------------------- Authorized Officer and WHEREAS, the Company is desirous of conveying, assigning, transferring, mortgaging, pledging, setting over, and confirming to the Trustee and to its respective successors in trust, 8
    • additional property acquired by it subsequent to the date of the preparation of the Supplemental Trust Indenture dated as of August 1, 2000; and WHEREAS, the Indenture provides in substance that the Company and the Trustee may enter into indentures supplemental thereto for the purposes, among others, of creating and setting forth the particulars of any new series of bonds and of providing the terms and conditions of the issue of the bonds of any series not expressly provided for in the Indenture and of conveying, assigning, transferring, mortgaging, pledging, setting over and confirming to the Trustee additional property of the Company, and for any other purpose not inconsistent with the terms of the Indenture; and WHEREAS, the execution and delivery of this Supplemental Trust Indenture have been duly authorized by a resolution adopted by the Board of Directors of the Company; WHEREAS, the Trustee has duly determined to execute this Supplemental Trust Indenture and to be bound, insofar as it may lawfully do so, by the provisions hereof, NOW, THEREFORE, Northern States Power Company, in consideration of the premises and of one dollar duly paid to it by the Trustee at or before the ensealing and delivery of these presents, the receipt of which is hereby acknowledged, and other good and valuable considerations, does hereby covenant and agree to and with BNY Midwest Trust Company, as Trustee, and its successors in the trust under the Indenture for the benefit of those who hold or shall hold the bonds, or any of them, issued or to be issued thereunder, as follows: ARTICLE I. SPECIFIC SUBJECTION OF ADDITIONAL PROPERTY TO THE LIEN OF THE ORIGINAL INDENTURE SECTION 1.01. The Company in order to better secure the payment, of both the principal and interest, of all bonds of the Company at any time outstanding under the Indenture according to their tenor and effect and the performance of and compliance with the covenants and conditions contained in the Indenture, has granted, bargained, sold, warranted, released, conveyed, assigned, transferred, mortgaged, pledged, set over, and confirmed and by these presents does grant, bargain, sell, warrant, release, convey, assign, transfer, mortgage, pledge, set over, and confirm to the Trustee and to its respective successors in said trust forever, subject to the rights reserved by the Company in and by the provisions of the Indenture, all of the property described and mentioned or enumerated in a schedule annexed hereto and marked Schedule A, reference to said schedule being made hereby with the same force and effect as if the same were incorporated herein at length; together with all and singular the tenements, hereditaments, and appurtenances belonging and in any way appertaining to the aforesaid property or any part thereof with the reversion and reversions, remainder and remainders, tolls, rents and revenues, issues, income, products, and profits thereof; Also, in order to subject the personal property and chattels of the Company to the lien of the Indenture and to conform with the provisions of the Uniform Commercial Code, all fossil, nuclear, hydro, and other electric generating plants, including buildings and other structures, turbines, generators, exciters, boilers, reactors, nuclear fuel, other boiler plant equipment, condensing equipment and all other generating equipment; substations; electric transmission and 9
    • distribution systems, including structures, poles, towers, fixtures, conduits, insulators, wires, cables, transformers, services and meters; steam heating mains and equipment; gas transmission and distribution systems, including structures, storage facilities, mains, compressor stations, purifier stations, pressure holders, governors, services, and meters; telephone plant and related distribution systems; trucks and trailers; office, shop, and other buildings and structures, furniture and equipment; apparatus and equipment of all other kinds and descriptions; materials and supplies; all municipal and other franchises, leaseholds, licenses, permits, privileges, patents and patent rights; all shares of stock, bonds, evidences of indebtedness, contracts, claims, accounts receivable, choses in action and other intangibles, all books of account and other corporate records; Excluding, however, all merchandise and appliances heretofore or hereafter acquired for the purpose of sale to customers and others; All the estate, right, title, interest, and claim, whatsoever, at law as well as in equity, which the Company now has or hereafter may acquire in and to the aforesaid property and every part and parcel thereof subject, however, to the right of the Company, until the happening of a completed default as defined in Section 1 of Article XIII of the Original Indenture prior to the Effective Date and upon the occurrence and continuation of a Completed Default as defined in the Restated Indenture on and after the Effective Date, to retain in its possession all shares of stock, notes, evidences of indebtedness, other securities and cash not expressly required by the provisions hereof to be deposited with the Trustee, to retain in its possession all