October 29, 2010

For Immediate Release                                                                                                                               

LP&L Media Contact: Chris Sims (806-775-2502)

Xcel Energy Media Contact: Wes Reeves (806-679-7773)

Xcel Sale to LP&L Completed

(Lubbock, TX) – Representatives from Lubbock Power & Light (LP&L), Xcel Energy and the City of Lubbock finalized the sale and purchase of Xcel Energy’s Lubbock distribution assets today that will lay the foundation for the future of power in Lubbock.

LP&L and Xcel Energy have reached a mutually beneficial agreement that allowed LP&L to purchase Xcel Energy’s electricity distribution system within the city and to serve all of Xcel Energy’s Lubbock retail electric customers. Since 1942 Lubbock has been served by both companies, resulting in duplication of electric power services, lines, poles and substations. Both companies have determined this to be an inefficient and intrusive way to provide electricity to the community.

“The duplication of retail electric service in Lubbock has not been efficient, and we believe we can best serve Lubbock and our other Texas retail customers by only providing the low-cost wholesale electricity to LP&L,” said Riley Hill, president and CEO of Southwestern Public Service (SPS), an Xcel Energy company. "Xcel Energy customers in Lubbock will be served by LP&L, but Xcel Energy will continue to supply the wholesale power and transmission services.”

This asset purchase allows LP&L to provide power to most of the households in Lubbock while still purchasing its power wholesale from Xcel Energy.

“It’s natural for LP&L to pick-up the Xcel retail electric service, since the City of Lubbock already provides utility service to all the properties in Lubbock,” Mayor Tom Martin said.

Because LP&L will use its solid financial position and bond ratings to fund the purchase through electric revenue bonds, electric rates for their customers will remain some of the lowest in the state.

“We want all our customers to know that electric rates will not increase as a result of this new relationship,” said W.R. Collier, LP&L Electric Utility Board Chairman.  “LP&L electric customers will continue to see low electric rates,”

Electric customers in the Panhandle and South Plains enjoy some of the lowest electric rates in Texas because of Xcel Energy’s low-cost power generation system and abundant renewable resources. Xcel Energy will remain a significant part of the Lubbock community and will continue its civic involvement in Lubbock as a regional hub of operations and as a wholesale electricity provider for LP&L and retail provider in other areas of the South Plains.

Xcel Energy received approval from the Xcel Energy Board of Directors to sell the assets, and the company gained regulatory approvals over the past year. LP&L received approval from the LP&L Electric Utility Board and the Lubbock City Council.

 “This decision was made in the best interest of the citizens of Lubbock as well as in the best interest of dozens of Texas and New Mexico communities where Xcel Energy will remain the sole retail provider,” Riley Hill said. “This will not be an immediate change, and we have done everything we could to make this transition as smooth as possible for our customers.”  

Gary Zheng, President and CEO of LP&L, said that LP&L has increased the number of their customer care center employees by 35%, purchased new phone systems and will be updating the billing system to continue LP&L’s goal of providing excellent customer service.  

LP&L and the City were advised by RBC Capital Markets with respect to financial matters, R.W. Beck with respect to operational matters and Vinson & Elkins with respect to legal matters.

LP&L’s business offices will be closed Friday, October 29, 2010 to ensure new customers’ account information accurately merges and validates into LP&L’s billing system.  In addition, nearly 23,000 meters will have to be read over the weekend.  Customers’ ability to pay bills will be limited on October 29 to registered users of Pay LP&L, the free online credit card and e-check payment center at lpandl.com, and LP&L’s pay-by-phone option, accessible at (806) 775-3409.  Customers experiencing non-billing related emergencies with their LP&L and City of Lubbock Utilities service between 8 a.m. on October 29 and 8 a.m. on November 1, should call (806) 775-2555 for electric emergencies and (806) 775-2588 from City of Lubbock Utilities emergencies.