Earnings call transcript: Xcel Energy Q3 2025 earnings miss EPS forecast, stock up

Xcel Energy Inc. reported its third-quarter 2025 earnings, revealing a slight miss in earnings per share (EPS) compared to forecasts. The company posted an EPS of $1.24, falling short of the expected $1.32. Despite this, Xcel’s revenue slightly exceeded expectations, reaching $3.92 billion against a forecast of $3.89 billion. In pre-market trading, the stock rose 2.05% to $81.32, reflecting investor optimism driven by strong revenue performance and forward-looking guidance.

Key Takeaways

• Xcel Energy’s Q3 EPS was $1.24, below the forecast of $1.32.
• Revenue for the quarter reached $3.92 billion, surpassing expectations.
• The company reaffirmed its 2025 earnings guidance and initiated 2026 guidance.
• Stock rose 2.05% in pre-market trading despite EPS miss.
• Significant infrastructure investments and AI initiatives highlighted.

Company Performance

Xcel Energy’s overall performance in Q3 2025 showcased resilience in revenue generation despite a minor EPS miss. The company continues to focus on infrastructure investments and AI-driven innovations, which are expected to bolster long-term growth. The reaffirmation of its 2025 earnings guidance and introduction of 2026 guidance signal management’s confidence in its strategic direction.

Financial Highlights

• Revenue: $3.92 billion, up from the forecasted $3.89 billion.
• Earnings per share: $1.24, down from the forecasted $1.32.
• Ongoing earnings per share for Q3 2025 were slightly lower than the $1.25 reported in Q3 2024.

Earnings vs. Forecast

Xcel Energy’s EPS of $1.24 missed the forecast of $1.32 by 6.06%. This shortfall marks a deviation from the company’s historical trend of meeting or exceeding EPS expectations. However, the revenue surprise of 0.77% suggests robust operational performance, mitigating some concerns over the EPS miss.

Market Reaction

Despite the EPS miss, Xcel Energy’s stock increased by 2.05% in pre-market trading, reaching $81.32. This movement places the stock closer to its 52-week high of $83.01. The positive reaction indicates investor confidence in the company’s revenue growth and strategic initiatives, overshadowing the EPS shortfall.

Outlook & Guidance

Xcel Energy reaffirmed its 2025 earnings guidance of $3.75 to $3.85 per share and initiated 2026 guidance, projecting EPS between $4.04 and $4.16. The company anticipates an average EPS growth of 9% through 2030. Key strategic initiatives include a $60 billion capital expenditure plan and significant investments in zero-carbon renewable generation and AI technologies.

Executive Commentary

CEO Bob Frenzel emphasized the role of AI in enhancing operational efficiency: "We are harnessing AI to empower our people, accelerate innovation, and build a smarter, more resilient energy future." CFO Brian Van Abel expressed confidence in the company’s supply chain strategies: "We feel really good about our overall place from a supply chain perspective."

Risks and Challenges

• Supply chain disruptions could impact project timelines and costs.
• Regulatory changes may affect rate structures and profitability.
• Market saturation in renewable energy could limit growth opportunities.
• Increasing O&M expenses may pressure profit margins.
• Economic downturns could reduce energy demand and sales growth.

Q&A

During the earnings call, analysts inquired about the company’s equipment availability and supply chain strategies. Xcel Energy detailed its approach to managing data center load growth and interconnection, alongside regulatory discussions around rate affordability.

Full transcript - Xcel Energy Inc (XEL) Q3 2025:

George, Conference Call Coordinator: Hello and welcome to the Xcel Energy third quarter 2025 earnings conference call. My name is George and I’ll be coordinator for today’s event. Please note this conference is being recorded and for the duration of the call your lines will be in the listen only mode. A question and answer session will follow the prepared remarks and questions will only be taken from institutional investors and analysts. Reporters can contact Media Relations with inquiries. I’ll call you over now to Roopesh Aggarwal, Vice President, Investor Relations to begin today’s conference. Please go ahead sir.

Roopesh Aggarwal, Vice President, Investor Relations, Xcel Energy: Thank you, George, and good morning. Welcome to Xcel Energy’s third quarter 2025 earnings call. Joining me today are Bob Frenzel, Chairman, President and Chief Executive Officer, and Brian Van Abel, Executive Vice President and Chief Financial Officer. In addition, we have other members of the management team in the room to answer your questions if needed. This morning, we will review our third quarter 2025 results and highlights, share recent business and regulatory updates, update our five-year capital and financing plan, and provide updated 2025 assumptions and 2026 guidance. Slides that accompany today’s call are available on our website. Some comments during today’s call may contain forward-looking information. Significant factors that could cause results to differ from those anticipated are described in our earnings release and SEC filings. Today, we will discuss certain metrics that are non-GAAP measures.

