XCEL ENERGY INCXEL
XCEL ENERGY INC Fair Value Disclosure
Fair Value Measurements
Accounting guidance for fair value measurements and disclosures provides a hierarchical framework for disclosing the observability of the inputs utilized in measuring assets and liabilities at fair value.
•Level 1 — Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. The types of assets and liabilities included in Level 1 are actively traded instruments with observable actual trading prices.
•Level 2 — Pricing inputs are other than actual trading prices in active markets but are either directly or indirectly observable as of the reporting date. The types of assets and liabilities included in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.
•Level 3 — Significant inputs to pricing have little or no observability as of the reporting date. The types of assets and liabilities included in Level 3 include those valued with models requiring significant judgment or estimation.
Specific valuation methods include:
Investments in equity securities and other funds — Equity securities are valued using quoted prices in active markets. The fair values for commingled funds and partnerships are measured using NAVs. The investments in commingled funds may be redeemed for NAV with proper notice. Private equity commingled funds require approval of the fund for any unscheduled redemption, and such redemptions may be approved or denied by the fund at its sole discretion. Unscheduled distributions from real estate commingled funds may be redeemed with proper notice, however, withdrawals may be delayed or discounted as a result of fund illiquidity.
Investments in debt securities — Fair values for debt securities are determined by a third party pricing service using recent trades and observable spreads from benchmark interest rates for similar securities.
Interest rate derivatives — Fair values of interest rate derivatives are based on broker quotes that utilize current market interest rate forecasts.
Commodity derivatives — Methods used to measure the fair value of commodity derivative forwards and options utilize forward prices and volatilities, as well as pricing adjustments for specific delivery locations, and are generally assigned a Level 2 classification. When contracts relate to inactive delivery locations or extend to periods beyond those readily observable on active exchanges, the significance of the use of less observable inputs on a valuation is evaluated and may result in Level 3 classification.
Electric commodity derivatives held by NSP-Minnesota and SPS include transmission congestion instruments, generally referred to as FTRs. FTRs purchased from an RTO are financial instruments that entitle or obligate the holder to monthly revenues or charges based on transmission congestion across a given transmission path.
The values of these instruments are derived from, and designed to offset, the costs of transmission congestion. In addition to overall transmission load, congestion is also influenced by the operating schedules of power plants and the consumption of electricity pertinent to a given transmission path. Unplanned plant outages, scheduled plant maintenance, changes in the relative costs of fuels used in generation, weather and overall changes in demand for electricity can each impact the operating schedules of the power plants on the transmission grid and the value of these instruments.
FTRs are recognized at fair value and adjusted each period prior to settlement. Given the limited observability of certain variables underlying the reported auction values of FTRs, these fair value measurements have been assigned a Level 3 classification.
Net congestion costs, including the impact of FTR settlements, are shared through fuel and purchased energy cost recovery mechanisms. As such, the fair value of the unsettled instruments (i.e., derivative asset or liability) is offset/deferred as a regulatory asset or liability.
Non-Derivative Fair Value Measurements
Nuclear Decommissioning Fund
The NRC requires NSP-Minnesota to maintain a portfolio of investments to fund the costs of decommissioning its nuclear generating plants. Assets of the nuclear decommissioning fund are legally restricted for the purpose of decommissioning these facilities. The fund contains cash equivalents, debt securities, equity securities and other investments. NSP-Minnesota uses the MPUC approved asset allocation for the investment targets by asset class for the qualified trust.
NSP-Minnesota recognizes the costs of funding the decommissioning over the lives of the nuclear plants, assuming rate recovery of all costs. Realized and unrealized gains on fund investments over the life of the fund are deferred as an offset of NSP-Minnesota’s regulatory asset or as a regulatory liability (dependent on funding status) for nuclear decommissioning costs. Consequently, any realized and unrealized gains and losses on securities in the nuclear decommissioning fund are deferred as a component of the regulatory asset/liability.
