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Commitments and Contingencies | 3 Months Ended | 9 Months Ended
--- | --- | ---
Sep. 30, 2021 | Sep. 30, 2021
Commitments and Contingencies Disclosure [Abstract] |  |
Commitments and Contingencies | Environmental MGP, Landfill and Disposal Sites Xcel Energy is investigating, remediating or performing post-closure actions at 14 MGP, landfill or other disposal sites across its service territories. Xcel Energy has recognized its best estimate of costs/liabilities from final resolution of these issues, however, the outcome and timing is unknown. In addition, there may be insurance recovery and/or recovery from other potentially responsible parties, offsetting a portion of costs incurred. Environmental Requirements — Water and Waste Coal Ash Regulation — Xcel Energy’s operations are subject to federal and state regulations that impose requirements for handling, storage, treatment and disposal of solid waste. Under the CCR Rule, utilities are required to complete groundwater sampling around their CCR landfills and surface impoundments. Currently, Xcel Energy has eight regulated ash units in operation. Xcel Energy is conducting groundwater sampling and monitoring and implementing assessment of corrective measures at certain CCR landfills and surface impoundments. In NSP-Minnesota, no results above the groundwater protection standards in the rule were identified. In PSCo, increases above background concentrations were detected at four locations. Based on further assessments, PSCo is evaluating options for corrective action at two locations, one of which indicates potential offsite impacts to groundwater. The total cost is uncertain, but could be up to $35 million. PSCo is continuing to assess the financial and regulatory impacts. In August 2020, the EPA published its final rule to implement closure by April 2021 for all CCR impoundments affected by the August 2018 D.C. Circuit ruling. This final rule required Xcel Energy to expedite closure plans for two impoundments. In October 2020, NSP-Minnesota completed construction and placed in service a new impoundment to replace the clay lined impoundment at a cost of $9 million. With the new ash pond in service, NSP-Minnesota has initiated closure activities for the existing ash pond at an estimated cost of $4 million. NSP-Minnesota has five years to complete closure activities. PSCo also built an alternative collection and treatment system to remove the Comanche Station bottom ash pond from service. The total cost of the alternate treatment system is approximately $25 million. PSCo worked expeditiously to meet the April 11, 2021 deadline, but was not able to remove the pond from service until June 18, 2021. PSCo expects to negotiate a compliance order with the EPA. PSCo will also now proceed with closure of the pond, with an estimated cost of $3 million. Closure costs for existing impoundments are included in the calculation of the asset retirement obligation. | The following includes commitments, contingencies and unresolved contingencies that are material to Xcel Energy’s financial position. Leases Xcel Energy evaluates contracts that may contain leases, including PPAs and arrangements for the use of office space and other facilities, vehicles and equipment. A contract contains a lease if it conveys the exclusive right to control the use of a specific asset. Components of lease expense:
|  | Three Months Ended Sept. 30
(Millions of Dollars) |  | 2021 |  | 2020
Operating leases |  |  |  |
PPA capacity payments |  | $ | 56 |  |  | $ | 56 |
Other operating leases (a) |  | 2 |  |  | 5 |
Total operating lease expense (b) |  | $ | 58 |  |  | $ | 61 |
Finance leases |  |  |  |
Amortization of ROU assets |  | $ | 2 |  |  | $ | 2 |
Interest expense on lease liability |  | 4 |  |  | 4 |
Total finance lease expense |  | $ | 6 |  |  | $ | 6 |
(a)Includes short-term lease expense o f $1 million and $2 million for 2021 and 2020, respectively. (b)PPA capacity payments are included in electric fuel and purchased power on the consolidated statements of income. Expense for other operating leases is included in O&M expense and electric fuel and purchased power.
|  | Nine Months Ended Sept. 30
(Millions of Dollars) |  | 2021 |  | 2020
Operating leases |  |  |  |
PPA capacity payments |  | $ | 170 |  |  | $ | 145 |
Other operating leases (a) |  | 19 |  | 22
Total operating lease expense (b) |  | $ | 189 |  |  | $ | 167 |
Finance leases |  |  |  |
Amortization of ROU assets |  | $ | 6 |  |  | $ | 5 |
Interest expense on lease liability |  | 12 |  | 13
Total finance lease expense |  | $ | 18 |  |  | $ | 18 |
(a)Includes short-term lease expense of $4 million for 2021 and 2020, respectively. (b)PPA capacity payments are included in electric fuel and purchased power on the consolidated statements of income. Expense for other operating leases is included in O&M expense and electric fuel and purchased power. Commitments under operating and finance leases as of Sept. 30, 2021:
(Millions of Dollars) |  | PPA Operating Leases |  | Other Operating Leases |  | Total Operating Leases |  | Finance Leases (a)
Total minimum obligation |  | $ | 1,470 |  |  | $ | 191 |  |  | $ | 1,661 |  |  | $ | 246 |
Interest component of obligation |  | (221) |  |  | (35) |  |  | (256) |  |  | (173) |
Present value of minimum obligation |  | $ | 1,249 |  |  | 156 |  |  | 1,405 |  |  | 73 |
Less current portion |  |  |  |  |  | (218) |  |  | (3) |
Noncurrent operating and finance lease liabilities |  |  |  |  |  | $ | 1,187 |  |  | $ | 70 |
(a)Excludes certain amounts related to Xcel Energy’s 50% ownership interest in WYCO. VIEs Under certain PPAs, NSP-Minnesota, PSCo and SPS purchase power from IPPs for which the utility subsidiaries are required to reimburse fuel costs, or to participate in tolling arrangements under which the utility subsidiaries procure the natural gas required to produce the energy that they purchase. These specific PPAs create a variable interest in the IPP. The utility subsidiaries had approxi mately 4,062 MW of capacity under long-term PPAs at both Sept. 30, 2021 and Dec. 31, 2020 with entities that have been determined to be VIEs. Xcel Energy concluded that these entities are not required to be consolidated in its financial statements because it does not have the power to direct the activities that most significantly impact the entities’ economic performance. The PPAs have expiration dates through 2041. Other Guarantees and Bond Indemnifications — Xcel Energy Inc. and its subsidiaries provide guarantees and bond indemnities, which guarantee payment or performance. Xcel Energy Inc.’s exposure is based upon the net liability under the agreements. Most of the guarantees and bond indemnities issued by Xcel Energy Inc. and its subsidiaries have a stated maximum amount. As of Sept. 30, 2021 and Dec. 31, 2020, Xcel Energy Inc. and its subsidiaries had no assets held as collateral related to their guarantees, bond indemnities and indemnification agreements. Guarantees and bond indemnities issued and outstanding for Xcel Energy were approximately $60 million and $62 million at Sept. 30, 2021 and Dec. 31, 2020, respectively. Other Indemnification Agreements — Xcel Energy Inc. and its subsidiaries provide indemnifications through various contracts. These are primarily indemnifications against adverse litigation outcomes in connection with underwriting agreements, as well as breaches of representations and warranties, including corporate existence, transaction authorization and income tax matters with respect to assets sold. Xcel Energy Inc.’s and its subsidiaries’ obligations under these agreements may be limited in duration and amount. Maximum future payments under these indemnifications cannot be reasonably estimated.

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