Information on the comparable GAAP measures and reconciliations are included in our earnings release. In the third quarter of 2025, Xcel Energy recorded a charge of $290 million, or $0.36 per share, reflecting the settlement in principle reached with plaintiffs in the Marshall Wildfire. Given the non-recurring nature of this item, it has been excluded from third quarter and year-to-date ongoing earnings. As a result, our GAAP earnings for the third quarter of 2025 were $0.88 per share, while our ongoing earnings, which exclude this non-recurring charge, were $1.24 per share. All further references to earnings drivers and variances in our discussion today will refer to ongoing earnings. For more information on this, please see the disclosure in our earnings release. I will now turn the call over to Bob.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Thank you Roopesh and good morning everybody. In the third quarter of 2025, Xcel Energy continued our commitment to our customers, our investors, and our communities to make energy work better. During the quarter, we delivered solid earnings of $1.24 per share. We invested over $3 billion and $8 billion year to date in resilient and reliable energy infrastructure for our customers. We reached a comprehensive and constructive settlement with plaintiffs in the Marshall Wildfire that helped our customers and our communities to move forward, and we accelerated our wildfire risk reduction efforts to protect our communities from volatile weather. Based on our results through the third quarter, we are reaffirming our earnings guidance for 2025 and remain confident in our ability to deliver on earnings guidance for the 21st year in a row, one of the best track records in the industry.

As per our usual Q3 rhythm, today we are introducing our updated 5-year infrastructure investment plan designed to serve increased energy demand, make needed investments to strengthen our transmission and distribution systems, provide a cleaner and more sustainable energy portfolio, and to keep energy safe, reliable, and affordable for all of our customers. In total, we expect this plan to deliver 7,500 megawatts of zero carbon renewable generation, 3,000 megawatts of natural gas fired generation, and almost 2,000 megawatts of energy storage to ensure system reliability, 1,500 new high voltage transmission line miles to support demand growth and regional delivery, and approximately $5 billion of investment in our distribution and transmission systems to improve resiliency and.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Reduce future risk from wildfire.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: We’re able to accomplish this plan because we have one of the best utility development and supply chain teams in the industry, and in combination with our strong balance sheet, we can deliver infrastructure timely and affordably for our customers. In connection with this forecast, we have safe harbored all renewable and storage projects in our base capital plan and expect the same for the projects in our incremental plan to ensure that we can capture available tax credits and help keep customers’ bills low. We also have 19 natural gas CTs on order, which will provide over 4 gigawatts of natural gas generation to help ensure reliability and affordability. Our ability to deliver infrastructure with excellence and our strategic geographic advantage allows our customers to benefit from some of the lowest energy bills in the country.

Over the past five years, our residential electricity and natural gas bills have been 28% and 12% below the national average, respectively. Our residential electric customers in Colorado have the lowest share of wallet out of all 50 states, and the average residential bills in our other states occupy five of the next 11 spots. Since 2014, our residential electric and natural gas bill growth has been well under the rate of inflation. In fact, a typical residential Xcel Energy electric and natural gas bill is 14% and 20% lower than it was in 2014 when adjusted for inflation. Our Steel for Fuel program has saved customers nearly $6 billion through 2025, and our 1 Xcel Energy Way Continuous Improvement program has realized over $1 billion in cumulative savings since 2020 while improving customer and operating outcomes.

Our industry-leading demand side management programs have saved enough energy to avoid building 30 average-sized power plants. As customers continue to electrify transportation and other parts of their lives, they can further reduce their overall monthly energy costs with low electric rates. We also continue to support critical programs to help our customers who may need assistance with their energy bills. Since 2024, Xcel Energy has connected over 200,000 customers with almost $300 million in financial resources. We’re also exploring new opportunities to help even more customers across our jurisdictions, including proposals in our current Minnesota, Wisconsin, and upcoming Colorado rate cases. Moving to the topic of artificial intelligence, artificial intelligence opportunities for Xcel Energy go well beyond our ability to power data centers. Of course, our load interconnection queue continues to grow even as we move some of our backlog into the contracted category.

Across Xcel Energy, we are in early stages of using AI in the business to bend the cost curve and to provide improvements in both customer satisfaction and operational outcomes. We’re harnessing AI to empower our people, accelerate innovation, and build a smarter, more resilient energy future for our customers and communities. Automated analysis across our diverse enterprise data sources is delivering actionable insights that strengthen security, improve operations and planning, and drive process improvement. We’re bridging knowledge gaps and empowering faster, more informed decision making across the organization. We’re leveraging AI built by others to advance our business, including high resolution imagery to transform how we inspect and maintain our distribution infrastructure. Through drone-based data collection and automated image analysis, AI-enabled processes can identify defects and assess risks and enable our teams to prioritize maintenance with greater speed and accuracy.

With wildfire risk mitigation, AI is transforming our risk models by leveraging internal models and tools like TechnoSilva. We’ve significantly improved our model coverage and accuracy as well as reduced analytical times to a fraction. This means faster, more reliable risk assessments protecting communities and infrastructure in real time. AI is truly an engine that’s driving enterprise-wide innovation and transformation in Xcel Energy, making energy work better for our employees, our customers, and our communities. Moving to Marshall, on September 23, Xcel Energy, Quest Corporation, and Teleport Communications America reached settlement agreements in principle that resolve all claims asserted by the subrogation insurers, the public entity plaintiffs, and individual plaintiffs. While Xcel Energy does not admit any fault or wrongdoing in disputes that our equipment caused the second ignition, we believe this provides a positive outcome for our communities and our investors.

