Executive Officer Compensation

Exhibit 10.27

Executive Officer Compensation

On Dec. 14, 2004, the Governance, Compensation & Nominating Committee (the “Committee”) of the Xcel Energy Inc. board of directors took actions setting executives’ salaries, annual bonus targets and long-term compensation awards for 2005. Executive compensation was set by the Committee after consideration of, among other things, individual performance and market-based data on compensation for executives with similar duties. Payouts of 2005 annual bonus targets and long-term awards are dependent on achievement of specified goals set by the Committee, and no officer is assured of any payout. Set forth below is a description of the actions taken.

Salary

The Committee made modest changes to the existing base salaries of its senior executive group. The salary of Mr. Wayne Brunetti, the Chairman of the Board and Chief Executive Officer, remained unchanged for the third consecutive year, while increases in the salary for the other Xcel Energy officers named in the Summary Compensation Table in Xcel Energy’s 2004 Proxy Statement (the “Named Executive Officers”) ranged from 2.5 percent to 8.3 percent.

Annual Bonus Targets

Annual incentive awards, expressed as a percentage of salary, were set by the Committee under the Xcel Energy Executive Annual Incentive Award Plan (the “Xcel Annual Incentive Plan”), which was approved by Xcel Energy’s shareholders in 2000 and is filed as Exhibit 10.02 to this Form 10-K. Payouts of annual incentive awards are dependent on the level of achievement of corporate financial and operational goals and business unit operational goals approved by the Committee, with each individual having the opportunity to earn from 0 percent to 200 percent of his or her target annual incentive award based on the level of achievement in 2005 of the goals applicable to such individual.

Corporate goals for 2005 include targeted earnings per share, a customer service measurement, an environmental measurement, operations measurements related to generation availability, system reliability and safety, and an employee engagement measurement. Business unit goals are related to customer service, environmental responsibility, reliability, safety and management to budgeted financial results, measured at a business unit level.

Target annual incentive awards, as a percent of base salary, were set for all Xcel Energy officers, ranging from 100 percent of salary for Mr. Brunetti (as compared to 85 percent for 2004) to 55 percent of salary for the other Named Executive Officers. With the approval of the Committee, an award may be multiplied by a leadership-rating factor from zero to two.

Payouts of the annual incentive awards for Mr. Brunetti and Mr. Kelly are dependent entirely on attaining corporate goals. For the other executive officers, including Named Executive Officers, the formula is weighted 67 percent to attaining corporate goals and 33 percent to attaining business unit operational goals.