Unrealized gains for the nuclear decommissioning fund were $1.8 billion and $1.4 billion as of Dec. 31, 2025 and 2024, respectively, and unrealized losses were $47 million and $49 million as of Dec. 31, 2025 and 2024, respectively.
Non-derivative instruments with recurring fair value measurements in the nuclear decommissioning fund:
| Dec. 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| Fair Value | ||||||||||||||||||||||||||||||||||||||
| (Millions of Dollars) | Cost | Level 1 | Level 2 | Level 3 | NAV | Total | ||||||||||||||||||||||||||||||||
Nuclear decommissioning fund (a) | ||||||||||||||||||||||||||||||||||||||
| Cash equivalents | $ | 60 | $ | 60 | $ | — | $ | — | $ | — | $ | 60 | ||||||||||||||||||||||||||
| Commingled funds | 720 | — | — | — | 1,072 | 1,072 | ||||||||||||||||||||||||||||||||
| Debt securities | 944 | — | 934 | 11 | — | 945 | ||||||||||||||||||||||||||||||||
| Equity securities | 505 | 1,861 | 2 | — | — | 1,863 | ||||||||||||||||||||||||||||||||
| Total | $ | 2,229 | $ | 1,921 | $ | 936 | $ | 11 | $ | 1,072 | $ | 3,940 | ||||||||||||||||||||||||||
(a)Reported in nuclear decommissioning fund and other investments on the consolidated balance sheets, which also includes $285 million of equity method investments and $164 million of rabbi trust assets and other miscellaneous investments.
| Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||
| Fair Value | ||||||||||||||||||||||||||||||||||||||
| (Millions of Dollars) | Cost | Level 1 | Level 2 | Level 3 | NAV | Total | ||||||||||||||||||||||||||||||||
Nuclear decommissioning fund (a) | ||||||||||||||||||||||||||||||||||||||
| Cash equivalents | $ | 39 | $ | 39 | $ | — | $ | — | $ | — | $ | 39 | ||||||||||||||||||||||||||
| Commingled funds | 703 | — | — | — | 1,025 | 1,025 | ||||||||||||||||||||||||||||||||
| Debt securities | 866 | — | 832 | 14 | — | 846 | ||||||||||||||||||||||||||||||||
| Equity securities | 522 | 1,583 | 1 | — | — | 1,584 | ||||||||||||||||||||||||||||||||
| Total | $ | 2,130 | $ | 1,622 | $ | 833 | $ | 14 | $ | 1,025 | $ | 3,494 | ||||||||||||||||||||||||||
(a)Reported in nuclear decommissioning fund and other investments on the consolidated balance sheets, which also includes $246 million of equity investments in unconsolidated subsidiaries and $156 million of rabbi trust assets and other miscellaneous investments.
For the years ended Dec. 31, 2025 and 2024, there were immaterial Level 3 nuclear decommissioning fund investments or transfer of amounts between levels.
Contractual maturity dates of debt securities in the nuclear decommissioning fund as of Dec. 31, 2025:
| Final Contractual Maturity | ||||||||||||||||||||||||||||||||
| (Millions of Dollars) | Due in 1 Year or Less | Due in 1 to 5 Years | Due in 5 to 10 Years | Due after 10 Years | Total | |||||||||||||||||||||||||||
| Debt securities | $ | 10 | $ | 344 | $ | 292 | $ | 299 | $ | 945 | ||||||||||||||||||||||
Rabbi Trusts
Xcel Energy has established rabbi trusts to provide partial funding for future deferred compensation plan distributions. The fair value of assets held in the rabbi trusts were $107 million and $96 million at Dec. 31, 2025 and 2024, respectively, comprised of cash equivalents and mutual funds (level 1 valuation methods). Amounts are reported in nuclear decommissioning fund and other investments on the consolidated balance sheet.
Derivative Activities and Fair Value Measurements
Xcel Energy enters into derivative instruments, including forward contracts, futures, swaps and options, for trading purposes and to manage risk in connection with changes in interest rates, and utility commodity prices.
