Good morning ladies and gentlemen. Thank you for standing by and welcome to the Xcel Energy Second Quarter 2008 Earnings Conference Call. During today's presentation all parties will be in a listen-only mode. Following the presentation the conference will be open for questions. [Operator Instructions]. This conference call is being recorded today, Thursday, July 31st of 2008. I would now like to turn the conference over to Paul Johnson, Managing Director of Investor Relations and Assistant Treasurer. Please go ahead sir. Paul A. Johnson: Thank you and welcome to Xcel Energy's second quarter 2008 earnings release conference call. I am Paul Johnson, Managing Director of Investor Relations and Assistant Treasurer. With me is Ben Fowke, Vice President and CFO of Xcel Energy and several others who can answer your questions. Today we plan to cover our second quarter results and provide a general business update. Please note that there are slides that accompany this conference call, which are available on our web page. Let me remind you that some of the comments that we may make may contain forward-looking information. Significant factors that could cause results to differ from those anticipated are described in our earnings release and our filing with the SEC. Today's discussion will focus on ongoing results, which we believe represents fundamental earnings call of Xcel Energy. Please refer to our earnings release for a reconciliation of non-GAAP earnings. Before I turn the call over to Ben, I will cover up overall results and how we calculate ongoing earnings. Second quarter 2008 GAAP earnings were $106 million or $0.24 per share compared to $69 million for $0.15 per share in 2007. As you may recall, in 2007 we reached a settlement resolving our dispute with the IRS regarding our COLI program. Our 2008 second quarter earning results do not include any material impacts from the discontinued COLI program. However, our 2007 second quarter GAAP earnings include a loss of $0.11 per share associated with the resolution of this dispute. This morning's discussion will focus on ongoing earnings, which excludes the impact of COLI from our results. Ongoing earnings for the second quarter of 2008 were $0.24 per share versus $0.27 per share for last year. With that I will turn the call over to Ben. Benjamin G.S. Fowke III - Vice President and Chief Financial Officer Thanks, Paul and welcome everyone. As Paul just mentioned our ongoing earnings was $0.24 per share for the second quarter of 2008 compared with $0.27 per share a year ago. While our ongoing results for the quarter declined, our year-to-date results are ahead of last year. For the first six months of the year ongoing earnings was $0.59 per share, which is up $0.05 from last year. As a result, we expect to deliver earnings within our guidance range of a $1.45 to $1.55 per share. Now let's take a closer look at the details. Second quarter 2008 ongoing earnings decreased by $0.03 compared to the same period last year largely due to higher O&M expense, which reduced earnings by $0.04 per share and lower electric utility margins which reduced earnings by $0.01 per share. These negative items were slightly offset by higher natural gas margins, which increased earnings by $0.02 per share. Starting with the top of the income statement electric margin decreased by about $6 million due to a combination of factors. On a positive side, our electric rate increased in Wisconsin and interim rate increased in North Dakota and MERP rider combined to increase electric margin by $14 million this quarter. Next in light of current economic conditions we are encouraged that our well diversified mix of electric customers generated normalized sales growth of 2.5% during the quarter, driven largely by a 3.2% increase in commercial and industrial sales. This increase in C&I sales is related primarily to strengthen energy and agricultural-based industries, particularly at the PSCo and SPS. Based on sales growth of 2.5%, we estimate that our margin increase by $12 million. However, because a greater portion of our sales, which are the C&I class, we saw lower levels of margin contribution as compared to residential customers. In addition, we also experienced some adverse impacts in rate design between energy and demand charges. Combination of these factors, which we refer to as sales mix in our margin table, reduced electric margin by $13 million for the quarter. As previously mentioned, we experienced cooler weather than last year, which reduced electric utility margins by $19 million. For more information on other items that had an impact on electric margins for the quarter, please refer to the table on our earnings release. Turning to natural gas margins, the rate increases in Colorado and Wisconsin, cooler weather and other items combined to increase natural gas margins by $13 million. Moving on to O&M expenses, second quarter O&M increased $29 million or 6.9%. Several items contributed to the second quarter increase, including higher plant operating costs, which reflects an increase in both planned and unplanned outages. In addition we also experienced higher labor costs due to general cost increases and additional employees to support our growth initiatives. As we discussed at our analyst meeting in December, we have filed a request with the Minnesota Commission to change how we account for nuclear refueling cost. Under the proposed plan, the refueling cost would be deferred and amortized between refueling outages. As opposed to [inaudible]. A request is pending and we expect the Minnesota Commission to rule on it before the end of September. Assuming we are successful in our pending request, we expect our annual O&M expense to increase by 2% to 3%, in line with our guidance. Next, second quarter depreciation and amortization expense decreased $1 million or 0.7%. This decrease is primarily due to timing associated with Commission approval of NSP-Minnesota's remaining lives depreciation filings in the third quarter of 2007. As you develop your quarterly models keep in mind that we recorded a year-to-date true-up that reduced depreciation expense, by approximately $31 million during the third quarter of 2007. As a result, depreciation expense was higher in the first half of 2007 and then lower in the second half of last