UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.           )

 

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April 6, 2010

Dear Shareholder,

        Xcel Energy's Annual Meeting of Shareholders convenes Wednesday, May 19, 2010, at 11 a.m. MDT, at 1800 Larimer Street, Second Floor, Denver, Colorado. The doors will open at 10:15 a.m. MDT.

        In response to lower attendance numbers over the past few years and tightening budgets, this year we will again use a shorter format for our Annual Meeting. We will conduct the business portion of the meeting, announce voting results and include time for your questions.

        If your shares are registered in your name and you received your proxy materials by mail, your admission ticket to the Annual Meeting is attached to your proxy card. You will not receive an admission ticket if you accessed your proxy materials via the Internet or if a bank or broker holds your shares. If you are a registered owner you should provide your Notice of Internet Availability of Proxy Materials. If you are a beneficial owner you should provide proof of ownership as of the record date of your Xcel Energy stock. In addition, state-issued photo identification is required to gain admittance to the Annual Meeting.

        This year, we again are pleased to be using the U.S. Securities and Exchange Commission rule that allows companies to furnish their proxy materials over the Internet. As a result, we are mailing to many of our shareholders a Notice of Internet Availability of Proxy Materials instead of a paper copy of this proxy statement and our 2009 Annual Report. We believe that this process will conserve natural resources and reduce the costs of printing and distributing our proxy materials.

        Please review the Annual Meeting guidelines that appear on the back cover of this proxy statement. Remember, too, that you can listen to a web cast of the meeting at www.xcelenergy.com.

        Your vote is important. We encourage you to vote on the issues included in the proxy statement as soon as possible. You can vote electronically over the Internet, by telephone or by mailing a proxy card. Instructions about each of the options are included on your Notice of Internet Availability of Proxy Materials or your proxy card.

Sincerely,

Richard C. Kelly

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ANNUAL MEETING OF SHAREHOLDERS

NOTICE OF ANNUAL MEETING AND PROXY STATEMENT

TABLE OF CONTENTS

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XCEL ENERGY INC.
414 Nicollet Mall
Minneapolis, Minnesota 55401-1993
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

        A Notice of Internet Availability of Proxy Materials or this proxy statement and proxy card are being distributed on or about April 6, 2010.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be held on May 19, 2010:

Our 2010 Proxy Statement and Annual Report are available at www.proxyvote.com

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XCEL ENERGY INC.
414 Nicollet Mall
Minneapolis, Minnesota 55401-1993

April 6, 2010

PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 19, 2010

        

GENERAL INFORMATION ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING

        Q:    Why Am I Receiving These Materials?

        A:    You are receiving these proxy materials in connection with the solicitation by the Board of proxies to be voted at Xcel Energy's 2010 Annual Meeting of Shareholders. You are requested to vote on the proposals described in this proxy statement. Xcel Energy has appointed Michael C. Connelly, Cathy J. Hart and David M. Sparby, or any of them with power of substitution to vote all proxies properly executed and submitted by shareholders who are entitled to vote at the Annual Meeting, or any adjournment of the meeting.

Q:

Why Did I Only Receive a Notice Directing Me to the Internet Instead of the Proxy Statement and Annual Report?

        A:    Under the SEC's notice and access rules, companies can take advantage of the Internet in the proxy distribution process by sending their shareholders a Notice of Internet Availability of Proxy Materials (the "Notice") containing instructions on how to view the proxy materials on the Internet. Xcel Energy is mailing Notices again this year to lower costs and reduce the environmental impact of our Annual Meeting. Shareholders can indicate a preference to receive a hard copy of the full package by contacting Broadridge Financial Solutions, Inc. at 1-800-579-1639. The full package choice will remain in effect until changed by the shareholder.

        Q:    What Are the Company's Voting Recommendations?

        A:    Our Board recommends that you vote your shares as follows:

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"FOR" each of the nominees to the Board (see pages 19-30);



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"FOR" the approval of the performance measures available under the Xcel Energy Inc. Executive Annual Incentive Award Plan (see pages 31-37);



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"FOR" the approval of the performance measures available under the Xcel Energy 2005 Long-Term Incentive Plan and an amendment to include non-employee directors as eligible participants (see pages 38-43);



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"FOR" the ratification of the appointment of Deloitte & Touche LLP as Xcel Energy Inc.'s independent registered public accounting firm for 2010 (see page 44); and



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"AGAINST" the shareholder proposal in this proxy statement regarding an annual advisory vote on executive compensation (see pages 45-49).

        Unless you give other voting instructions on your proxy card, the persons named as proxy holders will vote in accordance with the recommendations of the Board of Directors. With respect to any other matter that properly comes before the meeting, the proxy holders will vote as recommended by the Board of Directors or, if no recommendation is given, in their own discretion.

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Q:

What is the Difference Between Holding Shares as a Shareholder of Record and as a Beneficial Owner?

        A:    As summarized below, there are some distinctions between shares held of record and those owned beneficially:

Shareholder of Record.    Your shares are registered directly in your name with our transfer agent, Wells Fargo Shareowner Services. As the shareholder of record, you have the right to vote your shares by proxy directly with the Company (by Internet, by telephone or by mail) or to vote in person at the Annual Meeting. If you do not vote in person or by proxy, your shares will not be voted.

Beneficial Owner.    Your shares are held in a stock brokerage account or by a bank or other nominee (sometimes this is referred to as "street name"). Your broker or nominee is considered the shareholder of record with respect to those shares and forwards proxy materials to you. As the beneficial owner, you have the right to direct your broker on how to vote and are also invited to attend the Annual Meeting. If you wish to vote your shares in person, you must provide us with a legal proxy from your broker.

If you are beneficial owner and you do not provide instructions as to how your shares are to be voted, your broker or other nominee will not be able to vote your shares on certain matters. The election of directors and the proposal to approve the performance measures and amend the 2005 Long-Term Incentive Plan are proposals on which your broker cannot vote your shares unless directed by you. Accordingly, we urge you to provide instructions to your broker or nominee so that your votes may be counted on these matters. You should vote your shares by following the instructions provided on the voting instruction card that you receive from your broker.

        Q:    How Can I Vote My Shares?

        A:    You may vote in person at the Annual Meeting, by granting a proxy or, for shares held in street name, by submitting voting instructions to your broker or nominee. If you are a shareholder of record, you will be able to do this over the Internet, by telephone or by mail. Please help us save time and postage costs by voting through the Internet or by telephone. Each method is generally available 24 hours a day and will ensure that your vote is confirmed and posted immediately.

        Shareholders of record (including participants in our Dividend Reinvestment and Cash Payment Plan) may vote their shares as follows:

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By Internet — Go to the web site at www.proxyvote.com, 24 hours a day, seven days a week. You will need the control number that appears on your proxy card or on your Notice of Internet Availability of Proxy Materials. Internet voting is available until 11:59 p.m. EDT on May 18, 2010. You may incur telephone and Internet access charges if you vote by the Internet.



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By Telephone — Call 1-800-690-6903, 24 hours a day, seven days a week. You will need the control number that appears on your proxy card or on your Notice of Internet Availability of Proxy Materials. Telephone voting is available until 11:59 p.m. EDT on May 18, 2010.



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By Mail — If you received a full paper set of materials, date and sign your proxy card exactly as your name appears on your proxy card and mail it in the enclosed, postage-paid envelope. If you received a Notice of Internet Availability of Proxy Materials, you may request a proxy card by following the instructions in your Notice. You do not need to mail the proxy card if you are voting by Internet or telephone.

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        Beneficial owners will receive instructions from the holder of record (the bank, brokerage house or other nominee that holds your shares) that you must follow in order for your shares to be voted.

        If you are a participant in one of our employee savings or stock ownership plans, your proxy card is a voting directive for shares allocated to your account. The trustee will vote the shares as instructed by you in your voting directive. If you do not return your voting directive by 11:59 p.m. EDT on May 14, 2010 the trustee will vote your allocated shares, along with all unallocated shares held in the plan, in the same proportion that all other allocated shares are voted.

We Encourage You to Vote by Internet or by Telephone Because it is Faster and Reduces Our Expenses.

        Q:    Can I Change My Vote?

        A:    Yes. If you change your mind after voting your proxy and prior to the Annual Meeting, you can revoke your proxy and change your proxy instructions by signing another proxy with a later date, voting a second time by telephone or by the Internet prior to 11:59 p.m. EDT on May 18, 2010, or revoking your prior proxy and voting at the Annual Meeting. Alternatively, you may provide a written statement to the Company (attention: Corporate Secretary) of your intention to revoke your proxy.

        Q:    Is My Vote Confidential?

        A:    Yes. Xcel Energy has adopted a confidential voting policy under which shareholder votes are revealed only to a non-employee proxy tabulator or an independent inspector of election, except (1) as necessary to meet legal requirements, (2) in a dispute regarding authenticity of proxies and ballots, (3) in the event of a proxy contest if the other party does not agree to comply with the confidential voting policy, and (4) where disclosure may be necessary for the Company to assert or defend claims.

        Q:    What is the Record Date and What Does it Mean?

        A:    Only shareholders of record at the close of business on the record date, March 23, 2010, are entitled to receive notice of the Annual Meeting and to vote the shares of common stock and preferred stock that they held on the record date.

        Except in the case of cumulative voting for directors, each share of our common stock is entitled to one vote upon each matter presented at the Annual Meeting. On March 23, 2010, there were 459,208,300 shares of common stock issued and outstanding. If you owned preferred stock (other than the $3.60 Series), you are entitled to one vote per share of such preferred stock upon each matter presented at the Annual Meeting. On March 23, 2010, we had 774,800 shares of our preferred stock (other than the $3.60 Series) outstanding. If you owned shares of our $3.60 Series preferred stock, you are entitled to three votes per share of such $3.60 Series of preferred stock upon each matter presented at the Annual Meeting. On March 23, 2010, we had 275,000 shares of our $3.60 Series preferred stock outstanding. Accordingly, shares representing 460,808,100 votes are entitled to vote at the Annual Meeting.

        Q:    What is the Quorum Requirement for the Annual Meeting?

        A:    At March 23, 2010, there were shares representing 460,808,100 votes entitled to vote at the annual meeting. We will have a quorum and be permitted to conduct business if a majority of the voting power of these shares is present at the Annual Meeting in person or by proxy. Abstentions and broker non-votes will be counted for the purpose of determining the presence of a quorum. Generally, broker non-votes occur when shares held by a broker for a beneficial owner are not voted with respect to a particular proposal because (1) the broker has not received voting instructions from the beneficial owner and (2) the broker lacks or does not exercise discretionary voting power to vote such shares.

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        Q:    What is the Voting Requirement to Approve Each of the Proposals?

        A:    Election of Directors.    In the election of directors, you may vote "FOR" or "AGAINST" all of the nominees or your vote may be "WITHHELD" with respect to one of more of the nominees. In order to elect a director, the shares voted "FOR" a nominee must exceed the shares voted "AGAINST" the nominee. A "WITHHOLD" vote will not have an impact on the election of directors. You are entitled to cumulatively vote your shares for one or more nominees as described more specifically under the heading "Proposal No. 1 Election of Directors." Under our Guidelines on Corporate Governance, an incumbent director in an uncontested election who does not receive a majority of the votes cast "FOR" his or her election must offer to tender their resignation to our Governance, Compensation and Nominating Committee. The Board, taking into account the Governance, Compensation and Nominating Committee's recommendation, will act on the offer of resignation and publicly disclose its decision within ninety days after the date of the certification of the election results. The Governance, Compensation and Nominating Committee, in making its recommendation, and the Board, in making its decision, may each consider any factors or other recommendations that it considers relevant and appropriate. Any director who has offered to tender his or her resignation will not participate in the decision with respect to his or her resignation. If the director's resignation is not accepted by the Board, the director will continue to serve until the next annual meeting and until his or her successor is duly elected. If the director's resignation is accepted by the Board, the Board in its discretion may fill any resulting vacancy or may elect to not fill the vacancy and decrease the size of the Board.

        Other Proposals.    For the other proposals, you may vote "FOR," "AGAINST," or "ABSTAIN." All other proposals require the affirmative "FOR" vote of a majority of the voting power of the shares present in person or by proxy and entitled to vote at the Annual Meeting. If you "ABSTAIN," it has the same effect as a vote "AGAINST." Abstentions on these matters are treated as votes "AGAINST", while broker non-votes are treated as shares not present and not entitled to vote on that proposal. If you are a beneficial owner and do not provide the shareholder of record with voting instructions, your shares may constitute broker non-votes for certain proposals, as described in "What is the Quorum Requirement for the Annual Meeting?" above.

Q:

What Does it Mean if I Receive More Than One Notice of Internet Availability of Proxy Materials or Proxy Card or Voting Instruction Card?

        A:    It means your shares are registered differently or are in more than one account. Please provide voting instructions for all notices, proxy cards and voting instruction cards you receive.

        Q:    Who Will Count the Vote?

        A:    Representatives of Broadridge Financial Solutions, Inc., will tabulate the votes and act as the inspectors of election.

        Q:    Who Pays for the Cost of Soliciting Votes for the Annual Meeting?

        A:    Expenses for the solicitation of proxies will be paid by us. In addition to sending you these materials, some of our directors and officers as well as management and non-management employees may contact you by telephone, mail, email or in person. You may also be solicited by means of news releases issued by Xcel Energy, and postings on our web site, www.xcelenergy.com, and advertisements in periodicals. None of our officers or employees will receive any extra compensation for soliciting you. We have also hired Laurel Hill Advisory Group LLC to assist us in the solicitation of votes. We will pay Laurel Hill Advisory Group LLC a fee of $8,000 for these services, plus reimbursement of reasonable out-of-pocket expenses. We will also reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to beneficial owners of our stock.

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        Q:    Does the Company Offer Shareholders Electronic Delivery of Proxy Materials?

        A:    Yes. Xcel Energy offers shareholders the option to receive the Annual Report to Shareholders and proxy statement electronically instead of receiving paper copies of these documents in the mail. You must consent to do so prior to the record date for the Annual Meeting.

        To provide your consent for electronic delivery, please go to www.xcelenergy.com and click on "Investor Information." Then look for electronic delivery. As soon as the Annual Report to Shareholders and proxy statement are available, electronic delivery participants will receive an e-mail with a link to the information and a control number to use to vote online.

        Q:    What Happens if Additional Proposals are Presented at the Annual Meeting?

        A:    Other than the proposals described in this proxy statement, we do not expect any matters to be presented for a vote at the Annual Meeting. If you grant a proxy, the persons named as proxy holders, Michael C. Connelly, Cathy J. Hart and David M. Sparby, or any of them, will have the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting. If for any unforeseen reason any of our nominees is not available as a candidate for director, the persons named as proxy holders will vote your proxy for such other candidate or candidates as may be recommended by the Governance, Compensation and Nominating Committee and nominated by the Board.

Q:

May I Propose Actions for Consideration at Next Year's Annual Meeting of Shareholders or Nominate Individuals to Serve as Directors?

        A:    Yes, you may submit proposals for consideration at future shareholder meetings as follows:

To Be Included in the Proxy Statement.    Unless we indicate otherwise at a later date, in order for a shareholder proposal (other than a director nomination) to be considered for inclusion in the Company's proxy statement for next year's Annual Meeting, the written proposal must be received by the Corporate Secretary no later than 5:00 p.m. CST on December 7, 2010. These proposals must be in writing and sent to: Corporate Secretary, Xcel Energy Inc., 414 Nicollet Mall, 5^th floor, Minneapolis, Minnesota 55401-1993. These proposals also will need to comply with Securities and Exchange Commission regulations regarding the inclusion of shareholder proposals in our proxy materials.

To Be Raised from the Floor.    Similarly, unless we indicate otherwise at a later date, in order for a shareholder proposal or director nomination to be raised from the floor during next year's Annual Meeting, the shareholder's written notice must be received by the Corporate Secretary no later than February 19, 2011, and must contain certain information as required under our bylaws. The requirements for such notice are set forth in our bylaws, a copy of which can be found on our web site, www.xcelenergy.com, under "About Us — Corporate Governance."

To Recommend an Individual to Serve as a Director.    You may make a recommendation to our Governance, Compensation and Nominating Committee of an individual to serve as a director by sending a written statement of the qualifications of the recommended individual to the Corporate Secretary of Xcel Energy Inc. at 414 Nicollet Mall, 5th floor, Minneapolis, Minnesota 55401-1993. In order to be considered for next year's Annual Meeting, your recommendation should be received by October 1, 2010.

        Q:    How can I avoid duplicate mailings?

        A:    If you and other shareholders of record with whom you share an address currently receive multiple copies of our Annual Report to Shareholders and/or proxy statement, or if you hold stock in more than one account, and in either case, you would like to receive only a single copy of the Annual Report to Shareholders or proxy statement for your household, please forward your written request to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 17717. Shareholders who

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participate in householding will continue to receive separate proxy cards. Also, householding will not in any way affect dividend check mailings.

        If you currently participate in householding but would like to receive a separate copy of our 2009 Annual Report to Shareholders or this proxy statement, please contact us in the manner described in the immediately preceding paragraph or call 1-800-542-1061. We will deliver the requested documents to you promptly upon receipt of your request. If you are a shareholder of record and you want to receive separate copies of the Annual Report to Shareholders and proxy statement in the future, please contact us in the manner described in the immediately preceding paragraph or call 1-800-542-1061. If you are a beneficial owner and you want to receive separate copies of the Annual Report to Shareholders and proxy statement in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker, or other nominee record holder.

CORPORATE GOVERNANCE

Governance Guidelines and Code of Conduct

        The Board of Directors operates under a set of written Guidelines on Corporate Governance. These Guidelines set forth the Company's corporate governance philosophy and the governance policies and practices that have been established to assist in governing the Company and its affiliates.

        The Guidelines describe Board and Committee membership criteria, the Board selection and member orientation process, stock ownership guidelines and lead director responsibilities. Directors are to retire from the Board on or prior to the day of the Annual Meeting of Shareholders after they turn 72 and, except for inside directors and directors first elected prior to August 18, 2000, are to serve no more than 15 years on the Board. The Guidelines also provide that no director may serve on more than two other boards of directors of publicly held companies without the prior approval of the Governance, Compensation and Nominating Committee. Directors whose professional responsibilities change, such as upon retirement or a change in employer, are required to submit a letter of resignation for the Board's consideration. The Guidelines also establish a director resignation policy in the event that a director does not receive the majority vote of the shareholders in an uncontested election.

