Xcel Energy Inc. · NASDAQ:XEL
Xcel Energy — Edison Electric Institute Financial Conference 2005
48 slides from Xcel Energy's conference presentation, Nov 4, 2005
Slide 1: Edison Electric Institute Financial Conference
Xcel Energy* Edison Electric Institute Financial Conference November 8, 2005
Slide 2: Safe Harbor
2 Xcel Energy’ Safe Harbor This material includes forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements include projected earnings, cash flows, capital expenditures and other statements and are identified in this document by the
Slide 3: Dick Kelly, President and Chief Executive Officer
Xcel Energy* Dick Kelly President and Chief Executive Officer
Slide 4: Financial Performance Objectives
(2) Xcel Energy’ Financial Performance Objectives = EPS growth rate 2005 - 2009 — Target 5- 7% per year* @ Annual dividend increases — Consistent with dividend growth objective of 2 -— 4% per year = Credit rating — Senior unsecured debt A to BBB+ * Excluding any impact from COLI
Slide 5: (2) Xcel Energy’
(2) Xcel Energy’
Slide 6: Operational Focus
(2) Xcel Energy’ Operational Focus Results in local decision makers with 360 degree perspective, responsibility and accountability Regulatory Financial issues Resource a @ Customer needs rt expectations é Legislative Resource portfolio
Slide 7: Improving Reliability
2) nergy’ Improving Reliability tai Objective Within Top Quartile 120 System Average Interruption Duration Index (SAIDI) 100 ys 1999 2000 2001 2002 2003 2004 2005 — EE! Top Quartile ioleced EEI Median SS Xcel Energy
Slide 8: PSCo Quality Service Plan (QSP) Settlement
(2) Xcel Energy’ PSCo Quality Service Plan (QSP) Settlement mu Invest $11 million of incremental capital targeted at specific outage causes = QSP excludes SAIDI = Investment will be included in rate base after 2006 rate case
Slide 9: Distribution, Customer and A & G Costs
(2) Xcel Energy’ Distribution, Customer and A & G Costs Dollars per customer 500 400 300 200 100 © OL ESE SSP $ Source: 2004 FERC Form 1
Slide 10: Improving Large Customer Satisfaction
(2) Xcel Energy’ Improving Large Customer Satisfaction Percentile rank — TQS survey results 82 73 55 So 2003 2004 2005 * 6,100 customers surveyed served by 60 utilities
Slide 11: Working with Customers
(2) Xcel Energy’ Working with Customers = $5 million contribution to energy assistance providers @ Increased conservation and energy-saving programs promotion = Pro-actively work with “at-risk” customers regarding community resources and offer financial assistance = Work with community leaders, loca
Slide 12: Environmental Stewardship
(2) Xcel Energy’ Environmental Stewardship = 7% of energy from renewables — 2004 @ Wind generation: — Current 953 MW. — In-service by 2008 730 — Negotiating 850 Total 2,533 MW = Partner with EPRI on high-altitude, Powder River Basin coal IGCC demonstration = Partner with the National Renewable Energ
Slide 13: CAIR and Mercury Compliance Plan
(2) Xcel Energy’ CAIR and Mercury Compliance Plan = Colorado is exempt from CAIR @ Filed suit contesting inclusion of West Texas in CAIR = NSP SO, credits to last through 2020 & SPS to purchase SO, allowances = Investment of $50 — 60 million to meet NO, standards at NSP and SPS = PSCo expected to me
Slide 14: MERP Project Status
