ML112070181

Escrow and Custody Agreements, Enclosure 3

ML112070181
Person / Time
Site:	Monticello, Prairie Island
Issue date:	07/22/2011
From:	Tyson G Northern States Power Co, Xcel Energy
To:	Office of Nuclear Reactor Regulation
Shared Package
ML112070189	List: ML112070168 ML112070175 ML112070178 ML112070181 ML112070184
References
L-XE-11-011
Download: ML112070181 (24)

Text

Enclosure 3 Escrow and Custody Agreements 22 Pages Follow

ESCROW AND CUSTODY AGREEMENT This ESCROW AND CUSTODY AGREEMENT (the "Agreement") is dated as of'

( ? / / I ,2006, by and betweenNo~thetnStates Power Company d/b/a Xcel Energy, a company primarily engaged in the utility business ("Xcel Enermgy" or the "Company");

and Mellon Bank,N .A.,a national banking association (the "Custodian").

RECITALS WHEREAS, the Company owns several nuclear power stations, including Pr ai~ie Island Unit 1, Prairie Island Unit 2, and Monticello (each one, a "Unit7', and collectively the "'Units");

WHEREAS, the Company is responsible for the total cost of'decommissioning the Units; WHEREAS, the Company contributes h d s annually into decommissioning t~ust fund accounts (the "Annual Accrual"), which are designed to ensure that adequate funds will be available to decon~nlissioneach 'lJnit when such decommissioning expenses zu-e incutted in the fbture; WHEREAS, the amount of'the Annual Accrual is established by the Minnesota Public Utilities Commission ("MPUC" or the "Commission") and included in the rates charged by the Company to its customers within the service te~ritolyxegulated by the MPUC and the North Dakota Public Sewice Commission, the South Dakota Public Utilities Commission, the Public Service Commission of'wisconsin, the Michigan Public Service Comilzission and the Federal Energy Regulatory Commission ("FERC");

WHEREAS, if'the Annual Accxual is deposited into the decommissioning trust fmd accounts and certain events occu~,including without limitation, the extension of'the operating licenses for one or more of tlie Units, the decommissioning trust fund accounts ate likely to be ove~,-funded; WHEREAS, pursuant to applicable law, h d s deposited into the decomlnissioning bust fund accounts in excess of'theactual cost to decommission the Units gene~allymay be withdrawn only after all deconlmissioning activities are complete; WHEREAS, the1.e is a desixe to avoid the intergene~ationalinequities that could tesult if' one generation of'ratepayers pays substantially more than its fair share of'the cost to deconlrnission the Units; WHEREAS, under the tern~sof MPUC Order Setting End-of-life Dates and Other Guidelines for Nucleax Decommissioning Acclual, Docket No. E002IM-05-1648, issued M a ~ c h26,2006 (the "Order") (attached hereto as Exhibit A), the MPUC granted authotity for the creation of'm esclow into which the Company would deposit some or all of'the Annual Accrual, at the ditection of'the MPUC; WHEREAS, the Order also provides that the h n d s accumulated in said escrow will be distlibuted from the escrow solely (i) to the Company fot distribution to

ratepayers in the form of reduced rates andlor' (ii) to the applicable decommissioning trust fund upon a detetmination by the MPUC that such funds are needed to decommission one ox more of'the Units; WHEREAS, in future orders, the MPUC will direct the Company regarding how h d s in the escrow will be distributed based on the factual requirements fbr funding Unit decommissioning liabilities andlor refunding amounts to the atep payers following the granting or denial of'Company's application requesting decommissioning funding levels based on an extension of'opesatinglicenses applicable to the Units; WHEREAS, each of'the state and federal entities with jurisdiction has ageed that the determinations made by, and orders issued by, the MPUC shall be fbllowed with regard to cont~ibutionsto, disttibutions from, and allocations of hnds within said escrow; WHEREAS, this Agreement is subject to review and approval by the MPUC, which approval was issued by the MPUC on .July 21,2006; WHEREAS, the pa~tiesto this Agreement desire to establish the terms and conditions pursuant to which amounts will be deposited into, held in, and disbursed from, said escrow.