        The Guidelines provide that the Governance, Compensation and Nominating Committee of the Board will evaluate the performance of the Chief Executive Officer on an annual basis, using objective criteria. The Guidelines also provide that the members of the Board will conduct an annual assessment of the performance of the Board and the processes used by the Board. The members of each respective committee will conduct an annual assessment of the performance of the committees.

        The Board of Directors of the Company has adopted a Code of Conduct that applies to all our officers as well as our employees and directors of Xcel Energy Inc., its wholly owned subsidiaries and affiliates. Our Code of Conduct applies to our Chief Executive Officer, our Chief Financial Officer and our Chief Accounting Officer, and complies with the requirements imposed by the Sarbanes-Oxley Act of 2002 and the rules issued thereunder for codes of conduct applicable to such officers as well as the governance requirements of the New York Stock Exchange.

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Corporate Governance Documents Available On Our Web Site

        All of our corporate governance materials, including our Code of Conduct, our Guidelines on Corporate Governance and each of our committee charters, are available for public viewing on the Company's web site at www.xcelenergy.com, under "About Us — Corporate Governance." Copies of our corporate governance materials are also available free of charge to shareholders who request them. Requests must be in writing and sent to: Corporate Secretary, Xcel Energy Inc., 414 Nicollet Mall, 5^th floor, Minneapolis, Minnesota 55401-1993. We intend to disclose any future amendments to, or waivers from, any provision of our Code of Conduct involving our directors, our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer or other persons performing similar functions on our web site within four business days following the date of any such amendment or waiver.

Board Leadership Structure

        The Xcel Energy Board of Directors is committed to effective and independent oversight of management and effective corporate governance. Our Board leadership structure, which is set forth in our Guidelines on Corporate Governance, promotes effective governance through the designated lead director and Board and committee composition and structure.

        First, the Board leadership structure, which includes a designated lead director and a combined position of Chairman and Chief Executive Officer, promotes effective governance. The combined position promotes strategy development, execution, and the provision of information, which are essential to effective governance. One of the key responsibilities of the Board is to develop strategic direction and hold management accountable for the execution of that strategy. Management and independent directors have different perspectives and roles in strategy development and execution. Management brings experience and expertise of the Company and the industry. An executive Chair who is familiar with the Company and industry is in the best position to define and develop strategy and work with the lead director to educate the Board and lead the development of strategy. An example of this is our environmental leadership strategy. The Company also believes that an executive Chair can more effectively provide information to the Board on the Company's opportunities, challenges and performance. Independent directors, represented by the lead independent director, bring experience and expertise from outside the Company and industry to strategy development.

        The lead independent director is elected by and from the independent Board members for a one-year term. On May 20, 2009, the independent members of our Board of Directors elected Fredric W. Corrigan to serve as the lead director for a one-year term. The responsibilities of the lead independent director are outlined in our Guidelines on Corporate Governance and include the following:

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Preside at all meetings of the Board at which the Chair is not present, including executive sessions of the non-management and independent directors;



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Serve as a liaison between the Chair and the independent directors, maintain regular communications with the independent directors and focus director communication on critical issues;



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Approve the agenda for the Board and, with the Chair, approve all materials provided to the directors;



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Approve meeting schedules to ensure sufficient time is provided for discussion of agenda items;



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Call meetings of the independent directors, as necessary;



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Consult and communicate with major shareholders, if requested;



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Manage evaluation of Board performance;



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Chair executive sessions of the Board; and

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Develop and maintain a process for Chief Executive Officer succession planning with the Governance, Compensation and Nominating Committee.

        The lead director and executive Chair both have responsibilities in providing information and contributing to effective governance by the Board. The Board believes that the balance of the two positions ensures the Board receives the information, experience and direction it needs to effectively govern.

        Second, our Board and committee composition ensures independence. The Board currently has eleven independent, non-employee directors among its thirteen members. All committees are composed of independent, non-employee directors. The independent directors meet on a regular basis in executive sessions without the Chief Executive Officer or any other management present. The lead director presides at these executive sessions.

Board Oversight of Risk

        The goal of the Company's risk management process is to understand and manage material risk; management is responsible for identifying and managing the risks, while directors oversee and hold management accountable. Our risk management process has three parts: identification and analysis; management and mitigation; and communication and disclosure. Company management identifies and analyzes risks to determine materiality and other attributes like timing, probability and controllability. Management broadly considers our business, the utility industry, the domestic and global economy, and the environment to identify risks. Identification and analysis occurs formally through a key risk assessment process conducted by senior management, the securities disclosure process, the hazard risk management process, and internal auditing and compliance with financial and operational controls. Management also identifies and analyzes risk through its business planning process and development of goals and key performance indicators, which include risk identification to determine barriers to implementing the Company's strategy. At the same time, the business planning process identifies areas where a business area may take inappropriate risk to meet goals.

        The goal of the risk management process is to mitigate the risks inherent in the implementation of the Company's strategy. The process for risk management and mitigation includes our Code of Conduct and other compliance policies, formal structures and groups, and overall business management. At a threshold level, the Company has developed a robust compliance program and promotes a culture of compliance, which mitigates risk. In addition to the Code of Conduct, the Company has compliance policies, training and reporting options. Building on the culture of compliance, the Company manages and mitigates risks through formal structures and groups, including Management Councils, Risk Committees, and the services of corporate areas such as internal audit, the corporate controller and legal services. While the Company has developed a number of formal structures for risk management, many material risks affect the business as a whole and are managed across business areas. The Company confronts legislative and regulatory policy and compliance risks, including risks related to climate change and emission of carbon dioxide and risks for recovery of capital and operating costs; resource planning and other long-term planning risks, including resource acquisition risks; financial risks, including credit, interest rate and capital market risks; and macroeconomic risks, including risks related to economic conditions and changes in demand for the Company's products and services. Cross-cutting risks such as these are discussed and managed across business areas and coordinated by the Company's senior management.

        Management provides information to the Board in presentations and communications over the course of the Board calendar. Senior management presents an assessment of key risks to the Board annually. The presentation of the key risks and the discussion provides the Board with information on the risks management believes material, including the earnings impact, timing, likelihood and controllability. Based on this presentation, the Board reviews risks at an enterprise level and confirms risk management

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and mitigation are included in the Company's strategy. The Guidelines on Corporate Governance and committee charters define the scope of review and inquiry for the Board and Committees. The standing Committees also oversee risk management as part of their charters. Each committee has responsibility for overseeing aspects of risk and the Company's management and mitigation of the risk. The Board has overall responsibility for risk oversight. As described above, the Board reviews the key risk assessment process presented by senior management. This key risk assessment analyzes the most likely areas of future risk to the Company. The Board also reviews the performance and annual goals of each business area. This review, when combined with the oversight of specific risks by the committees, allows the Board to confirm risk is considered in the development of goals and that risk has been adequately considered and mitigated in the execution of corporate strategy.

Director Independence

        For purposes of determining independence, we have adopted the following categorical standards for director independence in compliance with the listing standards of the New York Stock Exchange:

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No director qualifies as "independent" unless the Board affirmatively determines, taking into account all of the relevant facts and circumstances, that the director has no material relationship with us or any of our subsidiaries (either directly or as a partner, shareholder or officer of an organization that has a relationship with us or any of our subsidiaries);



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A director who is an employee, or whose immediate family member is an executive officer, of us or any of our subsidiaries is not independent until four years after the end of such employment relationship;



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A director who receives, or whose immediate family member receives, more than $120,000 per year in direct compensation from us or any of our subsidiaries, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service), is not independent until four years after he or she ceases to receive more than $120,000 per year in such compensation;



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A director (a) who is a current partner or employee of the firm that is the Company's external auditor, or (b) whose immediate family member is a current partner of such firm, or (c) whose immediate family member is a current employee of such firm and personally worked on the Company's audit, or (d) who was, or whose immediate family member was, within the last four years a partner or employee of such a firm and personally worked on the Company's audit within that time, is not independent;



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A director who is employed, or whose immediate family member is employed, as an executive officer of another company where any of our present executives or any of our subsidiaries' present executives serve on that company's compensation committee is not "independent" until four years after the end of such service or the employment relationship;



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A director who is an executive officer or an employee, or whose immediate family member is an executive officer, of a company that makes payments to, or receives payments from, us or any of our subsidiaries for property or services in an amount which, in any single fiscal year, exceeds the greater of $1 million or 2% of such other company's consolidated gross revenues is not "independent" until four years after falling below such threshold; and



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A director who is an employee or representative of a significant supplier of any Xcel Energy business unit or legal entity will not be "independent" unless we entered into the relationship with the supplier as a result of competitive purchasing practices.

        For purposes of determining whether a director is independent, the Board has determined that the receipt of regulated electric and gas service from the Company by a director, the director's immediate

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family member, or any entity of which the director is an affiliate does not constitute a material relationship. One of our directors, Mr. Richard K. Davis, is the Chairman, President and Chief Executive Officer of U.S. Bancorp. U.S. Bancorp serves as trustee for two of our operating subsidiaries first mortgage indentures, is a member of the banking group syndicate, but not the lead bank, for our and our subsidiaries' revolving credit facilities, and one of its subsidiaries served as a co-manager, but not the lead bank, on an offering of public debt securities by one of our subsidiaries. In the future, U.S. Bancorp may perform similar services for the Company. For these services, the Company paid U.S. Bancorp and its affiliates approximately $245,000 in 2009. For purposes of determining whether Mr. Davis is independent, the Board has determined that, due to the nature and relative size of such banking work compared to the revenues of both the Company and U.S. Bancorp, such banking work did not constitute a material relationship.

        In light of the foregoing, the Board determined that the following directors, who constitute all of the non-management directors of our Board, meet the independence standards set forth above: Mr. C. Coney Burgess, Mr. Fredric W. Corrigan, Mr. Richard K. Davis, Mr. Albert F. Moreno, Mr. Christopher J. Policinski, Dr. Margaret R. Preska, Ms. A. Patricia Sampson, Mr. Richard H. Truly, Mr. David A. Westerlund, Ms. Kim Williams and Mr. Timothy V. Wolf. Mr. Richard C. Kelly and Mr. Benjamin G.S. Fowke III do not meet the independence standards because they currently serve as our Chairman and Chief Executive Officer and President and Chief Operating Officer, respectively.

Director Attendance

        During 2009, the Board met seven (7) times and the independent directors met in executive session on seven (7) occasions. All of our directors, except for Mr. Policinski, attended at least 75% of the meetings of the Board and committees on which such director served during 2009. Mr. Policinski, who became a director December 1, 2009, had a schedule conflict with the Land O'Lakes prescheduled December board meetings. Mr. Policinski did attend our Nuclear, Environmental and Safety Committee meeting, which occurred the day prior to the Land O'Lakes conflict, but given the short period of his tenure on the Board, he was unable to attain 75% attendance.

        We do not have a formal policy, but encourage, each of our Board members to attend each Annual Meeting. All members of our Board attended the 2009 annual meeting of shareholders.

Communications with the Board of Directors

        Shareholders or other interested parties who wish to communicate with members of the Board, including the independent directors individually or as a group, may send correspondence to them in care of the Corporate Secretary at the Company's principal offices, 414 Nicollet Mall, 5^th floor, Minneapolis, Minnesota 55401-1993. Alternatively, the directors may be contacted via e-mail at boardofdirectors@xcelenergy.com. We currently do not intend to have the Corporate Secretary screen this correspondence, but we may change this policy if directed by the Board due to the nature and volume of the correspondence.

Board Diversity

        The Governance, Compensation and Nominating Committee of the Board considers a number of factors when identifying nominees for director. On an annual basis, the Committee assesses the skills and characteristics required of directors in the context of the current make-up of the Board.

        While the Committee does not have a formal diversity policy, diversity is one of the factors included in the Board membership criteria. The Board's Guidelines on Corporate Governance state:

The Governance, Compensation and Nominating Committee is responsible for reviewing with the Board, on an annual basis, the appropriate skills and characteristics required of Board members in

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the context of the current make-up of the Board. This assessment of the perceived needs of the Board should consider factors such as demonstrated leadership, judgment, skill, diversity, integrity, experience with business and other organizations of comparable size, interplay of experience with experience of other Board members and the extent to which a member would be a desirable addition to the Board and any committee of the Board.

        In practice, the Committee considers a broad range of diversity factors, including gender, ethnicity, race, national origin, geographic representation, education and personality. During its director search process and review of nominees, the Committee strives for a balance of skills and characteristics of Board members to appropriately represent the diversity of its shareholders, employees and customers.

Nomination of Directors

        In considering individuals for nomination as directors, the Governance, Compensation and Nominating Committee typically solicits recommendations from its current directors and is authorized to engage third party advisors, including search firms, to assist in the identification and evaluation of candidates. In evaluating potential candidates, the Committee may consider such factors as it deems appropriate. As noted above, these factors include demonstrated leadership, judgment, skill, diversity, integrity, experience with businesses and other organizations of comparable size, the interplay of the candidate's experience with the experience of other Board members and the extent to which the candidate would be a desirable addition to the Board and any committees of the Board. While the Committee has not established any specific minimum qualifications for director nominees, the Committee believes that demonstrated leadership, as well as significant years of service in an area of endeavor such as business, law, public service, related industry or academia, is a desirable qualification for service as a director of the Company.

        Of the eight non-employee directors recommended for election at the 2010 Annual Meeting, all were elected as directors at our 2009 Annual Meeting, except for Christopher J. Policinski and Kim Williams, who were appointed to the Board after our external director recruitment firm identified them as candidates. The director recruitment firm identified, evaluated and performed background searches of the nominees and coordinated interviews. The Governance, Compensation and Nominating Committee reviewed their qualifications and recommended their election to the Board.

        Any shareholder may make recommendations to the Governance, Compensation and Nominating Committee for membership on the Board by sending a written statement of the qualifications of the recommended individual to the Corporate Secretary at 414 Nicollet Mall, 5th Floor, Minneapolis, Minnesota 55401-1993. Such recommendations should be received by October 1, 2010 in order to be considered for next year's Annual Meeting. The Committee will evaluate candidates recommended by shareholders on the same basis as it evaluates other candidates.

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BOARD STRUCTURE AND COMPENSATION

Standing Committees

        The Board had the following four standing committees during 2009:

•

Audit



•

Finance



•

Governance, Compensation and Nominating



•

Nuclear, Environmental and Safety

        The current members of the Committees are as follows:

Committee Structure

        The Governance, Compensation and Nominating Committee recommends to the Board the directors to chair these committees. The roles and responsibilities of these committees are defined in the committee charters adopted by the Board and provide for oversight of executive management. The duties and responsibilities of all the Board committees are reviewed regularly and are outlined below.

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Audit Committee

        All members of the Audit Committee are independent, as defined in the listing standards of the New York Stock Exchange and SEC rules, and are financially literate in accordance with the listing standards of the New York Stock Exchange. The Board has determined that Timothy V. Wolf and Kim Williams meet the Securities and Exchange Commission's definition of an audit committee financial expert.

        Number of meetings in 2009: Seven (7)

        The functions of the Audit Committee include:

•

Oversight of our financial reporting process, including the integrity of our financial statements, compliance with legal and regulatory requirements, and the independence and performance of internal and external auditors;



•

Review of the annual audited financial statements and quarterly financial information with management and the independent auditors;



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Appointment of independent auditors;



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Review with management the Company's major financial risk exposures and the steps management has taken to monitor and control the exposures, including the Company's risk assessment and risk management guidelines and policies;



•

Review with the independent auditors of the scope and the planning of the annual audit;



•

Review of findings and recommendations of the independent auditors and management's response to the recommendations of the independent auditors; and



•

Preparation of the Report of the Audit Committee included in this proxy statement.

Finance Committee

        Number of meetings in 2009: Four (4)

        The functions of the Finance Committee include:

•

Oversight of corporate capital structure and budgets;



•

Oversight of financial plans and dividend policies;



•

Recommendations as to dividends;



•

Oversight of insurance coverage and banking relationships;



•

Oversight of investor relations; and



•

Oversight of financial and operational risk management.

Governance, Compensation and Nominating Committee

        Number of meetings in 2009: Five (5)

        The functions of the Governance, Compensation and Nominating Committee include, among others:

•

Determination of Board organization, selection of director nominees and setting of director compensation;



•

Evaluation of performance of the Chief Executive Officer and other senior officers;



•

Approval of executive officer compensation, including incentives and other benefits;

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Establishment of corporate governance principles and procedures;



•

Review of corporate structure and policies with respect to human resource policies, corporate ethics, and long range planning and strategy;



•

Oversight of compensation and governance related risks;



•

Review proxy disclosures regarding directors' and executive officers' compensation and benefits, including but not limited to the Compensation Discussion and Analysis; and



•

Preparation of the Report of the Compensation Committee included in this proxy statement.

Process Related to Executive Officer and Director Compensation

        Under the terms of its charter, the Governance, Compensation and Nominating Committee of the Board of Directors has broad authority to develop and implement compensation policies and programs for executive officers and Board members. In particular the role or functions of the Governance, Compensation and Nominating Committee is to:

•

Review and approve corporate goals and objectives relevant to the compensation of the Chief Executive Officer;



•

Evaluate the performance of the Chief Executive Officer in light of those corporate goals and objectives and set the compensation level for the Chief Executive Officer based on such evaluation and any other factors it deems appropriate;



•

Review and recommend to the Board the approval, adoption and amendment of all cash and equity-based incentive compensation plans in which any executive officer participates and all other equity-based plans;



•

Administer the equity-based incentive compensation plans and any other plans adopted by the Board that contemplate administration by the Governance, Compensation and Nominating Committee;



•

Review performance and approve salaries and other forms of compensation, including perquisites and awards under the incentive compensation plans and equity-based plans, for executive and senior officers and report the results of such performance and compensation evaluations to the Board;



•

For executive and senior officers, approve short-term and long-term incentive awards and review corporate annual and long-term performance against goals;



•

Review severance and employment arrangements for senior officers; and



•

Review and recommend Board compensation plans.

        The Governance, Compensation and Nominating Committee may in its discretion delegate all or a portion of its duties and responsibilities to a subcommittee.

        The Governance, Compensation and Nominating Committee retained Towers Perrin as its independent, external compensation consultant for the last several years. At the beginning of 2010, Towers Perrin merged with Watson Wyatt, but all services provided in 2009 were by Towers Perrin. Towers Perrin is a nationally recognized consulting firm in the areas of executive compensation and benefits and has extensive experience and expertise in evaluating director and executive compensation for the utility industry. At the Governance, Compensation and Nominating Committee's direction, Towers Perrin provides an annual evaluation and analysis of trends in executive and director compensation. Towers Perrin also evaluates related compensation issues from time to time at the direct request of the Governance, Compensation and Nominating Committee. In 2009, Towers Perrin was paid approximately

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$144,000 for their services, of which approximately $108,000 was related to executive and director compensation consulting services while the remainder was associated with other executive compensation and salary survey projects. The Governance, Compensation and Nominating Committee receives additional support from the Vice President and Chief Administrative Officer, the Vice President and Corporate Secretary and the Vice President and General Counsel.

