Xcel Energy unveils 5,168 MW capacity expansion to meet growing demand

AMARILLO, Texas - Xcel Energy (NASDAQ:XEL), a $40.56 billion utility company with a stable beta of 0.37, announced plans to add 5,168 megawatts of new generation capacity to its Texas and New Mexico service area by 2030, according to a company press release. According to InvestingPro analysis, the company maintains a FAIR financial health score, suggesting solid operational stability.

The expansion includes 17 new power projects alongside extensions of 521 megawatts from existing generation facilities. The portfolio will comprise 3,200 megawatts of dispatchable generation and energy storage, plus 1,968 megawatts of wind and solar facilities. This expansion aligns with the company’s strong financial position, generating $13.7 billion in revenue over the last twelve months. For deeper insights into Xcel Energy’s investment potential, InvestingPro subscribers can access comprehensive financial analysis and additional ProTips.

Xcel Energy developed the plan in response to projected electricity demand growth of more than 40% by 2030 in its service region, driven by population increases, industrial expansion, and increased electrification. New Southwest Power Pool requirements for seasonal demand capacity also factored into the decision.

The company selected the projects through a competitive process open to all technologies. The resulting portfolio includes a mix of ownership structures, with some facilities to be built and owned by Xcel Energy, others developed externally and then purchased, and some operated under long-term power purchase agreements.

The plan also extends the operational life of existing natural gas units at Nichols, Maddox, and Plant X facilities to support reliability and reduce overall portfolio costs. The company has demonstrated long-term financial stability, maintaining dividend payments for 54 consecutive years, with a current dividend yield of 3.27%.

Many of the proposed projects will be constructed at existing power plant locations to shorten development timelines and utilize current infrastructure. According to the company, this approach will reinvest in host communities while accelerating project completion.

In New Mexico, the portfolio includes two solar projects specifically dedicated to meeting the state’s requirement for 50% renewable energy by 2030.

Xcel Energy will seek regulatory approval for the portfolio in the second half of 2025 and plans to issue another request for proposals to secure additional resources to be operational by 2032.

The announcement is part of Xcel Energy’s five-year investment plan for Texas and New Mexico announced in October 2024.

In other recent news, Xcel Energy has been the focus of several notable developments. Jefferies has raised its price target for Xcel Energy to $80, maintaining a Buy rating, citing the company’s significant capital expenditure potential and strong earnings growth guidance. The firm highlighted a potential resolution of the Marshall Fire as a future catalyst for stock re-rating. Meanwhile, Northern States Power Company, a subsidiary of Xcel Energy, filed for a $44 million rate increase in South Dakota, which, if approved, would be effective from January 1, 2026. This proposed increase is based on a 2024 historic test year and includes a return on equity of 10.3%. Additionally, Northern States Power issued $250 million in 5.65% First Mortgage Bonds due in 2054, expanding an existing series. In corporate leadership, Xcel Energy appointed Ryan Long as the new chief legal and compliance officer, succeeding Rob Berntsen. Long will continue to oversee operations in Minnesota, North Dakota, and South Dakota while the company searches for his replacement.

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