MERP Project Status King = 571 MW super-critical coal retrofit and upgrade = Broke ground April 2006 = 90% of contracts placed = Shut-down fall 2006; on-line spring 2007 High Bridge m= 267 MW coal to 575 MW CCGT = All major permits received = Site work under way = On-line late spring 2008 Riverside
Slide 15: Comanche Update
(2) Xcel Energy’ Comanche 3 Update = All environmental permits received* = Construction contracts awarded for: — Boiler — Turbine — Air quality systems — Site development — Stack construction @ Site preparation underway d @ Stack foundation work has begun = Formal groundbreaking later this year * Tw
Slide 16: Earn a Fair Return on Equity
(2) Xcel Energy’ Earn a Fair Return on Equity m File rate cases = Receive a fair return on equity = Manage to allowed cost = Invest in jurisdictions which provide a fair return u File rate cases as often as necessary
Slide 17: Financial Overview
(2) Xcel Energy’ Financial Overview Ben Fowke Vice President and Chief Financial Officer
Slide 18: Rate Cases with 2006 Impacts
(2) Xcel Energy’ Rate Cases with 2006 Impacts Filed = Colorado Gas v = Wisconsin Electric and Gas v = Minnesota Electric v @ North Dakota Electric November 2005
Slide 19: PSCo Gas Rate Case
PSCo Gas Rate Case Dollars in millions Case Amount ROE PSCo $34.5 11.00% CPUC Staff $8.5 9.50% occ $(0.2) 8.50% ( Historic year-end @) Average Percent Equity 55.49% 52.53% 50.10% (2) Xcel Energy’ Rate Base $1,030 0) $996 2) $1,003 2) Revenue requirement impact of 100 basis point change ROE = $9 mill
Slide 20: NSP - Wisconsin Electric Rate Case
(2) Xcel Energy’ NSP —- Wisconsin Electric Rate Case Dollars in millions Case Percent Rate Amount ROE Equity Base NSP (W) $53.1 11.90% 56.32% $553.2 (1) PSCW Staff $45.4 11.00% 56.43% $551.1 (1) Industrial Group NP 10.50% 51.00% NP. Department of Defense $20.2 10.25% 56.32% $553.2 () Forecast averag
Slide 21: NSP - Wisconsin Gas Rate Case
(2) Xcel Energy’ NSP —- Wisconsin Gas Rate Case Dollars in millions Case Percent Rate Amount ROE Equity Base NSP (W) $7.7 11.90% 56.32% $81.4 (1) PSCW Staff $5.8 11.00% 56.43% $81.1) Industrial Group NP 10.50% 51.00% NP. Department of Defense $3.3 10.25% 56.32% $77.01) () Forecast average NP — No pr
Slide 22: NSP - Minnesota Electric Rate Case
(2) Xcel Energy’ NSP —- Minnesota Electric Rate Case @ Request increase of $168 million; 8.05% increase @ Rate base of $3.2 billion m Request ROE of 11%; 51.7% equity = Based on 2006 forecast test year @ Interim rates set at $141 million in effect January 2006, subject to refund; 6.9% increase = Dec
Slide 23: Minnesota Electric Rate Case Drivers
(2) Xcel Energy’ Minnesota Electric Rate Case Drivers 1992 — 2004 Customer Growth 180,000 Load Growth 3,000 MW Added Capacity 580 MW Rate Reductions $23.5 million Residential Rate @ 675 KWh/month 1993 7.25 cents/KWh 2005 8.47 cents/KWh 1.3%/year increase
Slide 24: Minnesota Regulatory Process
2 Xcel Energy’ Minnesota Regulatory Process November 2006 Rates Implemented November 2006 Briefs ~July 2006 Decision August 2006 Public Hearings ~March 2006 Technical Hearings ~June 2006 Interveners File ~February 2006 Rebuttal Testimony ~March 2006 Discovery Interventions ‘Company Files Case Novemb
Slide 25: Rate Cases with Expected 2007 Impacts
(2) Xcel Energy’ Rate Cases with Expected 2007 Impacts = Colorado Electric = Texas Electric = New Mexico Electric = South Dakota Electric
Slide 26: Capital Expenditure Forecast