        In its oversight of the Company's executive compensation program, the Governance, Compensation and Nominating Committee worked with Towers Perrin, the CEO and the Chief Administrative Officer. The CEO and executive officers provide recommendations to the Governance, Compensation and Nominating Committee with respect to the corporate performance objectives and goals other than goals relating to environmental leadership and safety strategies, on which awards of both annual and long-term incentive compensation are based and with respect to issues related to attracting, retaining or motivating executive officers. The CEO and executive officers also provide the Governance, Compensation and Nominating Committee with information regarding financial performance, budgets and forecasts as it pertains to executive compensation. The CEO and executive officers provide recommendations to the Nuclear, Environmental and Safety ("NES") Committee with respect to safety and environmental leadership goals, which the NES Committee reviews and recommends to the Governance, Compensation and Nominating Committee. The Governance, Compensation and Nominating Committee considers this information with the advice of Towers Perrin and takes into account several factors, including but not limited to: the desire to align management interests with those of shareholders, customers and employees; the desire to link management pay to annual and long-term Company performance; and the need to attract and retain talent from both within and outside of the utility industry, all of which ultimately determines the executive compensation policies and programs.

        The Governance, Compensation and Nominating Committee reviews tally sheets for each executive officer, which identify the components of each executive officer's compensation. These tally sheets are prepared by the Company with certain post-employment valuations provided by outside consultants. These sheets present the value of each component of the executive officer's compensation including total cash compensation, deferred compensation, perquisite allowances, existing but unvested equity awards, any retirement or other post employment benefits, and other potential compensation under applicable severance plans. The purpose of the tally sheets is to aggregate and present in one document the entire compensation of the executive officers whether actually earned and received or in potential future amounts. The Governance, Compensation and Nominating Committee uses these tally sheets to determine if total executive compensation is competitive and accomplishes the goals of the Company's executive officer compensation program. Tally sheets are not used to determine any particular amount of compensation. The Governance, Compensation and Nominating Committee also uses these tally sheets to make comparisons of executive officers for internal equity.

Nuclear, Environmental and Safety Committee

        Number of meetings in 2009: Four (4)

        The functions of the Nuclear, Environmental and Safety Committee include, among others:

•

Oversight of nuclear strategy and operations, including the review of the results of reports and major inspections and evaluations;



•

Review of environmental strategy, compliance, performance issues and initiatives;



•

Review of material risks relating to our nuclear operations and our environmental and safety performance, including risks to the Company's reputation;



•

Review of safety performance, strategy and initiatives.

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Directors' Compensation

        Only non-employee directors are compensated for their Board service. For 2009, the director pay components were as follows:

Annual Retainers:

•

$80,000 retainer for all non-employee directors



•

$15,000 for the lead independent director



•

$5,000 if serving as a chair of a Board committee, with the exception of the Audit Committee chair, who receives $10,000



•

$5,000 for members of the Audit Committee, other than the chair

        Directors receive 25% of the applicable annual retainer each quarter (pro-rated for partial service during the quarter). As discussed under "Director Deferred Compensation Plans," directors may elect to defer all or a portion of their cash retainer into stock equivalent units.

Annual Equity Grant:

•

$80,000 of Xcel Energy common stock equivalent units are granted on the first business day following the annual shareholders meeting (prorated for directors who serve part of the one-year term), which are payable upon the director's disability or termination of service.

        In September 2009, the Board of Directors determined to increase that annual equity grant amount to $120,000 commencing with the grant to be made following the 2010 Annual Meeting.

        Xcel Energy does not pay meeting fees for a director's participation in board or committee meetings. The amount of compensation each current and former director received in 2009, including deferred amounts, is shown in the table below.

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Director Compensation Table

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Stock Equivalent Plan

        We have a Stock Equivalent Plan for Non-Employee Directors (the "SEP") to more closely align directors' interests with those of our shareholders. Under the SEP, directors receive an annual award of stock equivalent units on the first business day following the annual shareholders meeting for the following year of service, with each unit having a value equal to one share of our common stock. Stock equivalent units cannot be voted by a director and are only payable as a distribution of whole shares of the Company's common stock upon a director's death, disability or termination of service. The stock equivalent units fluctuate in value as the value of our common stock fluctuates. Additional stock equivalent units are accumulated upon the payment of, and at the same value as, dividends declared on our common stock. The SEP is intended to comply with Section 409A of the Internal Revenue Code. As such, directors can elect to receive payouts from the SEP either in January of the year following their separation from service or within 90 days of such event.

        On May 21, 2009, each outside director of the Company received an award of 4,716.98 stock equivalent units under this plan representing approximately $80,000 in cash value; these amounts are reflected in the "Stock Awards" column in the "Director Compensation Table" above. Additional stock equivalent units were accumulated during 2009 as dividends were paid on our common stock. The number of stock equivalent units for each outside director that have accumulated during their tenure of board service is listed in the Beneficial Ownership Table on page 50.

Directors Deferred Compensation Plans

        Directors are able to defer director fees until after retirement from the Board or separation from service as a director under two different plans. Under our SEP, directors who elect to defer compensation into stock equivalent units receive a premium of 20% of the compensation that was deferred. The terms of the SEP are discussed above. Directors may also elect to defer receipt of their cash retainer under our Non-Employee Directors Deferred Compensation Plan. Under this plan, deferred amounts earn a return of the average of the rate at which 30-day U.S. Treasury Bills are sold in the first auction of each month during a calendar quarter plus 100 basis points. The Directors Deferred Compensation Plan is intended to comply with the requirements of Section 409A of the Internal Revenue Code, and directors can elect to receive payments under the plan in either a lump sum in the January immediately following their termination of service or in ten annual installments commencing no later than the January of the year following their termination of service.

Frozen Predecessor Director Retirement Plan

        Our current director, Mr. Burgess is entitled to a benefit upon retirement from the Board resulting from his service as a director for a predecessor company under a policy that was frozen on August 22, 2000, at the time of the formation of Xcel Energy. Based on the terms of this tenure policy, Mr. Burgess is eligible to receive a monthly benefit ($406.25) for the lesser of ten years or life upon his retirement from the Board. In addition, under this tenure policy, Mr. Hirschfeld became entitled to receive a monthly benefit of $1,844.20 for the lesser of ten years or life upon his retirement from the Board and Mr. Hemminghaus became entitled to receive a monthly benefit of $353.75 for the lesser of ten years or life upon his retirement from the Board. The retirement benefits provided these directors are grandfathered benefits that were frozen in 2000, and the Company does not currently offer retirement benefits to its directors.

Director Stock Ownership Guidelines

        Outside directors are subject to stock ownership guidelines, which establish a target level ownership of Xcel Energy common stock or common stock equivalents of seven times their annual retainer. Directors are expected to meet this guideline within five years of becoming a director. All directors whose stock ownership target date was on or before December 31, 2009 have met the guideline.

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PROPOSALS TO BE VOTED ON

PROPOSAL NO. 1
ELECTION OF DIRECTORS

Number of Nominees, Classification and Voting

        The Board of Directors has set the size of the Board at thirteen directors until the 2010 Annual Meeting of Shareholders, at which time it will be reduced to ten following the retirement from the Board of Mr. Burgess, Dr. Preska and Mr. Truly. Each director serves a one-year term, with all directors subject to annual election.

        The following ten individuals are the nominees to be elected to serve until the 2011 Annual Meeting and until their successors are elected: Fredric W. Corrigan, Richard K. Davis, Benjamin G.S. Fowke III, Richard C. Kelly, Albert F. Moreno, Christopher J. Policinski, A. Patricia Sampson, David A Westerlund, Kim Williams and Timothy V. Wolf. Each of the nominees is a current director. C. Coney Burgess, Dr. Margaret R. Preska and Richard H. Truly are retiring from the Board at the time of the 2010 Annual Meeting and are not seeking re-election.

        The persons named as proxies intend to vote the proxies for the election of the foregoing nominees to the Board. If any of the nominees should be unavailable to serve as a director by an event that is not anticipated, the persons named as proxies reserve full discretion to vote for any other persons who may be recommended by the Governance, Compensation and Nominating Committee and nominated by the Board.

        The election of each director shall be decided by majority vote unless cumulative voting is in effect. This means that, to be elected, a nominee must receive more votes "FOR" his or her election than the votes cast "AGAINST" his or her election. If cumulative voting is in effect, you would be entitled to a number of votes equal to the number of votes entitled to be cast with respect to the shares held by you multiplied by the number of directors to be elected. If cumulative voting is in effect, you may cast all your votes "FOR" one nominee or distribute your votes "FOR" any number of nominees. With respect to the election of the nominated directors, the persons named as proxies reserve the right to cumulate votes represented by proxies which they receive and to distribute such votes among one or more of the nominees at their discretion.

Information as to Nominees

        The nominees, their ages, principal occupations or positions, qualifications that the Board believes each has to serve as a director of the Company, experience and the years first elected as a director of the Company, if applicable, are shown on the following pages.

        In considering relevant business experience for director candidates, the Company considers experience, demonstrated leadership, judgment, skill, diversity, integrity, experience with businesses and other organizations of comparable size, the interplay of the candidate's experience with the experience of other Board members and the extent to which the candidate would be a desirable addition to the Board and any committees of the Board.

        None of the nominees are related to each other or to any other nominee or to any executive officer of the Company or its subsidiaries by blood, marriage or adoption.

        Except for Mr. Kelly and Mr. Fowke, no nominee has been an employee of the Company within the past five years.

        The Board of Directors recommends a vote "FOR" the election to the Board of each of the following nominees. Proxies solicited by the Board of Directors will be voted "FOR" each of the nominees, unless a contrary vote is specified.

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PROPOSAL NO. 2

APPROVAL OF THE XCEL ENERGY INC.
EXECUTIVE ANNUAL INCENTIVE AWARD PLAN, AS AMENDED AND RESTATED

Introduction

        Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), limits the amount of compensation expense that we can deduct for income tax purposes. In general, a public corporation cannot deduct compensation in excess of $1 million paid to any of the named executive officers in the proxy statement other than the Chief Financial Officer. However, compensation that qualifies as "performance-based" is not subject to this deduction limitation. The Company's "covered employees" for 2009 are thus four of the five named executive officers listed in the Summary Compensation Table on page 69.

        The Xcel Energy 2005 Executive Annual Incentive Plan, as amended and restated, was originally approved by the shareholders of the Company on May 25, 2005 and was amended by the Board effective as of January 1, 2008, December 10, 2008 and February 17, 2010 (the "Annual Plan"). The Annual Plan allows the grant of performance awards that qualify as performance-based compensation under Section 162(m). One of the conditions to qualify as performance-based is that the material terms of the performance goals, and any amendments to those terms, must be approved by the shareholders at least every five years. The last such shareholder approval was when the Annual Incentive Plan itself was approved in 2005. Accordingly, to preserve the tax status of certain awards as performance-based, and allow us to deduct the compensation expense related to these awards, we are asking shareholders to approve an amendment to add two additional performance criteria relating to our energy efficiency and environmental performance and leadership. In addition, we are asking shareholders to re-approve the other material plan terms, including (i) the employees eligible to receive the compensation, (ii) the original performance criteria approved in 2005 upon which performance goals are or may be based, and (iii) the maximum amount that any covered employee may receive as an award payment if the performance goals for a performance cycle are achieved.

        Importantly, we are NOT seeking any increase to the number of shares authorized under the Annual Plan. As of December 31, 2009, 1,084,972 of the 1,200,000 shares that shareholders approved in 2005 remained available for issuance.

        In the following sections we have set forth:

•

A brief summary of the principal features of the Annual Plan;



•

A description of the available performance measures that we are asking shareholders to approve; and



•

Certain other required information.

        The full text of the Annual Plan is attached to this proxy statement as Appendix A. Because the following discussion is a summary and does not cover all aspects of the Annual Plan, shareholders may wish to review Appendix A in its entirety.

Purpose

        The purpose of the Annual Plan is to provide a significant and flexible economic opportunity to selected officers and salaried employees of the Company, its subsidiaries and specified other affiliates in an effort to reward their individual and group contributions to the success of the Company and more closely link the financial interests of management, shareholders and customers.

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Administration

        The Annual Plan is administered by the Governance, Compensation and Nominating Committee of the Board, or such other committee of the Board as the Board may from time to time designate (for purposes of this proposal, the "Committee"). The Committee will, to the extent required to comply with Section 162(m) of the Code or Rule 16b-3 promulgated under Section 16(b) of the 1934 Act, be composed solely of not less than two persons, each of whom qualifies as an "outside director" for purposes of Section 162(m) of the Code and a "non-employee director" for purposes of Rule 16b-3 promulgated under Section 16(b) of the 1934 Act. The Committee has sole authority and complete discretion to make rules and regulations relating to the administration of the Annual Plan and to construe and interpret the Annual Plan and any incentive awards granted thereunder. Any interpretations and decisions of the Committee with respect to the Annual Plan will be final and binding.

Number of Shares

        A maximum of 1,200,000 shares of common stock of the Company are available for issuance in respect of incentive awards under the Annual Plan, which is unchanged from the share authorization that was approved in 2005. Shares may be made available from the authorized but unissued shares of common stock of the Company or from shares acquired by the Company, including shares purchased on the open market. Any award of shares cancelled or forfeited for any reason under the Annual Plan without delivery of shares to the participant will not be counted as shares awarded under the Annual Plan until used in a subsequent award. If any withholding tax liabilities arising in connection with any award are satisfied by the withholding of shares by the Company or by the delivery of previously-owned shares by the participant as described under "Withholding" below, the number of shares available for issuance in respect of incentive awards under the Annual Plan will be increased by the number of shares withheld or delivered.

        If there is any change in the outstanding common stock by reason of any stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares, warrants or rights offering to purchase common stock at substantially below fair market value or other similar corporate event, the Committee will adjust appropriately the number and kind of shares of common stock which thereafter may be awarded, the number of shares of common stock subject to incentive awards or outstanding as restricted shares under the Annual Plan and the grant, exercise or conversion price with respect to any of the foregoing. If deemed appropriate in its sole discretion, the Committee may make provision for a cash payment to a participant or a person who has an outstanding incentive award or restricted shares in addition to or in place of such adjustments, and may condition such payment on the cancellation of any incentive award or restricted shares.

Eligibility

        The Committee will, in its sole discretion, determine those officers and salaried employees of the Company, its subsidiaries and specified other affiliates who will be eligible to participate in the Annual Plan for a given incentive period. These participants will be selected based upon their opportunity to have a substantial impact on the operating results of the Company, one of its subsidiaries or an affiliate. Participation in the Annual Plan does not guarantee continued employment by the Company or continued participation by the participant in any subsequent incentive period. At or prior to the time an incentive award is made under the Annual Plan, the Committee may designate participants who are, or are expected to be, covered employees for purposes of Section 162(m) of the Code as "designated covered employees" for purposes of the Annual Plan for the applicable incentive period. Such designation will make incentive awards to the designated covered employees for the applicable incentive period subject to the Annual Plan provisions intended to qualify such incentive awards as performance-based compensation under Section 162(m) of the Code.

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Determination of Incentive Awards for Participants Who Are Not Designated Covered Employees

        The Annual Plan provides that the amount and terms of each incentive award to a participant who is not a designated covered employee, and the incentive period to which the incentive award relates, will be determined by and in the discretion of the Committee and may be conditioned upon the attainment of pre-established performance goals that may be based on the performance of the participant, the Company or any of its subsidiaries or other affiliates, or on such other factors as the Committee may determine. Incentive awards may be payable in cash, shares of the Company's common stock or a combination of both, and payouts are determined by multiplying a participant's "target incentive award" by a percentage (which may exceed 100%) that varies depending on the extent to which the performance goals are satisfied for the incentive period. A participant's target incentive award, in turn, is determined by multiplying the participant's base salary as of the last day of the applicable incentive period by a percentage designated by the Committee, in its sole discretion, at the time the incentive award is granted, which percentage need not be the same for each participant. The Committee may, in its sole discretion, increase or decrease the amount of any incentive award payable to a participant who is not a designated covered employee and may, in recognition of changed or special circumstances, pay incentive awards to such participants even if not earned.

Determination of Incentive Awards for Participants Who Are Designated Covered Employees

        If the Committee decides to designate one or more participants as designated covered employees for an incentive period, then not more than 90 days after the beginning of the incentive period, and, in any event, before 25% or more of the incentive period has elapsed, the Committee will establish for the incentive awards to these designated covered employees objectively determinable performance goals that relate to specified business or financial criteria involving the Company, an affiliate or a business or functional unit thereof.

        Performance Measures.    Performance goals for incentive awards to designated covered employees are to be based on one or more of the following measures (new performance measures are noted):

•

earnings per share,



•

market share,



•

stock price,



•

sales,



•

costs,



•

capital expenditures,



•

net operating income,



•

net income,



•

cash flow,



•

retained earnings,



•

earnings before interest and taxes,



•

earnings before interest, taxes, depreciation and amortization,



•

return on equity,



•

return on capital,

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•

return on assets,



•

return on total assets employed,



•

total shareholder return,



•

shareholder value analysis,



•

results of customer satisfaction surveys,



•

aggregate product price and other product price measures,



•

safety record,



•

service reliability,



•

demand-side management (including conservation and load management),



•

operating and maintenance cost management,



•

energy production availability,



•

environmental standards or compliance,



•

environmental projects, goals, and leadership, (new performance measure)



•

energy efficiency, (new performance measure)



•

economic value added,



•

margins,



•

measures of employee satisfaction or engagement, and



•

individual performance measures.

        With respect to designated covered employees, all performance goals must be objective and must satisfy the requirements for "performance-based compensation" within the meaning of Section 162(m) of the Code.

        At the time of establishing a performance goal, the Committee will specify the manner in which the performance goal is to be calculated. In so doing, the Committee may exclude the impact of specified events from the calculation of the performance goal. For example, if the performance goal was earnings per share, the Committee could, at the time this performance goal was established, specify that earnings per share are to be calculated without regard to any subsequent change in accounting standards required by the Financial Accounting Standards Board. Performance goals may also be based on attainment of specified levels of performance of the Company, one or more subsidiaries or other affiliates, and/or one or more business or functional units thereof, and may be expressed in absolute amounts or by relative comparison to the performance of other corporations or indices. At the time an incentive award is granted to a designated covered employee, the Committee will specify the maximum dollar amount payable under the award. Incentive awards payable to designated covered employees are to be calculated in the same manner described under "Determination of Incentive Awards for Participants Who Are Not Designated Covered Employees" above, except that the Committee will not have the authority to increase the amount of an incentive award otherwise payable to a designated covered employee pursuant to the satisfaction of pre-established performance goals and payment formulas, although it may decrease any such amount that is otherwise payable.