NOW, THEREFORE, the parties to this Agreement agree as follows:

1. Escrow.

(a) Escrow Fund., The Custodian agrees to accept delivery of'all Required Deposits (as defined below in Section l(b)) delivered by the Company, and to hold such mounts togethe1 with any interest or earnings thereon (all such amounts, net of'any withdrawals, transfers or other distxibutions authorized p.~usuantto this Ageement, the "Property") in three sepaxate accounts established by the Custodian (all such accounts collectively referred to herein as the "Escrow Fund") f o the~ benefit of'the Company's decol~lnlissioningh n d obligations,for each ofthe three Units, subject to the terms and conditions of'this Agreement and the Ot,der,until the Cl~stodianis instructed to release such amounts from the Escrow Fund pursuant to the tem~nsof'this Agreement.. The Escrow Fund shall not be subject to any lien or attachment by any creditor of'any party hereto, and shall be used solely for the purposes permitted by this Agreement and the Order.. Except as explicitly provided in Section 5 hereof, amounts held in the Escrow Fund shall not be available to, and shall not be used by, the Custodian to pay any, or. as an off-set for any, obligations of'the Company owed to the Custodian or any other person or

entity, (b) Transfer to Escrow. From time to time, it is anticipated that the MPUC will issue orders requi~ingthe deposit of'cash hnds by the Company into one or more of'the Escrow Fund's three accounts (such deposits, the "Requited Deposits"), Such Requir,ed Deposits will be paid by the Colnpany dir8ectlyto the Custodian by wire transfer of immediately available funds on or. before the last business day ofthe month in which the Required Deposit in question is due.

(c) Powers of Custodian. The Custodian shall have the power to:

(I) Appoint subcustodians, including affiliates of'the Custodian, as to part or all of'each Escxow Fund account; (2) Hold Property in nominee name, in beatmer form or in book entry foxm, in a cleatinghouse corporation or in a depository, so long as the Custodian's records clearly indicate that the assets held are a part of'a specified Escrow Fund account; (3) In response to Authorized Instructions (as defined in Section 3(b) below),

to settle purchases and sales and engage in other transactions, including free receipts and deliveries, exchanges and other voluntary coxpolate actions, with respect to securities ox other Ploperty received by the Custodian.. Free leceipts and deliveries occur. when property is received into the Escrow Fund (without a co~respondingpayment out) or delivered out of'the Escrow Fund (without a corresponding receipt in of' equal propetty),

(4) Engage in sulch additional activities and t~ansactionsas explicitly set forth herein

2. Release of Escrowed Funds.

(a) Except as explicitly authorized in this Agreement, no distribution, transfer, withdrawal ox release of knds from the E;scxow Fund shaIl occur.,

(b) Distribution to the Company.. If'theMPUC or other regulatory agency with applopriate jmisdiction by issuance of an ordet detelmines that funds held in one om.

mor8eof the sepaate accounts compxising the Escrow Fund shall be distributed to the Company, the Company shall provide the Custodian (with a copy to the MPUC and any othel affected regulatory agency) with a written notice substantially in the form of' Exhibit B hereto (the "Release Notice") setting foxth the precise amounts in the Eisc~ow Fund to be released to the Company, the date ox.range of'dates within which such released funds shall be paid to the Company, and providing a representation by the Company that such distribution is in confolmity with a d d y approved order from the MPUC 01 any other regulatory agency with appropriate juxisdiction.,

(c) Distlibution to Decommissioning Ttust Fund. If'the MPUC 01 othert regulatory agency with appropriate jurisdiction by issuance of'an order determines that the decommissioning trust find for one or more of'the Units does not have sufficient fi~ndsto cover all decommissioning expenses associated with such Unit(s), then the Company shall provide the Custodian (with a copy to the MPUC and any other affected regulatory agency) with a Release Notice setting folth the precise amounts in the Escxow Fund to be transfened into the decommissiox~ingtrust fbnd for a given Unit, the date or range of'dates within which such funds shall be paid by the Custodian to the applicable deco~nmissioningtrust fund(s), and pxoviding a ~.epresentation by the Company that such distribution is in conformity with a duly approved o~derfrom the MPUC or any other regulatory agency with appropriate jurisdiction.

(d) The Custodian shall pay all amounts designated by the Company in a prope~lyexecuted Release Notice from the Escr,owFund as designated in such Release Notice The Custodian shall give written notice ofthe completion of' any such transfer to the Company no later than five (5) business days after the completion thereof. To the extent assets are required to be liquidated in order to xaise funds to pay amounts designated in a Release Notice, the Company or its Investment Manager (as defined in Section 3(a) below) shall direct the Custodian as to which assets are to be liquidated in order,to raise such funds..

