2010 Second Quarter Colorado DSM Roundtable Update August 13, 2010

2010 Second Quarter Colorado DSM Roundtable Update August 13, 2010 To comply with the 2009/10 Biennial DSM Plan Stipulation and Settlement Agreement, Docket No. 08A- 366EG, Decision No. R08-1243, Public Service Company of Colorado ( Public Service or the Company ) provides the following update regarding program status, including energy and demand savings achieved, expenditures, implementation changes, and measurement and verification modifications. Program Implementation Status Please refer to the attached table for the preliminary second quarter 2010 (through June 30, 2010) program energy and demand savings achieved, and program expenditures and CO 2 and SO 2 emissions avoided. In total, DSM electric programs have achieved savings of 130.1 GWh and gas savings of 162,378 Dth by June 30, 2010. This represents 55% of the total 2010 electric goal of 237 GWh and 40% of the gas goal of 402,808 Dth. The 2010 goals are as agreed to in the 2009/10 Stipulation and Settlement Agreement. The following section provides program status activities for the second quarter 2010 in the Business, Residential, Low-Income, and Planning & Research Segments, as well as other related activities. Business Programs Boiler Efficiency The anticipated slow-down through the second quarter was not too dramatic with 18 new participants bringing in more than 7,800 Dth in energy savings. This puts us over 50% of goal with great potential to exceed our end of year target due to solid projects in the pipeline. New products and rebate levels introduced June 3 rd have been well received and look to be increasing interest in the program. Vendor outreach also continues to yield results as inquiries through the Business Solutions Center have increased. These efforts appear to be offsetting the negative effects that lower gas prices are having on customer paybacks. Compressed Air Efficiency Through the second quarter, the program committed 2.1 GWh, which is 21 percent of its annual goal. Public Service recently conducted a forum for all compressed air vendors, and added a vendor incentive for performance in the balance of the year. We are planning to host a customer training session in September, with an advanced training shortly thereafter. Through November, we are also advertising in targeted trade publications and in on-line search engines. Cooling Efficiency The Cooling Efficiency Program had 48 projects completed in the second quarter which achieved 2.0 GWh and 1452 kw of savings. Combined with first quarter the cooling program has achieved 4.0 GWh (58 percent of goal) and 2725 kw (55 percent of goal). 1.8 GWh has currently been identified in the pipeline. The cooling season has remained strong due to consistently higher temperatures. The Colorado Avalanche promotion is continuing through November 30 th 2010 for both customers and trades. Trade Relations Managers are continuing to promote the program through on-site meetings and association presentations. Custom Efficiency 82 custom projects were committed in the second quarter. These are combined with the 127 projects from the first quarter. 17 projects were custom electric end use which contributed 1.2 GWh. Through the second quarter the program is at 17 percent of annual goal. Two large projects will be committed this year which will significantly help achieve the annual goal. Four custom gas end use projects were committed in the second quarter contributing 1083 Dth. Through the second quarter the program is at eleven percent of annual goal. The first quarter Dth contribution was reported in therms and not dekatherms. Therefore, the first quarter Dth contribution was 358 Dth, not 3,586 Dth.

