Xcel Energy Inc. · NASDAQ:XEL
Xcel Energy — Q4 2021 Earnings Presentation
35 slides from Xcel Energy's earnings presentation, Jan 27, 2022
Slide 1: 2021 Year End Earnings Report Presentation
2021 YEAR END EARNINGS REPORT PRESENTATION JANUARY 27, 2022
Slide 2: Safe Harbor
Safe Harbor Except for the historical statements contained in this presentation, the matters discussed herein are forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements, including the 2022 EPS guidance, long-term EPS and dividend
Slide 3: 2021 Financial and Operational Highlights
2021 Financial and Operational Highlights • Delivered earnings of $2.96 per share, the 17th consecutive year of meeting or exceeding guidance • Raised annual dividend by 11 cents per share (6.4%), marking the 18th consecutive annual increase • Achieved constructive regulatory outcomes: – Rate case s
Slide 4: Colorado Resource Plan
Colorado Resource Plan 87% Carbon Reduction by 2030 & Coal Exit by 2034 Full coal exit by 2034 Significant renewable additions • Hayden 1 & 2 (233 MW) retire 2028/2027 • Wind (~2,300 MW) • Pawnee (505 MW) convert to nat gas 2026 • Universal scale solar (~1,600 MW) • Comanche 3 (500 MW) retire 2034;
Slide 5: Minnesota Resource Plan
Minnesota Resource Plan 85% Carbon Reduction & Coal Exit by 2030 Full coal exit by 2030 Significant renewable additions • King (511 MW) retire 2028 • Universal scale solar (3,150 MW) • Sherco 3 (517 MW) retire 2030 • Wind (2,650 MW) Firm peaking capacity (reliability driven) Nuclear extension (Monti
Slide 6: Transmission Expansion - Colorado Pathway
Transmission Expansion - Colorado Pathway Transmission Backbone • ~$1.7 billion investment • Enables ~5,500 MW of renewable generation • ~560 miles of 345 kV lines; three new, four expanded substations • Settlement reached with staff and other parties in November 2021, including the $1.7 billion est
Slide 7: EPS Results by Operating Company
EPS Results by Operating Company Fourth Quarter Full Year Operating Company 2021 2020 2021 2020 PSCo $ 0.27 $ 0.25 $ 1.22 $ 1.11 NSPM 0.22 0.23 1.12 1.12 SPS 0.11 0.10 0.59 0.56 NSPW 0.05 0.04 0.20 0.20 Earnings from equity method investments 0.01 0.01 0.05 0.05 Regulated utility 0.65 0.63 3.18 3.04
Slide 8: Quarterly GAAP and Ongoing EPS Change
Quarterly GAAP and Ongoing EPS Change $0.05 $0.01 ($0.05) $0.07 ($0.03) ($0.01) $0.54 $0.58 2020 Q4 2021 Q4 EPS EPS * Includes PTCs and plant regulatory amounts, which are primarily offset in electric margin 7
Slide 9: Annual GAAP and Ongoing EPS Change
Annual GAAP and Ongoing EPS Change $0.17 $0.15 ($0.24) $0.26 ($0.10) ($0.04) ($0.03) $2.79 $2.96 2020 2021 EPS EPS * Combined electric and natural gas margins include ~$0.03 of negative weather impacts (post decoupling) ** Includes PTCs and plant regulatory amounts, which are primarily offset in ele
Slide 10: Sales and Customer Data
Sales and Customer Data 2021 W/A Retail Electric Sales Growth 2021 YoY Electric Customer Growth (leap year adjusted) 2.5% 2.7% 1.2% 1.5% 1.1% 1.7% 1.2% 1.0% 1.2% 0.7% NSPM NSPW PSCo SPS Xcel Energy NSPM NSPW PSCo SPS Xcel Energy 2021 W/A Natural Gas Sales Growth 2021 YoY Natural Gas Customer Growth
Slide 11: SPS Texas Electric Rate Case
SPS Texas Electric Rate Case Proceeding No. 51802 • In February 2021, SPS filed a required electric rate case: – Requesting base rate increase of ~$140 million – ROE of 10.35% and equity ratio of 54.6% – Rate base of ~$3.3 billion – Historic test year ended December 31, 2020 – Changes to depreciatio
Slide 12: NSPM Electric Rate Case
