Xcel Energy Inc. · NASDAQ:XEL
Xcel Energy — Q1 2022 Earnings Presentation
34 slides from Xcel Energy's earnings presentation, Apr 28, 2022
Slide 1: 2022 Q1 Earnings Report Presentation
2022 Q1 EARNINGS REPORT PRESENTATION APRIL 28, 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: Financial and Operational Highlights
Financial and Operational Highlights • Approval of our Minnesota resource plan, including coal exit in the Upper Midwest by 2030 • Reached a revised Colorado resource plan settlement, including accelerating the retirement of our Comanche 3 coal unit to no later than January 1, 2031 • Approval of our
Slide 4: 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 • 2,500 MW universal scale solar • Sherco 3 (517 MW) retire 2030 • 2,150 MW wind • Additional 1,100 MW beyond 2032 Firm peaking capacity (reliability dr
Slide 5: Colorado Resource Plan
Colorado Resource Plan 85% Carbon Reduction by 2030 & Coal Exit by 2031 Full coal exit by January 2031 Significant renewable additions • Hayden 1 & 2 (233 MW) retire 2028/2027 • ~2,400 MW wind • Pawnee (505 MW) conversion to natural • ~1,600 MW universal scale solar gas no later than January 2026 •
Slide 6: Transmission Expansion - Colorado Pathway
Transmission Expansion - Colorado Pathway $1.7 Billion Transmission Backbone • Enables ~5,500 MW of renewable generation • ~560 miles of 345 kV lines; three new, four expanded substations • Settlement reached November 2021, including the $1.7 billion estimate and rider recovery • Commission approved
Slide 7: Transmission Expansion - MISO Outlook
Transmission Expansion - MISO Outlook MISO Plans (indicative) • Three potential futures with up to 50% renewables by 2039 • Future 1 investment ~$30 billion, expected to include four project tranches – Tranches 1 & 2 (Midwest) – Tranche 3 (South) – Tranche 4 (linking North & South) • Future 3 invest
Slide 8: Transmission Expansion - MISO Outlook
Transmission Expansion - MISO Outlook MISO Tranche 1 (in service by 2030) • Seven groups of projects totaling ~$10 billion • Four of the seven groups of projects run through Xcel Energy’s service territory – Right of first refusal in MN, ND & SD – Competitive bidding in other states – Estimated capi
Slide 9: EPS Results by Operating Company
EPS Results by Operating Company First Quarter Operating Company 2022 2021 PSCo $ 0.32 $ 0.31 NSPM 0.23 0.24 SPS 0.10 0.11 NSPW 0.09 0.06 Equity earnings 0.01 0.01 Regulated utility 0.75 0.73 Holding company and other (0.05) (0.06) Total GAAP and Ongoing diluted EPS $ 0.70 $ 0.67 8
Slide 10: Quarterly GAAP and Ongoing EPS Change
Quarterly GAAP and Ongoing EPS Change $0.05 $0.04 ($0.06) ($0.04) ( $0.08 $0.02) ($0.01) ($0.01) $0.67 $0.70 2021 Q1 2022 Q1 EPS EPS * Combined electric and natural gas margins include ~$0.02 of positive weather impacts (post regulatory mechanisms) ** Includes PTCs and plant regulatory amounts, whic
Slide 11: Sales and Customer Data
Sales and Customer Data 2022 Q1 W/A Retail Electric Sales Growth 2022 Q1 YoY Electric Customer Growth 7.8% 4.0% 3.9% 3.0% 1.1% 1.1% 0.9% 1.1% 1.2% 0.7% NSPM NSPW PSCo SPS Xcel Energy NSPM NSPW PSCo SPS Xcel Energy 2022 Q1 W/A Natural Gas Sales Growth 2022 Q1 YoY Natural Gas Customer Growth 7.3% 5.3%
Slide 12: 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 March 2022, the CPUC approved an
Slide 13: 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 14: 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 15: 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 $ Millions, Except Percentages 2022 2023 2024 Total Rate
Slide 16: 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 • In 2021, the MPUC approved interim rates of $25 milli
Slide 17: 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 18: 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 remainder of the year W/A retail electric sales Increase of ~1 - 2% W/A
Slide 19: Appendix
APPENDIX 18
Slide 20: 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 21: 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 22: 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 23: 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 24: 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 25: 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 24
Slide 26: 2022 Debt Financing Plan
2022 Debt Financing Plan $ Millions Issuer Security Amount Anticipated Timing Hold Co Senior Unsecured Bonds $700 Q2 NSPM First Mortgage Bonds $500 Q2 NSPW First Mortgage Bonds $100 Q3 PSCo First Mortgage Bonds $700 Q2 SPS First Mortgage Bonds $200 Q2 Financing plans are subject to change, depending
Slide 27: 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 28: 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 over 24 months with no carrying charges –
Slide 29: 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, which was updated in April 2022: – Revised rate increase of ~$6 million – ROE of 10.5% and equity ratio of 52.54% – Revised rate base of ~$115 million – 2022 forecast test year –
Slide 30: ROE Results - GAAP and Ongoing Earnings
ROE Results – GAAP and Ongoing Earnings GAAP and Ongoing ROE 2021E Rate Base Twelve Months Ended 3/31/2022 SPS 10.85% 10.61% 17% 8.65% 8.39% NSPM 8.22% 8.10% ~$36 38% PSCo Billion 39% NSPM NSPW PSCo SPS Total Xcel NSPW OpCo Energy 6% 29
Slide 31: 2022 Q1 W/A Electric Sales Growth
2022 Q1 W/A Electric Sales Growth NSPM NSPW PSCo SPS Residential C&I 10.1% Total Retail 7.8% 5.9% 4.0% 4.1% 3.0% 2.7% 0.4% 0.8% 1.2% -0.1% -1.5% Extreme weather variations, wind chill and cloud cover may not be reflected in growth (decline) estimates 30
Slide 32: Xcel Energy W/A Sales Growth
Xcel Energy W/A Sales Growth Residential C&I Total Retail Electric Natural Gas Electric Natural Gas 5.9% 3.1% 3.9% 2.1% 1.7% 0.8% 0.7% 0.4% 1.5% -0.3% -3.1% -5.4% 2022 2022 2022 2022 2020* 2021* YTD 2020* 2021* YTD 2020* 2021* YTD 2020* 2021* YTD * Leap year adjusted Extreme weather variations, wind
Slide 33: 2022 Q2 Events
2022 Q2 Events Events Dates Citi Global Energy, Utilities & Climate Technology Conference May 11 Credit Suisse Utilities Conference May 12 Xcel Energy Annual Meeting of Shareholders May 18 AGA Financial Forum May 16 - 18 RBC Global Energy, Power & Infrastructure Conference June 7 Bank of America Tra
Slide 34: © 2022 Xcel Energy Inc.
(2) Xcel Energy’ © 2022 Xcel Energy Inc.