(e) Upon properly completing any tlansfers refemred to it1 Sections (6) or (c) above, the Custodian shall be discharged of' any furthe1 responsibility or obligation under this Agreement with respect to amounts released f ~ o m the Escrow Fund..The Custodian shall not be responsible in any way for the accuracy of'any calculations submitted to the Custodian by the Company, the responsibilities of'the Custodian in this regard being entirely ministerial and administrative,

3. Direction to Custodian: Limitation of Liability, (a) The Company shall furnish the Custodian with a written list of'the names, signatuies and extent of'authority of'all persons autho~izedto direct the Custodial on behalf' of'the Company under the terms of'this Agreement.. The Company may appoint and remove, in its sole discnetion, one or,more institutional or individual investment inanagers (each, an "Investment Manager") for.the Escrow Fund or such portion thereof' as the Company shall designate to the Custodian in witing, The Company shall cause the Investment Manage1 to furnish the Custodian with a written list ofthe names and signatures of'theperson or persons who are authorized to represent the Investment Manager in dealings with the Custodian.. The Custodian shall be entitled to deal with any person or entity propelly identified by the Company or Investment Manager (every such person or. enti.ty, an "Authorized Party") to the Custodian until the Custodian is notified to the conttaty in writing.

(b) Di~~ectionsfiom an Authorized Party to the Custodian pursuant to the terms of'this Agreement ("'Authorized Instructions") shall be in writing, transmitted by fixst class mail, overnight delivery, private courier; facsimile, or shall be an electronic transmission subject to the Custodian's policies and procedures, other institutional delivery systems ox trade matching utilities as directed by an Authorized Party and supported by the Custodian, or other methods agr'eedupon in writing by the Conlpany and the Custodian.

(c) The Custodian shall be undez no duty to: (i) question any Authorized Instructions with respect to the pottion of'the Escrow Fund ovet which the Authorized Party in question has authority; (ii) review any Prope~tyheld in the Escrow Fund 01.

monitor the anlount of'Property held; (iii) make any suggestions with respect to tl~e investment, retention and reinvestment of'the assets in the Escrow Fund; or (iv) evaluate or question the pelfowmance of' any Authorized Party. Furthermore, the Custodian shall

not be responsible 01. liable for any diminution of'value of any securities or othex Property held by the Custodian or. its subcustodians pursuant to Authorized Instructions.

(d) The term "Autho~izedTransactions" shall mean any action 01 sel-iesof actions resulting fiom Authorized Instructions.

(e) The parties acknowledge and agree that the Custodian shall not be responsible foi any ofthe p~ovisiotisof'tlle 01der referred to hefein or any subsequent MPUC orders, but shall only be obligated for the proper,and timely pe~formanceof such duties as are specifically set fotth in this Agreement. The Custodian (and its employees, attorneys, representatives and agents) will incut no liability with respect to any action taken or suffered by it in reliance upon any Authorized Instructions in accordance with the terms hereof'and believed by the Custodian in good faith to be genuine and to have been signed by the pfoper person (and shall have no responsibility to determine the authenticity 01 accuracy thereof), nor f o any

~ other action 01 inaction, except the Custodian's own willful misconduct, bad faith or,negligence.. In no event shall the Custodian be liable for indirect or consequential damages. h all questions arising under this Agreement, the Custodian may rely on the advice of counsel (which may be in-house counsel), and for anything properly done, omitted or suffered in good faith by the Custodian in reliance on such advice, the Custodicanwill not be liable., The Custodian will not be required to take any action under this Agreement involving any expense or liability unless the payment of' such expense or liability is made or provided for in a manner satisfactory lo the Custodian.,

(f) The Company agr.ees to indemnify the Custodian and hold it harmless against any claims, losses, liabilities,judgments, reasonable attorneys' fees and other reasonable costs or expenses of'any kind incurred by the Custodian without ~villfulmisconduct, bad faith 01. negligence on its pat, arising out of01 in connection with its entering into this Agreement and the performance of' its duties hereunder

4. Exncnses and Tax Reporting.

(a) Custodian. All fees and expenses incuxled in the ordinary course of' performing the Custodian's responsibilities her,eunde~, will be paid, as directed by the Company, though withdrawal from the Escrow Fund. Such fees and expenses will include, without limitation: [i) administrative costs; (ii) legal expenses; (iii) accounting expenses; (iv) actuarial expenses; (v) Investment Manager expenses and fees; (vi) Custodian expenses; and (vii) other expenses of'the E,scr'owFund, including all fedexal, state and local taxes, if'my, that are applicable to the Escrow Fund.. To the extent the Custodian p~usuantto Authorized Inst~uctionsadvances funds to the Escrow Fund for disbursements or to effect the settlement of'purchase hansactions, the Custodian shall be entitled to collect fiom the Esc~owFund leasonable charges established under the Custodian's standalcl overdraft terms, conditions and procedures.