contracts, bills and accounts receivable, motor cars, any stock of goods, wares and merchandise, equipment or supplies acquired for the purpose of consumption in the operation, construction, or repair of any of the properties of the Company, and to sell, exchange, pledge, hypothecate, or otherwise dispose of any or all of such property so retained in its possession free from the lien of the Indenture, without permission or hindrance on the part of the Trustee, or any of the bondholders. No person in any dealings with the Company in respect of any such property shall be charged with any notice or knowledge of any such completed default (prior to the Effective Date) or Completed Default (after the Effective Date) under the Indenture while the Company is in possession of such property. Nothing contained herein or in the Indenture shall be deemed or construed to require the deposit with, or delivery to, the Trustee of any of such property, except such as is specifically required to be deposited with the Trustee by some express provision of the Indenture; To have and to hold all said property, real, personal, and mixed, granted, bargained; sold, warranted, released, conveyed, assigned, transferred, mortgaged, pledged, set over, or confirmed by the Company as aforesaid, or intended so to be, to the Trustee and its successors and assigns forever, subject, however, to permitted liens as defined in Section 5 of Article I of the 1937 Indenture prior to the Effective Date and to Permitted Encumbrances on and after the Effective Date and to the further reservations, covenants, conditions, uses, and trusts set forth in the Indenture; in trust nevertheless for the same purposes and upon the same conditions as are set forth in the Indenture. 10
    • ARTICLE II. PROVISIONS OF BONDS OF POLLUTION CONTROL SERIES S SECTION 2.01. There is hereby created, for issuance under the Indenture, a series of bonds designated Pollution Control Series S, each of which shall bear the descriptive title quot;First Mortgage Bonds, Pollution Control Series Squot; and the form thereof shall contain suitable provisions with respect to the matters specified in this section. The Bonds of Pollution Control Series S shall be printed, lithographed or typewritten and shall be substantially of the tenor and purport previously recited. The Bonds of Pollution Control Series S shall be issued as registered bonds without coupons in denominations of a multiple of $5,000 and shall be registered in the name of the Pollution Control Trustee. The Bonds of Pollution Control Series S shall be dated as of the date of their authentication. The Bonds of Pollution Control Series S shall be payable, both as to principal and interest, at the office of the Trustee in Chicago, Illinois, in lawful money of the United States of America. The maturity of the obligation represented by the Bonds of Pollution Control Series S is April 1, 2030. The date of maturity of the obligation represented by the Bonds of Pollution Control Series S is hereinafter referred to as the Series S Final Maturity Date. The Bonds of Pollution Control Series S shall bear interest from the Series S Initial Interest Accrual Date, as hereinafter defined, at the same rate or rates then and thereafter from time to time borne by the Pollution Control Revenue Bonds. SECTION 2.02. Except as provided in the next succeeding paragraph of this Section 2.02, in the event of a default under Section 8.01 of the Agreement or in the event of a default in the payment of the principal of, premium, if any, or interest on the Pollution Control Revenue Bonds, whether at maturity, by acceleration, by sinking fund, redemption or otherwise, as and when the same becomes due, the Bonds of Pollution Control Series S shall be redeemable in whole upon receipt by the Trustee of a written demand (hereinafter called a quot;Series S Redemption Demandquot;) from the Pollution Control Trustee stating that there has been such a default, stating that it is acting pursuant to the authorization granted by Section 8.03 of the Pollution Control Indenture, specifying the last date to which interest on the Pollution Control Revenue Bonds has been paid (such date being hereinafter referred to as the quot;Series S Initial Interest Accrual Datequot;) and demanding redemption of the Bonds of Pollution Control Series S. The Trustee shall, within 10 days after receiving such Series S Redemption Demand, mail a copy thereof to the Company marked to indicate the date of its receipt by the Trustee. Promptly upon receipt by the Company of such copy of a Series S Redemption Demand, the Company shall fix a date on which it will redeem the Bonds of Pollution Control Series S so demanded to be redeemed (hereinafter called the quot;Series S Demand Redemption Datequot;). Notice of the date fixed as the Series S Demand Redemption Date shall be mailed by the Company to the Trustee at least 30 days prior to such Series S Demand Redemption Date. The date to be fixed by the Company as and for the Series S Demand Redemption Date may be any date up to and including the earlier of (i) the 120th day after receipt by the Trustee of the Series S Redemption Demand or (ii) the Series S Final Maturity Date; provided that if the Trustee shall not have received such notice fixing the Series S Demand Redemption Date within 90 days after receipt by it of the Series S Redemption Demand, the Series S Demand Redemption Date shall be deemed to be the earlier of (i) the 120th day after receipt by the Trustee of the Series S Redemption Demand or (ii) the Series S Final Maturity Date. The Trustee shall mail notice of the Series S Demand Redemption Date (such notice being hereinafter called the quot;Series S Demand Redemption Noticequot;) to the 11