Looking forward, Xcel Energy continues to make significant progress to mitigate risk from wildfires in extreme weather with public-facing wildfire mitigation plans in each of our states. This includes investments in situational awareness tools like weather stations and PanoAI cameras, advanced meteorology, fire science and AI-enabled risk modeling tools, hardening our systems and deploying advanced wildfire safety operations and PSPS capabilities, and operational actions including daily standups to address the threat from extreme weather across every part of our system and taking proactive actions as appropriate. Finally, each September, Xcel Energy employees and community members come together to honor the spirit of service. This year marked the 15th annual Day of Service for Xcel Energy with nearly 3,000 volunteers from across the company and the communities we serve coming together to support local nonprofit organizations. Together, volunteers dedicated almost 9,000 hours of service across more than 100 projects.

This is one of my favorite days of the year and exemplifies the spirit and dedication of our employees and partners who show up every day to provide safe, clean, reliable, and affordable energy to our customers and our communities. With that, I’ll turn it over to Brian.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Thanks Bob and good morning everyone. Starting with our financial results, Xcel Energy delivered earnings of $1.24 per share for the third quarter of 2025, compared to earnings of $1.25 per share in the third quarter of 2024. The most significant earnings drivers for the quarter include the regulatory outcomes in electric and natural gas sales growth increased earnings by $0.18, and higher AFUDC increased earnings by $0.08, offsetting these positive drivers.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Higher.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Financing costs decreased earnings by $0.15, reflecting the funding of our infrastructure investments and our financial discipline of maintaining a strong balance sheet. Higher depreciation and amortization decreased earnings by $0.09, driven by increased system investments, and the higher O&M expenses decreased earnings by $0.05. Turning to sales, weather-normalized and leap year adjusted electric sales increased 2.5% through the third quarter of 2025, driven by strong residential sales growth across all OPCOs and increased CNI load in SPS and PSCo. During the third quarter, we also energized Meta’s new data center in Minnesota that will continue to scale in the coming years. In turn, for full year 2025, we continue to forecast 3% weather-normalized electric sales growth. In the third quarter, O&M expenses increased $37 million relative to 2024. This increase was largely driven by a $25 million increase in health and benefit costs for the quarter.

For full year 2025, we now forecast that O&M expenses will increase 5%. Shifting to RFP and rate case activity in Colorado, in partnership with Colorado Energy Office, UCA, and Commission staff, we issued a near-term procurement for 4,000 MW of renewable resources and 500 MW of thermal and firm dispatchable resources. This RFP is intended to accelerate the deployment of a portion of our Colorado IRP to capture production tax credits before they sunset. Bids were received this month and we expect to file a recommendation December 2025, with the Commission decision by February of 2026. In SPS, we issued an all-source RFP to meet an 870 MW accredited capacity need. This represents 1,500 to 3,000 MW of nameplate capacity that will be online by 2032. Bids are due in January 2026, with an expected portfolio announcement by June 2026.

In October, the Wisconsin Commission verbally approved NSPW’s $725 million acquisition of the 375 MW Elk Creek Solar plus storage project. Tomorrow, we expect to file a natural gas rate case in Minnesota requesting a $63 million total revenue increase based on a 10.65% ROE and a 52.5% equity ratio. Interim rates of $51 million will also be requested effective January 1, 2026. Regarding future cases, we expect to file a Colorado Electric and Natural Gas and New Mexico Electric rate case later this year. Moving to data centers, we remain on track to contract the remainder of our original 2 gigawatt base plan by the end of the year. In addition, we have updated our total base plan to include approximately 3 gigawatts of data center capacity. Additional projects included in the base case we consider high probability and expected contracted by 2026.

This will drive 3% of the 5% assumed annual sales growth in our 2026-2030 capital plan. We also continue to make strong progress on the Small Coast Creek Wildfire claims process. We’ve resolved 212 of the 254 submitted claims, and we have settled or dismissed 21 of 34 lawsuits. We’ve updated the low end of our estimated liability to $410 million. We have made significant progress in the third quarter with the resolution of the three largest claims by acreage. We have committed $360 million in settlement agreements, so considering the low end estimated liability of $410 million, we’re estimating approximately $50 million more on top of the $360 million that has been committed based on our current information. As a reminder, we have approximately $500 million of insurance coverage.

Shifting to our investment plan, today we are providing an updated $60 billion five-year capital expenditure forecast, which reflects annualized rate base growth of approximately 11%. These investments are critical to serving growing electric demand, meet clean energy goals, and ensure safety and reliability of our system. We also have an additional pipeline of investments to our $60 billion plan, specifically from our recent RFPs across jurisdictions, incremental data center load, and transmission projects from future MISO and SPP tranches. We’re excited about our growth opportunities and will continue to finance accretive growth in a balanced manner. This year we have issued or contracted approximately $3 billion of equity and equity-like content between our ATM program and our 2025 hybrid financing. Our updated 2026 through 2030 capital plan reflects an additional $23 billion of debt and $7 billion of equity content.

We anticipate that any incremental capital investments would be funded by approximately 40% equity content and 60% debt. We continue to maintain a balanced financing strategy, which includes a mix of debt and equity to fund accretive growth while maintaining a strong balance sheet and credit metrics. Moving to earnings, we’re reaffirming our 2025 ongoing earnings guidance range of $3.75 to $3.85 per share. We’re also initiating our 2026 earnings guidance range of $4.04 to $4.16 per share, which reflects approximately a midpoint of 8% growth from the midpoint of our 2025 guidance. Key assumptions are detailed in our earnings release. We are updating our long-term EPS growth objective to 6% to 8% plus, with expectations to deliver 9% growth on average through 2030. This update reflects our significant investment needs to serve our customers and drive state policies, along with confidence in our financial outlook.