The Company aglees to assume any and all obligations imposed now or hereafter by any applicable tax law with respect to payments made out of the Escrow Fund under this Agreement, and to the extent allowed by law, to indemnify and hold the Custodian harmless fiom and against any taxes, additions of late payment, interest, penalties and othe~expenses that may be assessed against the Custodian on any such payment The Company shall ii~structthe Custodian in writing with ~espectto the CustodiCanys responsibility f o ~withholding and other taxes, assessments or' other governmental chages, cexti6cations and gove~mentalt eporting in connection with Custodian's activities in performance of this Agreement To the extent the Custodian xeceives information xelated to taxes, reporting, withholding, cextificates and obligations with xespect to any account that is part of the Escrow Fund, the Custodian shall, promptly upon receipt theteof, provide to the Company such information which could, in the Custodian's reasonable belief, assist the Company in the submission of any reports or ret~~xns by the Company with respect to filnds in the Esc~owFund (b) Tax Reporting. The parties hereto agree that this Agteement constitutes a "grantor trust", within the meaning of'the Internal Revenue Code and the Regulations thexeunder; with respect to the Company and accordingly, fox tax sepolting purposes, all interest or other income earned fiom the investment of the Escrow Fund shall be allocable to the Company Furthermore, the Custodian agrees that it shall pr,ovideto the Company such information, reports and other materials as the Company shall reasonably request fi'om time to time for the preparation of'CompanyYstax filings

5. Investment oEFunds. The Custodian shall continually invest and reinvest the Escrow Fund and any income or interest the~efiomin Qualified Investments (as defined below) in accordance with the ditections fiom the Company or the Investment Manager'.. "Qualified Investments", as used hexein, means:

(a) Marketable obligations of'the United States in registered form and having a matwity of not more than two yeas from the date of'acquisition; (b) Maiketable obligations directly and fully guaranteed by the United States in registeyed form and having a maturity of'not more than two years fiom the date of' acquisition; (c) U.,S.,corporate obligations with debt ratings of' at least A3 by Moody's Investor Service and A- by Standard & Poor's with maturities not greater than two years as of'the date of'acquisition; (d) Money marlet hnds .

The Custodian shall provide Company with monthly statements reflecting the cuxrent balance, as well as all activity, fol each account in the Escsow Fund. In addition, the Custodian shall provide to the Company such repotts, in such detail, as Company reasonably deems necessary to enable the Company to satisfy all applicable regulato~y and accounting iequirements. In addition, on request, the Custodian will provide confirmation to the Company of'the deposit of' money in the Escrow Fund.

The Custodian shall take all action necessary to pay for Autholized Transactions, including exercising the power to bo~rowox.raise monies from the Custodian in its corpo~atecapacity or an afEliate of'the Custodian, and hold any Property in the Escrow Fwd as secmity for advances made to the Custodian for any such Authorized T~ansactions,including disbutsements or. expenses, The Custodian shall be entitled to collect fiom the Escrow Fund sufficient cash for reimbursement of' such disbwsements or expenses and if'such cash is insuff~cient,upon notice to the Company dispose ofthe assets of the Escrow Fund to the extent necesssuy.to obtain reimbursement.

6, Force Maieure. Notwithstanding anything in this Agreement to the contraty, the Custodian sl~allnot be responsible or liable for its failure to perform unde~

this Agxeement or for any losses to the E;sc~owFund resulting from an event constituting Fo~ceMajewe. "Force Majeure" means an event or circumstance which prevents the Custodian from performing its obligations hereunder, which event or circumstance is not within the reasonable control of'the Custodian, and which, by the exe~ciseof'due diligence, the Custodian is unable to overcome or avoid or cause to be avoided. This provision shall survive the te~minationof'this Agr.eement.,In the event that pelformance of' Custodian's obligations hereundel is affected by an event of'Fot ce Majeme, Custodian shall use commercially leasonable efforts to overcome such event of Force Majeuxe in a timely manne1..

7. Successor Custodian.

(a) Voluntary Termination by Custodian., In the event the Custodian becomes unavailable or.unwilling to continue in its capacity as such, the Custodian may resign and be discharged from its duties or obligations hereunder by giving wiitten notice of' resignation to the Company not less than thilty (30) days pxior,to the date when such resignation shall be effective. Upon such wiitten notice, the Company may designate a successor custodian prior to the expiration of' such thirty (30) day period by giving written notice to the Custodian and the MPUC, so long as such successor is a U,S bank or trust company with assets of' at least One Billion Dollars ($1,000,000,000).