    • Pollution Control Trustee not more than 10 nor less than five days prior to the Series S Demand Redemption Date. Notwithstanding the foregoing, if a default to which this paragraph is applicable is existing on the Series S Final Maturity Date, such date shall be deemed to be the Demand Redemption Date without further action (including actions specified in this paragraph) by the Pollution Control Trustee, the Trustee or the Company. The Bonds of Pollution Control Series S shall be redeemed by the Company on the Series S Demand Redemption Date, upon surrender thereof by the Pollution Control Trustee to the Trustee, at a redemption price equal to the principal amount thereof, plus accrued interest thereon at the rate per annum set forth in Section 2.01 hereof, from the Series S Initial Interest Accrual Date to the Series S Demand Redemption Date. If a Series S Redemption Demand is rescinded by the Pollution Control Trustee by written notice to the Trustee prior to the Series S Demand Redemption Date, no Series S Demand Redemption Notice shall be given, or, if already given, shall be automatically annulled, and interest on the Bonds of Pollution Control Series S shall cease to accrue, all interest accrued thereon shall be automatically rescinded and cancelled and the Company shall not be obligated to make any payments of principal of or interest on the Bonds of Pollution Control Series S; but no such rescission shall extend to or affect any subsequent default or impair any right consequent thereon. In the event that all of the bonds outstanding under the Indenture shall have become immediately due and payable, whether by declaration or otherwise, and such acceleration shall not have been annulled, the Bonds of Pollution Control Series S shall bear interest at the rate per annum set forth in Section 2.01 hereof; from the Series S Initial Interest Accrual Date, as specified in a written notice to the Trustee from the Pollution Control Trustee, and the principal of and interest on the Bonds of Pollution Control Series S from the Series S Initial Interest Accrual Date shall be payable in accordance with the provisions of the Indenture. Anything herein contained to the contrary notwithstanding, the Trustee is not authorized to take any action pursuant to a Series S Redemption Demand or a rescission thereof or a written notice required by this Section 2.02, and such Series S Redemption Demand, rescission or notice shall be of no force or effect, unless it is executed in the name of the Pollution Control Trustee by one of its Vice Presidents. SECTION 2.03. Upon payment of the principal of and premium, if any, and interest on the Pollution Control Revenue Bonds, whether at maturity or prior to maturity by redemption or otherwise, and the surrender thereof to and cancellation thereof by the Pollution Control Trustee (other than any Pollution Control Revenue Bond that was cancelled by the Pollution Control Trustee and for which one or more other Pollution Control Revenue Bonds were delivered and authenticated pursuant to the Pollution Control Indenture), or upon provision for the payment thereof having been made in accordance with the Pollution Control Indenture, Bonds of Pollution Control Series S in a principal amount equal to the principal amount of the Pollution Control Revenue Bonds so surrendered and cancelled or for the provision for which payment has been made shall be deemed fully paid and the obligations of the Company thereunder shall be terminated, and such Bonds of Pollution Control Series S shall be surrendered by the Pollution Control Trustee to the Trustee and shall be cancelled and disposed of by the Trustee in accordance with its customary procedures, and a certificate of such cancellation and destruction shall be delivered to the Company. 12
    • SECTION 2.04. The Pollution Control Trustee as the registered holder of the Bonds of Pollution Control Series S, at its option may surrender the same at the office of the Trustee, in Chicago, Illinois, or elsewhere, if authorized by the Company, for cancellation, in exchange for other bonds of the same series of the same aggregate principal amount. Thereupon, and upon receipt of any payment required under the provisions of Section 2.05 hereof, the Company shall execute and deliver to the Trustee and the Trustee shall authenticate and deliver such other registered bonds to such registered holder at its office or at any other place specified as aforesaid. SECTION 2.05. No charge shall be made by the Company for any exchange or transfer of Bonds of Pollution Control Series S other than for taxes or other governmental charges, if any that may be imposed in relation thereto. ARTICLE III. FINANCING STATEMENT TO COMPLY WITH THE UNIFORM COMMERCIAL CODE SECTION 3.01. The name and address of the debtor and secured party are set forth below: Debtor: Northern States Power Company 414 Nicollet Mall Minneapolis, Minnesota 55401 Secured Party: BNY Midwest Trust Company, Trustee 2 North LaSalle Street, Suite 1020 Chicago, Illinois 60602 NOTE: Northern States Power Company, the debtor above named, is quot;a transmitting utilityquot; under the Uniform Commercial Code as adopted in Minnesota, North Dakota and South Dakota. SECTION 3.02. Reference to Article I hereof is made for a description of the property of the debtor covered by this Financing Statement with the same force and effect as if incorporated in this Section at length. SECTION 3.03. The maturity dates and respective principal amounts of obligations of the debtor secured and presently to be secured by the Indenture, reference to all of which for the terms and conditions thereof is hereby made with the same force and effect as if incorporated herein at length, are as follows: <TABLE> <CAPTION> FIRST MORTGAGE BONDS PRINCIPAL AMOUNT -------------------- ---------------- <S> <C> <C> Series due April 1, 2003................................... $ 80,000,000 Series due December 1, 2005................................ $ 70,000,000 Pollution Control Series J................................. $ 5,450,000 Pollution Control Series K................................. $ 3,400,000 Pollution Control Series L................................. $ 4,850,000 Series due July 1, 2025.................................... $250,000,000 </TABLE> 13
    • <TABLE> <S> <C> <C> Pollution Control Series N................................. $ 27,900,000 Pollution Control Series O................................. $ 50,000,000 Pollution Control Series P................................. $ 50,000,000 Resource Recovery Series Q................................. $ 15,170,000 Resource Recovery Series R................................. $ 19,615,000 Series due March 1, 2003................................... $100,000,000 Series due March 1, 2028................................... $150,000,000 Series due August 15, 2003................................. $308,000,000 Pollution Control Series S................................. $ 69,000,000 </TABLE> SECTION 3.04. This Financing Statement is hereby adopted for all of the First Mortgage Bonds of the series mentioned above secured by said Indenture. SECTION 3.05. The 1937 Indenture and the prior Supplemental Trust Indentures, as set forth below, have been filed or recorded in each and every office in the States of Minnesota, North Dakota, and South Dakota designated by law for the filing or recording thereof in respect of all property of the Company subject thereto: Original Indenture Dated February 1, 1937 Supplemental Indenture Dated June 1, 1942 Supplemental Indenture Dated February 1, 1944 Supplemental Indenture Dated October 1, 1945 Supplemental Indenture Dated July 1, 1948 Supplemental Indenture Dated August 1, 1949 Supplemental Indenture Dated June 1, 1952 Supplemental Indenture Dated October 1, 1954 Supplemental Indenture Dated September 1, 1956 14
    • Supplemental Indenture Dated August 1, 1957 Supplemental Indenture Dated July 1, 1958 Supplemental Indenture Dated December 1, 1960 Supplemental Indenture Dated August 1, 1961 Supplemental Indenture Dated June 1, 1962 Supplemental Indenture Dated September 1, 1963 Supplemental Indenture Dated August 1, 1966 Supplemental Indenture Dated June 1, 1967 Supplemental Indenture Dated October 1, 1967 Supplemental Indenture Dated May 1, 1968 Supplemental Indenture Dated October 1, 1969 Supplemental Indenture Dated February 1, 1971 Supplemental Indenture Dated May 1, 1971 Supplemental Indenture Dated February 1, 1972 Supplemental Indenture Dated January 1, 1973 15
    • Supplemental Indenture Dated January 1, 1974 Supplemental Indenture Dated September 1, 1974 Supplemental Indenture Dated April 1, 1975 Supplemental Indenture Dated May 1, 1975 Supplemental Indenture Dated March 1, 1976 Supplemental Indenture Dated June 1, 1981 Supplemental Indenture Dated December 1, 1981 Supplemental Indenture Dated May 1, 1983 Supplemental Indenture Dated December 1, 1983 Supplemental Indenture Dated September 1, 1984 Supplemental Indenture Dated December 1, 1984 Supplemental Indenture Dated May 1, 1985 Supplemental Indenture Dated September 1, 1985 Supplemental Indenture Dated May 1, 1988 Supplemental Indenture Dated July 1, 1989 16
    • Supplemental Indenture Dated June 1, 1990 Supplemental Indenture Dated October 1, 1992 Supplemental Indenture Dated April 1, 1993 Supplemental Indenture Dated December 1, 1993 Supplemental Indenture Dated February 1, 1994 Supplemental Indenture Dated October 1, 1994 Supplemental Indenture Dated June 1, 1995 Supplemental Indenture Dated April 1, 1997 Supplemental Indenture Dated March 1, 1998 Supplemental Indenture Dated May 1, 1999 Supplemental Indenture Dated June 1, 2000 Supplemental Indenture Dated August 1, 2000 Supplemental Indenture Dated June 1, 2002 SECTION 3.06. The property covered by this Financing Statement also shall secure additional series of First Mortgage Bonds of the debtor which may be issued from time to time in the future in accordance with the provisions of the Indenture. ARTICLE IV. AMENDMENTS TO INDENTURE SECTION 4.01. Each holder or registered owner of a bond of any series originally authenticated by the Trustee and originally issued by the Company subsequent to May 1, 1985 17