Data Center Efficiency The program received six new study funding applications in the second quarter. In addition, the program is in the final stages of approving a previously submitted study and expects to approve and pay the study rebate soon. The customer potentially plans to complete projects identified in the study this year. Marketing activities this quarter included, collateral updates and focus on one-on-one trade outreach to maintain trade relationships and increase depth of understanding among participating study providers. Energy Management Systems The program has achieved 4.3 GWh (77 percent of its annual goal), and is expected to finish the year at about 140 percent of annual goal for electricity. The performance was mostly driven by multi-location customers. Public Service has dedicated more engineering and program management focus to guiding customers through the custom analysis process. Vendors and Account Managers have noticed shorter processing times. Most projects either did not have retail gas or were not approved for gas savings. Nevertheless, the program achieved 1,887 Dth from three customers with a total of eighteen locations. We continue to target customers with both retail gas and electricity, and we expect full year gas achievement of 4,600 Dth (74 percent of goal). KW in the first quarter was erroneously reported as Customer KW. Actual Net Gen KW in the first quarter was 35 KW, and has been adjusted in the preliminary first quarter results. Furnace Efficiency There has been very little participation during the second quarter and little opportunity in the pipeline. The slow down during the warmer months was expected, but the forecasted low gas prices may be having an impact on our customer s decision to opt for the lower efficiency products leading to the limited pipeline. Lighting Efficiency The program achieved 37.1 GWh (103 percent of its annual goal) in the first half of 2010 due to continued customer and trade interest from increased lighting rebate levels commenced in 2009. The program benefitted from two large (greater than 1 GWh) opportunities that were committed in the second quarter. New LED lighting solutions were added to the program s prescriptive menu via 60-day notice, effective June 7 th. Motor & Drive Efficiency This program achieved 10.8 GWh of savings (52 percent of goal) in the second quarter of 2010. The majority of activity continues to occur through the drive component of the program. Performance of this product is maintained through strong trade participation, frequent communications through sales channels and an easy to conceptualize value statement with respect to operating efficiencies. New Construction The Energy Design Assistance component of this program added twelve new projects in the second quarter, which are expected to be completed between 2011 and 2013. Six projects were verified and completed in the second quarter, resulting in energy savings of 5.0 GWh and a demand reduction of 1.0 GW. The Energy Efficient Buildings component, targeted at smaller buildings, had one project completed in the second quarter, which provided approximately 0.1 GWh of energy savings and 0.1 GW of demand reduction. Process Efficiency We have conducted five Phase 1 sessions through the first two quarters with these new customers representing significant pipeline potential. Year-to-date achievement is slightly behind expected results, but projects slated for completion in the third and fourth quarters are still on track. The program continues to have no natural gas impacts due to the limited number of large gas customers with retail gas service. Xcel Energy Public Service Company of Colorado Quarterly DSM Roundtable Update 2

Recommissioning Year to date, recommissioning has achieved 2.888 GWh (59 percent of goal) and 1853 Dth (89 percent of goal). Currently, there are 51 studies in process, and an additional 69 studies that have been approved and are awaiting customer implementation, which is usually dependant on budget approval and resources. This pipeline will help us achieve our 2010 goals. Segment Efficiency The Segment Efficiency program has now completed five studies. The program has achieved 1.12 GWh (10 percent) of goal and 191 kw (8 percent of goal). No gas savings have been achieved. The program is continuing to be promoted through NAIOP, BOMA, Watts two Water, and is association with Energy Star. A direct mail campaign is planned for the third quarter along with trade show events. Self-Directed Custom Efficiency In the second quarter three projects were committed resulting in 2.1 GWh. Combined with first quarter results, the Self Direct program has achieved 2.6 GWh or 60 percent of year end goal. It is expected the program will significantly exceed the year end goal. Small Business Lighting The program achieved 2.61 GWh (57 percent of its annual goal) in the first half of 2010. The program s consultant, Franklin Energy Services, continued to conduct vendor orientation meetings and outreach to increase awareness and interest in the program and its key benefits: free lighting audits and energy-saving recommendations, assistance with Xcel s rebate process and paperwork, and start-to-finish project oversight. New LED lighting solutions were added to the program s prescriptive menu via 60-day notice, effective