Appointment of a successor that is not a U..S,bank or,trust company with assets of'at least One Billion Dollars ($1;000,000,000) shall require the prior written consent of'the MPUC. If'the Company fails to designate a successor custodian ptiox to the expiration of' such thirty (30) day period, the MPUC may appoint a successor custodian by giving written notice to the Company and the Custodian..

(b) Termination of' Custodian by Company. The Company may, in its sole judgment, tarninate the Custodian and transfer the Escrow Fund to a different custodian..

The Company shall provide witten notice of' such termination to both the Custodian and the MPUC no fewer than thirty (30) days piiol. to the effective date of such transfer, Such notice shall include (i) the effective date of'the transfer of'the Escrow Fund and (ii) the identity of the successor custodian, which must be a U S bank or trust company with assets of'at least One Billion Dollars ($1,000,000,000) or, in the alternative, a successor custodian explicitly pre-apploved by the MPUC.

(c) The Custodian will promptly tlansfer the Escrow Fund to a successor designated in acco~dancewith the terms of this Section 7 . In the event of'atermination of' the'custodian's role puxsuant to Section 7(a) hereof, and in the event no successor custodian is timely appointed as described in this Section '7, the Custodian may apply to a court of' competent jurisdiction fbx the appointment of'a successor custodian.. In no case, however, shall the Custodian be relieved of'theCustodian's duties and obligations under this Agreement until a successor custodian has been duly appoi~ltedin accordance with the terms of'this Section 7..

8, Limitation of Respoasibilitv; Notices The Custodian's duties are limited to those set forth in this Agreement, and no additional duties or obligations shall be implied.. The Custodian may rely upon the written notices delivered to the Custodian under this Agreement.

9. Notices.. Any notice provided for 01 permitted under this Agreement will be treated as having been received (a) when delivered personally, (b) when sent by confilmed telecopy or (c) one (1) day following when sent by cornmelcial overnight courier with written ve~ificationof'receipt,to the patty to be notified, at the address set forth below, or at such other place of'which the other pa~tyhas been notified in accordance with the provisions of'this Section 9 (except that the Custodian shall not be bound by or required to act upon any notice unless and until actually received by it).

(a) Ifto the Company, at:

George Tvson, 11, Vice President & Treasurer Xcel Energy 414 Nicollet Mall, 4thFloor Minneapolis, MN 55401 With copies to:

Jacob Mercer, Assistant Treasurer Xcel Enes~v 414 Nicollet Mall, 4thFloor Minneapolis, MN 55401 (b) If to the Custodian, at:

Mary Montz Mellon Global Secmity Se~vices Room 151 - 1315, One Mellon Bank Center Pittsburg, PA 15258-0001 With copies to:

Philli~Schneider 191 N. Wacker Drive Suite 2100 Chicago, IL 60606

Such notice will be treated as having been r'eceivedupon actual receipt if' actual receipt occurs earlier than as provided in clauses (a) through (c) hermeof'.

10. Cooperation. The Company shall provide to the Custodian all instfuments and documents within its power to provide that are necessary for the Custodian to pexform its duties and responsibilities hereunder,

11. Termination, The Custodian is not authorized to release Property from the Escrow Fund other than as explicitly set forth in this Agreement, (a) This Agreement shall te~minateupon the provision of'notice to the ,

Custodian by the Company stating that the MPUC or. other regulatoxy agency with appropriate jutisdiction has directed that no further deposits shall be made into the Escrow Fund and ordering distribution, pursuant to Section 2 hereof; of'all of'the sums held in the E scrow Fund.

@) In the event that any pexson or entity acting under color of'law, other than the Company, directs the Custodian to divert, transfer or release any amounts in the Escrow Fund to accounts or petsons other,than to (1) the decommissioning trust fund for one or more Units, or (2) the Company, as directed in Section 2 above, and in the absence of'the obligations created by this Agreement, the Custodian would be compelled to so divert, transfer 01 release, then (1) this Agreement, and the Custodian's authority hereunder, shall automatically texminate (except as such authority relates to the giving of' the required notice expressly set forth in the last sentence of'this Section 11(b)), (2) the Custodian shall illmediately give ixxevocable written notice to each of'the MPUC and the Company, to the effect that the provisions of'this Section 1l(b) have been triggered, and (3) the amounts in the Escrow Fund shall be directly transferred to the applicable decommissioning trust fund for the Units

12. Compensation. The Custodian shall'be entitled to co~npensationfor services under this Agteement as set forth in Exlibit C attached hereto..