    • and of any coupon pertaining to any such bond, by the acquisition, holding or ownership of such bond and coupon, thereby consents and agrees to, and shall be bound by, the provisions of Article VI of the Supplemental Trust Indenture dated May 1, 1985. Each holder or registered owner of a bond of any series (including Bonds of Pollution Control Series S) originally authenticated by the Trustee and originally issued by the Company subsequent to May 1, 1988 and of any coupon pertaining to such bond, by the acquisition, holding or ownership of such bond and coupon, thereby consents and agrees to, and shall be bound by, the provisions of the Supplemental and Restated Trust Indenture dated May 1, 1988 upon the Effective Date. ARTICLE V. MISCELLANEOUS SECTION 5.01. The recitals of fact herein, except the recital that the Trustee has duly determined to execute this Supplemental Trust Indenture and be bound, insofar as it may lawfully so do, by the provisions hereof and in the bonds shall be taken as statements of the Company and shall not be construed as made by the Trustee. The Trustee makes no representations as to the value of any of the property subject to the lien of the Indenture, or any part thereof, or as to the title of the Company thereto, or as to the security afforded thereby and hereby, or as to the validity of this Supplemental Trust Indenture or of the bonds issued under the Indenture by virtue hereof (except the Trustee’s certificate) and the Trustee shall incur no responsibility in respect of such matters. SECTION 5.02. This Supplemental Trust Indenture shall be construed in connection with and as a part of the 1937 Indenture, as supplemented by the Supplemental Trust Indentures dated June 1, 1942, February 1, 1944, October 1, 1945, July 1, 1948, August 1, 1949, June 1, 1952, October 1, 1954, September 1, 1956, August 1, 1957, July 1, 1958, December 1, 1960, August 1, 1961, June 1, 1962, September 1, 1963, August 1, 1966, June 1, 1967, October 1, 1967, May 1, 1968, October 1, 1969, February 1, 1971, May 1, 1971, February 1, 1972, January 1, 1973, January 1, 1974, September 1, 1974, April 1, 1975, May 1, 1975, March 1, 1976, June 1, 1981, December 1, 1981, May 1, 1983, December 1, 1983, September 1, 1984, December 1, 1984, May 1, 1985, September 1, 1985, the Supplemental and Restated Trust Indenture dated May 1, 1988 and the Supplemental Trust Indentures dated July 1, 1989, June 1, 1990, October 1, 1992, April 1, 1993, December 1, 1993, February 1, 1994, October 1, 1994, June 1, 1995, April 1, 1997, March 1, 1998, May 1, 1999, June 1, 2000, August 1, 2000 and June 1, 2002. SECTION 5.03. (a) If any provision of this Supplemental Trust Indenture limits, qualifies or conflicts with another provision of the Indenture required to be included in indentures qualified under the Trust Indenture Act of 1939, as amended (as enacted prior to the date of this Supplemental Trust Indenture) by any of the provisions of Sections 310 to 317, inclusive, of the said Act, such required provision shall control. (b) In case any one or more of the provisions contained in this Supplemental Indenture or in the bonds issued hereunder shall be invalid, illegal, or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected, impaired, prejudiced or disturbed thereby. 18
    • SECTION 5.04. Wherever in this Supplemental Trust Indenture the word quot;Indenturequot; is used without the prefix, quot;1937quot;, quot;Originalquot; or quot;Supplementalquot;, such word was used intentionally to include in its meaning both the 1937 Indenture and all indentures supplemental thereto. SECTION 5.05. Wherever in this Supplemental Trust Indenture either of the parties hereto is named or referred to, this shall be deemed to include the successors or assigns of such party, and all the covenants and agreements in this Supplemental Trust Indenture contained by or on behalf of the Company or by or on behalf of the Trustee shall bind and inure to the benefit of the respective successors and assigns of such parties, whether so expressed or not. SECTION 5.06. (a) This Supplemental Trust Indenture may be simultaneously executed in several counterparts, and all said counterparts executed and delivered, each as an original, shall constitute but one and the same instrument. (b) The Table of Contents and the descriptive headings of the several Articles of this Supplemental Trust Indenture were formulated, used and inserted in this Supplemental Trust Indenture for convenience only and shall not be deemed to affect the meaning or construction of any of the provisions hereof. ---------------------------- The amount of obligations to be issued forthwith under the Indenture is $69,000,000. ---------------------------- 19
    • IN WITNESS WHEREOF, on this 15th day of August, A.D. 2002, NORTHERN STATES POWER COMPANY, a Minnesota corporation, party of the first part, has caused its corporate name and seal to be hereunto affixed and this Supplemental Trust Indenture dated July 1, 2002, to be signed by its President or a Vice President, and attested by its Secretary or an Assistant Secretary, for and in its behalf, and BNY MIDWEST TRUST COMPANY, an Illinois corporation, as Trustee, party of the second part, to evidence its acceptance of the trust hereby created, has caused its corporate name and seal to be hereunto affixed, and this Supplemental Trust Indenture dated July 1, 2002, to be signed by its President, a Vice President, or an Assistant Vice President, and attested by its Secretary or an Assistant Secretary, for and in its behalf. NORTHERN STATES POWER COMPANY ---------------------------------------- By: Paul E. Pender Its: Vice President and Treasurer Attest: -------------------------------------- Nancy Haley Assistant Secretary Executed by Northern States Power Company in the presence of: -------------------------------------- (CORPORATE SEAL) Mary Schell, Witness -------------------------------------- Elizabeth Blohm, Witness