year. Overall, [inaudible] $0.04 per share and lower electric utility margins, which reduced earnings by $0.01 per share. These negative items were slightly offset by higher natural gas margins, which increased earnings by $0.02 per share. And starting with the top of the income statement, electric margin decreased by about $6 million due to a combination of factors. On the positive side, an electrical rate increase in Wisconsin and interim rate increase in North Dakota and MERP rider combined to increase electric margin by $14 million this quarter. Next, in light of current economic conditions, we are encouraged that our well diversified mix of electric customers generated normalized sales growth of 2.5% during the quarter, driven largely by a 3.2% increase in commercial and industrial sale. This increase in C&I sales is related primarily to strength in energy and agricultural based industries particularly at PSCo and SPS. Based on sales growth of 2.5%, we estimate that our margin increase by $12 million. However, because a greater portion of our sales, which were the C&I class, we saw lower levels of margin contribution as compared to residential customers. In addition, we also experienced some adverse impacts in rate design between energy and demand charges. A combination of these factors which we refer to as sales mix in our margin table reduced electric margin by $13 million for the quarter. Finally, as previously mentioned, we experienced cooler weather than last year, which reduced electric utility margins by $19 million. For more information on other items that had an impact on electric margins for the quarter, please refer to the table on our earnings release. Turning to natural gas margins, rate increases in Colorado and Wisconsin, cooler weather and other items combined to increase natural gas margins by $13 million. Moving on to O&M expenses, second-quarter O&M increased $29 million or 6.9%. Several items contributed to the second quarter increase including higher planned operating costs, which reflects an increase in both planned and unplanned outages. In addition, we also experienced higher labor costs, due to general cost increases, and additional employees to support our growth initiatives. As we discussed at our INOs [ph] meeting in December, we have filed a request with the Minnesota Commission to change how we account for nuclear refueling cost. Under the purposed plan, the refueling cost would be deferred and amortized between refueling outages, as opposed to expense as the cost to incur. A request is pending and we expect the Minnesota Commission to rule on it before the end of September. Assuming we are successful in our pending request, we expect our annual O&M expense to increase by 2% to 3% in line with our guidance. Next, second quarter depreciation and amortization expense decreased $1 million our 0.7%. This decrease is primarily due to timing associated with Commission approval of NSP-Minnesota's remaining life's depreciation filing in the third quarter of 2007. As you develop your quarterly models, keep in mind, that we recorded a year-to-date true up that reduced depreciation expense by approximately $31 million during the third quarter of 2007. As a result, depreciation expense was higher in the first half of 2007 and then lower in the second half of last year. Overall, for the full-year, we expect depreciation to increase $55 million to $65 million, in line with our annual guidance. That explains significant quarterly deviations; let me give you a brief regulatory update. Let we start with NSP-Minnesota. We have filed a rate request to increase electric rates in North Dakota by $17.9 million based on an equity ratio of 51.8%, an ROE of 10.75% and rate base of approximately $242 million. Interim rates of about $17 million went into effect in early February 2008. The North Dakota staff is currently recommending a rate increase of approximately $4.9 million. We expect a Commission decision later this fall. At SPS we have filed a rate case to increase electric rates by $15.6 million in New Mexico. The request is based on an historic test year, and includes an ROE of 10.7% rate base of $307 million and an equity ratio of about 51%. In July the hearing examiner recommended a rate increase of $12.6 million based on an ROE of 10.14%. We expect a Commission decision in August. In March 2008 SPS filed a wholesale case seeking an annual rate increase of almost $15 million, based on a requested ROE of 12.2%. On May 30, 2008 the FERC [ph] conditionally accepted and suspended the rates and established hearing and settlement procedures. The Commission granted a one-day suspension of rates instead of 180 days. The base rates based on a 10.25% ROE will become effective with the in-service date of Lea Power project. In June 2008, SPS filed a rate case with the Public Utility Commission of Texas seeking a net annual rate increase of approximately $61 million. The rate filing includes a requested ROE of 11.25%, an electric rate base of $989 million and an equity ratio of 51%. In SPS’ last Texas rate case, the parties agreed that SPS seek in this rate filings interim rate relief of $18 million per year for the Lea Power purchase agreement. The interim rates are proposed to go into effect when Lea Power comes online in 2008. We're still on the early stages of this case. We expect final rates to go into affect in early 2009. As most of you are aware, last year we filed resource plans in both Colorado and Minnesota. These plans demonstrate how we can meet increasing customer demands for energy while reducing overall carbon emissions in a cost effective manner. Clearance in Colorado have concluded. We expect the Commission to rule on the first phase of the Colorado resource plan in the third quarter. In Minnesota the process is going well and we should have a decision by the end of 2008. In both states we remain confident that we will receive constructive decisions, which allow us to make the investments to deliver on our environmental initiatives. In summary, while our results declined for the quarter our year-to-date ongoing earnings are $0.05 ahead of last year. We're confident we can deliver earnings within our annual earnings guidance range of $1.45 to $1.55 per share. So with that let's open it up for questions. Question and Answer