June 7 th. The program is expected to meet or exceed 2010 s goal of 4.6 GWh through continued small business lighting audits and conversion of a robust pipeline of lighting projects expected to complete in 2010. Standard Offer No projects have been completed in the second quarter. Three study rebates have been paid. Two projects are awaiting final documents for completion for projected savings of 2.44 GWh (69% of goal) 281 kw and 4289 Dth (225% of Goal). The program continues to work closely with the Energy Services Coalition and the Governor s Energy Office. Residential Programs Energy Efficient Showerhead This seasonal program launched in a June mailing of 400,000 direct mailers to qualified customers. The program increased its target to gain additional natural gas savings to compensate for other programs currently projecting to fall short of year-end goal. M&V will be conducted in early fall to determine the installation rate, which impacts the final yearend dekatherm savings for the program. In 2009, the installation rate identified through M&V was 65 percent. ENERGY STAR New Homes The ESNH Program continues to perform well as far as participation, but had not been cost effective since its inception in 2009. We conducted a thorough internal analysis that resulted in several modifications to the program. The modifications were posted June 1 through the 60 Day Notice process and implemented on July 2. The modifications impacted rebate levels, technical assumptions and the net to gross factors for this program. The modifications will improve overall participant savings and should result in a cost effective program by year-end. Xcel Energy Public Service Company of Colorado Quarterly DSM Roundtable Update 3

ENERGY STAR Retailer Incentive Pilot Public Service submitted a 60 Day Notice on June 1 to improve the viability and cost effectiveness of the program. Public Service implemented the changes on July 2. The changes included: An increase in the participants to align with estimated sales potential in the market. A substantial decrease in the budget to maintain cost effectiveness. Elimination the ceiling fans as a measure. The majority of the energy savings for the ceiling fan was a result of the CFLs, not the fan. Since this pilot program is focused on appliances and electronics, we believe that it is better served to promote CFLs within the Home Lighting Program. A modification of the deemed savings technical assumptions, rebate criteria and dollars, and an addition of net-to-gross ratios for each individual measure. The launch of this program is planned for mid-august. Evaporative Cooling Rebates As of June 2010, the program is trending to hit 75 percent of participation and 80 percent of energy savings goals for the year. To increase program participation, we are working with our third party program partner, Wisconsin Energy Conservation Corporation (WECC) to target the retail segment by leveraging the opportunity to have store sales associates promote qualifying equipment and the rebate program. Additional marketing and promotional efforts include creating bi-lingual rebate applications, in-store signage for retailers, specialized retailer advertising, and offering a rebate bonus from June 1 July 15 in which we promoted throughout the marketing mix. Heating System Rebates Nearly 3,637 customers have taken advantage of the rebate, providing 29,937 Dth of savings by the second quarter 2010. More than 94 percent of heating rebates have been paid out for the highest efficiency level of 94 percent AFUE or higher. High-Efficiency Air-Conditioning Program The program includes several components: Central AC Quality Installation, Central AC Trade-In, and Central AC Tune Up. The AC Tune-up program launched in early April and currently has 10 HVAC contractors participating. Two of the 12 original contractors who signed up for the program determined that the program was not a good fit for their firms. A key requirement of the program is that when a contractor performs a test the outdoor temperature must be 55 degrees Fahrenheit or higher. Due to the cooler temperatures seen in May, testing by the participating HVAC contractors did not get under way in earnest until late May. At the end of June, over 100 tests were completed, 38 which met the program requirements. We expect the percentage of passing tests to improve as the contractors become more familiar with the diagnostic tool, program requirements and identifying customers that are good fit. On June 1, we filed a 60-day notice to add the Plan B or Early Retirement rebate component to the High Efficiency AC program. Now called the Trade-in rebate, it was approved and launched July 2 nd. The $500 Trade-in rebate is designed to move customers to trade-in their functioning, working AC unit for new unit. Customers must purchase a new qualifying unit in order to receive the Trade-in rebate. It is too early to tell the impact this rebate will have on the marketplace. Home Lighting & Recycling The 2010 program started on February 1 and continued through May, with a CFL mark down promotions at Ace Hardware, Albertsons, Costco, Home Depot, Lowes, McGuckins, King Soopers, Sam s Club and Walmart. We achieved roughly 900,000 units in sales through second quarter. We filed a 60-Day Notice on May 3 to modify the program to incorporate recommendations from the program evaluation completed in December. The modifications included an increase to the saturation rate and net-to-gross ratio. Xcel Energy Public Service Company of Colorado Quarterly DSM Roundtable Update 4