        Certification.    Following the close of each incentive period and prior to the payment of an incentive award to a designated covered employee, the Committee will certify the amount to be paid to each designated covered employee for that incentive period. Incentive awards to designated covered employees may be payable in cash, shares of the Company's common stock, or a combination of both.

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No incentive awards will be paid to designated covered employees if the minimum applicable pre-established performance goals are not satisfied, unless the covered employee's employment is terminated because of death or disability or, as described under "Change in Control" below, a change in control occurs.

        Maximum Amount.    The maximum amount payable to any designated covered employee of the Company under the Annual Plan for any calendar year is $2,000,000 in cash and 100,000 shares, or a combination of cash and shares, amounts that are unchanged from those previously in effect. To the extent a designated covered employee elects to receive some or all of an incentive award payment in restricted or unrestricted shares of the Company's common stock, such shares will be valued for purposes of this limitation at the closing sale price of a share of the Company's common stock on the New York Stock Exchange on the trading day prior to the date incentive award payments are determined.

Elections as to Form of Payment of Incentive Awards

        Incentive awards under the Annual Plan are payable in cash except to the extent a participant elects, if permitted by the Committee, to receive some or all of the amount payable in the form of shares of the Company's common stock and/or shares of such stock that are restricted as to transfer and subject to possible forfeiture ("restricted shares"). Such an election must be made before an incentive period begins or at such other time as the Committee may permit. To the extent a participant elects to receive an incentive award payment in shares of common stock, the amount of the incentive award so payable will be increased by 5%, and to the extent a participant elects to receive an incentive award in restricted shares, the amount of the incentive award so payable will be increased by 20%, subject in all cases to the maximum payment limitation applicable to designated covered employees. The number of shares or restricted shares to be issued will be based on the closing sale price of a share of the Company's common stock on the New York Stock Exchange on the trading day prior to the date incentive award payments are determined. Prior to the proposed amendment and restatement, the number of shares were calculated on the basis of the high and low sale prices on the specified date.

        Restricted shares issued in payment of an incentive award will be subject to terms and conditions specified by the Committee, including the following:

•

Restricted shares will vest as to one-third of the shares on March 1 of each calendar year next following the calendar year in which the restricted shares are issued.



•

Until restricted shares vest, they may not be sold, encumbered or transferred in any manner except in connection with a participant's death.



•

Restricted shares will vest in full upon the occurrence of a change in control of the Company or if a participant's employment ends due to death or disability (as disability is defined in the Annual Plan).



•

If a participant's employment ends for any reason other than death or disability, all unvested restricted shares will be forfeited to the Company.



•

Before restricted shares vest, participants to whom the shares have been issued may vote the shares and receive all dividends and other distributions paid with respect to those shares. Any cash dividends or distributions will be reinvested in additional shares, which will be subject to the same restrictions and vesting conditions as the underlying shares.

Change in Control

        The Annual Plan provides that in the event of a change in control (as defined in the Annual Plan) of the Company, each participant who is employed by the Company or one of its subsidiaries or affiliates

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immediately prior to the change in control will be entitled to receive a payment in cash equal to his or her target incentive award for the incentive period that includes the date of the change in control. If, following the completion of an incentive period in which a change in control occurs, a participant who has received such a change in control payment is determined to be entitled to an incentive award payout for that incentive period that is greater than the change in control payment amount, then such incentive award payout will be reduced (but not below zero) by the amount of the change in control payment.

Deferral Elections

        A participant may elect under the Company's deferred compensation plan to defer the receipt of incentive awards payable in cash under the Annual Plan. Unless such a deferral election is made, payments under the Annual Plan are to be made at such times as to avoid characterization as a deferral of compensation for purposes of Section 409A of the Code.

Withholding

        The Company and its subsidiaries and affiliates will have the right to deduct from all amounts payable to a participant in cash any taxes required to be withheld in connection with incentive awards under the Annual Plan. If payments of incentive awards are made in the form of shares of common stock of the Company, withholding taxes may be paid by the participant in cash, by delivering previously owned shares or by having the Company withhold shares otherwise issuable to the participant.

Termination of Employment

        If a participant's employment terminates during an incentive period, a prorated incentive award will be payable to the participant only in cash (despite any election to the contrary) on the applicable payment date to the extent that applicable performance goals have been achieved. A participant who remains employed through an incentive period but is terminated prior to the applicable payment date will be entitled to receive the amount of any incentive award otherwise payable to him or her with respect to that incentive period only in cash.

Term of Annual Plan

        The Annual Plan will terminate May 25, 2015 unless sooner terminated by the Board. If the shareholders do not approve the material terms of the Annual Plan, as amended and restated, the Annual Plan will remain in effect, but certain awards to covered employees would not be fully tax deductible. Incentive awards and restricted shares outstanding as of the termination date of the Annual Plan will not be affected or impaired by the termination of the Annual Plan.

Amendment and Discontinuance

        The Board may amend, modify or discontinue the Annual Plan or any award thereunder from time to time, but no modification may, without the consent of the participant affected, impair any award made prior to the effective date of the modification. No amendment may be made to the Annual Plan without shareholder approval if that approval is necessary to comply with any tax or regulatory requirement or any rule of the stock exchange on which the Company's common stock is listed.

Federal Income Tax Consequences

        The following discussion is intended only as a brief discussion of the current federal income tax rules relevant to restricted shares that may be granted under the Annual Plan. The laws governing the tax aspects of such grants are highly technical and such laws are subject to change.

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        A recipient of restricted shares normally will not recognize taxable income at the time the shares are granted. Thereafter, the recipient will recognize ordinary income as the shares vest. The amount of such ordinary income will be equal to the market value of the restricted shares at the time of vesting. However, the recipient may elect, pursuant to Section 83(b) of the Code, to recognize ordinary income at the time the restricted shares are granted in an amount equal to the market value of the restricted shares at that time. Any subsequent change in the value of the restricted shares would then be treated as either short-term or long-term capital gain or loss when the shares are sold, depending on how long the shares have been held.

        The Company will be entitled to a deduction for federal income tax purposes at the same time and in the same amount as the receipt or vesting of shares is initially treated as ordinary income to the recipient, provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary business expense, is not an "excess parachute payment" within the meaning of Section 280G of the Code and is not disallowed by the $1,000,000 limitation on certain executives under Section 162(m) of the Code.

Amended and Restated Plan Benefits

        The following table summarizes the target incentive award amounts payable to the individuals and groups indicated for the 2010 incentive period under the Annual Plan.

2010 Annual Plan Benefits

Vote Required

        The affirmative vote of the holders of a majority of the total voting power present in person or by proxy and entitled to vote at the Annual Meeting will be required for approval of the Annual Plan. Abstentions from voting on this matter are treated as votes "AGAINST," while broker non-votes are treated as shares not present and entitled to vote. Proxies solicited by the Board of Directors will be voted "FOR" the proposal, unless a different vote is specified.

        The Board of Directors recommends a vote "FOR" the approval of the performance measures and terms of the Annual Plan, as amended and restated. Proxies solicited by the Board of Directors will be voted "FOR" the approval of the amendment and restatement of the Annual Plan, unless a different vote is specified.

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PROPOSAL NO. 3

APPROVAL OF THE PERFORMANCE MEASURES AVAILABLE UNDER THE XCEL ENERGY INC.
2005 LONG-TERM INCENTIVE PLAN AND AN AMENDMENT TO THE PLAN

        As described in Proposal No. 2, Section 162(m) of the Code limits the amount of compensation expense that we can deduct for income tax purposes. The Xcel Energy 2005 Long-Term Incentive Plan, as amended and restated effective February 17, 2010, (the "Plan") allows the grant of performance awards that qualify as performance-based compensation under Section 162(m). The material terms of the performance goals were last approved by shareholders when the Plan itself was approved in 2005. Accordingly, to preserve the tax status of certain awards as performance-based, and thereby to allow us to continue to fully deduct the compensation expense related to these awards, we are asking shareholders to approve the material terms of the Plan.

        In addition, in February 2010 the Board approved an amendment to the Plan that would allow non-employee directors to participate in the Plan, subject to shareholder approval at the 2010 Annual Meeting. Importantly, we are NOT seeking any increase to the number of shares authorized under the Plan. As of December 31, 2009, we had 5,115,299 shares remaining for issuance under the Plan.

        In the following sections we have set forth:

•

A brief summary of the principal features of the Plan;



•

A description of the available performance measures that we are asking shareholders to approve; and



•

Certain other required information.

        The full text of the Plan is attached to this proxy statement as Appendix B. The following discussion is a summary and you may wish to review Appendix B in its entirety.

Principal Features of the Plan

Shares Subject to Plan

        The maximum number of shares of Xcel Energy common stock that may be issued for grants under the Plan is the sum of:

•

8,323,800 shares;



•

Shares tendered by participants to pay the exercise price or tax withholding obligations on options or other awards granted under the Plan;



•

Shares covered by options or stock appreciation rights settled for cash or which expire or are terminated or unexercised; and



•

Shares in respect of any awards that are canceled or forfeited for any reason without delivery of Shares or for awards that are paid in cash.

        The maximum number is subject to adjustment for stock splits, stock dividends, spin offs, reclassifications or other relevant changes affecting Xcel Energy common stock.

Eligible Participants

        Under the Plan as approved by shareholders, all employees are eligible to participate although the plan is generally used for non-bargaining employees. We currently have over 11,000 employees. In February 2010, the board approved an amendment to the plan, subject to shareholder approval, to allow non-employee directors to also be eligible to participate in the Plan.

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        The selection of participants and the nature and size of awards under the Plan are within the discretion of the Committee. Consequently, we cannot specifically identify those employees, or if shareholders approve the amendment and performance measures, those non-employee directors to whom awards may be granted since no such determination has been made.

Types of Awards

        Several types of stock-related grants can be made under the Plan. The Committee will have broad authority to fix the terms and conditions, including the consequences upon death, disability or retirement, of individual agreements with participants. A summary of the types of awards is set forth below:

        Stock Options and Stock Appreciation Rights.    The Committee may grant nonqualified options or incentive stock options. The Committee establishes the option price, which may not be less than 100% of the fair market value of the stock on the date of grant. Options may not be repriced. The Committee also establishes the vesting date and the term of the option. The term may not be longer than ten years.

        The Committee may also grant stock appreciation rights (SARs), which represent the right to receive an amount based on appreciation in the fair market value of shares of Xcel Energy common stock over a base price. SARs may not be exercised earlier than six months after grant, and the base price of the SARs may not be less than the fair market value of the stock on the date of grant. SARs may not be repriced. The term of the SARs may not be more than ten years after the grant date. At the time of or prior to exercise, the Committee will determine whether the SAR will be settled in cash, shares of common stock or a combination of the foregoing. The Committee may also grant limited SARs related to an option which can only be exercised during limited periods following a change in control of the Company and which would entitle the holder to receive an amount based upon the highest price paid or offered for common stock in any transaction relating to the change in control or paid during the thirty-day period immediately preceding the occurrence of the change in control in any transaction reported on the primary stock exchange on which the common stock is traded.

        Performance Awards.    The Committee may grant performance awards under which payment is made if our performance meets certain performance goals established by the Committee for a specified performance period. There may be more than one performance period in existence at any one time and the duration of each performance period may differ from each other, although no performance period may be less than one fiscal year. There may be different performance goals in existence at any one time. The specific business criteria upon which performance goals may be based are described in the "Items for Shareholder Approval" section below.

        The Committee establishes the performance goals within a reasonable period of time after the beginning of the performance period. The Committee also establishes the performance period (not less than one calendar year or fiscal year) and the amount payable at various performance levels. At any time prior to payment, the Committee can adjust awards for the effect of unforeseen events that have a substantial effect on the performance goals as it deems equitable in recognition of unusual or non-recurring events affecting the Company, changes in applicable tax laws or accounting principles, or such other factors as the Committee may determine.

        Awards may be payable in the form of cash, shares of Xcel Energy common stock, or a combination thereof as determined by the Committee. The Committee may impose additional conditions on a participant's entitlement to receive payment under a performance award.

        Restricted Stock.    The Committee may grant awards of restricted stock under the Plan. All awards have a minimum one-year holding period before payment can be achieved. The Committee determines any participants to whom shares of restricted stock are to be granted, the number of shares of restricted stock to be granted to each participant, the duration of the period during which, and the conditions

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under which, the restricted stock may be forfeited to the Company and the other terms and conditions of such awards. Subject to certain exceptions referred to below, restrictions on shares of restricted stock that do not include performance-based vesting conditions may not lapse in their entirety earlier than three years from the date of grant, except in the case of (i) a change of control if so provided by the Committee, (ii) death, disability or retirement if so provided by the Committee, and (iii) a substitute award of restricted stock granted pursuant to Section 4 of the Plan. Shares of restricted stock may not be sold, assigned, transferred, pledged or otherwise encumbered during the restricted period, but the holders thereof may exercise full voting rights with respect to those shares and are entitled to receive all dividends and other distributions paid with respect to those shares. If such dividends or distributions are paid in shares, the shares shall be subject to the same restrictions on transferability as the restricted stock with respect to which they were distributed.

        Restricted Stock Units.    The Committee may also grant restricted stock unit awards subject to vesting and transfer restrictions determined by the Committee. All awards have a minimum one-year holding period before payment can be achieved. Restricted stock units may not be sold, assigned, transferred, pledged or otherwise encumbered during the restricted period. As soon as practicable after the expiration of the restricted period and unless the restricted stock units have been forfeited, the Company will pay, in the discretion of the Committee, either a cash payment equal to the fair market value of the restricted stock units as of the last day of the restricted period or shares of common stock of the Company in an amount equal to the number of restricted stock units.

        Bonus Stock.    The Committee may award shares of bonus stock to participants under the Plan without cash consideration. The Committee may place restrictions and limitations on such stock if it elects to do so.

        Stock Unit Awards.    The Committee may grant stock unit awards, which can be in the form of common stock of the Company or units, the value of which is based, in whole or in part, on the value of the common stock. The Committee will determine the terms, restrictions, conditions, vesting requirements and payment rules that govern the stock unit awards, and the rules need not be identical for each stock unit award.

        The Committee may, in its discretion, in respect of a stock unit award or any other award granted under the Long-Term Incentive Plan, provide for dividends or dividend equivalents which may be added to the award and subject to such conditions and restrictions as the Committee determines.

Maximum Awards to any One Participant

        The Plan provides that the maximum award that may be paid to any covered employee under the Plan as performance awards for any performance cycle is $2,000,000 in cash and 2,000,000 shares. The maximum number of shares of common stock subject to options or stock appreciation rights that may be granted during a calendar year to any employee is 2,000,000 shares. The maximum number of shares of common stock subject to restricted stock, restricted stock units, bonus stock or stock unit awards granted during a calendar year to any employee which are subject to performance goals is 2,000,000 shares.

Authority of Committee

        The Plan is administered and interpreted by the Committee, each member of which must be a "non-employee" director within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934 and an "outside director" within the meaning of Section 162(m) of the Code. The Committee selects persons to receive grants from among the eligible participants, determines the type of grants and number of shares to be awarded, and sets the terms and conditions of the grants. The Committee may

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establish rules for administration of the Plan and may delegate its authority to others, subject to limitations imposed by SEC, IRS rules and New York Stock Exchange rules and state law.

Items for Shareholder Approval

        Business criteria on which performance goals can be based for our covered employees take into account the business or financial goals of the Company, an affiliate or a business or functional unit thereof, and they include one or more of the following measures (new performance measures are noted):

•

earnings per share,



•

market share,



•

stock price,



•

sales,



•

costs,



•

capital expenditures,



•

net operating income,



•

net income,



•

cash flow,



•

retained earnings,



•

earnings before interest and taxes,



•

earnings before interest, taxes, depreciation and amortization,



•

return on equity,



•

return on capital,



•

return on assets,



•

return on total assets employed,



•

total shareholder return,



•

shareholder value analysis,



•

results of customer satisfaction surveys,



•

aggregate product price and other product price measures,



•

safety record,



•

service reliability,



•

demand-side management (including conservation and load management),



•

operating and maintenance cost management,



•

energy production availability,



•

environmental standards or compliance,



•

environmental projects, goals, leadership, (new performance measure)



•

energy efficiency, (new performance measure)

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•

economic value added,



•

margins,



•

measures of employee satisfaction or engagement, and



•

individual performance measures.

        The specific performance goals using the business criteria listed above will be determined by the Committee, and may be absolute in their terms or measured against or in relationship to the performance of other companies or indices. In addition, the performance goals may be based on our consolidated results or the results of any affiliate, segment or other subset of our business, and may be calculated in accordance with generally accepted accounting principles or any other management accounting method, as determined by the Committee.

        The Committee does not have discretion to increase any such award to a covered employee. The maximum annual award that may be paid to any covered employee under the Plan as performance awards for any performance cycle is $2,000,000 in cash and 2,000,000 shares. The maximum number of shares of common stock subject to options or stock appreciation rights that may be granted during a calendar year to any employee is 2,000,000 shares. The maximum number of shares of common stock subject to restricted stock, restricted stock units, bonus stock or stock unit awards granted during a calendar year to any employee which are subject to performance goals is 2,000,000 shares.

        In addition, the proposal asks shareholders to approve an amendment to the Plan to include non-employee directors as eligible participants under the Plan.

Other Information

        The Plan remains effective until May 25, 2015, unless earlier terminated by the Board. The Board may amend the Plan as it deems advisable, except that shareholder approval is required for any amendment that would (i) increase the number of shares authorized for issuance, increase the benefits accrued to participants, modify the requirements for participation in the Plan, modify the no repricing provisions for options and stock appreciation rights, or include a provision allowing the Board to lapse or waive restrictions at its discretion, except in limited cases relating to death, disability, retirement or a change in control, or (ii) require approval by law or the rules of the New York Stock Exchange, including any approval requirement which is a prerequisite for exemptive relief under Section 16(b) of the Securities Exchange Act of 1934 or which is a requirement for the performance-based compensation exception under Section 162(m) of the Code.