13. Inspection of'Books and Records. Each of'the Company, the MPUC and the Minnesota Depattment of Cornme~ceshall have the light, at its own expense and with prior w~ittennotice to the Custodian, to inspect the Custodian's books and records telating to the Escrow Fund at any time during normal business hours or. to designate an accountant to make such inspection.

14, Standard of Carme. In perfo~mingits duties under this Agreement, the Custodian shall exercise the standard of' care required by applicable law, including without limitation, the same care and diligence that a professional custodian engaged in the banking or.trust company iadusby and having professional expertise in financial and securities processing transactions and custody would observe in these affairs.

15. General.

(a) Governing Law for Disputes. It is the intention of'the parties her,eto that the internal laws of the State of'Minnesota (inespective of its choice of law principles) shall goveln the validity of'this Agreement, the construction of'its terms, and the interpretation and enforcement of the rights and duties ofthe palties to this Agreement.

(b) Successor~sand Assigns. The Custodian may not assign this Agreement without the prior mitten consent ofthe Company. Any entity, which shall by merger, consolidation, purchase, or. otherwise, succeed to substantially all the custody business of' the Custodian shall, upon such succession and without any appointment 01 other action by the Company or.the MPUC, be and become successol custodian hereunder, upon notification to the Company This Agreement shall be binding upon, and inure to the benefit of; the Custodian and the Company and theit respective successors and permitted assigns..

(c) Counterparts. This Agreement may be executed in any number of' counterparts, each of' which shall be an otiginal as against any party whose signature appeas on such counterpat and all of'which together shall constitute one and the same instrument., This Agr'eement shall become binding when one or more countexparts ofthis Agreement, individually or talten together, shall bear the signatutes of'all of'the parties reflected in this Agreement as signatoxies, (d) Entire Agreement. This Agreement, the documents (if' any) explicitly referenced in this Ageement and the exhibits to such documents, constitute the entire understanding and agteement of'the paties to this Agreement with respect to the subject matter of'this Agreement and of'such documents and exhibits and supersede all prior and contemporaneous agreements or,understandings, inducements or conditions, express or implied, mitten or o~al,between the parties with respect to this Agreement.

(e) Waivers No waiver.by any party to this Agleelnent of'any condition or of'any breach of'any provision of'this Agreement will be effective unless in wiiting. No waiver by any parPtyof'any such condition or8breach, in any one instance, will be deemed to be a k t h e r 01 continuing waiver of' any such condition or breach or a waiver of'any other condition ox.breach of a11y other pr,ovisioncontained in this Agreement..

(f) Amendment, This Agreement may be amended with the written consent of'theCompany and the Custodian and subject to the approval of'the MPUC, p~ovided that ifthe Custodian does not agree to an amendment requested by the Company, the Company may, at its option, appoint a successorm Custodian in accordance with Section 7 of'this Agl eement..

(g) Business Days. As used herein, any reference herein to a "business day" shall mean any day other than a Saturday, Sunday or,other day on which banks in St.,

Paul, Minnesota are authorized or required to be closed,

(h) Capitalized Terms. To the extent not defined herein, capitalized terms shall have the same meaning asclibed to then1 in the Order..

(i) Reprpesentation,Each party represents and wa~antsto the other. party that it has fill autho~ityto enter into this Agreement upon the terms and conditions set fo~thherein and that the individual executing this Agxeement on its behalf'has the requisite autholity to bind such paty to this Agreement The Company has received and read the "Customer Identification Program Notice", a copy of which is attached to this Agreement as Exhibit D

I N WITNESS WHEREOF, the parties have duly executed this Ageement as of' the day and year first above written, and this Agreement shall be effective when executed by the Company and the Custodian. By executing this Agreement, each signatoly affirms and represents that the signatory has the requisite power and atlthority to execute this Agreement. Each signatory further' affi~msand represents that they, or. the principals upon whose behalf'they have signed, have the axithority to, and will, perform under and be bound by, the terms of this Agreement NORTHERN STATES POWER COMPANY d/b/a XCEL EMiRGY Name: George Tvson, I1

.7&- "=  !