    • BNY MIDWEST TRUST COMPANY, as Trustee ------------------------------------- By: J. Bartolini Its: Vice President Attest: ------------------------------------- M. Callahan Assistant Vice President Executed by BNY Midwest Trust Company in the presence of: ------------------------------------- (CORPORATE SEAL) K. Gibson, Witness ------------------------------------- A. Hernandez, Witness
    • STATE OF MINNESOTA ) ) ss.: COUNTY OF HENNEPIN ) On this 15th day of August A.D. 2002, before me, Sharon Quellhorst, a Notary Public in and for said County in the State aforesaid, personally appeared Paul E. Pender, and Nancy Haley, to me personally known, and to me known to be the Vice President and Treasurer and Assistant Secretary, respectively, of Northern States Power Company, one of the corporations described in and which executed the within and foregoing instrument, and who, being by me severally duly sworn, each for himself, did say that he, the said Paul E. Pender is a Vice President and Treasurer, and she, the said Nancy Haley is the Assistant Secretary, of said Northern States Power Company, a corporation; that the seal affixed to the within and foregoing instrument is the corporate seal of said corporation, and that said instrument was executed on behalf of said corporation by authority of its stockholders and board of directors; and said Paul E. Pender and Nancy Haley each acknowledged said instrument to be the free act and deed of said corporation and that such corporation executed the same. WITNESS my hand and notarial seal, this 15th day of August, A.D. 2002. (NOTARY SEAL) ---------------------------------------- Sharon Quellhorst Notary Public My Commission Expires: January 31, 2005
    • STATE OF MINNESOTA ) ) ss.: COUNTY OF HENNEPIN ) Paul E. Pender and Nancy Haley, being severally duly sworn, each deposes and says that he, the said Paul E. Pender is Vice President and Treasurer, and she, the said Nancy Haley is Assistant Secretary, of Northern States Power Company, the corporation described in and which executed the within and foregoing Supplemental Trust Indenture, as mortgagor; and each for himself further says that said Supplemental Trust Indenture was executed in good faith, and not for the purpose of hindering, delaying, or defrauding any creditor of the said mortgagor. --------------------------------- --------------------------------------- Paul E. Pender Nancy Haley Subscribed and sworn to before me this 15th day of August, A.D. 2002. (NOTARY SEAL) --------------------------------- Sharon Quellhorst Notary Public My Commission Expires: January 31, 2005
    • STATE OF ILLINOIS ) ) ss.: COUNTY OF COOK ) On this _____ day of _______________, A.D. 2002, before me, L. Garcia, a Notary Public in and for said County in the State aforesaid, personally appeared J. Bartolini and M. Callahan to me personally known, and to me known to be the Vice President and Assistant Vice President, respectively, of BNY Midwest Trust Company, one of the corporations described in and which executed the within and foregoing instrument, and who, being by me severally duly sworn, each, did say that she, the said J. Bartolini, is Vice President, and she, the said M. Callahan, is the Assistant Vice President, of said BNY Midwest Trust Company, a corporation; that the seal affixed to the within and foregoing instrument is the corporate seal of said corporation, and that said instrument was executed on behalf of said corporation by authority of its board of directors; and said J. Bartolinli and M. Callahan each acknowledged said instrument to be the free act and deed of said corporation and that such corporation executed the same. WITNESS my hand and notarial seal, this _____ day of _______________, A.D. 2002. (NOTARY SEAL) ------------------------------------ L. Garcia Notary Public My Commission Expires: July 8, 2006
    • STATE OF ILLINOIS ) ) ss.: COUNTY OF COOK ) J. Bartolini and M. Callahan, being severally duly sworn, each for himself deposes and says that she, the said J. Bartolini, is Vice President, and she, the said M. Callahan, is Assistant Vice President, of BNY Midwest Trust Company, the corporation described in and which executed the within and foregoing Supplemental Trust Indenture, as mortgagee; and each for himself further says that said Supplemental Trust Indenture was executed in good faith, and not for the purpose of hindering, delaying, or defrauding any creditor of the mortgagor. ---------------------------------- -------------------------------------- J. Bartolini M. Callahan Subscribed and sworn to before me this __________ day of _______________, A.D. 2002. (NOTARY SEAL) --------------------------------- L. Garcia Notary Public My Commission Expires: July 8, 2006