Amendment

        The Committee may amend, modify or terminate any outstanding award without the participant's consent at any time prior to payment or exercise in any manner not inconsistent with the terms of the Plan, including to change the date or dates as of which an option or stock appreciation right becomes exercisable, a performance unit or performance share is deemed earned and restricted stock or restricted stock units become nonforfeitable. The Committee may also cancel and reissue an award under such different terms and conditions as it determines appropriate. No such amendment or modification, however, may adversely affect the rights of a participant without the participant's consent. Except for equitable adjustments in the case of corporate events described above under "Number of Shares."

        The future amounts that will be received by grantees under the Plan are not determinable. In fiscal 2009, the named executive officers received grants of restricted stock units and performance shares as set forth on page 74 in the Grants of Plan-Based Awards Table, and payouts of performance shares as set forth on page 77 in the Option Exercises and Stock Vested Table. In fiscal 2009, the executive officers

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as a group received restricted stock unit grants for 207,238 shares and all other employees (approximately 250 employees) received restricted stock unit grants for 600,027 shares. In fiscal 2009, the executive officers as a group received grants of performance shares totaling 207,238 shares and received payouts for performance shares totaling 293,093 shares.

        The Board of Directors recommends that shareholders vote for approval of the performance measures available and for the amendment to include non-employee directors as eligible participants under the 2005 Long-Term Incentive Plan.

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PROPOSAL NO. 4

RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS
XCEL ENERGY INC.'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2010

        The Audit Committee of our Board of Directors has selected Deloitte & Touche LLP as our independent registered public accounting firm to audit the accounts of the Company for the fiscal year ending December 31, 2010. Deloitte & Touche LLP was originally selected by the Board, upon the recommendation of the Audit Committee, as independent registered public accounting firm effective March 27, 2002.

        While the Audit Committee is responsible for the appointment, retention, termination and oversight of the Company's principal independent accountants, the Audit Committee and the Board are requesting, as a matter of policy, that shareholders ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm. The Audit Committee is not required to take any action as a result of the outcome of the vote on this proposal. However, if the shareholders do not ratify the appointment, the Audit Committee may investigate the reasons for the shareholders' rejection and may consider whether to retain Deloitte & Touche LLP or to appoint another auditor. Furthermore, even if the appointment is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its shareholders.

        Representatives of Deloitte & Touche LLP will be present at the Annual Meeting and will have an opportunity to make a statement if they so desire. Such representatives will be available to respond to appropriate questions from shareholders at the Annual Meeting.

Vote Required

        The affirmative vote of the holders of a majority of the total voting power present in person or by proxy and entitled to vote at the Annual Meeting will be required for the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2010. Abstentions from voting on this matter are treated as votes "AGAINST". Proxies solicited by the Board of Directors will be voted "FOR" the proposal, unless a different vote is specified.

        Our Board of Directors, upon recommendation of the Audit Committee, recommends a vote "FOR" the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm. Proxies solicited by the Board of Directors will be voted "FOR" the ratification of the appointment, unless a different vote is specified.

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SHAREHOLDER PROPOSAL

        We expect the following shareholder proposal (Item 5 on the proxy card) to be presented at the Annual Meeting. The text of the proposal and supporting statement appear in the exact form as we received them (including typographical errors). All statements contained in the proposal and supporting statement are the sole responsibility of the proponent.

        The Board of Directors has carefully considered the following shareholder proposal and has concluded its adoption would not be in the best interests of the Company or its shareholders. For the reasons stated after the proposal and its supporting statement, the Board recommends a vote "AGAINST" this proposal.

PROPOSAL NO. 5

SHAREHOLDER PROPOSAL REGARDING ANNUAL ADVISORY VOTE ON
EXECUTIVE COMPENSATION

        Gerald R. Armstrong, 820 Sixteenth Street, No. 705, Denver, Colorado, 80202-3227, registered owner of 914 shares, has given notice that he intends to present for action at the Annual Meeting the following resolution:

RESOLUTION

        That the shareholders of XCEL ENERGY INC. request its Board of Directors to adopt a policy that provides shareholders the opportunity at each annual meeting to vote on an advisory resolution, prepared by management, to ratify the compensation of named-executive officers listed in the proxy statement's Summary Compensation Table.

        The proposal submitted to shareholders should clearly state that the vote is non-binding and would not affect any compensation paid or awarded any named-executive officer.

STATEMENT

        As a shareholder, I am concerned about the levels of compensation afforded our top management and members of the board of directors, who are to be independent, while XCEL has been unable to restore its dividend to past levels.

        The following table summarizes compensation paid our executives:

        XCEL was created upon the merger of Northern States Power Company and New Century Energies, Inc. At the time, directors fees at Northern States were about $30,000 per year and at New Century were about $60,000 per year. Now, compensation to directors is as much as $272,046 a year!

        In the thirty-six pages of discussion on compensation in the proxy statement, it lists "Towers Perrin" as the independent compensation consultant for the "last several years." "Towers Perrin" reportedly was appointed by the Board of Directors to review executive compensation and also its own compensation. Whose sniff test for independence does this pass?

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        As noted by former CEO Jerry Levin of Time Warner, "I think it is time to relook at exacty how CEOs are paid." He blasted compensation consultants for making salary decisions based on "another CEO who may not be worth the $10,000,000. he or she is getting." The proxy statement discusses the consultant's role is relying upon compensation of peers.

        Richard Davis, a director, is Chairman and President of U. S. Bancorp which allows its shareholders to vote on approval of executive compensaton.

        Certain executives received cash perquisite allowances totalling $518,000. during 2008. Our CEO received $30,000. and others received $25,000. This was simply an hors d'oeuvre in their compensation feast as they provided no documentation for the use of these funds.

        The executive compensation feast includes not just a base salary with possible bonus, it carries:

–

performance based restricted stock units + earned dividend equivalents,



–

performance shares,



–

deferred compensation plans,



–

retirement benefits of generous proportions,



–

use of corporate aircraft operated for business purposes,



–

golden parachutes,



–

supplement retirement programs,



–

only a limited clawback policy,



–

stock awards,



–

non-equity incentive plan,



–

stock options,



–

retirement spending accounts,



–

Social Security supplements,



–

Tax gross-ups,



–

golden coffins, and



–

pensions for some of" the "independent" directors.

The proponent believes that "enough is enough" and that XCEL "enough has become too much" and he would like to vote on this issue. If you agree, please vote "FOR" this proposal.

RECOMMENDATION OF YOUR BOARD OF DIRECTORS "AGAINST" THIS PROPOSAL

        The Xcel Energy Board of Directors has carefully considered and discussed the shareholder proposal regarding a shareholder advisory vote on executive pay and recommends that you vote "AGAINST" the proposal. The Board believes that its adoption is unnecessary and would not be in the best interests of Xcel Energy or our shareholders. We believe that we already have in place strong corporate governance and executive compensation practices structured to align the interests of our executive officers with those of our shareholders and customers and that other more meaningful avenues exist for shareholders to communicate with the Board on executive compensation issues.

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        Our competitive compensation structure has aligned executive compensation with shareholder value and served shareholders well.

        The Board believes its fully independent Governance, Compensation and Nominating Committee (the "Committee") is in the best position to carefully balance the competing interests and make the complex decisions involved in executive compensation policies. Our executive compensation program is designed to promote our success by aligning the interests of our shareholders with the economic interests of our executive officers and employees to promote superior performance. The Committee has responsibility for reviewing all aspects of executive officer compensation and spends considerable time reviewing our compensation philosophy and program, which is designed to achieve four core principles:

(1)

attract and retain talented leaders;

(2)

focus executives' attention on company performance;

(3)

support our business strategy and reinforce management's link to shareholders, customers and employees; and

(4)

encourage executive leadership to have significant ownership in the Company and to maintain a focus on the long-term value proposition of our Company.

        Our directors are in a unique position to review and design our executive compensation program in light of these principles, and the Committee considers both public and confidential information, including sensitive information about our strategies, operations and the performance of our executive officers. The executive compensation policies and practices implemented to achieve these objectives are described in detail in this proxy statement.

        Our Board has a track record of proactively designing compensation programs that embrace a strong pay-for-performance approach by linking annual incentive and long-term compensation to achievement of strategic, operating, and financial results related to our key corporate goals. Equity-based incentives, which are tied to increasing shareholder value and our environmental leadership, either through the achievement of earnings per share growth, total shareholder return or environmental goals, coupled with our stock ownership guidelines, encourage executive leadership to have significant ownership in the Company and to maintain a focus on the long-term value proposition of our Company.

        Xcel Energy should not be grouped with companies that have rewarded poor company performance.

        Our record demonstrates that "say on pay" is unnecessary to protect our shareholders from poor executive compensation practices. Executive compensation at Xcel Energy is not excessive. As noted under the "Compensation Discussion and Analysis" section, the utility compensation environment is traditionally lower than similarly situated companies in the broader economy. This is reflective of the conservative philosophy of utility companies working in a fully regulated environment.

        We have not paid any excessive bonus payouts or other amounts for poor performance like those companies that have garnered media attention. Xcel Energy has continued to deliver solid growth, even during the current economic downturn. Nonetheless, in February 2009, after reviewing actual 2008 performance results relative to the established goals for 2008, the Committee and Board concurred with the recommendation by the CEO to not authorize any annual incentive awards related to our 2008 performance. The Company has been willing to take such actions at other times as well, such as in 2003 when executives did not receive payment of the annual incentive award related to our 2002 performance. Furthermore, recent grants of performance-based restricted stock units have not vested because the earnings per share growth target has not yet been achieved.

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        In his supporting statement, the proponent mischaracterizes and misstates information about our compensation programs, thereby exaggerating our current level of benefits and giving the impression that director compensation has increased at a substantially higher rate than it actually has.

        The proponent's supporting statement is filled with errors relating to our current and former compensation programs, which leads to the impression that current benefits are greater than they actually are and that they have increased more than they actually have since the merger between Northern States Power Company ("NSP") and New Century Energies, Inc. ("NCE") in 2000. For example, none of the numbers relating to director compensation contained in the proponent's supporting paragraph beginning with "XCEL was created upon the merger..." are accurate. The proponent understates what was paid to NSP and NCE directors pre-merger, while exaggerating the level of compensation to current directors by selecting the amount reported for the highest compensated director last year, which was $272,046. However, he fails to note that a substantial portion of this amount was due to dividend equivalents that were credited at the same rate as dividends to our common shareholders on compensation the director had deferred or received in the form of stock equivalent units over his 18-year tenure as a director of the Company. As reported in our Director Compensation table on page 17, average annual compensation for our directors is substantially below this $272,046 amount. Moreover, the proponent confuses the issue by spending a large portion of his proposal discussing director compensation when his proposal relates to an advisory vote on executive compensation.

        The proponent has also included benefits that are not currently provided by the Company and repeats items, using different terminology, which exaggerates the compensation currently paid by the Company to executives. For example, "performance based restricted stock units + earned dividend equivalents" and "performance shares" are listed in the first and second bullets, respectively. These items are duplicative of "stock awards" listed in the ninth bullet. In addition, "retirement benefits of generous proportions" in the fourth bullet encompasses and is duplicative of the following items: (i) "supplement retirement programs" in the seventh bullet, (ii) "retirement spending accounts" in the twelfth bullet, and (iii) "Social Security supplements" in the thirteenth bullet. The fifteenth bullet references "golden coffins"; however, the Company does not provide death benefits for any of its current executives. In addition, the sixteenth bullet references "pensions for some of the 'independent' directors"'; however, the Company does not currently offer pensions for its directors. While certain directors have grandfathered benefits pursuant to prior agreements dating before the NSP and NCE merger in 2000, none of the Company's directors are currently provided these types of benefits by the Company.

        The proposal would not provide the Board or its Committee with meaningful guidance as to our compensation structure or individual executive compensation payouts.

        The proposed advisory vote will not improve communications with our shareholders and does not assist directors in carrying out their duties. An advisory vote does not provide the Board with useful feedback regarding shareholders' specific concerns and wishes. A simple "yes or no" vote provides no guidance to the Board regarding what component of the executive compensation strategy shareholders are satisfied or dissatisfied with, nor does it provide shareholders an opportunity to advise the Board as to what they would like to have done to remedy any concerns.

        A vote by shareholders not to ratify our executive compensation program would not clearly convey to the Board the reasons for shareholder dissatisfaction, which aspects of the program were of concern to shareholders, or what actions the Committee should take to address shareholder concerns. Such a vote taken after the prior year's compensation has been paid and well into the following year's compensation cycle could be confusing and counter-productive to the Committee when structuring executive compensation for subsequent years.

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        Shareholders can more clearly express their concerns and have a greater impact on our compensation practices by communicating directly with our Board of Directors or individual Committee members.

        A better approach is for the shareholders to directly communicate their specific concerns and suggestions regarding our executive compensation programs with the Board. As discussed under "Communications with the Board of Directors" on page 10 of this proxy statement, shareholders can write any member of the Board and express their views. Shareholders may also express their views on executive compensation to the Board and management in person at our Annual Meeting. Unlike an advisory vote, these methods of communication allow shareholders to voice specific concerns and to communicate clearly and effectively with the Board and management. Communications of this sort are taken very seriously.

The proposal may conflict with proposed legislation by the federal government.

        Because the issue of a shareholder vote on executive compensation may be the subject of legislation by the federal government, we believe that adoption of this proposal would be premature and might inappropriately subject Xcel Energy to standards that are different from those that may be enacted into law and applicable to members of our peer group.

        Executive compensation practices are influenced by a wide range of complex factors, including changes in strategic goals, regulatory developments, and the competitive compensation practices of our peer companies. The Board believes that the Committee is the governing body best suited to formulate executive compensation principles and practices that best serve the interests of our shareholders and the needs of our business.

        Xcel Energy and its Board of Directors are fully committed to maintaining an executive compensation program designed to enhance long-term shareholder value. In this regard, we have and will continue to implement executive compensation policies and practices that reflect this commitment. Given that our program is already strongly aligned with company performance, an advisory vote to ratify prior executive compensation is not necessary, would be counter-productive, and could undermine the fundamental role of the Board and its Committee in formulating executive compensation principles and practices that reflect the interests of shareholders.

        Our Board of Directors recommends a vote "AGAINST" the shareholder proposal to require an annual advisory vote on executive compensation. Proxies solicited by the Board of Directors will be voted "AGAINST" the proposal unless a different vote is specified.

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BENEFICIAL OWNERSHIP OF CERTAIN SHAREHOLDERS

Share Ownership of Directors and Officers

        The following table sets forth information concerning beneficial ownership of our common stock as of March 23, 2010 for: (a) each director and nominee for director; (b) the executive officers set forth in the Summary Compensation Table; and (c) the directors and current executive officers as a group. Unless otherwise indicated, each person has sole investment and voting power (or shares such powers with his or her spouse) with respect to the shares set forth in the following table. None of the individual directors or officers or the nominees for director listed in the Beneficial Ownership Table below beneficially owned more than 1% of Xcel Energy's common stock. The directors and executive officers as a group beneficially owned less than 1% of our common stock on March 23, 2010. None of these individuals owns any shares of Xcel Energy's preferred stock.

Beneficial Ownership Table

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(1)

At March 23, 2010, the closing price of Xcel Energy common stock on the New York Stock Exchange was $21.30.

(2)

Common stock equivalents represent (i) the share equivalents of Xcel Energy common stock held under Xcel Energy's deferred compensation plan as of March 23, 2010, and (ii) stock equivalent units held under the directors' stock equivalent plan.

(3)

Mr. Kelly's wife owns 408 of these shares and 4,497 of these shares are held in a trust for which Mr. Kelly serves as trustee. Mr. Kelly disclaims beneficial ownership of these shares.

(4)

Mr. Wilks retired from the Company on March 31, 2010.

Largest Owners of Xcel Energy's Shares

        The table below sets forth certain information as to each person or entity known to us to be the beneficial owner of more than 5% of any class of our voting securities:

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(1)

Represents shares of our common stock. The information contained in the table and these footnotes with respect to Franklin Resources, Inc. is based solely on a Schedule 13G filed by each of the listed persons with the Securities and Exchange Commission on February 9, 2010. The filing indicates that (a) the shares are held by investment companies and institutional accounts that are advised by subsidiaries of Franklin Resources pursuant to advisory contracts which grant to such subsidiaries all investment and voting power over the shares, (b) Charles B. Johnson and Rupert H. Johnson, Jr. are the principal stockholders of Franklin Resources and (c) Franklin Advisers, Inc., one of the subsidiaries of Franklin Resources, had sole voting power for 25,529,281 shares of common stock and sole dispositive power for 25,904,281 shares of common stock.

(2)

Represents shares of our cumulative preferred stock, $4.10. Wells Fargo & Company ("Wells Fargo") reported its beneficial ownership on a Schedule 13G/A filed on January 25, 2010, on behalf of itself, Evergreen Investment Management Company, LLC ("Evergreen") and Wells Fargo Securities, LLC. The filing indicates that as of December 31, 2009, Wells Fargo had sole voting and sole dispositive power for 57,390 shares of our cumulative preferred stock, $4.10, and that

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Evergreen had sole voting and sole dispositive power for 57,390 shares of our preferred stock, $4.10. Each share of our cumulative preferred stock, $4.10 is entitled to one vote per share.

(3)

Represents shares of our cumulative preferred stock, $4.56. Wells Fargo reported its beneficial ownership on a Schedule 13G filed on January 25, 2010 on behalf of itself and Evergreen. The filing indicates that as of December 31, 2009, Wells Fargo and Evergreen each had sole voting and dispositive power for 20,280 shares of our cumulative preferred stock, $4.56, and shared voting and dispositive power for 0 shares. Each share of our cumulative preferred stock, $4.56 is entitled to one vote per share.

(4)

Represents shares of our cumulative preferred stock, $4.16. Wells Fargo reported its beneficial ownership on a Schedule 13G filed on January 25, 2010 on behalf of itself and Evergreen. The filing indicates that as of December 31, 2009, Wells Fargo and Evergreen each had sole voting and dispositive power for 35,180 shares of our cumulative preferred stock, $4.16, and shared voting and dispositive power for 0 shares. Each share of our cumulative preferred stock, $4.16 is entitled to one vote per share.

(5)

Represents shares of our cumulative preferred stock, $4.08. Wells Fargo reported its beneficial ownership on a Schedule 13G filed on March 10, 2010 on behalf of itself and Wells Fargo Securities, LLC. The filing indicates that as of February 28, 2010, Wells Fargo and Wells Fargo Securities, LLC each had sole voting and dispositive power for 21,870 shares of our cumulative preferred stock, $4.08, and shared voting for 0 shares, and that Wells Fargo had shared dispositive power for 100 shares. Each share of our cumulative preferred stock, $4.08 is entitled to one vote per share.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

        Section 16(a) of the 1934 Act requires our directors and officers to file with the Securities and Exchange Commission reports regarding their ownership and changes in ownership of our stock. We are required to disclose whether we have knowledge that any person required to file such a report may have failed to do so in a timely manner. We believe that during 2009, all of our officers and our directors subject to such reporting obligations have satisfied all Section 16(a) filing requirements. In making this statement, we have relied upon examinations of the copies of Forms 3, 4 and 5 and the written representations of our directors and executive officers.