Home Performance with ENERGY STAR This performance based whole house improvement program has a natural air change per hour (NACH) requirement to reduce NACH by 0.15, in addition to performing three required improvements and two optional. As of June, we have 45 participants, which is below our targeted participation goal. Several marketing and promotional efforts are being implemented to grow program participation. One of the most important areas is through the education of the insulation and air sealing Participating Improvement Contractors. We have developed subsidized contractor training that launched in May to increase contractor skills in blower door directed air-sealing, reducing NACH, and meeting program requirements. For the customer, we increased the rebates making them more attractive than the stand-alone rebate programs. This promotional rebate is a 30-50 percent increase for each improvement and was implemented starting February 1 through December 31. Insulation Rebate This program is very often cross-marketed with the Heating Systems Rebates and Water Heating Rebates. As of June 30, we have experienced increased participation and are currently at 112 percent of our gas goal. (31,674 Dth achieved / 28,210 goal) We are monitoring spending and marketing efforts due to the stronger than planned performance year-to-date. Refrigerator Recycling Throughout the year we have implemented an aggressive marketing and advertising campaign, provided by our third party vendor ARCA, Inc. We are utilizing their industry expertise in hopes to bring more program awareness surrounding this program. Through late June, we have 904 refrigerators recycled, equaling over 1.035 GWh. This is 35 percent of our goal of 2.95 GWh. School Education Kits In 2010, we plan on delivering 18,318 kits to fifth grade classrooms resulting in a total savings of 2.1 GWh and 18,636 Dth. The kits were distributed in the April-May 2010. We will be using the M&V results for 2009 for our install rates which are: 66 percent install rate of the CFL light bulbs (two per kit), a 46 percent install rate for the 1.5 GPM aerator, and a 48 percent install rate for the 1.5 GPM showerhead. Once M&V is conducted on the 2010 this summer, we will update the installation rates to determine final year-end savings. Water-Heating Rebate The program has achieved 5,239 Dth as of late June, which exceeded the 2,119 Dth goal by 247 percent. Participation continues to be higher than planned in the 2010-11 DSM Plan due to the high participation with tankless water heater rebates. Saver s Switch As of the end of the second quarter, Public Service had received about 14,000 signup requests. To date we have installed 3,538 switches at customer sites. As in 2009 we are executing a strong promotional effort via direct mail, telemarketing, and radio/web/print advertising. In-Home Smart Device Pilot We have identified several Home Area Network (HAN) providers that can provide the enabling technology needed for us to proceed with installing systems in the homes of our participating customers, Each system submitted by these HAN providers much pass an established and rigorous functionality and security requirements testing process before in home installation can begin. We expect to be testing multiple systems beginning in early August. Testing each system typically takes one week. Assuming we have a system or systems that pass our requirements, installation of HAN systems in customer s homes could begin in early September. Xcel Energy Public Service Company of Colorado Quarterly DSM Roundtable Update 5

SmartGridCity Pricing Pilot Public Service filed an Application with the Colorado PUC requesting approval of the SGC Pricing Pilot, which offers customers a variety of pricing structures (tariffs) to test their response to price signals and it was approved in late May. The Order stipulated we must submit compliance tariffs which apply to the volunteer pilot participants for Phase I of the Pilot Program. PSCo shall also file a detailed expansion plan for Phase II of the SGC Pricing Pilot no later than 90 days prior to when service shall be provided to Phase II pilot participants under the pilot rates (March 2011). An evaluation plan shall also be filed on or before May 1, 2011 and annual progress reports in December of each year beginning 2011. PSCo shall be allowed to recover costs of the pilot through DSM cost adjustment and be allowed to recover lost margins attributable to the impacts on customer usage as quantified in the final report assessing the pilot. Low-Income Programs Easy Savings Energy Kits Working with the Mile High Youth Corps, Public Service has distributed a total of 16,064 kits to qualifying Colorado residential customers for the second quarter 2010. 