(2) Xcel Energy’ Capital Expenditure Forecast Dollars in millions 2005 2006 2007 2008 2009 Base level capital exp $ 982 $1,035 $1,016 $ 920 $1,031 Minnesota MERP 211 336 228 180 44 Comanche 3 62 198 331 284 73, Total $1,255 $1,569 $1,575 $1,384 $1,148 Anticipated annual growth in average rate base 4
Slide 27: Potential Regulatory Net Income
(2) Xcel Energy’ Potential Regulatory Net Income Dollars in millions 2004 2005 2006 2007 2008 #2009 Average rate base $10,500 Projected rate base growth 4% 4% Th 5% 2% Projected average rate base $10,920 $11,357 $12,152 $12,759 $13,015 Equity ratio 5Si% 51% 51% 51% 51% Average equity rate base $5,57
Slide 28: Potential Regulatory Net Income
(2) Xcel Energy’ Potential Regulatory Net Income Dollars in millions eau Rate from 2005 2006 2007 2008 2009 2005 Equity Rate Base $5,570 $5,790 $6,200 $6,510 $6,640 ROE 9.2% $570 $600 $610 4.3% 9.5% $590 5.2% 10.0% 6.4% 10.5% 8.0% 11.0% 9.1% * Represents approximately mid-point of lower half of 2005
Slide 29: Earnings Guidance Range
(2) Xcel Energy’ Earnings Guidance Range Dollars per share 2005 2006** Regulated Utility $1.18 — $1.28 $1.25 - $1.35 Holding Company and other (0.09) (0.10) COLI - Tax benefit 0.09 0.10 Continuing operations $1.18-$1.28* $1.25 - $1.35 * Expected to be in lower half of range ** See earnings guidance
Slide 30: Financial Performance Objectives
(2) Xcel Energy’ Financial Performance Objectives = EPS growth rate 2005 — 2009 — Target 5 - 7% per year* @ Annual dividend increases — Consistent with dividend growth objective of 2 -— 4% per year = Credit rating — Senior unsecured debt A to BBB+ * Excluding any impact from COLI
Slide 31: Xcel Energy Investor Meeting
(2) Xcel Energy’ Xcel Energy Investor Meeting Tuesday, November 29, 2005 Pierre Hotel 5th Avenue at 61% Street, New York Breakfast buffet at 7:30 am Presentation from 8:00 am to 12 noon Presenters Dick Kelly President and Chief Executive Officer Paul Bonavia President — Operating Utilities David Wil
Slide 32: Xcel Energy
Xcel Energy*
Slide 33: Appendix
(2) Xcel Energy’ Appendix
Slide 34: Strong Regional Economy
2 Xcel Energy’ Strong Regional Economy Unemployment rate — August 2005 US 4.9% Xcel service area 4.0% Xcel annual sales growth — 2005-2009 Electric 1.8% Gas 1.5% 4 largest US electric and gas utility — * Sale pending on Kansas and Oklahoma properties
Slide 35: Organizational Structure
. = Xcel Energy’ Organizational Structure 2004 Results Income from Continuing Operations (Dollars in millions) Xcel Energy In: $527 o Holding Compan: $(43) t Northern Northern States States Power Power Public Service Southwestern MI Subsidiaries Public * Eloigne Service = Quixx Company $55 $13 Compa
Slide 36: Rate Base and Returns
(2) Xcel Energy’ Rate Base and Returns Dollars in millions Rate Base Earned Auth- Equity 2004 ROE orized Ratio Average 2004 ROE 2004 NSP (M) - Electric retail $2,992 10.73% ) 11.47% 50.3% NSP (M) - Gas retail 402 8.50 10.402) 50.3 North Dakota - Electric retail 166 10.80. 12.00 $0.3 North Dakota - G
Slide 37: Reconciliation of Estimated Regulatory Reporting from GAAP
Reconciliation of Estimated Regulatory Reporting from GAAP Common Equity 2004 GAAP common stockholder’s equity (1) 2003 GAAP common stockholder's equity (1) ‘Average GAAP common stockholder's equity Adjustments Adjusted average equity for purposes of regulatory equity ratio Debt 2004 GAAP total debt