We are maintaining our dividend growth objective of 4% to 6%, with the expectation to be at the low end of the range over our 2026 to 2030 forecast period. We expect our dividend payout ratio will trend toward the bottom end of our updated payout ratio range of 45% to 55%, which allows greater financial flexibility and dry powder for the future. With that, I’ll wrap up with a quick summary. We continue to lead the clean energy transition, ensuring safe, clean, and reliable service and keeping customer bills as low as possible. We announced an updated five-year capital investment program that provides strong, transparent rate base growth and significant customer value. We reached a constructive settlement in the Marshall Wildfire and continue to make investments to reduce risk to our system and communities from extreme weather.

Our customers have and will continue to enjoy some of the lowest bills in the country. With our investment plan, we maintain a strong balance sheet and credit metrics, using a balance of debt and equity to fund accretive growth. We reaffirm our 2025 EPS guidance of $3.75 to $3.85 and have initiated 2026 EPS guidance of $4.04 to $4.16, which reflects a midpoint of 8% growth from the midpoint of our 2025 guidance. Finally, we expect to deliver 9% EPS growth on average through 2030. This concludes our prepared remarks. Operator, we will now take questions.

George, Conference Call Coordinator: Thank you, sir. Once again, for analysts to register for questions, please press star 1 on your tablet keypad. Our first question is coming from Nicholas Campanella from Barclays. Please go ahead. The line is open.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Hey, good morning. Thanks for all the updates. Morning, Nick. Morning. Just wanted to be clear, 26 at the midpoint. You did about 8, and you know, I hear you on the 9% through 2030. Does that start beyond 26 or is that how you’re kind of viewing this year? Thank you.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Hey, Nick, I’ll take that. No, that includes 2026, so 9% over the next 5 years inclusive of 2026 guidance. That 9% would be based off the midpoint of this year, so $380.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Okay, great. I appreciate that. Just one other clarification. $7 billion of equity in the plan, I know you talked about $1.3 billion already priced forward. Is that kind of net against that $7 billion, or is it still $7 billion from here on out?

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Thank you. No, think of it as we do as kind of $7 billion from here on out with our new 2026 to 2030 plan. If you kind of look what we did this year relative to last year’s plan, which had $4.5 billion in it, and kind of take those two pieces, we’re right online with kind of what we’ve been messaging around incremental capital drives, about 40% incremental equity content.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: So.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: I feel really good about our equity content plans and where we are in terms of managing our credit metrics and executing on a $60 billion investment plan. Great.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Thank you so much. We’ll see you at EI.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Absolutely.

George, Conference Call Coordinator: Thank you. Our next question is coming from Steven Fleischman calling from Wolfe Research. Please go ahead.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Yeah, hi. Good morning. Thanks for the updates. I guess first on just kind of the profile of the growth rate or growth. When you look at the CapEx plan and the rate base growth, it’s very heavily front-end loaded and then CapEx actually falls right now 2029, 2030 a decent amount. A lot of the other companies are kind of the opposite where it’s lower now and it’s like ramping up. Could you maybe just kind of talk to that and is a lot of that just we just don’t know some of these RFPs and other factors out in 2029, 2030. Yeah, Steve, I can take that one. I think you’re exactly right in terms of, you know, we’re always conservative of what we capital plan and our SPP portfolio process in there, projects that were approved by our Minnesota commission in Q1.

It really gets to in that 2029 and 2030, it’s, you know, we’ve launched RFPs with Colorado, SPS that were pretty early in the process and that sits in kind of our additional pipeline bucket. That is, you know, as we move through that process kind of into next year and even beyond that, we expect there’ll be opportunities to fill in there both generation to serve load growth for our customers but also transmission that we expect to see out of SPP in the near term here. The next tranche of SPPs should be a Q4 event that we get visibility in, but then also longer term on MISO tranche too.

George, Conference Call Coordinator: Okay.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: I know just maybe related, at times you’ve given kind of some rough idea of the range of spending on the upside cases and those different things that you mentioned there. Is there anything you can share on the potential capital and the upside case things?

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Not in here.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: I would say the slide we have in our deck here for today, you know that’s going to be a range of 6,000 to 9,000 total MW. We think out of those RFPs plus transmission we’ve always guided people to being competitive in our generation processes and winning about half of that plus that transmission. I see $10 billion plus sitting in that pipeline. Not all will be in 2030. Some of those generation processes run through 2031, 2032. Really good opportunity as we look at the load growth and then transmission needs in our system.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Bob, I think you’re right in terms of shape. You know the earnings generally will follow the capital investment plan with some amount of lag and financing costs, and then we look to fill in the back part of our plan with some of the incremental opportunities that Brian had.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Okay, great. Thanks for the update.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Thanks.

George, Conference Call Coordinator: Thank you, Mitcher. Next question will be coming from Jeremy Tunnett of J.P. Morgan. Please go ahead.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Hi, good morning, Jeremy.

