Xcel Energy Inc. · NASDAQ:XEL
Xcel Energy — Q2 2021 Earnings Presentation
29 slides from Xcel Energy's earnings presentation, Jul 29, 2021
Slide 1: Second Quarter 2021 Earnings Report Presentation
SECOND QUARTER 2021 EARNINGS REPORT PRESENTATION JULY 29, 2021
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 2021 EPS guidance, long-term EPS and dividend
Slide 3: 2021 Q2 Financial & Operational Highlights
2021 Q2 Financial & Operational Highlights • Reaffirmed 2021 earnings guidance of $2.90 to $3.00 per share • Received approval of the 74 MW Mustang solar project in Wisconsin • Received approval to buy out a repowered 120 MW wind PPA from Allete • Proposed alternative resource plan in Minnesota, whi
Slide 4: Western Mustang Solar Project – Approved
Western Mustang Solar Project – Approved • First universal scale solar rate base investment – Build-own-transfer in NSPW – 74 MW • ~$100 million investment • 30% ITC qualification • Approved June 2021 • Planned to be in service by 2023 3
Slide 5: Incremental Renewable Projects
Incremental Renewable Projects ~$785 Million in Additional Wind and Solar Allete Wind Repowering Sherco Solar • ~$210 million • ~$575 million • ~120 MW • ~460 MW universal scale • Approved June 2021 • Decision 2021 Q4 or 2022 Q1 ($ Millions) 2021 2022 2023 2024 2025 Total Sherco Solar $10 $170 $215
Slide 6: Alternative Minnesota Resource Plan Proposal
Alternative Minnesota Resource Plan Proposal 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) • 8
Slide 7: Colorado Resource Plan
Colorado Resource Plan 85% Carbon Reduction by 2030 & Coal Exit by 2040 Full coal exit by 2040 Significant renewable additions • Hayden 1 & 2 (233 MW) retire 2028/2027 • Wind (~2,300 MW) • Pawnee (505 MW) convert to nat gas in 2028 • Universal scale solar (~1,600 MW) • Comanche 3 (500 MW) retire 204
Slide 8: Colorado Pathway – Transmission Expansion
Colorado Pathway – Transmission Expansion Transmission Backbone • Enables ~5,500 MW of renewable generation • ~560 miles of 345 kV lines; three new, four expanded substations • Potential ~$1.7 billion investment • CPCN filing March 2021; decision anticipated 2022 Q1 Estimated Investment ($ millions)
Slide 9: EPS Results by Operating Company
EPS Results by Operating Company Second Quarter YTD Operating Company 2021 2020 2021 2020 PSCo $ 0.25 $ 0.21 $ 0.56 $ 0.45 NSPM 0.21 0.22 0.45 0.43 SPS 0.13 0.14 0.23 0.22 NSPW 0.03 0.02 0.09 0.09 Earnings from equity method investments 0.01 0.01 0.02 0.02 Regulated utility 0.62 0.60 1.35 1.20 Holdi
Slide 10: Quarterly GAAP and Ongoing EPS Change
Quarterly GAAP and Ongoing EPS Change $0.05 ($0.08) $0.06 ($0.07) $0.14 ($0.05) ($0.01) $0.54 $0.58 2020 Q2 2021 Q2 EPS EPS * Includes PTCs and plant regulatory amounts, which are primarily offset in electric margin 9
Slide 11: YTD GAAP and Ongoing EPS Change
YTD GAAP and Ongoing EPS Change $0.12 $0.02 ($0.16) $0.12 ($0.08) ($0.07) $0.25 ($0.04) ($0.01) $1.10 $1.25 2020 YTD 2021 YTD EPS EPS * Combined electric and natural gas margins include ~$0.02 of positive weather impacts (post decoupling) ** Includes PTCs and plant regulatory amounts, which are prim
Slide 12: Sales and Customer Data
Sales and Customer Data 2021 YTD W/A Retail Electric Sales Growth 2021 Q2 YoY Electric Customer Growth (leap year adjusted) 3.4% 1.3% 1.8% 1.6% 1.2% 1.2% 1.1% 1.0% 0.8% 0.7% NSPM NSPW PSCo SPS Xcel Energy NSPM NSPW PSCo SPS Xcel Energy 2021 YTD W/A Natural Gas Sales Growth 2021 Q2 YoY Natural Gas Cu
Slide 13: NSPW Electric and Natural Gas Rate Case
NSPW Electric and Natural Gas Rate Case Docket No. 4220-UR-125 • In July 2021, NSPW filed an electric and natural gas rate case settlement based on a FTY, reflecting: – Electric rate increase: $35 million for 2022 and incremental $18 million for 2023 – Natural gas rate increase: $10 million for 2022
Slide 14: SPS New Mexico Electric Rate Case
SPS New Mexico Electric Rate Case Case 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 capital addition
Slide 15: NSPM North Dakota Electric Rate Case