Title:

Vice P~esident& Treasurer MELLON BANK, N A

Title:

c l i e n t service O f f i c e r

TAXPAYER IDENT1,FICATIONNUMBER CERTIFICATION By signing below the Company hereby cextifies under penalties ofperjury that the taxpaya identification numbel. provided below is correct and that the Company is not subject to 'back-up withholding on reportable payments c~editedto the Company's Account by the Custodian. The Company may not be subject to back-up withholding either' because (a) the Company is exempt fiom back-up withholding because it is an "exempt recipient", (b) the Company has not been notified by the Internal Revenue Service that it is subject to back-up withholding fos failure to ~eportall interest or' dividends, 01, (c) the IRS has notified the Company that it is no longer' subject to back-up withholding. (If'(a), (b), or. (c) do not apply, please cross out) Failure to sign beIow and provide a valid taxpayer, identification number may require that the Custodian apply federal income tax withholding at the rate of'30% (or the rate as rmequlred by law) on a11 reporstable payments made to the Account established under, this Agreement,,

The Internal Revenue Service does uot require your consent to any pr,ovision of'this documelit other than the certifications required to avoid backup withholding.

NORTHERN STATES POWER COR'IPANY, d/b/a XCEL ENERGY Name: George Tyson, 11

Title:

Vice Pr,esident & Tr,easurer.

EIN: 41-1967505 Taxpayer, Identification Number

Exhibit A: MPUC Order LeRoy ~ o ~ ~ e ~ d r a ~ e r ChaiI Matshall Johnson Commissioner Ken Nickolai Commissioner

'Ihomas Pugh Commissioner Phyllis A. Reha Commissioner Tn the Matte1 of Northe~nStates Power d/b/a ISSUE DATE: July 20,2006 Xcel Energy's Petition for Approval of the 2005 Review of Nucleaz Plant DOCKET NO Et.002M-05-1648 Decommissioning ORDER APPROVING ACCESSBLE ESCROW FUND PROCEDURAL HISTORY n Power d/b/a Xcel, Energy (Xcel) filed a Petifionfor On October 11,2005, N o ~ r h e ~States Approval offhe 200.5Review of Nuclear Plant Decommissioning (Petition)

On Decembex 23,2005, the Department of Commerce (the Depaxtment) filed comments on Xcel's Petition.

On May 23,2006, the Commission issued its Chder Setting End-o$L$e Dotes and Other Guidelines fo? Nudear Decommissioning Accrzrul. The Order states at Ordering paragraph 1:

Xcel and Department shall work together to prepare a pzaposed external account to submit to the Commission fox approval.

In compliance with tbe Order, Xcel confe~redwith the 1)epartment regarding a proposed exte~nal account On May 8,2006, Xcel filed its Petition for Approval of the 2006 Nuclear Decommissioning Accrual, setting fo~thits proposed Escrow Agreement.

On June 2,2006, the Depaximent filed its comments on the compliance filing, recommending approval of the Escrow Agreement.

On J d y 13,2006, the Commission met to consider the matter ENDJNGS AND CONCLUSIONS Nuclear Regulatory Commission O\IRC) regulations require exte~nalfunding to be available when nuclear operations cease The regulations sesttict withdt'awals fiom an extexnal decommissioning h d to only decommissioning costs until atl such cosfs have been satisfied. Thus, no matter how over-funded the exte~nalh d may be, the excess monies in the external fund cannot be,r.etwnedto ratepayers until such time as decommissioning is complete

In ordex to prevent inequities among ratepayers, Xcel proposed that the Commission approve an alternative bust account fbr the annual acc~ual The altexnative trust account would allow for greater flexibility and an earlier return of excess monies to xattpayers in the event that the collected funds are no longer needed fox decommissioning The Department also recognized the potential for over-funding, and expressed support for an altexnative fmding mechanism, so long as the funds could be adequatelyprotected..

On May 8,2006, Xcel filed its prsoposed accessible escrow h d for Commission approval. Its proposal would establish an Escrow and Custody Agreement between Xcel and Mellon Bank, the custodian.

The Escrow Agreement includes, i n f e ~alia, the following relevant provisions:

1 Ihe fimd will receive decommissioning payments as required by the Commission; 2 There will be three sepatate accounts --one for each nuclear generation unit -

within the escrow fund;

3. The custodian will invest and reinvest the funds in accord with directions &omXcel or the investment manager.

4 The Agreement provides that in the event the custodian becomes unavailable, he or she may be discharged from duties The company may designate a success01 custodian, or if it fails to do so, the Commission may appoint a successor custodian The Commission finds that the proposed Escrow Agseement will provide the desi~edflexibility and protections and is therefore in the public inte1,est. The Commission will therefole approve the Xcel's compliance filing ORDER

1. Xcel's Petition f o Approval

~ of the 2006 Nucleat Decommissioning Accxual and proposed Escrow Agx eement is approved 2 This Ordet shall become effective immediately Executive Secretary (SEAL)

This document can be made available in aIternative fo~mats(i e ,laxge print or audio tape) by calling (651) 201-2202 (voice) ox 1-800627-3529 @ANrelay service).