George, Conference Call Coordinator: It appears that he’s just moved. Jeremy, please press Star one again and we’ll put you back in the queue. We’ll go to Carly Davenport. Okay, Carly, same thing. We’ll go to Julian Dumoulin of Jefferies, please ask your question.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Okay.

George, Conference Call Coordinator: Can you guys hear me?

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Yes, sir. Good morning, Julian. There we go. Third time’s a charm, I say. All right.

George, Conference Call Coordinator: Awesome guys.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Seriously. Look, if I can just go back to where you left off with Steve.

George, Conference Call Coordinator: I’ll just tee it up this way: of those different points that you raised.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: What are the more substantive pieces? It seems like the SBP element could be more substantive, that seems more front loaded, and then the acceleration of some of these renewable procurements in light of tax credit expirations could be more substantive and lumpy.

George, Conference Call Coordinator: They don’t seem to be in there.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: You tell me what are the bigger pieces that are not yet in that 60? You’ve laid out a whole bunch of them. I’m just curious which one moves the needle more as best you see it initially. Julian, I’ll start and then Brian can chime in. A large piece of the SPP RFP is embedded into our base capital plan. There’s a second RFP for SPP capacity and energy that is not included in the plan. When I think about Colorado generation, we have really two RFPs sitting in front of the commission out there. We have a near term procurement portfolio that’s designed to accelerate and take advantage of renewable credits. That looks like a $4.5 billion, sorry, 4.5 gigawatt plan.

There’s the just transition solicitation that’s been in progress with the commission for a while, which we expect some amount of adjudication either later this year or early next, which had somewhere between 4 and 15 gigawatts of generation needs in it. There’s a bit of overlap between the NTP and the JTS in terms of what’s needed and timing. I wouldn’t count those as additive. There’s a big piece of Colorado generation that’s likely to come in the 2028, 2029, 2030 timeframe that’s not included in our base capital plan. There’s a handful of smaller RFPs in the Upper Midwest for generation that are not included in our base plan as well.

Secondly, with regard to transmission, we have ITP and MISO 2.1 embedded in there, although they’re longer dated capital plans and longer dated service spends that will result in stuff drifting through this time period and into later into the early 2030s. There are subsequent ITPs and MISO LRTPs that are coming that are not also embedded in this plan. I think about Colorado generation being probably the biggest driver of backend investment in this five year plan, and transmission that’s not announced out of the SPP ITP process is sort of the second biggest. Brian, you got anything to add to that?

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: No, I think just absolutely on the Colorado side, we’re working through the process. It’s a really good engagement with our stakeholders to accelerate procurement for these renewable resources, given that we have the tax credit cliff in 2030. We should get visibility into that portfolio in December with a commission decision in Q1. We’ve got the bids in, robust bid pool, working through that. That’s one of the big drivers. Also, as we think about longer term, it’s incremental data center opportunities and working with our stakeholders in our states in terms of driving economic development, load growth that can drive longer term generation and transmission needs, which wouldn’t be incorporated. That’s just a longer term opportunity that I know the industry is seeing.

George, Conference Call Coordinator: Excellent, guys, thank you very much. I don’t mean to, but I.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Let me ask you it this way. The 6 to 8% plus versus the.

George, Conference Call Coordinator: 9% that you guys have out there.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Is the idea that the 9% is.

George, Conference Call Coordinator: At this point.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: In time, and the 6 to 8% plus is designed to be for any eventual roll forwards where the large sort of large numbers kind of drive some deviation from the 9% if you roll forward a couple years.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Yeah, Julian, we think about it this way is that 6% to 8%. 6% to 8% is whatever you think about our long-term view on EPS growth. When you balance the investment needs of our system, the load growth we’re seeing on opportunities and also affordability. When we look at our current five-year plan and the $60 billion infrastructure projects for our customers serving the load growth and the needs of our system, de-risking our communities, that plus really represents the 9% that we see over the next five years. If that helps differentiate in terms of how we’re thinking about it.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Excellent. All right, guys, I’ll leave it there.

George, Conference Call Coordinator: Thank you. Thank you very much, sir. Next question will be coming from Carly Davenport of Goldman Sachs. Please go ahead.

Good morning. Thanks for taking the questions.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Welcome back.

Thank you. Glad to be back. Maybe just on the load growth outlook, looks like continued strength in SPS, which is great to see. A couple of the other opcos shifting a bit lower from the prior plan. Could you just talk a little bit, what’s driving those moving pieces on load growth across the regions?

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: When we look at it really, SPS continues to be strength in our oil and gas sector. We’ve seen that for years. This year out in New Mexico we’re going to see key teens type of growth at this large CNI sector. We continue to see that with electrification out of that industry in New Mexico. Strong growth there. Also, Fermi America is down in Texas, New Mexico, there’s certainly opportunities there that we’ve talked about. We’re seeing that the other one’s more just a kind of shifting around potentially in timing of data centers as we think about it, when they’re coming in. When you look at our sales growth across all OPCOs, all are in the, call it, 4%, roughly 4 to 5% with SPS at 8% when we look at it. We’re pretty excited when we see our data center opportunities really mixed across our service territory.