Interest Rate Derivatives — Xcel Energy enters into contracts that effectively fix the interest rate on a specified principal amount of a hypothetical future debt issuance. These financial swaps net settle based on changes in a specified benchmark interest rate, acting as a hedge of changes in market interest rates that will impact specified anticipated debt issuances. These derivative instruments are designated as cash flow hedges for accounting purposes, with changes in fair value prior to occurrence of the hedged transactions recorded as other comprehensive income.
As of Dec. 31, 2025, accumulated other comprehensive loss related to interest rate derivatives included $2 million of net losses expected to be reclassified into earnings during the next 12 months as the hedged transactions impact earnings. As of Dec. 31, 2025, Xcel Energy had unsettled interest rate derivatives with a notional amount of $240 million.
See Note 13 for the financial impact of qualifying interest rate cash flow hedges on Xcel Energy’s accumulated other comprehensive loss included in the consolidated statements of common stockholder’s equity and in the consolidated statements of comprehensive income.
Wholesale and Commodity Trading — Xcel Energy Inc.’s utility subsidiaries conduct various wholesale and commodity trading activities, including the purchase and sale of electric capacity, energy, energy-related instruments and natural gas-related instruments, including derivatives. Xcel Energy is allowed to conduct these activities within guidelines and limitations as approved by its risk management committee, comprised of management personnel not directly involved in the activities governed by this policy.
Results of derivative instrument transactions entered into for trading purposes are presented in the consolidated statements of income as electric revenues, net of any sharing with customers. These activities are not intended to mitigate commodity price risk associated with regulated electric and natural gas operations. Sharing of these margins is determined through state regulatory proceedings as well as the operation of the FERC-approved joint operating agreement.
Commodity Derivatives — Xcel Energy enters into derivative instruments to manage variability of future cash flows from changes in commodity prices in its electric and natural gas operations. This could include the purchase or sale of energy or energy-related products, natural gas to generate electric energy, natural gas for resale and FTRs.
The most significant derivative positions outstanding at Dec. 31, 2025 and 2024 for this purpose relate to FTR instruments administered by MISO and SPP. These instruments are intended to offset the impacts of transmission system congestion.
When Xcel Energy enters into derivative instruments that mitigate commodity price risk on behalf of electric and natural gas customers, the instruments are not typically designated as qualifying hedging transactions. The classification of unrealized losses or gains on these instruments as a regulatory asset or liability, if applicable, is based on approved regulatory recovery mechanisms.
As of Dec. 31, 2025, Xcel Energy had no commodity contracts designated as cash flow hedges.
Gross notional amounts of commodity forwards, options and FTRs:
(Amounts in Millions) (a)(b) | Dec. 31, 2025 | Dec. 31, 2024 | ||||||||||||
| MWh of electricity | 35 | 38 | ||||||||||||
| MMBtu of natural gas | 31 | 77 | ||||||||||||
(a)Not reflective of net positions in the underlying commodities.
(b)Notional amounts for options included on a gross basis but weighted for the probability of exercise.
Consideration of Credit Risk and Concentrations — Xcel Energy continuously monitors the creditworthiness of counterparties to its interest rate derivatives and commodity derivative contracts prior to settlement and assesses each counterparty’s ability to perform on the transactions set forth in the contracts. Impact of credit risk was immaterial to the fair value of unsettled commodity derivatives presented on the consolidated balance sheets.
Xcel Energy’s utility subsidiaries’ often have significant concentrations of credit risk with particular entities or industries in their wholesale, trading and non-trading commodity activities.
As of Dec. 31, 2025, three of Xcel Energy’s ten most significant counterparties for these activities, comprising $22 million or 14% of this credit exposure, had investment grade credit ratings from S&P Global Ratings, Moody’s Investor Services or Fitch Ratings.
Six of the ten most significant counterparties, comprising $92 million or 57% of this credit exposure, were not rated by these external ratings agencies, but based on Xcel Energy’s internal analysis, had credit quality consistent with investment grade.
One of these significant counterparties, comprising $25 million or 15% of this credit exposure, had credit quality less than investment grade, based on internal analysis.
Nine of these significant counterparties are municipal or cooperative electric entities, RTOs or other utilities.