    • SCHEDULE A The property referred to in Article I of the foregoing Supplemental Trust Indenture from Northern States Power Company to BNY Midwest Trust Company, Trustee, made as of July 1, 2002 includes the following property hereinafter more specifically described. Such description, however, is not intended to limit or impair the scope or intention of the general description contained in the granting clauses or elsewhere in the Original Indenture. I. PROPERTIES IN THE STATE OF MINNESOTA The following described real property, situate, lying and being in the County of Hennepin, to-wit: 1. Lot 1, Block 1, Ceridian 2nd Addition, according to the recorded plat thereof, Hennepin County, Minnesota. Together with and subject to the easements filed with the Hennepin County Recorder’s Office as Document Nos. 3714541, 6584907 and 6987085 to the extent such easements are appurtenant to the above-referenced real property. II. TRANSMISSION LINES OF THE COMPANY The electric transmission lines of the Company, including towers, poles, pole lines, wire, switch racks, switchboards, insulators, and other appliances and equipment, and all other property forming a part thereof or appertaining thereto, and all service lines extending therefrom; together with all rights for or relating to the construction, maintenance of operation thereof, through, over, under, or upon any private property of public streets or highways within as well as without the corporate limits of any municipal corporation, and particularly the following described lines, to-wit: IN THE STATE OF MINNESOTA <TABLE> <S> <C> <C> Line 0808 0.56 Miles (U.G.) High Bridge-Rogers Lake-Airport-Bloomington-Wilson Hennepin Co., MN., Sec 36, T28N, R23W Line 5531 14.91 Miles Pipestone-Chanerambie Pipestone Co., MN., Sec 12, T106N, R46W Pipestone Co., MN., Sec’s 4, 7, 8, 9, T106N, R45W Pipestone Co., MN., Sec’s 33, 34, 35, 36, T107N, R45W Pipestone Co., MN., Sec’s 31, 32, 33, 34, 35, 36, T107N, R44W Murray Co., MN., Sec 1, T106N, R43W Murray Co., MN., Sec 31, T105N, R43W Line 0832 8.68 Miles Black Dog-Burnsville-Lake Marion Waseca Co., MN., Sec 18, T107N, R22W </TABLE> A-1
    • <TABLE> <S> <C> <C> Waseca Co., MN., Sec’s 1, 12, 13, T107N, R23W Waseca Co., MN., Sec’s 1, 12, 13, 24, 25, 36, T108 N, R23W Line 0832 7.28 Miles Black Dog-Burnsville-Lake Marion LeSueur Co., MN., Sec’s 35, 36, T109N, R23W Rice Co., MN., Sec’s 17, 20, 29, 30, T109N, R22W Line 0703 6.62 Miles Yankee Doodle-Northfield (Tap to Kegan Lake and Air Lake) Dakota Co., MN., Sec’s 31, 32, 33, T114N, R20W Dakota Co., MN., Sec 36, T114N, R21W Scott Co., MN., Sec’s 1, 12, 13, T113N, R21W </TABLE> ------------------------- This instrument was drafted by Northern States Power Company, 414 Nicollet Mall, Minneapolis, Minnesota 55401. Tax statements for the real property described in this instrument should be sent to Northern States Power Company, 414 Nicollet Mall, Minneapolis, Minnesota 55401. A-2
    • EXHIBIT 99.01 UTILITY SUBSIDIARIES OF XCEL ENERGY CAUTIONARY FACTORS The Private Securities Litigation Reform Act provides a quot;safe harborquot; for forward-looking statements to encourage such disclosures without the threat of litigation, providing those statements are identified as forward-looking and are accompanied by meaningful, cautionary statements identifying important factors that could cause the actual results to differ materially from those projected in the statement. Forward-looking statements are made in written documents and oral presentations of the Utility Subsidiaries of Xcel Energy. These statements are based on management’s beliefs as well as assumptions and information currently available to management. When used in the Utility Subsidiaries of Xcel Energy’s documents or oral presentations, the words quot;anticipate,quot; quot;estimate,quot; quot;expect,quot; quot;projected,quot; objective,quot; quot;outlook,quot; quot;forecast,quot; quot;possible,quot; quot;potentialquot; and similar expressions are intended to identify forward-looking statements. In addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements, factors that could cause the actual results of the Utility Subsidiaries of Xcel Energy to differ materially from those contemplated in any forward-looking statements include, among others, the following: o Economic conditions, including inflation rates and monetary fluctuations; o The risk of a significant slowdown in growth or decline in the U.S. economy, the risk of delay in growth recovery in the U.S. economy or the risk of increased cost for insurance premiums, security and other items as a consequence of the Sept. 11, 2001, terrorist attacks; o Trade, monetary, fiscal, taxation and environmental policies of governments, agencies and similar organizations in geographic areas where the Utility Subsidiaries of Xcel Energy have a financial interest; o Customer business conditions, including demand for their products or services and supply of labor and materials used in creating their products and services; o Financial or regulatory accounting principles or policies imposed by the Financial Accounting Standards Board, the SEC, the Federal Energy Regulatory Commission and similar entities with regulatory oversight; o Availability or cost of capital such as changes in: interest rates; market perceptions of the utility industry, Xcel Energy or any of its subsidiaries; or security ratings; o Factors affecting utility and nonutility operations such as unusual weather conditions; catastrophic weather-related damage; unscheduled generation outages, maintenance or repairs; unanticipated changes to fossil fuel, nuclear fuel or gas supply costs or availability due to higher demand, shortages, transportation problems or other