92521--2/28/2006--SOUTHWESTERN_PUBLIC_SERVICE

related topics

{gas, price, oil}

{cost, contract, operation}

{operation, natural, condition}

{cost, regulation, environmental}

{capital, credit, financial}

{stock, price, share}

Risks Associated with Our Business Our profitability depends in part on our ability to recover costs from our customers and there may be changes in circumstances or in the regulatory environment that impair our ability to recover costs from our customers We are subject to commodity price risk, credit risk and other risks associated with energy markets. We are subject to environmental laws and regulations, compliance with which could be difficult and costly. Recession, grid disturbances, acts of war or terrorism could negatively impact our business. Reduced coal availability could negatively impact our business. Rising energy prices could negatively impact our business. Our operating results may fluctuate on a seasonal and quarterly basis and can be adversely affected by milder weather. Increasing costs associated with our defined benefit retirement plans, health care plans and other employee-related benefits may adversely affect our results of operations, financial position, or liquidity. Any reductions in our credit ratings could increase our financing costs and the cost of maintaining certain contractual relationships. We are a wholly owned subsidiary of Xcel Energy. Xcel Energy can exercise, within certain regulatory and other limitations and the limitations provided by corporate law, substantial control over our dividend policy and business and operations and may exercise that control in a manner that may be perceived to be adverse to our interests.

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92521--2/28/2006--SOUTHWESTERN_PUBLIC_SERVICE_CO