Fitch Ratings Upgrades Xcel Energy & Subs; Rating Outlook Stable.

Business Editors

NEW YORK--(BUSINESS WIRE)--June 9, 2003

Fitch Ratings has completed a credit review of Xcel Energy Inc.(Xcel) and its subsidiaries and has upgraded the senior unsecured rating of Xcel to 'BBB-' from 'BB+', the senior secured ratings of Northern States Power Co. Minnesota (NSP-MN) and Northern States Power Co. Wisconsin (NPS-WI) to 'A-' from 'BBB+' and the senior unsecured rating of Southwestern Public Service Co (SPS) to 'BBB+' from 'BBB'. Fitch also affirmed the senior secured rating of Public Service Co. of Colorado (PSCO) at 'BBB+'. Fitch has also removed the ratings from Rating Watch Positive. The Rating Outlook is Stable. Ratings of all the affected entities are listed on the table below.

Xcel's revised rating reflects the substantial dividends upstreamed by its four main regulated subsidiaries, NSP-MN, NSP-WI, PSCO and SPS and the expectation that the company's exposure for the debt and obligations of its subsidiary NRG Energy (NRG) will be limited via the bankruptcy process as explained below. The utility subsidiaries, which distributed $567 million in dividends to Xcel in 2002, have strong financial profiles, and they will continue to be the main providers of cash flow to Xcel. Xcel itself has low debt leverage. Over the course of the past year, Xcel managed to recover from a serious cash flow stress that resulted from the insolvency of its subsidiary NRG Energy, exacerbated by significant parent company financings that had contained cross-default provisions tied to defaults at NRG. Those agreements have all been restructured or refinanced. In recent months, Xcel and its regulated utility subsidiaries have demonstrated access to capital markets and bank financing. Over the near to intermediate term, Xcel's liquidity is projected to be adequate to meet the expected requirements, including $752 million in payments to NRG creditors to hasten the resolution of NRG's bankruptcy.

With the recent bankruptcy filing of NRG, management has proposed a plan of reorganization (NRG Plan) that would limit Xcel's exposure to NRG to $752 million (including potential payouts related to Xcel's guarantees for NRG, to be paid over the course of about a year) and speed the resolution of the bankruptcy. Prior to filing the Plan, NRG Energy had approval from some important creditors, but it does not yet have the requisite majority approvals for the Plan to become effective. The revised rating encompasses Fitch's view that the requisite majority of creditors will accept the NRG Plan and that the Bankruptcy Court will approve the NRG Plan in more or less its proposed form. The rating also assumes that Xcel will benefit from tax refunds in 2004 that will aid in funding the payment under the NRG Plan. However, if the requisite creditors do not approve the Plan, Xcel's payments to creditors, if any, would be indefinitely delayed, somewhat enhancing short-term liquidity at Xcel.

Xcel will deconsolidate the NRG financials from consolidated results, improving the company's debt to total capitalization ratio to 57% in 2003 from 77% in 2002. Remaining non-regulated assets are projected to represent about 10% of total consolidated assets at year end 2003 after giving effect to the NRG de-consolidation. Xcel's Debt to EBITDA ratio is projected to improve significantly to about 3.5 times (x) in the next few years, from above 5.5x in the past two years.

The upgrade of Xcel permits the corresponding upgrade of its regulated subs, whose ratings are currently constrained by those of its parent. Three of the regulated subsidiaries, NSP-MN, NSP- WI, and SPS, have substantially better standalone credit profiles than indicated by their current constrained ratings. PSCO's rating is consistent with its underlying financial condition and not constrained. PSCO's credit profile has weakened due to a slowing economy in Colorado, higher leverage and a less favorable base rate settlement reached with the Colorado Public Utility Commission in April 2003.

The rating constraint of the regulated utilities by the Xcel rating reflects the utilities' moderate degree of insulation from the parent. Since NSPW, NSPM and SPS are not entirely insulated from the credit risk of their parent, their senior unsecured ratings are two notches above Xcel's senior unsecured ratings.

Xcel's Stable Rating Outlook incorporates Fitch's view of a better than even chance that the NRG Plan will be approved by the requisite percentage of creditors by year-end 2003. Going forward, Xcel's ability to wind down all involvement with NRG, collect expected tax refunds, and achieve continued improvements in group liquidity would likely lead to positive rating action or improved rating outlook for Xcel and its subsidiaries.

Ratings affected by the rating actions are:

Xcel Energy Inc.

-- Senior unsecured debt upgraded to 'BBB-' from 'BB+'.

Northern States Power Company-MN

-- First mortgage bonds and secured pollution control revenue

bonds upgraded to 'A-' from 'BBB+';

-- Senior unsecured debt and unsecured pollution control revenue

bonds upgraded to 'BBB+' from 'BBB';

-- Trust preferred stock upgraded to 'BBB' from 'BBB-';

-- Commercial paper affirmed at 'F2'.

Northern States Power Company-WI

-- First mortgage bonds upgraded to 'A-' from 'BBB+';

-- Senior unsecured debt upgraded to 'BBB+' from 'BBB'.

Southwestern Public Service Company

-- First mortgage bonds withdrawn;

-- Senior unsecured debt upgraded to 'BBB+' from 'BBB';

-- Commercial paper affirmed at 'F2'.

Southwestern Public Service Capital I

-- Trust preferred stock upgraded to 'BBB' from 'BBB-'.

Public Service Company of Colorado

-- First mortgage bonds affirmed at 'BBB+';

-- Senior unsecured notes affirmed at 'BBB';

-- Preferred stock affirmed at 'BBB-';

-- Commercial paper rating affirmed at 'F2'.

Rating Outlook is Stable for all entities.

Xcel Energy Inc. is the holding company for six electric utility companies that serve electric and natural gas customers in 12 states and a small natural gas pipeline company. Xcel also owns a number of non-regulated businesses, the largest of which, NRG Energy, Inc. along with numerous NRG subsidiaries is currently operating under the protection of the U.S. bankruptcy court.