13,384 were distributed to customers receiving electric service, and 15,416 were distributed to customers receiving gas service. Business reply cards will be mailed every other month to qualifying customers using the most up to date LEAP participant list. Net generator kw was incorrect for the first quarter and has been updated to show accurate savings. Multi-Family Weatherization Thus far, Public Service has approved eight projects, with seven projects completed by second quarter to achieve 4,179 Dth (61 percent of gas goal) and 946 MWh (272 percent of electric goal). Non-Profit Energy Efficiency Through this program, Public Service approved 20 projects in the first quarter. Eight of these projects have been completed, achieving 247 MWh (112 percent of electric savings goal) and 1244 Dth (28 percent of gas goal). Single-Family Weatherization Over 1,220 homes were weatherized resulting in approximately 804 MWh and 10,923 Dth savings through the second quarter. Public Service has focused on program promotions, including consumer education efforts, local green community events, and Web presence at xcelenergy.com. Net generator kw was incorrect for the first quarter and has been updated to show accurate savings. Indirect Programs Customer Behavioral Change - Business As of June 2010, this program achieved 134 percent of the program goal with 2,650 participants. Public Service is currently executing a campaign including: an Energy Solutions newsletter, event marketing, stakeholder relations, educational workshops, and distribution of Smart Energy Employee materials. Customer Behavioral Change - Residential By the end of June 2010, this program achieved 96 percent of the program goal with 65,000 participants. Primary activities year-to-date include execution of a mass media (ad) campaign used in print, radio, and Web; development of the ResponsibleByNature.com web presence; and participation in community based marketing events statewide. Energy Analysis The program continues to perform well as many communities are encouraging their business customers to participate in an energy audit, and even more so now since stimulus funds are beginning to filter in. We achieved more than 40 percent of our goal Xcel Energy Public Service Company of Colorado Quarterly DSM Roundtable Update 6

during second quarter and are currently projecting to be at 178 percent of goal by the end of the year. Home Energy Audit We currently project that nearly 4,000 in-home energy audits will be completed by the end of 2010. Nearly 2,000 audits were completed by late June. Of the completed audits, 91 percent are Infrared, six percent Blower Door, and three percent Standard. Starting in September, the HEA program will study Apogee s EnergyInsights residential audit software. The study will take place September through December testing the audit software on an estimated 450 customers. The RESNET approved software has the potential of aiding in program efficiencies, increasing customer conversion from audit to improvement, and overall improving the quality of output data generated for the audit report. The study will be evaluated January 2011. DSM Market Research We bundled the four 2010 Colorado DSM Program Evaluations (Evaporative Cooling, Motor & Drive Efficiency, Recommissioning, Behavioral Change) with the Minnesota DSM Program Evaluations, and hired two vendors to manage the work. After a competitive bid process, we determined that The Cadmus Group will manage the Residential Evaluations (which includes Evaporative Cooling and Consumer Behavioral Change (CBC)) and Tetra Tech (formerly PA Consulting) will manage the Business Evaluations (which includes the Motor & Drive Efficiency and Recommissioning). All Evaluations are underway and on schedule. For the Evaporative Cooling Program Evaluation, Trade Ally and Participant surveys are complete. We anticipate completing this evaluation by December 15 th. The surveying for the CBC Program Evaluation is underway, with a target project completion date of October 1 st. For the Business Evaluations, we are embarking on customer surveying in August for both the Motors & Efficiency Drive and the Recommissioning Evaluations. We anticipate completing these Evaluation studies by December 31 st. DSM Planning & Administration On July 1 st the 2011 Colorado DSM Plan was filed along with testimony to the Colorado PUC. The combined electric and natural gas Plan proposes to achieve energy savings goals of approximately 240 GWh in electric and 368,000 Dth in natural gas at costs of $67.4 million and $15.8 million, respectively. The Strategic Issues filing which addresses longer range DSM issues such as the incentive mechanism, results from the DSM Market Potential Study, and long-range goals was filed on August 10 th. DSM Product Development During the second quarter of 2010, the DSM Product Development team continued with development of new products for the CO 2011 filing. Nine new products were launched for various programs based on approval through the 60-day Notice process. These include both Business and Residential products and were also included in the CO 2011 filing. Measurement & Verification Our third-party verification contractor, Nexant, has been conducting random field inspections for our prescriptive programs. Results so far are good with no major deviations from reported savings. Please contact Suzanne Doyle at 612-330-5518 or Neil Cowan at 303-294-2115 with questions/comments or e-mail at suzanne.galster@xcelenergy.com, neil.cowan@xcelenergy.com. 1-800-481-4700 xcelenergy.com Xcel Energy Public Service Company of Colorado Quarterly DSM Roundtable Update 7