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COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

        Xcel Energy is a holding company with subsidiaries engaged primarily in the utility business. In 2009, Xcel Energy's continuing operations included the activity of our four wholly owned utility subsidiaries that serve electric and natural gas customers in eight states. These utility subsidiaries are: Northern States Power Company, a Minnesota corporation; Northern States Power Company, a Wisconsin corporation; Public Service Company of Colorado; and Southwestern Public Service Company. These utilities serve customers in portions of Colorado, Minnesota, Michigan, New Mexico, North Dakota, South Dakota, Texas and Wisconsin. Along with WYCO Development L.L.C., a joint venture formed with Colorado Interstate Gas Company to develop and lease natural gas pipeline, storage, and compression facilities, and West Gas Interstate, an interstate natural gas pipeline company, these companies comprise our continuing regulated utility operations.

        Our strategic plan is focused on providing electric and gas service through our utility operations. This includes our goal of building the core of our utility operations so that we may serve our customers with reasonably priced electric and gas services while maintaining safe, clean, and reliable electric and gas systems. We promote advancements in technology that will lower operational and financial risks while enhancing our stature as the environmental leader amongst utilities. In concert with that, environmental leadership is a strategic priority for Xcel Energy. Our industry leading environmental leadership strategy is designed to meet environmental regulatory requirements, meet customer expectations around utility service value and simultaneously create shareholder value. We have established a highly effective environmental compliance program and record. Through our market leading environmental leadership strategy, we are well positioned to meet the challenges of potential future climate change regulation and comply with the renewable energy mandates.

        Even though Xcel Energy ultimately manages its business based on revenue streams provided by electric and natural gas, our strategy and our operations are customized by jurisdiction. We operate in eight (8) states and have multiple jurisdictions and services in almost all those states. By taking a jurisdictional focus, we operate each state and region as its own company to ensure that we meet the varying stakeholder interests that are unique to each of our jurisdictions. This has allowed us to customize our capital and investment strategy and take advantage of the clean energy and renewable energy incentives created by policy makers in the states in which we operate. By executing our business strategy and investing in our core utility businesses, we optimize our earnings portfolio and the ability to earn a reasonable return in each individual jurisdiction.

        Our consolidated financial goals are to attain long-term earnings per share growth of 5 to 7 percent, maintain annual dividend increases from 2 to 4 percent, and to protect and enhance our credit ratings in the BBB+ to A range. Our earnings projection for ongoing operations for 2009 was $1.45 to $1.55 per share. For 2009, our results from ongoing earnings were $1.50 per share and our GAAP earnings were $1.48 per share.

        Our executive compensation program is designed to promote our success by aligning the economic interests of our executive officers and employees with the interests of our shareholders and our customers to promote superior performance. It is entirely results oriented with a direct correlation to the operating and financial goals of the Company. It is designed on a long-term, low risk approach to compensation that does not encourage or support undue risk taking by our executive officers. It is market based, market competitive, and market tested. All of our programs are founded on widely used and endorsed market compensation principles, are comparative to similarly situated utilities or companies in the marketplace, and have proven to be excellent instruments to reward exemplary performance and discourage undue risk taking.

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        To accomplish this, our compensation philosophy is to reward our executive officers at competitive levels that reflect their individual responsibilities and contributions with a focus on the compensation environment in the utility business. The utility direct compensation environment is traditionally lower than similarly situated companies in the broader economy. This is reflective of the conservative philosophy of utility companies working in a fully regulated environment. In addition, we believe that our executive compensation program must be internally consistent and equitable to align the interests of all our executive officers to achieve our strategy. Consequently, we place a significant emphasis on internal equity to ensure that executive compensation is tiered within the Company based upon experience, total responsibilities, and contributions to Company results. To implement this philosophy, our executive compensation program focuses on three key factors:

•

We provide a competitive base salary, which is the foundation for attracting and retaining the leadership needed to execute our strategy;



•

We create a pay-for-performance environment by making a significant portion of compensation variable through performance-based short- and long-term incentive compensation for both retention purposes and to motivate our executive officers to deliver superior results; and



•

We provide a low-risk compensation environment with risks aligned between all stakeholder groups and executive management.

        We believe our philosophy and programs, which ensure we are competitive in the market, have a positive correlation of pay to performance and adhere to sound governance principles. Our philosophy and program for executive officer compensation remained substantially the same in 2009 as compared to 2008. We have evaluated our compensation programs and have made some immaterial changes with regards to environmental leadership and expense reimbursements.

Risk Environment and Assessment

        As part of the annual compensation process, we began in 2009 a review of the Company's compensation programs to analyze our risk profile as well to ensure we continue to maintain a low-risk compensation environment. Our compensation programs are designed to encourage superior performance, the creation of value both in the short-and long-term for our shareholders, the retention of talent to execute our strategy, and the discouragement of undue risk taking which would jeopardize the short or long-term goals of Xcel Energy.

        Overall, our internal risk assessment confirms that our executive compensation plans are low in risk and do not foster undue risk taking. Our compensation philosophy and plans are not complex, are market based, are 100% performance driven, and have strong governance and control mechanisms, including mechanisms like clawback provisions.

        The Company believes this assessment of low risk is supported in both design and in focus of the compensation philosophy. In the design area, incentives are not based on single goals but rather use multiple tiers and indicators. In addition, the incentives use measures such as Total Shareholder Return (see page 63 for explanation) which are broad-based in scope and easily obtainable. The design of the performance-based long-term incentives have long vesting periods (minimum of two years with a maximum of four years), which encourage long-term decision making and value creation. Finally, all grants are capped in number and the only variables for payment are performance and equity market value.

Risk Considerations in Compensation Decisions

        Payment for performance is an important part of our compensation philosophy. We understand that compensation and incentives based on specific measures of performance could encourage undue risk-taking by executive officers, managers or employees at all levels of the Company. As a result the

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Committee annually reviews several factors in establishing executive officer compensation programs, setting compensation levels and selecting target measures for variable compensation programs. The Company reviews the same factors in considering compensation of employees generally:

•

The relative values of base salaries, annual incentives and long-term incentives;



•

The mix of performance measures for each business area and for the Company as a whole under the annual incentive program;



•

The relative weighting of performance measures for each business area and the Company as a whole;



•

The impact of the performance measures on the Company's financial results;



•

The likelihood that achievement of performance measures in one performance period could have material adverse impacts on Company financial performance in succeeding fiscal periods;



•

The relative significance of each of the Company's business areas to its overall financial performance;



•

The extent to which performance measures are not directly reflected in audited financial statements; and



•

The balance between the achievement of short-term objectives and longer-term value creation.

        The Committee will continue to assess our executive management programs to align employee interests with those of long-term shareholder interests.

Executive Compensation Philosophy and Core Principles

        Xcel Energy's executive compensation philosophy is to align and motivate executive leadership's interests with those of our shareholders, customers and employees. This is accomplished primarily by using a combination of base salary, modest perquisites and performance-based incentive compensation, delivered through annual and long-term incentives. There are also retirement programs which also contribute to this philosophy.

        This philosophy has four core principles:

•

Executive compensation levels must be competitive. To attract and retain talented leaders, we look to the utility industry 50^th percentile for all elements of total direct compensation, which includes base salary, annual incentive and long-term incentives;



•

Executive compensation is focused on performance. We structure a compensation mix in which annual and long-term incentives are entirely based on our performance and are designed to comprise more than 50% of the Named Executive Officers' ("NEOs") (defined below) targeted annual compensation;



•

The annual and long-term incentives are oriented on strategic, operating, and financial results to deliver rewards for the achievement of key corporate goals that support our strategy and reinforce management's link to shareholders, customers and employees; and



•

Equity-based incentives, coupled with our stock ownership guidelines, encourage executive leadership to have significant ownership in the Company and to maintain a focus on the long-term value proposition of our Company.

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Executive Compensation Elements and Design

        For 2009, the Xcel Energy total executive compensation program had five components:

•

Base salary;



•

Annual incentives;



•

Long-term incentives;



•

A perquisite allowance, which was terminated on January 1, 2010, and other modest perquisites; and



•

Post-retirement or other post-employment benefits.

The following graphic represents the average percentage of total compensation for each of these elements for the NEOs (defined below) as a group in 2009.

        Executive officers in general and the executive officers named in the Summary Compensation Table on page 69 (who are referred to in this Compensation Discussion and Analysis as "Named Executive Officers" or "NEOs") in particular all receive the same components of the executive compensation program with the amount (other than retirement benefits) dependent on scope of responsibilities, experience, internal equity and the market for executive officers with similar skills and experience. In considering compensation changes, the Committee considers changes in our business and the market for executive leadership in the utility industry and, as appropriate in certain limited cases, in general industry. Prior year compensation is one consideration in setting current year compensation, but it is not the primary driver in determining future compensation.

        We are primarily dedicated to the utility business and believe our executive compensation philosophy and core principles reflect this. In 2009, we continued to use the 50^th percentile of the utility industry in assessing the market rate for our executive officers' total direct compensation. We believe that the 50^th percentile is reflective of the peer group of utility companies that are relevant for comparison purposes.

        As shown on the following graph, we have designed that approximately 50% of a NEO's total direct compensation will be in the form of base salary and annual (short-term) incentives, provided that targeted performance is achieved. The remainder of their total direct compensation is composed of long-term incentives. The Committee believes this achieves an equitable and low-risk designed balance between long-term incentive compensation opportunity as compared to base salary and short-term incentive. Through this design, the compensation opportunity aligns the NEO's interests with the

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long-term performance of the Company and encourages long-range thinking and value creation by our executives. This is consistent with the long-term nature of utility operations and the capital investment necessary for such operations.

        The following graphic shows the average percentage for the NEOs as a group of target total direct compensation of base salary paid in 2009, target annual incentive compensation awards in 2009, and target long-term compensation awards in 2009.

        In 2009, base salary for the NEOs accounted for approximately 26% of target total direct compensation, while target incentive compensation (annual) accounted for approximately 20% of the total direct compensation. Our compensation programs are focused on strategic, operating, and financial results. Consequently, if our results exceed our financial performance objectives and corporate goals, our executives may receive total direct compensation that is above the 50^th percentile for the utility industry due to the heavy weighting of variable elements of compensation in total direct compensation. Likewise, if our results do not reach target levels for financial performance objectives or corporate goals, our executive officers may receive total direct compensation amounts that are lower than the 50^th percentile. These results are consistent with our executive compensation philosophy to pay for performance and reward our executives for achieving corporate goals that link to our strategy.

        We recognize it is critical to be internally consistent and equitable in order to create the balance necessary to achieve corporate goals and objectives. Consequently, as a part of the compensation evaluation, the total compensation of each officer is evaluated and compared to others of the entire executive team. This evaluation includes comparing the overall scope and responsibilities of each officer to maintain the compensation levels that are internally consistent within each tier of management. These management tiers generally are: CEO, senior corporate officers, individual utility operating officers, and other corporate officers. These four tiers provide a basis for separation in internal pay equity related to officer responsibilities and individual performance. Within each tier, additional evaluation is conducted to ensure intra-tier equity between similarly situated executives based upon overall scope, responsibilities, experience, and performance.

Compensation Survey Data

        In December 2008, at the request of the Committee, and to provide a broad perspective of the competitive compensation market for comparative purposes, Towers Perrin prepared an analysis and evaluation of our executive compensation program relative to survey data. This analysis included an evaluation of each executive officer position, including each NEO. A similar analysis has been completed annually for several years. The Committee uses the compensation data to obtain a general understanding of current marketplace compensation practices. Towers Perrin has been the Committee's consultant for several years, and effective January 1, 2010, it merged with Watson Wyatt. In 2009, we paid Towers Perrin approximately $144,000 for executive officer and director compensation consulting

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services, of which approximately $108,000 was related to executive officer and director compensation consulting services while the remainder was associated with other executive compensation and salary survey projects.

        Towers Perrin bases its analysis on competitive compensation data collected in two surveys: data related to approximately 60 investor-owned utility companies included in the Towers Perrin Energy Industry Executive Compensation Database, including nearly all major electric and natural gas utilities in the United States, and compensation data related to approximately 800 general industry companies included in the Towers Perrin Executive Compensation Database and Long-Term Incentive Plan Reports. The utility survey is focused by Towers Perrin on utility companies that are similar in various attributes to our Company, including revenue, assets, and number of employees. Compensation data from these surveys was size adjusted using regression analysis to correspond with each officer's approximate scope of responsibility. This data is not used to benchmark compensation but is one of several objective and subjective factors that are considered in executive compensation levels. Other factors include individual performance, experience, operating and financial results, and internal equity.

        Towers Perrin was able to identify comparable positions, find competitive data, and formulate a competitive rate for base salary, annual incentives, long-term incentives and total direct compensation for thirteen positions in its analysis. Towers Perrin concluded that the competitive rates represent the compensation level for a similar position with similar responsibilities and scope in the utility industry. At the Committee's request and in order to provide a broad perspective of the competitive market for comparative purposes, Towers Perrin analyzed data for various market rates, where possible, including: utility industry at the 50^th and 75^th percentiles, general industry at the 50^th percentile and blended industry at the 50^th percentile. Blended industry is a blend of utility and general industry data for each pay component, where available. Utility-specific positions were analyzed using utility industry specific data. The CEO and executive positions in a corporate function, as compared to a utility operating function, were analyzed in both the utility industry and general industries. We also utilize the broad based general survey so that we can clearly understand each component of compensation as well as in the aggregate. The Committee has been advised that compensation within 15% (above or below) of the median is considered within the competitive range.

        In addition to reviewing this survey information to gain a general understanding of current compensation practices within the marketplace, the Committee considers several subjective and objective factors, including individual performance, experience, financial results and internal equity. Following consideration of these factors, the Committee exercises its discretion to set specific compensation levels for each executive officer, which may vary from the competitive range. After the Committee sets specific compensation levels based on its determination of the foregoing factors, it then confirms where the final compensation level falls in comparison to the competitive range as an informational matter. In evaluating our executive compensation against survey data, the Committee considers only the aggregated survey data. The identities of the companies comprising the survey data is not disclosed to, or considered by, the Committee in its decision-making process and, thus, is not considered material by the Committee.

Components of Xcel Energy Executive Officer Compensation Program

Base Salary

        The role of base salary in the Xcel Energy executive officer compensation program is to provide a base or foundational level of regular income that is competitive in the utility industry. As stated above, the Company's executive compensation strategy is generally to compare to the utility industry 50^th percentile as the primary reference point, with the flexibility to review other data points as appropriate. Company management then considers the executive officer's individual performance, experience, financial results, internal equity and changes in the marketplace and recommends a base

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salary to the Committee. The Committee considers such recommendation and factors in determining base salary. The material elements in determining the amount of any increase in base salary of a NEO are the individual's performance in meeting corporate goals and providing executive leadership and changes in the marketplace.

Annual Incentives

        The role of annual incentives in the Xcel Energy executive officer compensation program is to reward achievement of corporate goals that are designed to benefit our shareholders, customers and employees. Compensation eligibility under the Xcel Energy Inc. Executive Annual Incentive Award Plan (the "2005 Annual Incentive Plan") begins at the threshold performance that provides an opportunity to earn 50% of the targeted award opportunity; targeted compensation is designed to achieve an opportunity to earn 100% of the targeted award; and exceptional performance provides an opportunity to earn 150% of the targeted award. Company management recommended targets based on its evaluation of performance and comparison to available objective and comparative metrics, which they presented to the Committee. These metrics align with the primary strategic objectives of the Company for Environmental Leadership, Safety, and Financial Results. The Committee retains the sole discretion to modify the goals during the course of the year based upon operating, economic, or other conditions, which may arise. The Committee did not exercise this discretion with respect to the 2009 goals.

        Actual award amounts are determined based on achievement of Committee-approved corporate financial and operational goals. In addition, individual performance may be considered in the application of a leadership factor or multiplier to the annual incentive award.

        In December 2008, the Committee set target annual incentive awards for 2009, expressed as a percentage of salary, for all Xcel Energy officers. Certain target annual incentive awards were adjusted in August to reflect the acquisition of new job responsibilities by Mr. Fowke and Mr. Sparby, including a new percentage target for the President and Chief Operating Officer which was newly established. These target award values were analyzed and presented by Towers Perrin. The Committee believes these rates to be appropriate and competitive for the utility industry. These target awards ranged from 100% of salary for the CEO, 70% for the COO, 65% for the CFO and 55% for the President, Energy Supply and Vice President and General Counsel. Payouts of annual incentive awards were to be determined based on the level of achievement of corporate financial and operational goals previously approved by the Committee and described below, with each individual having the opportunity to earn from 0% to 150% of his or her 2009 target award amount. In addition, individual performance may be considered in the application of a leadership factor or multiplier to the annual incentive award.

        In 2009, annual incentive objectives for the NEOs and all executive officers, including those reporting to the CEO, were based entirely on attainment of corporate goals, which included targeted earnings per share, an environmental metric based upon achievement of goals related to emission reductions and the safety of our employees. These objectives were determined to be critical to our performance and to align with our long-term strategy as an environmental leader. Furthermore, the Committee believes that these goals do not encourage short-term thinking or behavior that could threaten the value of the Company or the investment of its shareholders.

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        The specific corporate performance measures and goal targets for the 2009 annual incentive awards were:

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(1)

Performance measure is based on the completion of identified projects associated with carbon dioxide emissions reductions in the area of renewable energy, emissions reductions, energy efficiency and technology. Threshold performance is completion of two identified projects; target performance is completion of three identified projects, and; maximum performance is completion of four identified projects.

(2)

Completion of three and two-thirds identified projects associated with carbon dioxide emissions reductions in the area of renewable energy, emissions reductions, energy efficiency and technology.

        For comparative purposes, the increase in non-equity incentive awards and stock awards seen in the summary compensation table on page 69 and other tables for 2009 as compared to 2008 relate to the non-payment of awards for 2008. In February 2009, after reviewing actual 2008 performance results relative to the established goals for 2008, the Committee and Board concurred with the recommendation by the CEO to not authorize any annual incentive awards for 2008. Management made this recommendation because operational performance results were less than targeted in safety; had we paid an annual incentive, we would not have achieved our threshold financial goal; the overall and underlying distressed economic conditions; the effect of the overall market decline on programs such as our pension and retiree medical plans; and the desire to keep a strong financial foundation for 2009.