Strong opportunities in Minnesota, working through some really good opportunities in Colorado. We talked about some opportunities in Texas and New Mexico. The one other thing I’d like to say is, that 5% sales growth that we talk about having the diversification, it’s not all data centers. Only three of that 5% is data centers. We also have one and a half percent of that 5% is driven by the SPS, oil and gas electrification. Then we just have customer growth, residential customer growth. We’re starting to see some electrification on the residential side. That’s about half a percent. Really kind of diversified growth which I think is important as we look forward to.

Great, that’s really clear. Thank you for that. Maybe just to follow up on kind of the financing and the balance sheet, seems like you’re targeting kind of now 16% to 17% FFO to debt targets, I guess. Can you just talk about sort of comfort level there with the cushion versus downgrade threshold levels and how confident you are in the path to kind of squarely getting back to that 17% level on a longer term basis?

Yeah, Carly, the way I think about it is we have not changed our long-term view on our credit metrics in that 17% level. That has not changed. It’s important to maintain a strong balance sheet and healthy credit metrics. When you look at our spending over the next few years, we kind of grow into that 17%. It’s really just we designed our equity plan or equity content plan to get back to that 17% in the latter part of this forecast, which is our long-term view. That has not fundamentally changed from a credit perspective. Maintaining our balance sheet, protecting our metrics. When you have this type of elevated CapEx over the next few years, there is some pressure there.

Makes a ton of sense. Thank you so much for the time.

George, Conference Call Coordinator: Thank you for your questions, Ben. Next question will be coming from Jeremy Tonnett of JP Morgan. Please go ahead.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Hi, good morning. Second time’s a charm.

Roopesh Aggarwal, Vice President, Investor Relations, Xcel Energy: Jeremy.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Thank you for the color today. Just want to step into equipment availability a little bit more if I could, such as transformers, transmission, two CGTs and components there. Just wondering if you could frame for us how long the queues are there and I guess how you see aligning that with new data center interest or contracts. Yeah, great question. Very timely and very strategic. I said in my prepared remarks I’m really proud of the team here at Xcel Energy. I think we have the best team working on this. We have been very, very progressive in terms of securing the assets that we need to build the infrastructure that sits in front of us. You’re absolutely right. Lead times have elongated and I’ll let Brian comment on any particular components.

We think that given our scale, our scope and our approach to our major vendors that we have access to inventory and supplies, maybe that others don’t have. We’ve taken a very progressive shift in how we work with our vendors, making sure that they see our entirety of our capital plan, they can plan for the work that they do with us. We find out who’s best able to serve us both on the services side as well as the equipment side and we backward integrate them into our capital plan in a way that is potential. We protect ourselves from pricing side as well as we get certainty of equipment and certainty of labor in a pretty tight market. That’s been the strategic focus for the team for a year or two as we saw the market start to tighten, particularly with data center build.

Maybe I’ll let Brian just comment on what we’re seeing in turbines and transformers and things like that.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Yeah, I mean, I think it’s absolutely no secret in terms of where the turbine market is. Call it for four years out. As Bob mentioned, though, we’ve gotten ahead of it in terms of having those 19 turbines on order. That’s one of the benefits of scale, as we can order a significant amount of equipment knowing that we’ll use it somewhere in our system and being able to deploy it throughout our system with the load growth we’re seeing. Main power transformers is another one that’s taken, that’s these large scale transformers, 345 kV a year, out for a few years. It’s really how do you get ahead of it? Make sure that you have the right supplier relationships, working through all the potential tariffs and supply chain challenges that currently exist there.

We feel really good about where we are, and also I think about that also within the context of our safe harbor strategy in terms of having all the equipment for both our base plan and any incremental projects that are coming out of our incremental plan and ensuring that not only are they safe harbor but we’re FERC compliant. We feel really good about our overall place from a supply chain perspective. That’s on the equipment side. There’s also a labor side of it too from an EPC perspective and ensuring that we have top tier EPC firms lined up not only for this year, next year, but for our five year plan and beyond. Having those key partnerships is really, really important and I think a differentiator as we go to market here in terms of executing on our plan.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Got it, very thoughtful process there and was just wondering might be able to align that a little bit more with demand growth. It seems like the data center pipeline as you described in the slide stepped up quite nicely versus before and just wondering what you see on the type of discussions and the speed to market world and how this all fits together. Obviously very strategic and timely. As we watch our industry work very progressively to bring speed to power here and making sure that we energize this very critical national asset in terms of artificial intelligence and data center development. Not surprising. We’ve got great interest and our pipeline continues to build and we continue to move stuff from highly probable into the contracted categories. We have some of the most affordable energy in the country.

As I mentioned in my prepared remarks, we have an incredibly good strong development team. We’re working through either ESAs or large load tariffs in all of our states and making sure that we protect our existing customers from the addition of new large loads. We’ve laid out in the past our principles around this in terms of cost causation and who’s funding and if we trigger a transmission investment, new generation investments, making sure that we protect our customers along the way and there’s net benefit for the entirety of the system when you bring on some of these new large loads. I think that it should also be noted that I mentioned sort of strategic geographic advantage in addition to low energy bills, we have enormous high clean energy content in our systems already.

That’s a very attractive component to these data center developers as well as their end use customers. I think that between our sustainability portfolio and where we’re trending as a company across all of our states and making sure that we can deliver a cleaner energy product as well as a highly reliable and highly affordable product is very strategic as we approach economic development with data center developers.