NSPM Electric Rate Case Proceeding No. 21-630 • In October 2021, NSPM filed a three-year electric rate case: – Requesting rate increase of $677 million over three years – ROE of 10.2% and equity ratio of 52.5% – 2022 - 2024 forecast test years – Requested interim rates of $288 million in January 202
Slide 13: NSPM Natural Gas Rate Case
NSPM Natural Gas Rate Case Proceeding No. 21-678 • In November 2021, NSPM filed a natural gas rate case: – Requesting rate increase of ~$36 million – ROE of 10.5% and equity ratio of 52.50% – Rate base of ~$934 million – 2022 forecast test year – Requested interim rates of ~$25 million in effect Jan
Slide 14: PSCo Colorado Electric Rate Case
PSCo Colorado Electric Rate Case Proceeding No. 21AL-0317E • In July 2021, PSCo filed an electric rate case: – Requesting a net base rate increase of ~$343 million – ROE of 10.0% and equity ratio of 55.64% – Rate base of ~$10.3 billion – 2022 forecast test year • In January 2022, PSCo filed a compre
Slide 15: PSCo Colorado Natural Gas Rate Case
PSCo Colorado Natural Gas Rate Case Proceeding No. 22AL-0046G • In January 2022, PSCo filed a natural gas rate case: – Requesting a net base rate increase of ~$107 million in 2022, with incremental step increases of $40 million in 2023 and $41 million in 2024 – Total change to base rates is $215 mil
Slide 16: 2022 GAAP and Ongoing EPS Guidance: $3.10 - $3.20
2022 GAAP and Ongoing EPS Guidance: $3.10 - $3.20 Earnings Drivers Key Assumptions (as compared to 2021 levels unless noted) Regulatory proceedings Constructive outcomes in all proceedings Weather Normal weather patterns for the year W/A retail electric sales Increase of ~1% W/A retail firm natural
Slide 17: Appendix
APPENDIX 16
Slide 18: Robust Base Capital Forecast 2022 - 2026
Robust Base Capital Forecast 2022 - 2026 Investment by Function Investment by Company Other Electric 10% Distribution SPS SPS NSPM NSPM 30% 15% 14% 37% 39% Natural Gas LDC $26 $22.5 $26 13% Billion Billion Billion Electric Electric PSCo Generation Transmission 38% NSPW 12% NSPW 29% 10% 9% Renewables
Slide 19: Base Capital Expenditures by Function
Base Capital Expenditures by Function $ Millions 2022 2023 2024 2025 2026 Total Electric Distribution $1,485 $1,600 $1,520 $1,605 $1,720 $7,930 Electric Transmission $1,105 $1,220 $1,575 $1,965 $1,555 $7,420 Natural Gas $655 $670 $695 $660 $660 $3,340 Electric Generation $645 $580 $670 $650 $650 $3,
Slide 20: Base Capital Expenditures by Company
Base Capital Expenditures by Company $ Millions 2022 2023 2024 2025 2026 Total NSPM $2,250 $2,030 $1,830 $2,130 $2,010 $10,250 NSPW $480 $420 $540 $460 $390 $2,290 PSCo $1,930 $1,850 $2,070 $2,220 $1,860 $9,930 SPS $630 $660 $690 $780 $790 $3,550 Other* ($10) $0 $10 ($30) $10 ($20) Total $5,280 $4,9
Slide 21: Potential Incremental Investment 2022 - 2026
Potential Incremental Investment 2022 - 2026 $1.5 - $2.5 Billion in Incremental Opportunities $1.0 - $1.5 Billion Renewables ~2,000 MW proposed additions across Colorado and Minnesota resource plans for 2024 - 2026, assuming 50% ownership $0.5 - $1.0 Billion Transmission Enables renewables associate
Slide 22: Strong Rate Base Growth
Strong Rate Base Growth Xcel Energy Consolidated Op Co Base CAGRs 2021-2026 $ Billions Base 2021 - 2026 CAGR: ~6.5% NSPM PSCo Incremental 2021 - 2026 CAGR: ~7.3% ~6% ~7% $51.2 XEL $48.5 ~6.5% NSPW SPS ~11% ~5% $47.3 $49.4 $41.7 $44.4 $36.1 $39.2 Op Co CAGRs exclude potential 2021E 2022E 2023E 2024E
Slide 23: Financing Plan 2022 - 2026
Financing Plan 2022 - 2026* $ Millions $800 $450 $7,110 $3,900 $3,900 $26,000 $17,640 CFO** Maturing Refinanced Incremental Equity Equity Base Plan LT Debt LT Debt Debt (Other) (DRIP) * Financing plans are subject to change ** Cash from operations is net of dividends and pension funding 22