developments; nuclear or environmental incidents; or electric transmission or gas pipeline constraints; o Employee workforce factors, including loss or retirement of key executives, collective bargaining agreements with union employees, or work stoppages; o Increased competition in the utility industry; o State, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an impact on rate structures and affect the speed and degree to which competition enters the electric and gas markets; industry restructuring initiatives; transmission system operation and/or administration initiatives; recovery of investments made under traditional regulation; nature of competitors entering the industry; retail wheeling; a new pricing structure; and former customers entering the generation market; o Rate-setting policies or procedures of regulatory entities, including environmental externalities, which are values established by regulators assigning environmental costs to each method of electricity generation when evaluating generation resource options; o Nuclear regulatory policies and procedures, including operating regulations and spent nuclear fuel storage; o Social attitudes regarding the utility and power industries; o Risks associated with the California and other western power markets; o Cost and other effects of legal and administrative proceedings, settlements, investigations and claims;
    • o Technological developments that result in competitive disadvantages and create the potential for impairment of existing assets; o Factors associated with nonregulated investments, including conditions of final legal closing, foreign government actions, foreign economic and currency risks, political instability in foreign countries, partnership actions, competition, operating risks, dependence on certain suppliers and customers, domestic and foreign environmental and energy regulations; and o Other business or investment considerations that may be disclosed from time to time in the SEC filings of the Utility Subsidiaries of Xcel Energy or in other publicly disseminated written documents. The Utility Subsidiaries of Xcel Energy undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing review of factors should not be construed as exhaustive.
    • EXHIBIT 99.02 - OFFICER CERTIFICATION CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of NSP-Minnesota on Form 10-Q for the quarter ended Sept. 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (Form 10-Q), each of the undersigned officers of the NSP-Minnesota certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge: (1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Xcel Energy as of the dates and for the periods expressed in the Form 10-Q. Date: Nov. 14, 2002 /s/ Wayne H. Brunetti ----------------------------------------------- Wayne H. Brunetti Chairman, President and Chief Executive Officer /s/ Richard C. Kelly ----------------------------------------------- Richard C. Kelly Vice President and Chief Financial Officer The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.
    • EXHIBIT 99.03 - OFFICER CERTIFICATION CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of NSP-Wisconsin on Form 10-Q for the quarter ended Sept. 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (Form 10-Q), each of the undersigned officers of the NSP-Wisconsin certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge: (1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Xcel Energy as of the dates and for the periods expressed in the Form 10-Q. Date: Nov. 14, 2002 /s/ Wayne H. Brunetti ----------------------------------------------- Wayne H. Brunetti Chairman, President and Chief Executive Officer /s/ Richard C. Kelly ----------------------------------------------- Richard C. Kelly Vice President and Chief Financial Officer The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.
    • EXHIBIT 99.04 - OFFICER CERTIFICATION CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of PSCo on Form 10-Q for the quarter ended Sept. 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (Form 10-Q), each of the undersigned officers of the PSCo certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge: (1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Xcel Energy as of the dates and for the periods expressed in the Form 10-Q. Date: Nov. 14, 2002 /s/ Wayne H. Brunetti ----------------------------------------------- Wayne H. Brunetti Chairman, President and Chief Executive Officer /s/ Richard C. Kelly ----------------------------------------------- Richard C. Kelly Vice President and Chief Financial Officer The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.
    • EXHIBIT 99.05 - OFFICER CERTIFICATION CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of SPS on Form 10-Q for the quarter ended Sept. 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (Form 10-Q), each of the undersigned officers of the SPS certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge: (1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Xcel Energy as of the dates and for the periods expressed in the Form 10-Q. Date: Nov. 14, 2002 /s/ GARY L. GIBSON ----------------------------------------------- Gary L. Gibson President and Chairman /s/ Richard C. Kelly ----------------------------------------------- Richard C. Kelly Vice President and Chief Financial Officer The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.