**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:

 

·              Economicconditions, including inflation rates, monetary fluctuations and their impacton capital expenditures;

·              The risk of asignificant slowdown in growth or decline in the U.S. economy, the risk ofdelay in growth recovery in the U.S. economy or the risk of increased cost forinsurance premiums, security and other items;

·              Trade, monetary,fiscal, taxation and environmental policies of governments, agencies andsimilar organizations in geographic areas where SPS has a financial interest;

·              Customerbusiness conditions, including demand for their products or services and supplyof labor and materials used in creating their products and services;

·              Financial orregulatory accounting principles or policies imposed by the FinancialAccounting Standards Board, the Securities and Exchange Commission, the FederalEnergy Regulatory Commission and similar entities with regulatory oversight;

·              Availability orcost of capital such as changes in: interest rates; market perceptions of theutility industry, SPS, Xcel Energy or any of its other subsidiaries; orsecurity ratings;

·              Factorsaffecting utility operations such as unusual weather conditions; catastrophicweather-related damage; unscheduled generation outages, maintenance or repairs;unanticipated changes to fossil fuel or natural gas supply costs oravailability due to higher demand, shortages, transportation problems or otherdevelopments; environmental incidents; or electric transmission or gas pipelineconstraints;

·              Employeeworkforce factors, including loss or retirement of key executives, collectivebargaining agreements with union employees, or work stoppages;

·              Increasedcompetition in the utility industry;

·              State andfederal legislative and regulatory initiatives that affect cost and investmentrecovery, have an impact on rate structures and affect the speed and degree towhich competition enters the electric market; industry restructuringinitiatives; transmission system operation and/or administration initiatives;recovery of investments made under traditional regulation; nature ofcompetitors entering the industry; retail wheeling; a new pricing structure;and former customers entering the generation market;

·              Rate-settingpolicies or procedures of regulatory entities, including environmentalexternalities, which are values established by regulators assigningenvironmental costs to each method of electricity generation when evaluatinggeneration resource options;

·              Socialattitudes regarding the utility and power industries;

·              Risksassociated with the California power market;

·              Cost and othereffects of legal and administrative proceedings, settlements, investigationsand claims;

·              Technologicaldevelopments that result in competitive disadvantages and create the potentialfor impairment of existing assets;

·              Risksassociated with implementation of new technologies; and

·              Other businessor 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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