NSPM North Dakota Electric Rate Case Case No. PU-20-441 • In November 2020, NSPM filed an electric rate case: – Requesting rate increase of $19 million – ROE of 10.2% and equity ratio of 52.5% – Rate base of ~$677 million – 2021 forecast test year – Interim rates of $13 million (subject to refund) i
Slide 16: PSCo Electric Rate Case
PSCo Electric Rate Case Docket No. 21AL-0317E • In July 2021, PSCo filed an electric rate case: – Requesting base rate increase of ~$343 million ($470 million total increase, which includes $127 million previously authorized costs currently recovered through riders) – ROE of 10.0% and equity ratio o
Slide 17: SPS Texas Electric Rate Case
SPS Texas Electric Rate Case Docket No. 51802 • In February 2021, SPS filed a required electric case: – Requesting base rate increase of ~$143 million – Customer increase of $74 million after reflecting fuel savings & PTCs from Sagamore wind farm – ROE of 10.35% and equity ratio of 54.60% – Rate bas
Slide 18: 2021 GAAP & Ongoing EPS Guidance: $2.90 – $3.00
2021 GAAP & Ongoing EPS Guidance: $2.90 – $3.00 Earnings Drivers Key Assumptions (as compared to 2020 levels unless noted) Regulatory proceedings Constructive outcomes in all proceedings COVID-19 Modest impacts Weather Normal weather for remainder of year W/A retail electric sales Increase of approx
Slide 19: Appendix
APPENDIX 18
Slide 20: ROE Results – GAAP and Ongoing Earnings
ROE Results – GAAP and Ongoing Earnings GAAP and Ongoing ROE 2020E Rate Base Twelve Months Ended 6/30/2021 SPS 11.10% 16% 10.05% 8.87% 8.40% 8.87% 8.75% NSPM ~$33 38% PSCo Billion 41% NSPM NSPW PSCo SPS Total Xcel NSPW OpCo Energy 5% 19
Slide 21: Proven Strength in Wind Development
Proven Strength in Wind Development ~4,200 MW of Owned Wind Now in Service In Serviced Pre-2020 Capacity In Serviced In 2020 Capacity Border 150 MW Blazing Star 1 200 MW Courtenay 200 MW Cheyenne Ridge 500 MW Grand Meadow 100 MW Crowned Ridge 200 MW Nobles 200 MW Sagamore 522 MW Pleasant Valley 200
Slide 22: MISO Transmission Outlook
MISO Transmission Outlook MISO’s long-range potential transmission Indicative Transmission Development in MISO planning roadmap highlighted: • Three potential futures with up to 50% renewables by 2039 • Urgency for significant expansion over next ~15 years • Initial set of projects with preliminary
Slide 23: Strong Rate Base Growth
Strong Rate Base Growth $ Billions Incremental forecast: 2020 - 2025 CAGR: ~6.9% Base forecast: 2020 - 2025 CAGR: ~6.6% $45.9 $43.7 $41.2 $38.4 $45.3 $43.0 $40.5 $38.0 $35.4 $32.9 2020E 2021E 2022E 2023E 2024E 2025E Incremental forecast includes proposed NSPM Sherco solar and Allete wind PPA repower
Slide 24: 2021 Debt Financing Base Plan
2021 Debt Financing Base Plan $ Millions Issuer Security Amount Status Tenor Coupon Hold Co Unsecured Term Loan $1,200 Completed 1 Yr N/A PSCo First Mortgage Bonds $750 Completed 10 Yr 1.875% SPS Green First Mortgage Bonds $250 Completed 29 Yr 3.15% 10 Yr ($425) 2.25% NSPM Green First Mortgage Bonds
Slide 25: 2021 YTD W/A Electric Sales Growth
2021 YTD W/A Electric Sales Growth NSPM NSPW PSCo SPS Residential C&I Total Retail 4.4% 3.4% 3.4% 2.2% 1.0% 1.3% 1.0% 1.8% 2.0% 1.1% 0.8% 1.0% Leap year adjusted Extreme weather variations, wind chill and cloud cover may not be reflected in growth (decline) estimates 24
Slide 26: Xcel Energy W/A Sales Growth
Xcel Energy W/A Sales Growth Residential C&I Total Retail Electric Natural Gas Electric Natural Gas 3.1% 2.5% 2.7% 1.2% 1.6% 1.8% 0.4% 0.7% -0.5% -0.3% -3.1% -5.4% YTD YTD YTD YTD 2019 2020* 2021* 2019 2020* 2021* 2019 2020* 2021* 2019 2020* 2021* * Leap year adjusted Extreme weather variations, win
Slide 27: Storm Uri Impacts
Storm Uri Impacts Maintained Reliability, Managing Customer Bill Impacts Estimated Storm Impact Total Average Average Monthly Company ($ Millions) Resi Bill Impact Resi Bill Impact Electric Natural Gas Total NSPM ($20) $250 $230 $250 - $300 $10 - $13 PSCo $305 $305 $610 $210 - $220 $8 - $9 SPS $100
Slide 28: 2021 Q3 Events
2021 Q3 Events Virtual Events Dates Goldman Sachs Conference August 11 UBS Kohler Conference August 19-20 Barclays Conference September 10 Wolfe Research Conference September 29 27
Slide 29: © 2021 Xcel Energy Inc.
(2) Xcel Energy’ © 2021 Xcel Energy Inc.