        The Company utilizes a leadership factor applicable to the annual incentive program. The purpose of the leadership factor is to allow for the adjustment of the annual incentive award to reflect exceptional individual performance. With the approval of the Committee, awards are multiplied by a leadership factor of 0% to 100%. Prior to any application of the leadership factor, individual performance is not considered in calculating an executive officer's annual incentive. The leadership factor can be applied to increase or decrease an executive officer's annual incentive award. For 2009, leadership factors applied varied from 10% to 25%. For 2009, two of our NEOs received a leadership factor. The CEO recommended, and the Committee approved, a leadership factor of 25% for the President and Chief Operating Officer for his outstanding effort in cost reduction and management initiatives in 2009, in recognition of his seamless transition to the COO role from the CFO role, the exceptional management of pension and trust assets to realign the Company's investment strategies in a tumultuous market year and the excellent support of all jurisdictions for rate case outcomes.

        The Committee determines whether to apply a leadership-rating factor for the CEO. The CEO does not participate in this determination. The Committee applied a leadership factor of 25% to the annual incentive of the Chief Executive Officer for 2009. The leadership factor was applied to reward his leadership role in managing through extraordinary weather and sales challenges, the Company's

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outstanding performance in furtherance of its goals on environmental leadership, the constructive regulatory results in all jurisdictions with particular success in positive growth in SPS earnings and resolution of SPS fuel allocation issues, the initiation of legislative strategies which furthered the operational and financial goals of Xcel Energy and the smooth succession planning and guidance of new senior management into new roles.

        In order to encourage and maintain significant share ownership by executive officers, the 2005 Annual Incentive Plan offers executives an election to receive any payments in shares of common stock or shares of restricted stock (which vest in equal installments over a three-year period).

Long-Term Incentives

        The role of long-term incentives in the Xcel Energy executive officer compensation program is to align management's interests with the Company's long-term strategy and with the interests of our shareholders and customers and to provide a retention mechanism and to attract executive talent. We target approximately 50% of our NEOs' total direct compensation in base salary and annual incentive with the remainder targeted as long-term compensation in order to align the NEO's interest with the long-term performance of the Company. In December 2008, the Committee set target long-term incentive awards, expressed as a percentage of salary, for all Xcel Energy officers. Actual award targets for each NEO were tied to management tier and scope of responsibility at the beginning of 2009. Actual award amounts are reflected in the Grants of Plan-Based Awards Table on page 74. All long-term compensation is entirely performance-based with no time vesting provisions. In addition, one form of long-term incentives requires at least two years before performance can be achieved and are forfeited after a maximum of four years. The other form of long-term incentives is tied to a rolling three-year performance result.

        The plan allows for several forms of incentive compensation from which the Committee may select in designing its long-term incentive program. The Committee and the Company believe strongly in providing long-term incentive opportunities that deliver awards upon the achievement of specific performance goals linked to the success of the Company and its long-term strategy in the core utility business. Furthermore, the Committee believes that these arrangements encourage long-term thinking by our executives and do not encourage inappropriate risk taking.

        For 2009, the Company's long-term incentive plan had two components:

•

Performance-based restricted stock units; and



•

Performance shares.

        Performance-based restricted stock units are targeted to deliver 50% of each executive officer's long-term incentive opportunity, with the remaining 50% delivered through the performance share component. Neither the plan nor its application materially changed in 2009.

        Performance-Based Restricted Stock Unit Component.    Effective January 1, 2009, the Company granted performance-based restricted stock units to executive officers. The award of the restricted stock units is priced based on the closing stock price on the first trading day of the award year.

        Each restricted stock unit represents one share of our common stock, and earned restricted stock units pay out in shares of our common stock. Prior to the expiration of the restricted period, restricted stock units may not be sold, encumbered or otherwise transferred by the participant. In order to align an executive officer's interests with those of our shareholders, dividend equivalents are earned on restricted stock units during the performance period to the same extent dividends are paid on shares of our stock, but are only paid if the performance target is achieved.

        When the restricted period ends, restrictions on transfer of the restricted stock units lapse, based on the achievement of two separate performance criteria. For 2009, of the total restricted stock units

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awarded (plus associated earned dividend equivalents), 75% have a performance-based vesting schedule based on Earnings Per Share ("EPS") growth. The grant of this tranche of restricted stock units is intended to link the interest of executive officers with the creation of shareholder value, represented by sustained increases in EPS. The restriction period for these awards will lapse if Xcel Energy achieves 15% EPS growth from the fiscal 2008 EPS. Additionally, Xcel Energy's annual dividend paid on its common stock must remain at $0.94 per share or greater. EPS growth will be measured annually at the end of each fiscal year and restricted stock units could vest between two and four years from the date of grant. The first date the performance criteria will be measured is December 31, 2010. If the performance criteria are not achieved by December 31, 2012, all associated restricted stock units and dividend equivalents are forfeited.

        The remaining 25% of the awarded restricted stock units (plus associated earned dividend equivalents) have a performance-based vesting schedule related to our strategy as an environmental leader. For these restricted stock units, the restriction period will lapse based on the achievement of activities or goals intended to result in emissions reductions. This goal was selected to further the corporate goal of environmental leadership, which includes prudently reducing our emissions and impact on the environment. The following table outlines our environmental targets by category, and notes with respect to each environmental target its estimated completion date. For the environmental goal restricted stock units granted in 2009, nine of the 12 environmental targets must be achieved on or prior to December 31, 2012 for the restrictions on the restricted stock units to lapse and the awards and associated dividend equivalents to vest.

1

This target represents the energy reduction targets for our Customer Demand Side Management programs. It represents the annual savings we achieve from our customer goals, resulting in 1,715 GWh total.

        As outlined in the table, the performance objectives require accomplishment of a number of specific projects linked to increases in renewable energy sources, emission reductions, efficiency enhancements and technology implementations. Performance against these environmental goals will be measured annually at the end of each fiscal year. Restricted stock units may vest between two and four years after the date of the grant. The first date the performance criteria will be measured is

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December 31, 2010. If the performance criteria are not met by December 31, 2012, all associated restricted stock units and dividend equivalents are forfeited.

        For 2009, the CEO was awarded 96,669 restricted stock units. Other NEOs were awarded from 7,325 to 25,677 restricted stock units. These awards are included in the Grants of Plan-Based Awards Table.

        For the measurement cycle that ended in 2009 (representing awards granted effective January 1, 2007), the restricted stock units related to the 25% award directed at environmental leadership resulted in a performance based vesting and payout. Performance considered whether the average of actual performance results for nitrogen oxide ("NOx"), sulfur dioxide ("SO₂") and carbon dioxide ("CO₂") emissions reductions (measured a percent of target performance), met or exceeded 100%. For the cycle that ended in 2009, our approximate achievement on these three measures ranged from 102% to 112% of target, resulting in an approximate overall average achievement of 107%. As a result, all the associated restricted stock units vested.

        For the 2007 to 2009 measurement cycle, the CEO was awarded 21,619.50 restricted stock units related to environmental performance. Other NEOs were awarded 1,755.75 to 4,731.75 restricted stock units. One NEO, Mr. Connelly, has no restricted stock units related to environmental performance as he was not an executive officer at the time of the grant of these awards.

        The performance goals for the 2007 and 2008 restricted stock units related to EPS growth were not achieved as of Dec. 31, 2009; there is one additional year to achieve the EPS growth on 2007 units before expiration and two additional years to achieve the EPS growth on the 2008 units.

        Performance Share Component.    At the December 2008 Committee meeting, the Committee awarded performance shares to executive officers effective January 1, 2009. Payout of the performance share award is dependent entirely on a single measure, Total Shareholder Return ("TSR") relative to our peers. Xcel Energy's TSR, as measured over a three-year period, is compared to the three-year TSR of other companies in the Edison Electric Institute Electrics Index ("EEI Electrics Index") as a peer group. The EEI Electrics Index is composed of approximately sixty investor-owned domestic electric utilities. The Committee believes this is the appropriate peer group for comparing creation of shareholder value. Awards of performance shares directly link the interest of executive officers with shareholders by rewarding management for creating enterprise value as compared to utility industry peer companies.

        Awards in the performance share component are denominated in shares, each of which represents the value of one share of Xcel Energy common stock. The target number of shares granted was calculated by dividing the executive's target award by the closing stock price on the first trading day of the award year. Performance shares are not credited with dividend equivalent units during the performance period. At the end of each three-year period, the performance share component provides for payout at the target level if Xcel Energy's TSR is at the 50^th percentile of the peer group and payout at 200% of the target level for performance at or above the 90^th percentile of the peer group. The performance unit component provides smaller payouts for performance below the 50^th percentile. No payout would be made for performance below the 35^th percentile.

        For 2009 the CEO was awarded 96,669 performance shares. Other NEOs were awarded from 7,325 to 25,677 performance shares. These awards are included in the Grants of Plan-Based Awards Table.

        For the measurement cycle that ended in 2009 (representing awards granted effective January 1, 2007), the TSR was at the 77^th percentile resulting in a 167.5% of target payout. For the 2007 to 2009 measurement cycle, the CEO was awarded 95,211 shares. Other Named Executive Officers were awarded from 7,732 to 20,838 performance shares. The Committee determined to pay the performance share awards 50% in cash and 50% in shares of our common stock. One NEO, Mr. Connelly, has no performance shares for the 2007 to 2009 measurement cycle as he was not an executive officer at the time of the grant of these awards.

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        Stock Options.    The Company has not granted stock options since December 2001. The CEO and other NEOs received stock option grants from the Company or its predecessors. The grant prices for all of these stock option awards were above the market price of the Company's shares as of December 31, 2009.

Other Benefits

        Perquisites.    For 2009, as was the practice in 2008, the CEO received a cash perquisite allowance of $30,000 and the other NEOs received a cash perquisite allowance of $25,000. The purpose of the cash perquisite allowance was to provide reimbursement for expenses or items that an executive incurred that promote efficiency in conducting our business and help focus executive officers on the Company. We did not prescribe the use of the cash perquisite allowance. The cash perquisite allowance was paid separately from the executive officer's base salary, but was paid at the same time as the base salary. The cash perquisite allowance was fully taxable at the time of payment.

        Effective January 1, 2010, the Committee eliminated all perquisite allowance payments to executive officers. After a review of the intent of the payment, the market perception of perquisite allowances, and the amount of the payments in comparison to salaries, the Chief Executive Officer decided to terminate the perquisite allowance program for all other Xcel Energy employees who received this benefit effective March 1, 2010.

        The Company and the Committee are sensitive to concerns about the expense of operating the two aircraft the Company leases for business travel purposes. Flights for strictly personal use are prohibited. However, the Company and the Committee believe that use of these aircraft is critical to the successful operation of the Company's business, given the large geographical area our operations cover, which extends over 100,000 square miles, and the need for our executives and other employees to travel to locations in our eight-state system that are not otherwise easily accessible by aircraft. Effective management frequently requires us to be in different locations — in person. Operating these aircraft allows our executives and employees to move to other locations efficiently, safely and productively. The company has made significant efforts to reduce the variable costs of the planes by reducing the number of flights so that we make the most efficient use of these assets. We permit executive officers and their families to use the aircrafts for personal travel only when the aircraft is already scheduled to fly to a destination on Company business and only when there is an open seat available. Any such personal travel for the individual or his or her family member is reported as taxable income on behalf of the individual. We do not gross up executives for any additional tax associated with this imputed income.

        As part of our project to demonstrate and evaluate plug-in hybrid electric vehicles ("PHEVs") and vehicle-to-grid technology, Xcel Energy has converted several vehicles into PHEVs. These vehicles are used by our fleet pool, and we offer them to certain employees as part of an internal test program to utilize in real-life, real-world situations. For research purposes and to demonstrate our environmental leadership and executive commitment to that strategy, the Company provided a PHEV to the senior executive officers (the CEO and the CFO), which they use for both business and personal purposes. These officers will provide feedback to the company on the vehicles as part our testing program. We do not reimburse our executives for any tax associated with the value of their use of Company aircraft or the PHEVs.

        The Company does not generally provide tax gross ups to executive officers. However, in 2009 the Company agreed to reimburse Mr. Wilks to cover the tax gross up associated with the under-withholding of Minnesota state income taxes related to his business travel to Minnesota in the years 2003-2007. The under-withholding was due to an error by the Company. The tax gross up was $45,588.

        Xcel Energy has available a comprehensive relocation package for NEOs in the same way as management employees. This benefit includes temporary living arrangements, home search trip, shipment of household goods and travel allowance for family, home sale and home purchase assistance

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as well as miscellaneous allowance, up to one month's base salary not exceeding $5,000, and gross ups on certain taxable benefits. None of our NEOs received relocation benefits during 2009.

        Retirement and Deferred Compensation Benefits.    In 2009, the Company provided retirement benefits to executive officers under the Xcel Energy qualified and non-qualified pension plans subject to the same terms as all eligible non-bargaining employees. The role of the pension plans in executive compensation is the same as it is for other employees: to provide income after retirement, and aid in the retention of qualified employees, including executive officers. The qualified pension plan includes earnings below the Internal Revenue Service's established limits and the benefit may be payable in a manner that results in individual income tax advantages. The non-qualified pension plan includes earnings, if any, above the same Internal Revenue Service limit. The 2009 Internal Revenue Service earnings limit was $245,000.

        Each executive officer was eligible to participate in Xcel Energy's 401(k) Savings Plan and Deferred Compensation Plan. The plans allow executive officers, like other eligible employees, to defer all or a portion of their base salary and their annual incentive award up to certain limits. For 2009, the Company matched 50% of eligible amounts deferred to both plans up to 8% of base salary. The purpose of the Deferred Compensation Plan is to make up for retirement benefits that cannot be paid under the Company's qualified retirement plans due to the Internal Revenue Service Code limitations and the exclusion of certain compensation elements from pension eligible earnings.

        Certain executive officers were eligible to participate in the Supplemental Executive Retirement Plan ("SERP"). In 2008, the Board closed the SERP to new participants. Benefits will continue to accrue for executives who became participants in the SERP before this closure. The SERP provides benefits to these executive officers in addition to those provided through the qualified and non-qualified pension plans. The role of the SERP plan is to provide income after retirement commensurate with the executive officer's income during employment with the Company. The SERP is designed to encourage continued employment on the part of executive officers and aids in the retention of qualified officers. Covered compensation for the purposes of calculating SERP benefits includes base salary and annual incentive. Long-term incentive payments are not included in covered compensation. The SERP benefit is valued as a 20-year annuity but is payable as a lump sum after the officer's termination of employment. Unreduced benefits are payable at age 62, or as early as age 55 reduced 5% for each year that the benefit commencement date precedes age 62.

        Severance Policy.    The Company provides severance benefits to a NEO in accordance with the Xcel Energy Senior Executive Severance and Change in Control Policy (as amended, the "Severance Policy"). The Board of Directors or the Committee may name additional participants. The Committee believes the Severance Policy provides a competitive severance benefit which helps to manage any potential risks and changes in the event the Company undergoes a change in control. Outside of change in control situations, the Severance Policy also encourages executive officers to focus on the interests of Xcel Energy and its shareholders without undue concern that the officer will be terminated without compensation and benefits until the officer obtains another position.

        The Committee believes that the Severance Policy aligns the executive officer's interest with that of the Company and shareholder. This is particularly true with respect to a corporate transaction, such as a sale or merger transaction, which may result in an executive officer's termination. Given the protracted nature of such transactions in the utility industry, retaining and continuing to motivate the Company's key executives would be critical to protecting shareholder value. In a change of control situation, outside competitors are also more likely to try to recruit top performers away from the Company, and our executive officers may be more likely to consider these opportunities when faced with uncertainty about retaining their positions. The policy is intended to provide an incentive to complete such transactions even when the transactions may result in the officer's termination. The benefits payable under the

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Severance Policy for scenarios is discussed in more detail under "Potential Payments Upon Termination or Change in Control" beginning on page 85.

Grant Timing Practices

        We have the following practices regarding the timing of equity compensation grants:

•

Performance shares and restricted stock units are normally granted on the date of our regularly scheduled December Committee meeting. We use the closing stock price on the first trading day of the year of grant to price the award of restricted stock units. The target number of performance shares granted was calculated by dividing the executive's target award by the closing stock trading price on the first day of the year.



•

Annual grants of stock equivalent units to directors are made on the first business day following the annual shareholders meeting. We use the average of the high and low trading prices of our common stock on the day after the annual meeting to determine the value of each stock equivalent unit granted.



•

In years where we pay out annual incentive awards, we issue the common shares and restricted shares of our common stock to officers who elect to receive their award in common and/or restricted shares on the regularly scheduled date of the February Committee meeting. Historically we have used the average of the high and low trading prices of our common stock on the day of the Committee meeting to determine the number of shares of common and/or restricted stock shares to issue but effective for 2010 awards we will use the closing price of our common stock the day before the Committee meeting.



•

We have no practice or policy relating to the timing of the release of Company information around our grant dates.

Stock Ownership Guidelines

        The Company believes that it is essential to align management's interests with those of the shareholders. As part of this philosophy, the Company adopted stock ownership guidelines for executive officers. The Company believes that linking a significant portion of an executive's current and potential future net worth to the Company's success, as reflected in the stock price, ensures that executive officers have a stake similar to that of the Company's shareholders. Such guidelines also encourage the long-term management of the Company for the benefit of the shareholders. The share ownership guideline for each executive is based on the executive's position. The guideline for the CEO is five times base salary. The guideline for the COO is four times base salary. The other NEOs have a guideline of three times base salary. Each executive is expected to achieve the applicable ownership guidelines within five years of assuming an executive position. If an executive changes position, a new timeline is set based upon that position's requirements. All shares that the executive is entitled to vote count toward compliance with the ownership guidelines. For a given year, the number of shares necessary to satisfy the guidelines is based on the closing sale price of the Company's stock on the last

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trading day of the prior fiscal year. For purposes of calculating compliance with the guidelines for 2010, the closing price of $21.22 per share on December 31, 2009, will be used.

        Xcel Energy prohibits the use of any hedging or similar transactions related to its shares for all employees, including executives. In February 2009, the Board re-examined our policies relating to stock ownership by our executives, directors and other employees. The Board determined to reaffirm the prohibition on hedging and related transactions and also decided to prohibit the pledging of shares by executive officers and directors, unless the executive officer or director receives approval from the securities trading policy committee prior to pledging the shares. The Board believes that these policies are consistent with our philosophy that senior executives' and directors' interests should be aligned with those of our long-term shareholders through equity ownership.