Credit Related Contingent Features — Contract provisions for derivative instruments that the utility subsidiaries enter, including those accounted for as normal purchase and normal sale contracts and therefore not reflected on the consolidated balance sheets, may require the posting of collateral or settlement of the contracts for various reasons, including if the applicable utility subsidiary’s credit ratings are downgraded below its investment grade credit rating by any of the major credit rating agencies.
As of Dec. 31, 2025 and 2024, there were $7 million and $11 million, respectively, of derivative liabilities with such underlying contract provisions, respectively.
Certain contracts also contain cross default provisions that may require the posting of collateral or settlement of the contracts if there was a failure under other financing arrangements related to payment terms or other covenants.
As of Dec. 31, 2025 and 2024, there were approximately $62 million and $69 million of derivative liabilities with such underlying contract provisions, respectively.
Certain derivative instruments are also subject to contract provisions that contain adequate assurance clauses. These provisions allow counterparties to seek performance assurance, including cash collateral, in the event that a given utility subsidiary’s ability to fulfill its contractual obligations is reasonably expected to be impaired.
Xcel Energy had no collateral posted related to adequate assurance clauses in derivative contracts as of Dec. 31, 2025 and 2024.
Recurring Derivative Fair Value Measurements
Impact of derivative activity:
| Pre-Tax Fair Value Gains (Losses) Recognized During the Period in: | ||||||||||||||
| (Millions of Dollars) | Accumulated Other Comprehensive Loss | Regulatory (Assets) and Liabilities | ||||||||||||
| Year Ended Dec. 31, 2025 | ||||||||||||||
| Derivatives designated as cash flow hedges | ||||||||||||||
| Interest rate | $ | 2 | $ | — | ||||||||||
| Total | $ | 2 | $ | — | ||||||||||
| Other derivative instruments | ||||||||||||||
| Electric commodity | $ | — | $ | 69 | ||||||||||
| Natural gas commodity | — | (3) | ||||||||||||
| Total | $ | — | $ | 66 | ||||||||||
| Year Ended Dec. 31, 2024 | ||||||||||||||
| Interest rate | $ | 29 | $ | — | ||||||||||
| Total | $ | 29 | $ | — | ||||||||||
| Other derivative instruments | ||||||||||||||
| Electric commodity | $ | — | $ | 44 | ||||||||||
| Natural gas commodity | — | 4 | ||||||||||||
| Total | $ | — | $ | 48 | ||||||||||
| Year Ended Dec. 31, 2023 | ||||||||||||||
| Interest rate | $ | (2) | $ | — | ||||||||||
| Total | $ | (2) | $ | — | ||||||||||
| Other derivative instruments | ||||||||||||||
| Electric commodity | $ | — | $ | (137) | ||||||||||
| Natural gas commodity | — | (13) | ||||||||||||
| Total | $ | — | $ | (150) | ||||||||||
| Pre-Tax (Gains) Losses Reclassified into Income During the Period from: | Pre-Tax Gains (Losses) Recognized During the Period in Income | ||||||||||||||||||||||
| (Millions of Dollars) | Accumulated Other Comprehensive Loss | Regulatory Assets and (Liabilities) | |||||||||||||||||||||
| Year Ended Dec. 31, 2025 | |||||||||||||||||||||||
| Derivatives designated as cash flow hedges | |||||||||||||||||||||||
| Interest rate | $ | 3 | (a) | $ | — | $ | — | ||||||||||||||||
| Total | $ | 3 | $ | — | $ | — | |||||||||||||||||
| Other derivative instruments | |||||||||||||||||||||||
| Commodity trading | $ | — | $ | — | $ | (3) | (b) | ||||||||||||||||
| Electric commodity | — | (36) | (c) | — | |||||||||||||||||||
| Natural gas commodity | — | — | (22) | (d)(e) | |||||||||||||||||||
| Total | $ | — | $ | (36) | $ | (25) | |||||||||||||||||
| Year Ended Dec. 31, 2024 | |||||||||||||||||||||||
| Derivatives designated as cash flow hedges | |||||||||||||||||||||||
| Interest rate | $ | 3 | (a) | $ | — | $ | — | ||||||||||||||||
| Total | $ | 3 | $ | — | $ | — | |||||||||||||||||
| Other derivative instruments | |||||||||||||||||||||||
| Commodity trading | $ | — | $ | — | $ | (27) | (b) | ||||||||||||||||
| Electric commodity | — | (22) | (c) | — | |||||||||||||||||||
| Natural gas commodity | — | — | (22) | (d)(e) | |||||||||||||||||||