Thank you, sir. [Operator Instructions]. One moment please for the first question. Our first question comes from the line of Paul Ridzon with KeyBanc. Please go ahead. Benjamin G.S. Fowke III - Vice President and Chief Financial Officer Hi Paul.

Mr. Ridzon your line is open. Please go ahead.

I'm sorry. I was on mute. I had a question on smoothing out the nuke refuel costs? Benjamin G.S. Fowke III - Vice President and Chief Financial Officer Yes.

When do you expect that decision, is that an '08 issue to watch? Benjamin G.S. Fowke III - Vice President and Chief Financial Officer Yes. We expect a decision in September. Assuming we are successful that will reduce O&M within the Minnesota jurisdiction by about $25 million. So, that's why Paul, we are optimistic about the outcome and that should get us right back in line with our annual O&M guidance.

So, your guidance continues upon getting that regulatory approval? Benjamin G.S. Fowke III - Vice President and Chief Financial Officer It was... we would assume successful outcome of that approval when we developed a 2% to 3% guidance range last year.

Okay, thank you.

Thank you. The next question comes from the line of Dave Parker with Robert W. Baird. Please go ahead. Benjamin G.S. Fowke III - Vice President and Chief Financial Officer Hi, Dave. David E. Parker: Hi, good morning. Just a question on what you term sort of the shift or the rate design issue. Could you provide a little more color on that? Benjamin G.S. Fowke III - Vice President and Chief Financial Officer Yes. There is a couple of things that are happening Dave. I mean as I mentioned, we have seen I think pretty strong sales growth; break it down to a couple of different ways. In Colorado, we're actually seeing pretty good growth in both residential and the C&I plans. And SPS it’s primarily a large C&I, at NSP-Minnesota, quite a bit of a decline from what we have expected coming into the year. Now, within those classes, we're seeing far more sales from C&I than residential and C&I has a lower unit margin contribution associated with it. In addition, within the C&I class, we're actually seeing more sales come from larger C&I customers, basically energy services customers, then some of the smaller C&I classes. So, they also have a smaller margin contribution per Kwh sale. The rate design issues that I referred to, have to do with the fact that we did implement new rates in Colorado and SPS and we shifted around some of the components of demand and energy in Colorado. And in SPS we actually implemented seasonal rates that we implemented last year. So, you have lower winter rates and higher summer rates. So we're seeing some of the effects of that. Overall Dave, while this was obviously something that happened within the quarter and something we will monitor going-forward, we don't necessary think this is a trend at all. And in fact, we're pretty pleased that, our economies are showing a resiliency that they seem to have as evidenced by overall sales coming in strong. David E. Parker: Yes. Have you bet... mostly for explaining sales of across all customer classes. Is it your C&I... the sales pick up is that because you... of just... I think you mentioned earlier maybe the E&P segments going well obviously at Texas but AT other places as well? Benjamin G.S. Fowke III - Vice President and Chief Financial Officer Yes, very much Texas but also in Colorado, which is... having a resurge in and is becoming an energy state now in oil and gas, but also the commodity side with mining. So we're seeing a lot of that and even the residential side in Colorado is coming through okay. It is bit flat up here Dave in Minnesota and Wisconsin. David E. Parker: Okay. Thank you very much. Benjamin G.S. Fowke III - Vice President and Chief Financial Officer Thank you.

Thank you. Your next question comes from the line of Anne Paul [ph] with Alliance Bernstein. Please go ahead. Benjamin G.S. Fowke III - Vice President and Chief Financial Officer Hi Anne.

Hi, good morning. Good afternoon actually. Two questions I have on the income statement you have a conservation demand [ph] by management expenses, was about 44% in the quarter. Can you kind of go through what's in it and then what kind of trend do you see going forward? And the second question has to do with your accounts receivable and bad debts, can you clarify how bad it is, since you have some headline news about shutting off some of the services? Benjamin G.S. Fowke III - Vice President and Chief Financial Officer Let's... Okay, let's address the first one, demand side management and the various conservation programs we have. We are implementing state policy we have always been, I think on the forefront of demand side management we're stepping that up Anne. As our states have asked us to do, those… the expenses, the same for Saver Switches and various interruptible programs and all the other things you do to conserve energy, which we think are very important, those expenses are increasing, we get very timely recovery of those as well. So if you look at the margin table you'll see some increases in what we are picking up in margin as a result of those programs. So that's... I hope the explanation you were looking for on the conservation programs. Turning to accounts receivable on bad debt, we are... well you've read those headlines. The reality is our bad debt is tracking just like it has been over the last couple of years. So there has been some shut offs, etcetera but bad debts... we are forecasting bad debt to be right on top of where it was in '07, which is about where it was in '06. And I take that as a sign of just how much more disciplined we have become in our collection processes in our rate design. And you may remember that in Colorado, we didn't have a late fee until the last rate case for residential customers. So all of those things combined I think are preventing the bad debt from rising out of control.

