**Exhibit 99.01**

 

**SPS Cautionary Factors**

 

The Private SecuritiesLitigation Reform Act provides a “safe harbor” for forward-looking statementsto encourage such disclosures without the threat of litigation, providing thosestatements are identified as forward-looking and are accompanied by meaningful,cautionary statements identifying important factors that could cause the actualresults to differ materially from those projected in the statement.Forward-looking statements are made in written documents and oral presentationsof SPS. These statements are based on management’s beliefs as well asassumptions and information currently available to management. When used in SPS’documents or oral presentations, the words “anticipate,” “estimate,” “expect,” “projected,”objective,” “outlook,” “forecast,” “possible,” “potential” and similarexpressions are intended to identify forward-looking statements. In addition toany assumptions and other factors referred to specifically in connection withsuch forward-looking statements, factors that could cause SPS’ actual resultsto differ materially from those contemplated in any forward-looking statementsinclude, among others, the following:

 
| · |   | Economic conditions,  including inflation rates, monetary fluctuations and their impact on capital  expenditures;                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · |   | The risk of a significant  slowdown in growth or decline in the U.S. economy, the risk of delay in  growth recovery in the U.S. economy or the risk of increased cost for  insurance premiums, security and other items as a consequence of past or  future terrorist attacks;                                                                                                                                                                                                                                                           |
| · |   | Trade, monetary, fiscal,  taxation and environmental policies of governments, agencies and similar  organizations in geographic areas where SPS has a financial interest;                                                                                                                                                                                                                                                                                                                                                                |
| · |   | Customer business  conditions, including demand for their products or services and supply of  labor and materials used in creating their products and services;                                                                                                                                                                                                                                                                                                                                                                          |
| · |   | Financial or regulatory  accounting principles or policies imposed by the Financial Accounting  Standards Board, the SEC, the Federal Energy Regulatory Commission and  similar entities with regulatory oversight;                                                                                                                                                                                                                                                                                                                      |
| · |   | Availability or cost of  capital such as changes in: interest rates; market perceptions of the utility  industry, SPS, Xcel Energy or any of its other subsidiaries; or security  ratings;                                                                                                                                                                                                                                                                                                                                               |
| · |   | Factors affecting utility  operations such as unusual weather conditions; catastrophic weather-related  damage; unscheduled generation outages, maintenance or repairs; unanticipated  changes to fossil fuel or natural gas supply costs or availability due to  higher demand, shortages, transportation problems or other developments;  environmental incidents; or electric transmission or natural gas pipeline  constraints;                                                                                                      |
| · |   | Employee workforce  factors, including loss or retirement of key executives, collective  bargaining agreements with union employees, or work stoppages;                                                                                                                                                                                                                                                                                                                                                                                  |
| · |   | Increased competition in  the utility industry;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| · |   | State and federal  legislative and regulatory initiatives that affect cost and investment  recovery, have an impact on rate structures and affect the speed and degree  to which competition enters the electric market; industry restructuring  initiatives; transmission system operation and/or administration initiatives;  recovery of investments made under traditional regulation; nature of competitors  entering the industry; retail wheeling; a new pricing structure; and former  customers entering the generation market; |
| · |   | Rate-setting policies or  procedures of regulatory entities, including environmental externalities,  which are values established by regulators assigning environmental costs to  each method of electricity generation when evaluating generation resource  options;                                                                                                                                                                                                                                                                    |
| · |   | Social attitudes regarding  the utility and power industries;                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| · |   | Risks associated with the  California power market;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| · |   | Cost and other effects of  legal and administrative proceedings, settlements, investigations and claims;                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| · |   | Technological developments  that result in competitive disadvantages and create the potential for  impairment of existing assets;                                                                                                                                                                                                                                                                                                                                                                                                        |
| · |   | Risks associated with  implementation of new technologies; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| · |   | Other business or  investment considerations that may be disclosed from time to time in SPS’ SEC  filings or in other publicly disseminated written documents.                                                                                                                                                                                                                                                                                                                                                                      |

 

SPS undertakes no obligationto publicly update or revise any forward-looking statements, whether as aresult of new information, future events or otherwise. The foregoing review offactors should not be construed as exhaustive.

 

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