Slide 38: Reconciliation of Estimated Regulatory Reporting from GAAP (Continued)
(2) Xcel Energy’ Reconciliation of Estimated Regulatory Reporting from GAAP (Continued) Dollars in millions Net Income NsP(M) NSP(W) PSCo SPS Total 2004 GAAP net income (1) $230 $54 $218 $85 ($867 Adjustments 2 26 41 Adjusted net income for purposes of regulatory net income $206 $84 $192 $65 $506 Ca
Slide 39: 2006 Key Earnings Guidance Assumptions
(2) Xcel Energy’ 2006 Key Earnings Guidance Assumptions @ Successful rate cases — Minnesota electric request $168 million — Wisconsin electric & gas request $61 million — Colorado gas request $34 million — North Dakota electric request = Weather adjusted sales growth: — Retail Electric 1.3-1.7% — Ga
Slide 40: 2006 Key Earnings Assumptions
(2) Xcel Energy’ 2006 Key Earnings Assumptions Change from 2005: @ Short-term wholesale margins decline approximately $15 — 30 million = O&M expenses increase 3 — 4% = Depreciation increases $100 — 110 million, including $60 million increase in decommissioning @ Interest increases $10 — 15 million =
Slide 41: Coal Supply Contracted
Xcel Energy’ Coal Supply Contracted Coal Transportation Annual consumptio! 2 million tons of low-sulfur, low-mercury western coal
Slide 42: Electric Fuel and Purchased Energy Cost Recovery Mechanisms
(2) Xcel Energy’ Electric Fuel and Purchased Energy Cost Recovery Mechanisms Minnesota: Colorado: Texas: Wisconsin: New Mexico: Monthly recovery of prospective costs Recovery of costs with sharing of deviations up to +$11.25 million from benchmark File for semi-annual adjustments — required if + 4%
Slide 43: Retail Electric Rate Comparison
(2) Xcel Energy’ Retail Electric Rate* Comparison Cents per KWh * EEI typical bills - Summer 2005 8.48 6.48 5.46
Slide 44: Senior Debt Ratings
(2) Xcel Energy’ Senior Debt Ratings Moody’s S&P Secured Unsecured Secured Unsecured Holding Co. - Baa1 - BBB- NSP (M) A2 AS A- BBB- NSP (W) A2 AS A- BBB PSCo A3 Baa1 A- BBB- SPS - Baa1 - BBB Outlook Stable Stable
Slide 45: Capital Expenditure Forecast by Operating Company
(2) Xcel Energy’ Capital Expenditure Forecast by Operating Company Dollars in millions 2005 2006 2007 2008 2009 NSP(M) $ 673 $ 879 $ 697 $ 564 $ 517 NSP (W) 58 66 67 95 63 PSCo 414 525 684 604 457 SPS 110 99 127 121 111 Total $1,255 $1,569 $1,575 $1,384 $1,148
Slide 46: Minnesota MERP - Potential Earnings
(2) Xcel Energy’ Minnesota MERP — Potential Earnings Dollars in millions 2005 2006 2007 2008 2009 Capital expenditures Current year $211 $336 $213 $138 $64 Cumulative $258 $594 $806 $944 $1,008 Equity ratio 485% 485% 485% 485% 485% Return on equity 10.86% 10.86% 10.86% 10.86% 10.86% Equity return $8
Slide 47: Comanche - Potential Earnings
(2) Xcel Energy’ Comanche 3 — Potential Earnings Dollars in millions 2005 2006 2007 2008 2009 Capital expenditures Current year $62 $198 $331 $284 $73 Cumulative $66 $264 $595 $879 $952 Equity ratio 56% 56% 56% 56% 56% Return on equity 10.75% 10.75% 10.75% 10.75% 10.75% Equity return $2 $10 $26 $45
Slide 48: Searchable text section of graphics shown above
Searchable text section of graphics shown above [L OGO] [GRAPHIC] Edison Electric Institute Financial Conference November 8, 2005 [LOGO] Sa fe Harbor This material includes forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements in
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