2

EXHIBIT B RELEASE CERTIFICATE T 0 MELLON BANK, N A.

AS CUSTODIAN The unde~signed,pursuant to Section 2 of'the Escrow and Custody Ag~eement dated as of' ,2006 between Northern States Power Company d/b/a Xcel Energy and Mellon Bank, N.A..(the "Escrow Agreement") (terms defined in the Escrow Agreement have the same meanings when used herein), hereby instructs you to pay the following anlount(s) from the Escrow Fund Account No.. to the following account(s) by wire ttansfer of'immediatelyavailable funds:

[name of'recipient] Account No.. 3 The under'signed hereby represents that the transaction(s) set forth herein are pur'suant to and in conformity with an order(s) issued by the Minnesota Public Utilities Commission or another legulatory agency with appropriate juxisdiction, The wire transfer is to be made within five business says of' your teceipt of'this NORTHERN STATES POWER COMPANY d/b/a XCEL ENERGY By:

Name:

Title:

Dated:

EXHIBIT C FEE SCHEDULE

Xcel Energy Inc. - Escrow Fee Schedule

-. ~uGmitted'6y-,

@ Mellan TrustsM I. Structural Charges

$3,500 per investment manage1 account per year

$1,500 per line item account pet year

$ 500 per plan account per year

11. Asset Based Charges Domestic:

2 basis points (,0002) on all assets J~terrzational:

7 basis points (.0007) on Developed Market assets 30 basis points (..0030)on Intermediate Maltet assets 50 basis points (.,0050)on Emerging Market assets DI. Transaction Fees Domes tic:

$10 per mortgage paydown

$1 0 pel wire hansfer

$15 per fiee tseceipt/f'ree delivery t~ansaction

$12 per depository pmchase, sale ox.maturity transaction

$40 per physical delivery/putchase t~ansaction Inter national:

$20 per purchase, sale or maturity transaction for Developed Markets

$60 peI purchase, sale 01 maturity transaction for Inte~mediateMarkets

$85 per.purchase, sale or matu~itytxansaction fox Emerging Markets

Page 2 Proposed Fee Schedule IV. Other Fees

$10 per fi~tur~es transaction

$10 per mar,ginvariation wire

$25 per commingled/mutual fund transaction

$25 per private placement & limited partnership transaction

$40 per sound trip option

$40 pet OTC transaction 2% of proceeds received fox each class action claim V, Cash Sweep Fee Dreyfus Cash Management Plus 20 basis points (.,0020)

VI. On-Line Information Delivery E.xecutive Wor lbench $5,000 annually VII. Tax Reporting

$165 pet' how multiplied by act~raltax hours VIII. Non-Periodic Payments

$8 per single sum payment IX. Comments We will pass through to the client any out-of-pocket expenses including, but not limited to, postage, courier expense, regisbation fees, stamp duties, telex cl~arges, custom leporting or custom programming, internallexternal tax, legal or' consulting costs and proxy voting expenses.

Page 3 Proposed Fee Schedule We reseIve the xight to amend ow fees if the service requirements change in a way that matelidly affects ow responsibilities or costs.. Suppolt of' other derivative investment strategies or special processing requirements (e,g. external cash sweep, etc..)may result in additional fees MelZon Tlust will bill Xcel on a monthly basis via a direct debit to an Xcel bt~~st account. Xcel will receive a copy ofthe Mellon invoice detailing the trustee fees, Mellon Trust will begin producing lnolzthly trust accounting repoxts in CD-ROM format, Har'dcopystatements will continue to be generated and will run parallel with the CD's in the short teim, Hardcopy x.eports will then be discontinued.

For : Xcel Energy,

-,. - Inc. For: ~ e l l d dank, n N .,

-9 By:

Date: Date: 9 129 /20~6

CUSTOMER IDENTIFICATION PROGRAM NOTICE IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT To help the government fight 'the funding of' terrorism and money laundering activities, all financial institutions al'e required by law to obtain, vexify and record idolmation that identifies each individual 01 entity that opens an account,.

What this means for you: When you open an account, we will ask you for your name, address, taxpayer or other government identification number and other information, such as date of' birth for individuals, that will allow us to identify you. We may also ask to see identification docunlents such as a drive1's license, passpoxt 01.

documents showing existence of'the entity.

Rev 0910