Clawback Policy

        In 2007, the Committee adopted a clawback policy to provide the Company the right to recover certain payments made to executives. Beginning with the 2008 awards, Xcel Energy may recover annual and long-term incentive awards from an executive who is terminated from Xcel Energy for fraud or misconduct resulting in a restatement of Xcel Energy's earnings or financial statements.

Impact of Accounting and Tax Treatment on Executive Compensation

        Federal tax law limits the deductibility of executive compensation in excess of $1,000,000 unless certain exceptions are met. It is the Committee's intent to maintain the deductibility of executive compensation to the extent reasonably practicable and to the maximum extent possible but also consistent with its other compensation objectives. For 2009, a portion of the compensation of the CEO was non-deductible.

        As stated above, the Company offers a qualified pension plan to all employees that includes earnings below an Internal Revenue Service established limit and the benefit may be payable in a manner that results in individual income tax advantages. The Company also offers a non-qualified pension plan that includes earnings, if any, above the same Internal Revenue Service limit and the benefit generally does not provide any individual income tax advantages. For 2009, the Internal Revenue Service annual limit was $245,000. Each executive officer was also eligible to participate in Xcel Energy's Deferred Compensation Plan which is designed to allow participants to make up for retirement benefits that cannot be paid under the Company's qualified retirement plans as discussed above.

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TABLES RELATED TO EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

        The following table provides information regarding compensation paid or to be paid by us or any of our subsidiaries to the Chief Executive Officer, the Chief Financial Officer and the three other most highly compensated executive officers (who we refer to collectively in this section as the "Named Executive Officers" or "NEOs") for 2009. From left to right, the following elements are disclosed in the columns of the Summary Compensation Table:

        Base Salary — The amounts in this column reflect the amount of base salary earned for a particular year regardless of whether or not any portions were deferred under the 401(k) Plan or otherwise.

        Bonus — The amounts in this column reflect that portion of the awards under the 2005 Annual Incentive Plan that are attributable to the leadership-rating factor including any discretionary upward adjustment that was applied by the Committee. This amount does not, however, include amounts that the executive officer elected to receive in shares of unrestricted and restricted common stock in lieu of a portion of the cash payment for which they were otherwise entitled under the 2005 Annual Incentive Plan.

        Stock Awards — The amounts in this column reflect the aggregate grant date fair value of stock awards granted in accordance with FASB ASC Topic 718 for (i) the performance shares that were granted in 2007 (with a 1/1/07 to 12/31/09 performance period), 2008 (with a 1/1/08 to 12/31/10 performance period) and 2009 (with a 1/1/09 to 12/31/11 performance period), and (ii) performance-based restricted stock units granted in 2007, 2008 and 2009. The amounts in this column also reflect, for 2007 and 2009, awards earned under the 2005 Annual Incentive Plan, including: (i) amounts that the executive officer elected to receive in shares of unrestricted and restricted common stock in lieu of a portion of the cash payment for which he was otherwise entitled under the 2005 Annual Incentive Plan; (ii) that portion of the awards under the 2005 Annual Incentive Plan that are attributable to the leadership-rating factor including any discretionary upward adjustment that was applied by the Committee that the executive officer elected to receive as shares of stock in lieu of a cash payment and (iii) the applicable premium (5% for unrestricted shares and/or 20% for restricted shares) received for stock awards under the 2005 Annual Incentive Plan. The amount reported is not intended and does not represent earned or paid compensation as the majority of the performance shares and the restricted stock units are still subject to performance and vesting conditions.

        Non-Equity Incentive Plan Compensation — The amounts in this column represent awards earned under the 2005 Annual Incentive Plan, excluding amounts that the executive officer elected to receive in shares of unrestricted and restricted shares in lieu of a portion of the cash payment for which they were otherwise entitled under the 2005 Annual Incentive Plan. This amount also excludes any amounts attributable to the leadership-rating factor or the premium (5% for unrestricted stock and 20% for restricted stock) attributable to the election to receive shares of stock in lieu of a cash payment. Amounts attributable to the application of the leadership factor appear in the Bonus column and/or Stock Awards column depending on the executive officer's elected form of payment. The value of the premium is also reflected in the Stock Awards column.

        Change in Pension Value and Non-Qualified Deferred Compensation Earnings — The amounts in this column reflect the actuarial increase in the present value of the executive officer's benefits under all pension plans established by the Company determined using interest rate and mortality rate assumptions consistent with those used in the Company's financial statements. Thus, the amount reported does not represent earned or paid compensation for the year 2009. The increase from the prior year is generally due to (1) the additional years of service earned by the executive officer under the plans, (2) the increase in the final average salary from the prior year used to determine plan benefits, (3) the interest earned on accumulated benefits during the year (that is, the decrease in the deferral period until

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benefits commence as the executive officer approaches retirement), and (4) changes in actuarial assumptions. Amounts shown in this column for 2008 were also negatively impacted by the Committee's decision not to pay annual incentive for 2008. For Mr. Sparby and Mr. Connelly, this amount also includes preferential earnings under a grandfathered non-qualified compensation plan.

        All Other Compensation — The amounts in this column reflect Company contributions into the 401(k) Plan and Xcel Energy's Deferred Compensation Plan, insurance premiums, accrued vacation pay and perquisites and other personal benefits. The specific amounts are detailed in a footnote to this column.

        Total — The amounts in this column are the sum of the amounts listed above.

Summary Compensation Table

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(1)

Amounts reported in this column for each year represent the grant date fair value of long-term incentive awards (performance shares and performance-based restricted stock units) granted to each executive officer during the applicable year, as well as the value of the shares of restricted and unrestricted common stock each executive officer elected to receive in lieu of the cash payment to which he was otherwise entitled to under the 2005 Annual Incentive Plan for the respective years. In each instance, the grant date fair value was computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. The value of the restricted and unrestricted shares granted under the 2005 Annual Incentive Plan is determined based on the fair market value of our common stock at the time the shares were issued following the close of the performance year, and includes the premium (20% for restricted stock) payable for the election to receive shares of stock in lieu of cash. The grant date fair value of the performance-based restricted stock units is determined based on the market price of our common stock on the grant date of the award and is based on the assumption that the performance conditions will be achieved and the units and future credited dividend equivalents will vest and will not be forfeited. The grant date fair value of the performance shares is determined using the assumption that the target performance condition will be achieved and based on the market price of our common stock on the grant date of the award discounted by the present value of assumed future dividends on our common stock, since grantees have no right to receive payment of dividend equivalents under the terms of the award. For a discussion of the assumptions and methodologies used to calculate the amount reported, see Note 10, Share-Based Compensation, to Xcel Energy's Consolidated Financial Statements, included as part of Xcel

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Energy's 2009 Annual Report on Form 10-K. The value of the performance shares on the grant date assuming that the maximum performance conditions will be achieved is:

(2)

The amounts in the Non-Equity Incentive Plan Compensation column represent awards earned under the 2005 Annual Incentive Plan in 2007, 2008 and 2009, excluding amounts that the executive officer elected to receive in shares of restricted common stock including the premium (20%) attributable to the election to receive restricted shares of stock in lieu of a cash payment. The value of stock received in lieu of the cash payment plus associated premiums is reflected in the Stock Awards column for the respective years.

(3)

The amount reported in this column does not represent earned or paid compensation. Pension values are dependent on many variables including years of service, earnings and actuarial assumptions. See "Pension Benefits" beginning on page 79. Amounts in this column reflect the actuarial increase in the present value of the executive officer's benefits under all pension plans established by the Company determined using interest rate and maturity rate assumptions consistent with those used in the Company's financial statements. For Mr. Wilks, change in pension value for 2008 was ($20,994). Negative changes in pension value are not included in the Summary Compensation Table. For Mr. Sparby and Mr. Connelly, the amount reported also includes preferential earnings of approximately $1,510 and $2,195, respectively, under a nonqualified compensation plan from a grandfathered deferred compensation benefit.

(4)

The amounts in the "All Other Compensation" column for the NEOs include the following:

        The amounts represented in the "Company Sponsored PHEV" column represent the estimated value of providing the plug-in hybrid electric vehicle from our fleet to the executive by estimating the lease expense for a comparable vehicle through our fleet program. The estimated expense takes into account the cost of using the vehicle including fuel, maintenance, license, title and registration fees, and insurance.

        The amounts represented in the "Other" column include a reimbursement the Company made to Mr. Wilks, a Colorado resident, to cover under-withholding of Minnesota state income tax for business travel to Minnesota in the years 2003-2007. The amount represents a tax under-withholding payment of $101,092 and a gross-up of $45,588 to cover the additional tax liability associated with the payment.

        Executive officers and their families may use the corporate aircraft for personal travel only when the aircraft is already scheduled to fly to the destination on Company business and only when there is an open seat available. The aggregate cost of personal use of the corporate aircraft is determined on a per flight basis and includes the cost of actual fuel used, the hourly cost of aircraft maintenance for the applicable number of flight hours, landing fees, trip related hangar and parking costs, universal weather monitoring costs, if applicable, crew expenses and other variable costs specifically incurred. Because the plane may only be used for personal travel if the aircraft already is scheduled to fly to the destination and an open seat is available, there is no incremental cost to the Company for such personal use. The Company has significant corporate operations in Minneapolis, Minnesota and Denver, Colorado, and some executive officers, including several of the NEOs, split time between those offices and utilize the corporate aircraft to travel between Minneapolis and Denver. Executive officers also have the occasional

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personal use of event tickets when such tickets are not being used for business purposes, for which we have no incremental costs.

SUPPLEMENTAL DIRECT COMPENSATION TABLE

        The Supplemental Direct Compensation Table below depicts the compensation that was actually paid to the NEOs for 2009. This table excludes those components of the Summary Compensation Table that represent (i) amounts earned but not yet received due to time requirements and (ii) amounts granted but which are still subject to certain time and performance criteria. In addition, the Supplemental Direct Compensation Table does not include amounts attributable to changes in Pension Values or Earnings on Non-Qualified Deferred Compensation. This table does not necessarily reconcile to the tax definition of 2009 received compensation (W-2) due to the timing of payments. This Supplemental Direct Compensation Table is not a substitute for the information contained in the Summary Compensation Table and the other tables required by the SEC's rules.

        The elements of total direct compensation in the table below include:

        Salary — As described in the Summary Compensation Table.

        Bonus — The amounts in this column reflect that portion of the awards under the 2005 Annual Incentive Plan that are attributable to the leadership-rating factor including any upward discretionary adjustment that was applied by the Committee.

        Non-Equity Incentive Plan Compensation — The amounts in this column represent awards earned under the 2005 Annual Incentive Plan, including amounts that the executive officer elected to receive in shares of unrestricted and restricted common stock in lieu of a portion of the cash payment for which they were otherwise entitled under the 2005 Annual Incentive Plan. This amount excludes any amounts attributable to the leadership-rating factor or the premium (5% for unrestricted stock and 20% for restricted stock) attributable to the election to receive shares of stock in lieu of a cash payment. Amounts attributable to the application of the leadership factor appear in the Bonus column and/or Annual Incentive Stock Premium Value column depending on the executive officer's elected form of payment.

        Annual Incentive Stock Premium Value — The amounts in this column represent the value attributable to the premium (20% for restricted stock) received for electing to receive stock in lieu of a portion of the cash payment otherwise payable under the 2005 Annual Incentive Plan.

        All Other Compensation — As described in the Summary Compensation Table.

        Stock Awards Value Realized on Vesting — Value of long-term incentive awards that vested in 2009 as described in the Option Exercises and Stock Vested Table on page 77. The value excludes the value of restricted stock received in lieu of cash the executive was otherwise entitled to receive under the 2005 Annual Incentive Plan as including this value results in double counting the value as earnings.

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Supplemental Direct Compensation Table

GRANTS OF PLAN-BASED AWARDS TABLE

        The following table discloses on a grant-by-grant basis equity and non-equity awards effective in 2009. (The Committee approved the awards December 9, 2008, effective January 1, 2009.) From left to right, the following elements are disclosed in the columns of the Grant of Plan-Based Awards Table:

        Estimated Future Payouts Under Non-Equity Incentive Plan Awards — The amounts in this column show target annual incentive awards pursuant to the 2005 Annual Incentive Plan, exclusive of the leadership-rating factor. Annual incentive awards, expressed as a percentage of salary, were set by the Committee under the 2005 Annual Incentive Plan. Payouts of annual incentive awards are dependent on the level of achievement of corporate financial and operational goals approved by the Committee, with each individual having the opportunity to earn from 0% to 150% of his or her target annual incentive award based on the level of achievement in 2009 of the goals. Corporate goals for 2009 included targeted EPS, an environmental metric related to emissions reduction and safety of our employees. Target annual incentive awards, as a percentage of base salary, were set for all Xcel Energy officers, ranging from 100% of salary for Mr. Kelly to 70% to 55% of salary for the other NEOs. With the approval of the Committee, an award may be multiplied by a leadership-rating factor from zero to two. Also with approval of the Committee, an executive officer may elect to receive shares of unrestricted and restricted common stock in lieu of a portion of the cash payment for which they were otherwise entitled under the 2005 Annual Incentive Plan. The values shown are inclusive of elected forms of payment and associated premium.

        Estimated Future Payments Under Equity Incentive Plan Awards — Long-term incentive grants were made 50% in the form of performance shares and 50% in the form of restricted stock units. The amounts in this column show performance shares (top number) and restricted stock units based on EPS growth measurement (second number) and restricted stock units based on environmental goals (third number) issued under the 2005 Long-Term Incentive Plan. The amounts of the awards for each individual were established by the Committee and expressed as a percentage of such individual's base salary. The actual number of restricted stock units awarded to an individual were determined by dividing the dollar value of such percentage of base salary by the closing common stock price on January 2, 2009. For

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Mr. Kelly, his target long-term award for 2009 was set at 310% of his salary. For the other NEOs, the percentage ranged from 80% to 150% of their base salaries.

        Awards in the performance share component are denominated in shares, each of which represents the value of one share of Xcel Energy common stock. The target number of shares granted was calculated by dividing the executive's target award by the closing common stock price on January 2, 2009. At the end of each three-year period, the performance share component provides for payout at the target level if Xcel Energy's TSR is at the 50^th percentile of the peer group and payout at 200% of the target level for performance at or above the 90^th percentile of the peer group. The performance share component provides smaller payouts for performance below the 50^th percentile. No payout would be made for performance below the 35^th percentile. Performance shares do not receive dividend equivalent units during the performance period.

        The awards of restricted stock units represent an equal number of shares of Xcel Energy common stock. Prior to the expiration of the restricted period, the restricted stock units may not be sold or otherwise transferred by the recipients. Restricted stock units are credited during the restricted period at the same rate as dividends paid on all other shares of outstanding common stock. The dividend equivalents are subject to all terms of the original grant. Payout of the restricted stock units and the lapsing of restrictions on the transfer of restricted stock units are based on two separate performance criteria. Of the awarded restricted stock units, 75% of them plus associated credited dividend equivalents will be settled, and the restricted period will lapse, after Xcel Energy achieves 15% EPS growth measured against fiscal 2008 EPS. Additionally, Xcel Energy's annual dividend paid on its common stock must remain at $0.94 per share or greater. EPS growth will be measured annually at the end of each fiscal year. However, in no event will the restrictions lapse prior to December 31, 2010. If the performance criteria are not achieved by December 31, 2012, all associated restricted stock units and dividend equivalents are forfeited.

        The remaining 25% of the awarded restricted stock units (plus associated credited dividend equivalents) have a performance-based vesting schedule related to our strategy as an environmental leader. For these restricted stock units, the restriction period will lapse based on the achievement of activities or goals intended to result in emissions reductions. This goal was selected to further the corporate goal of environmental leadership, which includes prudently reducing our emissions and impact on the environment. Performance against these environmental targets will be measured annually at the end of each fiscal year. However, in no event will the restrictions lapse prior to December 31, 2010. If the performance criteria have not been met by December 31, 2012, all associated restricted stock units and dividend equivalents shall be forfeited.

        Grant Date Fair Value of Stock and Option Awards — This column shows the grant date fair value pursuant to FASB ASC Topic 718 for equity awards.

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Grants of Plan-Based Awards Table For 2009

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(1)

The Committee approved the awards December 9, 2008, effective as of January 1, 2009.

(2)

Amounts reflect potential cash payouts for 2009 annual incentive awards pursuant to the 2005 Annual Incentive Plan, exclusive of the leadership-rating factor, after taking into account any election by an executive officer to receive restricted or unrestricted shares of common stock in lieu of cash payments to which he would otherwise have been entitled under the 2005 Annual Incentive Plan. The actual payments of the cash component of these awards are included in the "Non-Equity Incentive Plan Compensation" column in the Summary Compensation Table. To the extent an executive officer elected to receive restricted or unrestricted shares in lieu of a cash payment for 2009 under the 2005 Annual Incentive Plan, the estimated future payouts of those equity awards are disclosed in dollar amounts in the columns under the caption "Estimated Future Payouts Under Equity Incentive Plan Awards."

(3)

Amounts in shares reflect (i) performance shares (top number), (ii) performance-based restricted stock units based on EPS growth measurement (second number) and (iii) performance-based restricted stock units based on environmental goals (third number) issued under the 2005 Long-Term Incentive Plan. Performance share payout values, while based on percentile performance, are also determined by the price of Xcel Energy common stock at payout.

Amounts denominated in dollars (fourth line) reflect the value of potential payouts for 2009 annual incentive awards pursuant to the 2005 Annual Incentive Plan, exclusive of the leadership-rating factor, to be received in restricted and/or unrestricted shares of common stock in accordance with an executive officer's election. The amounts shown include a 20% premium to be received for restricted shares. The number of shares to be received is determined based on the fair market value of our common stock at the time the shares are issued following the close of the performance year. The value of the shares actually issued to each executive officer pursuant to 2009 annual incentive awards is included in the "Stock Awards" column in the Summary Compensation Table.

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE

        The following table discloses on a grant-by-grant basis the number of outstanding equity awards (option and stock awards) at the end of 2009. From left to right, the following elements are disclosed in the columns of the Outstanding Equity Awards At Fiscal Year-End Table:

        Option Awards — We granted no stock options in 2009. We have not granted stock options since December 2001. The values shown on the table are for options granted prior to 2002.

        Stock Awards — Values were calculated based on a $21.22 closing price of Xcel Energy common stock, as reported on the New York Stock Exchange on December 31, 2009. As described in detail in the footnotes to the table, the equity awards consist of performance-based restricted stock units and performance shares.

Outstanding Equity Awards at Fiscal 2009 Year-End Table

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