Thank you. Benjamin G.S. Fowke III - Vice President and Chief Financial Officer Thank you.

Thank you. Next question comes from the line of Ashar Khan with SAC Capital. Please go ahead. Benjamin G.S. Fowke III - Vice President and Chief Financial Officer Hi, Ashar.

Hi, how are you doing? If I understood correctly you said, if you get this ruling on the O&M you would be able to reverse certain expenses am I right if I understand it correctly? Benjamin G.S. Fowke III - Vice President and Chief Financial Officer Yes, I mean what we are looking to do is amortize those refueling cost over the full refueling period. Typically 18 months, it depends on the plan. This is a year that you recall that we have two outages versus last year we had one. The filing itself ask for that accounting change, which we think, is a best practice to be effective at the beginning of the year and we have filed this quite some time ago. It's a bit backed up because of the number of dockets that the staff is working through. If we are successful that should reduce O&M expense by about $25 million, or roughly Ashar one refueling outage cost, typically.

Okay. And so if it comes in September, you book it in the third quarter. Correct? Benjamin G.S. Fowke III - Vice President and Chief Financial Officer That's correct.

And if it is after September, it will get booked in the fourth quarter? Benjamin G.S. Fowke III - Vice President and Chief Financial Officer It will get booked in the fourth quarter and again we are asking for treatment effect at the beginning of the year.

And what is the plan with the Colorado rate case, the timing and the test year? Benjamin G.S. Fowke III - Vice President and Chief Financial Officer Well it'll be a forward test year, at the timing of that we are still working through, as we make sure that the filing incorporates [inaudible] and when that is anticipated to come online. So, we're working through some of the filed details there but we will be filing a rate case in Colorado I think it'll be subject to the things that I just described.

Okay. But this year or no? Benjamin G.S. Fowke III - Vice President and Chief Financial Officer It should be this year, if possibly very beginning of the next year and again Ashar that would be I'm sure that would be basically our assessment of what make sense to incorporate the various projects that are coming in the service during that timeframe.

Okay. And then, could you just talk... could give you some ROE information on the different subs. What they're earning right now on an LTM basis? Benjamin G.S. Fowke III - Vice President and Chief Financial Officer I would say that, by and large most of the SPS continues to struggle as you might imagine, Colorado and Minnesota are probably slightly under earning based upon their authorized returns. Wisconsin is in a similar situation. So, did I give you a little bit of color Ashar.

Yes, that's fine. That's fine. Thank you.

[Operator Instructions]. Our next question comes from the line of Daniel Shites with Shites Research [ph]. Please go ahead. Benjamin G.S. Fowke III - Vice President and Chief Financial Officer Hi Daniel.

Hi. I just was wondering if from the hearings that has been taking place regarding resource plans in both states, is there anything that would assume some changes in your… potential changes in your CapEx scheduler or most of it is pretty much in line so far? Benjamin G.S. Fowke III - Vice President and Chief Financial Officer I would say probably most of it's in line Daniel. I mean, you recall that when we issued our CapEx forecast last year, we had a pretty large amount of CapEx and what we call potential. And if I recall right it was, I think anywhere between $800 million to $1.4 billion, depending upon how these resource plans come out, what opportunities we find it to invest, what the Commission decide they would like us to invest in versus continue to purchase. We're working through those, a little too early to tell but, I mean, again I think we'll get outcomes that allow us to make the kind of investment we want to make. We have a 500 megawatt RFP out here in Minnesota for basic return key vendors, those bids we've been very happy with the quality of the bids we have seen and we think that will give us some good opportunities but, stay tuned we'll [inaudible] year.

Thank you. Benjamin G.S. Fowke III - Vice President and Chief Financial Officer Okay.

Thank you and management, I'm seeing that there are no further questions. I'll turn it back to you for closing comments. Benjamin G.S. Fowke III - Vice President and Chief Financial Officer Well, I appreciate your questions and your interest and if you have any more follow-up questions as always contact Paul Johnson, or the rest of the IR team and I look forward to seeing you soon in the various conferences we all attend. Thank you.

Ladies and gentlemen, that will conclude the Xcel Energy's second quarter 2008 earnings conference call. We do thank you again for your participation and at this time you may disconnect. Have a nice day.