Business & Regulatory Drivers for Multi-Emissions Legislation

1. Business & Regulatory Drivers for Multi-Emissions Legislation

2. Northern States Power Company- Minnesota Northern States Power Company- Wisconsin Public Service Company of Colorado Strong Regional Economy Unemployment rate —November 2004 US 5.2% Xcel service area 4.1% Job growth – 2005 Forecast Xcel service area 2.4% Xcel Annual sales growth —2005-2009 Electric 2.0% Gas 1.2% Southwestern Public Service 4th largest US electricand gas utility — Customers: 3.3 Million Electric1.8 Million Gas

3. Energy Supply Mix — 2004Owned and Purchased Fuel Mix Purchased Energy Gas 21% Nuclear 12% Other 11% Gas 27% Renewable 7% Owned Generation 68% Coal * 54% * Low-sulfur, low-mercury western coal

4. Thousands of MW 27 Resource need without renewal of expiringpurchase contracts 26 25 Supply requirement 24 23 22 Current capability based on existing generation and contracted purchases 21 20 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Xcel EnergySupply Requirement and Capability

5. Thousands of MW 27 Resource need without renewal of expiringpurchase contracts 26 25 Supply requirement 24 With approved additions 23 22 Current capability based on existing generation and contracted purchases 21 20 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Xcel EnergySupply Requirement and Capability

6. Environmental Initiatives • Reduce and manage energy consumption • Reduce our environmental impact • Increase use of renewable energies • Advocate public policies that achieve environmental improvement, regulatory certainty and cost effective energy • Protect wildlife

7. Reduce and Manage Energy Consumption • Promote use of high efficiency products including lighting by offering cash rebates • Provide “online energy assessment” • Provide energy efficient design assistance to architects and engineers • Offer rebates to commercial and industrial customers for boiler maintenance and equipment improvements • Control 360,000 residential air conditioners to reduce peak demand • Control 972 MW of interruptible commercial and industrial load • Spent more than $65 million on electric and gas demand-side management programs across its service territories in 2004 • Expenditures alone resultedin 340 GWh and 663,000 MCFin first-year energy savings • Various conservation andDSM programs have beenin operation for more than15 years

8. Voluntary Denver Metro Emission Reduction Program Flexibility and incentive result in economical projects with greater environmental improvement Valmont I-25 I-76 Cherokee US 36 6,181 1,236 20,964 6,502 2003 Projected Tons per Year I-70 Uncontrolled SO2 Controlled SO2 I-25 Uncontrolled NOX Arapahoe Controlled NOX 7,807 2,455 2,747 6,377

9. Voluntary Minnesota Metro Emissions Reduction Program • Convert two in-city coal plants to natural gas & refurbish a third in-city coal plant • Improves environment SO2 NOx Mercury Particulate CO2 93% 91% 78% 55% 21%

10. Renewable Energy Sources Hydro 1,885 MW Wind 884 MW Biomass 95 MW Solar 40 KW Total 2,864 MW Type Capacity * ** * Owned and purchased ** Nameplate rating > 12% of 2004 System Capacity

11. Commitment to Wind Power MW 2206 ActualProjected 1596 884 829 478 469 348 316 138 25 ** Timing dependent on renewal of Production Tax Credit

12. Reduce Environmental Impact Carbon Management Plan Mercury Management Initiatives Goals • 7% reduction in CO2 intensity (pounds per MWh) from 2003to 2012 • 12 million ton reduction in CO2 emissions by 2009, based on 2003 emissions • Burn low-sulfur, low-mercury coal • Baghouses help capture mercury and are currently in-place on most units • Continue testing sorbent technologies at existing facilities • Comanche 3 will be equipped with state-of-the-art technology Actions • Industry-leading voluntary emission reduction projects • Triple wind generation • Participate in three carbon sequestration programs • Relicense nuclear generation • Implement Minnesota MERP

13. Reduce Environmental Impact Environmental Advocacy Protect Wildlife • By 1989, the Company began installing nest boxes on its power plant chimneys to rebuild peregrine falcon population. By 1999, the peregrine was taken off the endangered species list. • In 2002, Xcel Energy was thefirst electric utility to voluntarily approach the US Fish and Wildlife Service to jointly develop a plan to protect eagles, large raptors and migrating birds from electrocution. • Advocate for voluntary emission reduction legislation that supports recovery of investments that reduce emissions below current regulations • Support Clear Skies Legislation • Xcel Foundation will provide additional funding to:— Minnesota Renewable Development Fund— Colorado Renewable Energy Trust

14. Owned Generation (GWh) Pounds per MWh 6.0 5.0 4.0 3.0 Nitrogen Oxide emissions Sulfur Dioxide emissions Owned generation (GWh) Environmental Initiatives

15. Retail Electric Rate* Comparison Cents per KWh * EEI typical bills – Summer 2004 6.01 6.06 4.87 Denver Boston Amarillo Phoenix Miami Chicago St. Louis Milwaukee New York Des Moines Kansas City Salt Lake City Mpls/St. Paul

16. Regulators Customers Investors Utility Environmentalists Shifting the Paradigm Regulators Xcel Energy Customers Investors Environmentalists

17. Acid Rain Cap & Trade Program Near-perfect compliance – over 99% • Early reductions – averaged 25% below allowable levels early in the program • Cost savings– cost 75% less than projected • Innovation– generators looked for new, low-cost ways to reduce emissions • Support – accepted among environmental organizations and industry

18. Key Components of Multi-Emissions Legislation • Certainty • Meaningful Reductions • Proven Regulatory Program • Updates Clean Air Act • Cost Effective For these reasons, Xcel Energy supports the Clear Skies Act legislation.

19. Thank You