| Total | $ | — | $ | 22 | $ | (49) | |||||||||||||||||
| Year Ended Dec. 31, 2023 | |||||||||||||||||||||||
| Derivatives designated as cash flow hedges | |||||||||||||||||||||||
| Interest rate | $ | 5 | (a) | $ | — | $ | — | ||||||||||||||||
| Total | $ | 5 | $ | — | $ | — | |||||||||||||||||
| Other derivative instruments | |||||||||||||||||||||||
| Commodity trading | $ | — | $ | — | $ | (7) | (b) | ||||||||||||||||
| Electric commodity | — | 123 | (c) | — | |||||||||||||||||||
| Natural gas commodity | — | 15 | (d) | (27) | (d)(e) | ||||||||||||||||||
| Total | $ | — | $ | 138 | $ | (34) | |||||||||||||||||
(a)Recorded to interest charges.
(b)Recorded to electric revenues. Presented amounts do not reflect non-derivative transactions or margin sharing with customers.
(c)Recorded to electric fuel and purchased power. These derivative settlement gains and losses are shared with electric customers through fuel and purchased energy cost-recovery mechanisms and reclassified out of income as regulatory assets or liabilities, as appropriate. FTR settlements are shared with customers and do not have a material impact on net income. Presented amounts reflect changes in fair value between auction and settlement dates, but exclude the original auction fair value.
(d)Other than $4 million of 2025 and $3 million of 2024 losses recorded to electric fuel and purchased power, amounts are recorded to cost of natural gas sold and transported. Amounts are subject to cost-recovery mechanisms and reclassified out of income to a regulatory asset, as appropriate.
(e)Relates primarily to option premium amortization.
Xcel Energy had no derivative instruments designated as fair value hedges during the years ended Dec. 31, 2025, 2024 and 2023.
Derivative assets and liabilities measured at fair value on a recurring basis were as follows:
| Dec. 31, 2025 | Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value | Fair Value Total | Netting (a) | Total | Fair Value | Fair Value Total | Netting (a) | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Millions of Dollars) | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current derivative assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives designated as cash flow hedges: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate | $ | — | $ | 1 | $ | — | $ | 1 | $ | — | $ | 1 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other derivative instruments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commodity trading | $ | 2 | $ | 13 | $ | 7 | $ | 22 | $ | (16) | $ | 6 | $ | 6 | $ | 20 | $ | 8 | $ | 34 | $ | (23) | $ | 11 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Electric commodity | — | — | 147 | 147 | (3) | 144 | — | — | 90 | 90 | (1) | 89 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Natural gas commodity | — | 14 | — | 14 | — | 14 | — | 14 | — | 14 | — | 14 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total current derivative assets | $ | 2 | $ | 28 | $ | 154 | $ | 184 | $ | (19) | $ | 165 | $ | 6 | $ | 34 | $ | 98 | $ | 138 | $ | (24) | $ | 114 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Noncurrent derivative assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other derivative instruments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commodity trading | $ | 3 | $ | 28 | $ | 34 | $ | 65 | $ | (11) | $ | 54 | $ | 8 | $ | 37 | $ | 47 | $ | 92 | $ | (20) | $ | 72 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total noncurrent derivative assets | $ | 3 | $ | 28 | $ | 34 | $ | 65 | $ | (11) | $ | 54 | $ | 8 | $ | 37 | $ | 47 | $ | 92 | $ | (20) | $ | 72 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Dec. 31, 2025 | Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value | Fair Value Total | Netting (a) | Total | Fair Value | Fair Value Total | Netting (a) | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Millions of Dollars) | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current derivative liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other derivative instruments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commodity trading | 5 | 22 | 6 | 33 | (18) | 15 | 7 | 35 | 5 | 47 | (23) | 24 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Electric commodity | — | — | 3 | 3 | (3) | — | — | — | 1 | 1 | (1) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Natural gas commodity | — | 10 | — | 10 | — | 10 | — | 7 | — | 7 | — | 7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total current derivative liabilities | $ | 5 | $ | 32 | $ | 9 | $ | 46 | $ | (21) | 25 | $ | 7 | $ | 42 | $ | 6 | $ | 55 | $ | (24) | 31 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