Slide 24: 2022 Debt Financing Plan
2022 Debt Financing Plan $ Millions Issuer Security Amount Anticipated Timing Hold Co Senior Unsecured Bonds $600 Q2 NSPM First Mortgage Bonds $500 Q2 NSPW First Mortgage Bonds $100 Q3 PSCo First Mortgage Bonds $650 Q2 SPS First Mortgage Bonds $150 Q2 Financing plans are subject to change, depending
Slide 25: Strong Credit Metrics
Strong Credit Metrics Plan 2022 2023 2024 2025 2026 FFO/Debt ~17% ~17% ~17% ~17% ~17% Debt/EBITDA 5.0x 4.9x 4.8x 4.8x 4.7x Equity Ratio 40% 41% 41% 41% 41% Hold Co Debt/Total Debt 24% 23% 23% 23% 24% Credit Ratings Moody’s S&P Fitch Xcel Energy Unsecured Baa1 BBB+ BBB+ NSPM Secured Aa3 A A+ NSPW Sec
Slide 26: PSCo Colorado Comprehensive Settlement
PSCo Colorado Comprehensive Settlement Proceeding No. 21A-0192EG In October 2021, PSCo filed a settlement that proposes to address several regulatory items: • Full recovery of all Winter Storm Uri deferred fuel costs through a rider – Electric: $263 million electric over 24 months with no carrying c
Slide 27: SPS New Mexico Electric Rate Case Settlement
SPS New Mexico Electric Rate Case Settlement Proceeding No. 20-00238-UT • In January 2021, SPS filed a required electric rate case: – Requesting base rate increase of ~$84 million – ROE of 10.35% and equity ratio of 54.72% – Retail rate base of ~$1.9 billion – HTY ended September 30, 2020, including
Slide 28: NSPM North Dakota Natural Gas Rate Case
NSPM North Dakota Natural Gas Rate Case Proceeding No. PU-21-381 • In September 2021, NSPM filed a natural gas rate case: – Requesting rate increase of ~$7 million – ROE of 10.5% and equity ratio of 52.54% – Rate base of ~$140 million – 2022 forecast test year – Requested interim rates of ~$7 millio
Slide 29: 2021 ESG Highlights
2021 ESG Highlights • Remain on track to achieve 80% carbon reduction by 2030; accelerated full coal exit from 2040 to 2034 • Committed to 25% GHG reduction in natural gas business by 2030 and net zero by 2050, including emission scopes 1, 2 and 3 • Issued additional voluntary disclosures – Natural
Slide 30: Recognized for ESG Leadership
Recognized for ESG Leadership Safety Achievement Award Emergency Response Award Outstanding Customer Service Exemplary EE Programs Smartest Utility Projects (EV) for National Accounts 29
Slide 31: ROE Results – GAAP and Ongoing Earnings
ROE Results – GAAP and Ongoing Earnings GAAP and Ongoing ROE 2020 Rate Base Twelve Months Ended 12/31/2021 SPS 9.92% 10.58% 18% 9.22% 8.58% NSPM 8.45% 8.23% ~$34 38% Billion PSCo 39% NSPM NSPW PSCo SPS Total Xcel NSPW OpCo Energy 5% 30
Slide 32: 2021 W/A Electric Sales Growth
2021 W/A Electric Sales Growth NSPM NSPW PSCo SPS Residential C&I Total Retail 3.6% 3.6% 1.9% 1.5% 2.5% 2.7% 1.7% 0.7% 1.1% 0.6% 0.1% -0.7% Leap year adjusted Extreme weather variations, wind chill and cloud cover may not be reflected in growth (decline) estimates 31
Slide 33: Xcel Energy W/A Sales Growth
Xcel Energy W/A Sales Growth Residential C&I Total Retail Electric Natural Gas Electric Natural Gas 3.1% 2.7% 2.1% 1.7% 0.4% 0.8% 0.7% 0.4% -0.5% -0.3% -3.1% -5.4% 2019 2020* 2021* 2019 2020* 2021* 2019 2020* 2021* 2019 2020* 2021* * Leap year adjusted Extreme weather variations, wind chill and clou
Slide 34: 2022 Q1 Events
2022 Q1 Events Events Dates Morgan Stanley Conference March 1 Barclays Fixed Income Conference March 1 BofA Conference March 2 UBS Europe Conference March 22-23 UBS Midwest Conference March 30 33
Slide 35: © 2022 Xcel Energy Inc.
(2) Xcel Energy’ © 2022 Xcel Energy Inc.