Roopesh Aggarwal, Vice President, Investor Relations, Xcel Energy: Got it.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Helpful. Thank you.

George, Conference Call Coordinator: Thank you very much, sir. Next question will be coming from Anthony Crudwell of Mizuho. Please go ahead, your line is open.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Hey, good morning team. I just have, I guess, two super quick cleanups. I think to Steve’s question, I think you mentioned about $10 billion of incremental CapEx that is in addition or would be on top of the current 9% EPS growth. Is that accurate?

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: That is accurate.

George, Conference Call Coordinator: Great.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: I probably should wait for EEI, but just, you know, the time is ripe. Currently talking 9% growth, but you’ve kept the guidance at 6 to 8% plus. Just curious on why not readjusting the 6, the messaging that shows all the potential upside that you have. Like it doesn’t even seem likely that you hit 6 or even 7. I’m just curious on the thought process of keeping it 6 to 8% plus.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Yeah, Anthony, look, you know we balance a lot of perspectives as we think through this in terms of, you know, what is the right long term, and when I say long term, six to eight, it’s beyond the five years about balancing affordability and everything else that goes into that. We thought the plus is a way to message that we do have a lot of infrastructure needs on behalf of our customers here in the next five years. Longer term, you know we need to start to roll beyond 2030. You know we’ll continue to evaluate that. Just quick on your first question, we said $10 billion plus, but some of that could fall outside of this five year.

When you think about some of the generation procurement and some of the, particularly the MISO transmission, will be longer dated, but really excited about our overall five year opportunity and beyond that.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Great. Thanks for taking the question. See you in Hollywood.

George, Conference Call Coordinator: Thank you, Mitzer. Next question will be coming from Sophie Karp calling from KeyBank. Please go ahead.

Hi, good morning. Congrats on the strong, I guess, guidance revision. Couple of questions for me. If you could talk a little bit about the trends in SPS. I know you continue to flag the electrification of the Permian as one of the drivers of the volume growth there. With the oil prices being kind of where they are, is there any reason to be concerned about that trend at all at this point?

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Hey Sophie, it’s Bob. I think the growth you see in the Permian is probably a function of two things. One is continued strength in mining in the Permian Basin, just more wells, more infrastructure, more fields being open. The second is the trend towards electrification of those fields and of existing fields. I think there’s two big drivers out there. When I talk to our largest customers down in the Permian in the Delaware basins, this continues to be their lowest cost resource around the globe. I think even when you start to see oil and gas prices fluctuate, these properties in the Southwest are still very in the money for them and they’ll continue to see mining and mining growth down the Southwest. I don’t have a lot of concern about that load growth profile.

As we talked about the data centers, that load growth profile we feel very confident in and see opportunity to add to it.

Got it, thank you. That’s pretty clear. Then only renewables versus gas, right? You guys are clearly stepping into more, accelerating the renewables to harvest the tax credits. At the same time, a lot of your peers are actually going more towards gas, and they are flagging that we will need to build more gas to firm up the system for data center demand. I guess my question is, will we see this same trend play out in your service territories at some point, or is it just the renewables are so attractive that you feel good by, I guess, still going full speed in renewables as opposed to more dispatchable generation?

Yeah, couple of themes in there for sure. One, as I said in my prepared remarks, we sit in one of the most geographically attractive areas for both wind and solar assets. We see real customer benefits from continuing down a trend of investing and taking advantage of those natural resources, particularly while tax credits help make them affordable for our customers. You also see us adding, you know, we’ve got 4.5 gigs of natural gas capability coming into the plant in the next five years as well as I think probably north of 5 gigs of energy storage as well. We are firming the system, backing the wind and the solar with attractively priced backup energy and making sure that we are both reliable, affordable, and sustainable for our customers, which is sort of the holy trinity of our business.

All right, thank you so much.

George, Conference Call Coordinator: Thank you. Next question will be coming from Steven Dabrizi calling from RBC Capital Markets. Please go ahead.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Hi Bob and Brian, thanks very much for taking my question. I just had a quick one. Thanks very much. It’s good to be back. Just had a quick one. I appreciate the color on the 9% because one of the things I guess I was scratching my head about and I was hoping to get a little color on was clearly 2029 rate base moves up something on the order of 20+%. If you run the midpoint of your EPS guidance out now at 9% versus where you were previously in the plan, it implies a pretty significant compression in earned ROEs, implied earned ROEs. Obviously you’re spending a lot more capital and spending it quicker, so that kind of makes sense to me. You do have pretty good mechanisms.

Can you talk about any embedded conservatism that’s in the plan around assumed earned ROEs that you would get given the significant increase in rate base? I can answer that question for you and I think that’s really why I wanted to provide some color with 11% rate base growth. We expect 9% rate base growth or 9% earnings growth over the next five years to really highlight that. No, we don’t expect significant compression in ROEs by any means. If you think where we are, we’ve talked about some of the rate cases that we have coming up in terms of driving some ROE improvement because we’ve delayed some rate cases for some reasons. When I think about it, we’ve always talked about when you get to this kind of high growth, we’re at 11% rate base growth.