PPAs (b) | 6 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current derivative instruments | $ | 31 | $ | 37 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noncurrent derivative liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other derivative instruments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commodity trading | $ | 6 | $ | 24 | $ | 40 | $ | 70 | $ | (13) | $ | 57 | $ | 11 | $ | 32 | $ | 40 | $ | 83 | $ | (22) | $ | 61 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total noncurrent derivative liabilities | $ | 6 | $ | 24 | $ | 40 | $ | 70 | $ | (13) | 57 | $ | 11 | $ | 32 | $ | 40 | $ | 83 | $ | (22) | 61 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
PPAs (b) | 10 | 16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noncurrent derivative instruments | $ | 67 | $ | 77 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(a)Xcel Energy nets derivative instruments and related collateral on its consolidated balance sheets when supported by a legally enforceable master netting agreement. At Dec. 31, 2025 and 2024, derivative assets and liabilities include no obligations to return cash collateral. At Dec. 31, 2025 and 2024, derivative assets and liabilities include rights to reclaim cash collateral of $4 million and $2 million, respectively. Counterparty netting amounts presented exclude settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements.
(b)Xcel Energy currently applies the normal purchase exception to qualifying PPAs. Balance relates to specific contracts that were previously recognized at fair value prior to applying the normal purchase exception, and are being amortized over the remaining contract lives along with the offsetting regulatory assets and liabilities.
Changes in Level 3 commodity derivatives:
| Year Ended Dec. 31 | ||||||||||||||||||||
| (Millions of Dollars) | 2025 | 2024 | 2023 | |||||||||||||||||
| Balance at Jan. 1 | $ | 99 | $ | 90 | $ | 236 | ||||||||||||||
Purchases (a) | 262 | 210 | 176 | |||||||||||||||||
Settlements (a) | (322) | (303) | (154) | |||||||||||||||||
| Net transactions recorded during the period: | ||||||||||||||||||||
(Losses) gains recognized in earnings (b) | (13) | (9) | 6 | |||||||||||||||||
Net gains (losses) recognized as regulatory assets and liabilities (a) | 113 | 111 | (174) | |||||||||||||||||
| Balance at Dec. 31 | $ | 139 | $ | 99 | $ | 90 | ||||||||||||||
(a)Relates primarily to NSP-Minnesota and SPS FTR instruments administered by MISO and SPP, respectively.
(b)Relates to commodity trading and is subject to substantial offsetting losses and gains on derivative instruments categorized as levels 1 and 2 in the income statement. See above tables for the income statement impact of derivative activity, including commodity trading gains and losses.
Fair Value of Long-Term Debt
As of Dec. 31, other financial instruments for which the carrying amount did not equal fair value:
| 2025 | 2024 | |||||||||||||||||||||||||
| (Millions of Dollars) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||||
| Long-term debt, including current portion | $ | 32,333 | $ | 29,943 | $ | 28,419 | $ | 25,115 | ||||||||||||||||||
Fair value of Xcel Energy’s long-term debt is estimated based on recent trades and observable spreads from benchmark interest rates for similar securities. Fair value estimates are based on information available to management as of Dec. 31, 2025 and 2024, and given the observability of the inputs, fair values presented for long-term debt were assigned as Level 2.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 17, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Feb 22, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 19, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.