**Exhibit 99.01**

 

**SPS Cautionary Factors**

 

The PrivateSecurities Litigation Reform Act provides a “safe harbor” for forward-lookingstatements to encourage such disclosures without the threat of litigation,providing those statements are identified as forward-looking and areaccompanied by meaningful, cautionary statements identifying important factorsthat could cause the actual results to differ materially from those projectedin the statement. Forward-looking statements are made in written documents andoral presentations of SPS. These statements are based on management’s beliefsas well as assumptions and information currently available to management. Whenused in SPS’ documents or oral presentations, the words “anticipate,” “estimate,”“expect,” “projected,” objective,” “outlook,” “forecast,” “possible,” “potential”and similar expressions are intended to identify forward-looking statements. Inaddition to any assumptions and other factors referred to specifically inconnection with such forward-looking statements, factors that could cause SPS’actual results to differ materially from those contemplated in anyforward-looking statements include, among others, the following:

 

•              Economic conditions,including inflation rates, monetary fluctuations and their impact on capitalexpenditures;

 

•              The risk of a significant slowdown ingrowth or decline in the U.S. economy, the risk of delay in growth recovery inthe U.S. economy or the risk of increased cost for insurance premiums, securityand other items;

 

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

 

•              Customer businessconditions, including demand for their products or services and supply of laborand 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 or costof capital such as changes in: interest rates; market perceptions of theutility industry, SPS, Xcel Energy or any of its other subsidiaries; orsecurity ratings;

 

•              Factors affectingutility 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;

 

•              Employee workforcefactors, including loss or retirement of key executives, collective bargainingagreements with union employees, or work stoppages;

 

•              Increasedcompetition in the utility industry;

 

•              State and federallegislative and regulatory initiatives that affect cost and investmentrecovery, have an impact on rate structures and affect the speed and degree to whichcompetition enters the electric market; industry restructuring initiatives;transmission system operation and/or administration initiatives; recovery ofinvestments made under traditional regulation; nature of competitors enteringthe industry; retail wheeling; a new pricing structure; and former customersentering the generation market;

 

•              Rate-settingpolicies or procedures of regulatory entities, including environmentalexternalities, which are values established by regulators assigning environmentalcosts to each method of electricity generation when evaluating generationresource options;

 

•              Social attitudesregarding the utility and power industries;

 

•              Risks associatedwith 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;

 

•              Risks associatedwith implementation of new technologies; and

 

•              Other business orinvestment considerations that may be disclosed from time to time in SPS’ SECfilings or in other publicly disseminated written documents.

 

SPS undertakesno obligation to publicly update or revise any forward-looking statements, whetheras a result of new information, future events or otherwise. The foregoingreview of factors should not be construed as exhaustive.

 

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