Significant CapEx comes with financing needs that you would see about a 200 basis points delta between your rate base growth and your earnings growth over a five-year period. I think we want to just highlight that as we move through the next few years, our financing is lined up with our CapEx spend and we’re working through some regulatory proceedings. Over the next couple years you start to catch up on that rate base versus EPS growth. Over the five-year period we feel really good about where we are, that the long-term EPS growth coupled with our financing plan and maintaining a strong balance sheet is. We feel good about that and don’t see ROE compression at all. We certainly have conservative ROEs in our plan, but don’t see ROE compression as we sit here today and look at where we are today. Okay, that’s all I had.

Really appreciate it. Great, great result guys. Thanks very much. Thank you.

George, Conference Call Coordinator: Thank you, sir. Next question will be coming from Travis Miller calling from Morningstar. Please go ahead, sir.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Good morning.

George, Conference Call Coordinator: Thank you.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Morning Travis.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Questions around the transmission spend. Obviously this has been a big thing for you for many years, but as you ramp that up and think about these large customers, how easy or difficult is it to identify specific customers who might pay for some of this transmission spend? Yeah, we see contracts between generation and data centers.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Can.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Can you take some of this transmission spend essentially off of residential, commercial customer bills and identify specific customers to pay for it?

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Yeah. Great question. First, thanks for recognizing leadership in transmission. I like to say that we have been the, you know, leading builder of new transmission line miles over the last 15 years. When you come from the state of hockey, you got to skate to where the puck is. We feel like we’ve built a grid and an infrastructure system that is enabling us to energize this new data class. When I think about incremental people willing to spend incremental money on transmission, I think our first principle with regard to hooking up data centers is if they require a new transmission line, particularly a lateral, usually they’re paying for that 100%. We put that into sort of a kayak buck as opposed to net rate based spend, and it’s going to be attributable directly to that customer.

When you talk about can you identify those customers, those customers are knocking on our door freely and willingly to spend the money, particularly on the transmission interconnection to make sure that they can get service as quickly as possible. This is really a management of the inbounds as opposed to us having to go find people that are willing to do it. I think that’s a pretty common approach that the distance data center developers and the hyperscalers are willing and able to do. We’re protecting our customers from the transmission build. When you think about the net benefit, if you’re taking the entirety of our system cost and adding more megawatts to it, that’s a net benefit on a per kilowatt hour rate on the transmission system in totality and a benefit for all customers.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Okay, so not all that transmission spend then would go on commercial residential bills.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: The transmission spend that we highlight in our plan is regional, super regional. We have stuff that’s connecting MISO and SPP markets. We have big regional transmission coming out of the long range transmission planning out of the MISO process that is regionally allocated. It’s not necessarily coming directly onto our customers. Same with our SPP build out, a lot of that is regional cost allocated, not coming into the directly 100% into retail rates.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Okay, great. How much as you talked about that lateral, just to follow up on that, a scale or kind of share of how much that specific lateral type of demand you’re getting relative to like what you just talked about, the regional type of. Yeah, Travis, those are really customer specific. You do system impact studies to just, you know, wherever that customer is locating on the transmission system, the size of that customer, the ramp of that customer. Those are really specific. Hard to put a number on it in a general sense.

George, Conference Call Coordinator: Okay, that’s fair. I appreciate all the thoughts.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Thank you.

George, Conference Call Coordinator: Thank you very much, sir. Next question will be coming from Alexia Kania calling from BTIG. Please go ahead. Alex Kania, that is. Thank you.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Good morning.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Thanks.

Bob Frenzel, Chairman, President and Chief Executive Officer, Xcel Energy: Thanks for taking my question. Maybe just a question on the regulatory side. Obviously it’s great to see all this CapEx and also the transmission as well. I’m just thinking about also your comments about relative share of wallet and rates. I’m just wondering the nature of communications that you’re having with regulators just on kind of expectations for where rate trends may be going over the next five years within this window. Maybe there’s kind of a balance between revenue requirements and volume growth or whatnot. I’m just kind of curious about what the reception is to those types of conversations. Yeah, great. I think it’s really fundamental and foundational for our team here to make sure that we keep our bills for our product as affordable as possible for our customers. We wake up every day thinking about that.

We have to balance that with other desires: reliability, sustainability, resiliency, and safety across our system to make sure that we can meet those needs of our customers as well. You don’t have to look any further than Jamaica or Cuba to realize the devastating effect that communities have when our system and our product isn’t available. We are spending time and energy, as you say, with our regulators, with our legislators, making sure that we recognize all of the things that we’re bringing to the system and that while affordability is a hugely important piece, we think we start from a very good spot. We think we’ve been a very good steward of our customers’ money over the last decade.

We’ll continue to be very prudent, very focused on making sure that we can deliver the system that they need and want with the policy objectives that they need and want at a price that is as affordable as possible. We work through that with each state and each class of customer, making sure that we keep our product very affordable and attractive. Great. Thanks very much and thank you very.

George, Conference Call Coordinator: you for your questions, Alex. As we have no further questions for closing remarks, I’ll turn the call back over to CFO Brian Van Abel for closing remarks. Thank you.

Brian Van Abel, Executive Vice President and Chief Financial Officer, Xcel Energy: Thank you all for participating in our earnings call this morning. Please contact our Investor Relations team with any follow up questions.

George, Conference Call Coordinator: Thank you much, sir. Ladies and gentlemen, that concludes today’s conference. We wish you a very good day. You may now disconnect. Have a good day.

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