Xcel Energy Inc. · NASDAQ:XEL
Xcel Energy — Q3 2021 Earnings Presentation
35 slides from Xcel Energy's earnings presentation, Oct 28, 2021
Slide 1: Third Quarter 2021 Earnings Report Presentation
THIRD QUARTER 2021 EARNINGS REPORT PRESENTATION OCTOBER 28, 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 and 2022 EPS guidance, long- term EPS and
Slide 3: 2021 Q3 Highlights
2021 Q3 Highlights • Narrowed 2021 earnings guidance to $2.94 to $2.98 per share • Initiated 2022 earnings guidance of $3.10 to $3.20 per share • Issued robust five-year capital plan that supports long-term EPS growth objective • Reached constructive settlement in Colorado (pending Commission approv
Slide 4: 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 5: 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 Billion Transmission Enables renewables associated wi
Slide 6: 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 7: 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 8: 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 2028 • Universal scale solar (~1,600 MW) • Comanche 3 (500 MW) retire 2040;
Slide 9: 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 • Commission decision anticipated 2022 Q1 Potential Incremental Capital Investment • Potential $0.
Slide 10: Transmission Expansion – MISO Outlook
Transmission Expansion – MISO Outlook • MISO’s initial long-range 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
Slide 11: EPS Results by Operating Company
EPS Results by Operating Company Third Quarter YTD Operating Company 2021 2020 2021 2020 PSCo $ 0.40 $ 0.42 $ 0.96 $ 0.87 NSPM 0.46 0.46 0.91 0.89 SPS 0.25 0.24 0.48 0.46 NSPW 0.07 0.08 0.15 0.16 Earnings from equity method investments 0.01 0.01 0.03 0.04 Regulated utility 1.19 1.21 2.54 2.42 Holdin
Slide 12: Quarterly GAAP and Ongoing EPS Change
Quarterly GAAP and Ongoing EPS Change $0.03 $0.02 $0.01 $0.01 $0.01 ($0.03) ($0.03) ($0.02) ($0.01) $1.14 $1.13 2020 Q3 2021 Q3 EPS EPS * Combined electric and natural gas margins include ~$0.01 of negative weather impacts (post decoupling) ** Includes PTCs and plant regulatory amounts, which are pr
Slide 13: YTD GAAP and Ongoing EPS Change
YTD GAAP and Ongoing EPS Change $0.15 $0.12 $0.02 ($0.19) $0.25 ( $0.09) ($0.07) ($0.06) $2.25 $2.38 2020 YTD 2021 YTD EPS EPS * Includes PTCs and plant regulatory amounts, which are primarily offset in electric margin 12
Slide 14: Sales and Customer Data
Sales and Customer Data 2021 YTD W/A Retail Electric Sales Growth 2021 Q3 YoY Electric Customer Growth (leap year adjusted) 2.7% 2.0% 1.2% 1.2% 1.6% 1.9% 1.9% 1.2% 0.7% 1.0% NSPM NSPW PSCo SPS Xcel Energy NSPM NSPW PSCo SPS Xcel Energy 2021 YTD W/A Natural Gas Sales Growth 2021 Q3 YoY Natural Gas Cu
Slide 15: 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 16: 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 – A historical test year including a 1
Slide 17: 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 year – Interim rates of $288 million in January 2022 (subject
Slide 18: 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 – Customer increase of $71 million after reflecting fuel savings and PTCs from Sagamore wind farm – ROE of 10.35% and equity ratio of 54.60%
Slide 19: 2021 GAAP & Ongoing EPS Guidance Narrowed: $2.94 - $2.98
2021 GAAP & Ongoing EPS Guidance Narrowed: $2.94 - $2.98 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
Slide 20: 2022 GAAP & Ongoing EPS Guidance: $3.10 - $3.20
2022 GAAP & 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 approximately 1% W/A retail fi
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: 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: 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 25: Appendix
APPENDIX 24
Slide 26: ROE Results – GAAP and Ongoing Earnings
ROE Results – GAAP and Ongoing Earnings GAAP and Ongoing ROE 2020 Rate Base Twelve Months Ended 9/30/2021 SPS 10.85% 18% 9.72% 9.07% NSPM 8.65% 8.22% 8.61% ~$34 38% Billion PSCo 39% NSPM NSPW PSCo SPS Total Xcel NSPW OpCo Energy 5% 25
Slide 27: NSPW Electric & Natural Gas Rate Case Settlement
NSPW Electric & Natural Gas Rate Case Settlement Proceeding 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 mil
Slide 28: 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 29: NSPM North Dakota Rate Cases
NSPM North Dakota Rate Cases Proceeding Nos. PU-20-441 and PU-21-381 Electric Case – Approved Settlement Natural Gas Case - Pending • In November 2020, NSPM filed an electric case: • In September 2021, NSPM filed a natural gas case: – Requesting rate increase of $19 million – Requesting rate increas
Slide 30: 2021 Debt Financing Plan
2021 Debt Financing Plan $ Millions Issuer Security Amount Status Tenor Coupon Hold Co Unsecured Bonds $800 2021 Q4 5 Year/10 Year TBD Hold Co Unsecured Term Loan $1,200 Completed 1 Yr (Feb 2022) N/A PSCo First Mortgage Bonds $750 Completed 10 Yr 1.875% SPS Green First Mortgage Bonds $250 Completed
Slide 31: 2022 Debt Financing Plan
2022 Debt Financing Plan $ Millions Issuer Security Amount Hold Co Senior Unsecured Bonds $500 NSPM First Mortgage Bonds $550 NSPW First Mortgage Bonds $100 PSCo First Mortgage Bonds $600 SPS First Mortgage Bonds $150 Financing plans are subject to change, depending on capital expenditures, regulato
Slide 32: 2021 YTD W/A Electric Sales Growth
2021 YTD W/A Electric Sales Growth NSPM NSPW PSCo SPS Residential C&I Total Retail 3.6% 1.8% 1.6% 2.7% 3.0% 2.4% 2.0% 1.2% 0.8% 1.3% 1.9% 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% 1.8% 1.9% 1.9% 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 34: 2021 Q4 Events
2021 Q4 Events Events Dates EEI Financial Conference November 7 - 9 Mizuho Conference November 30 Wells Fargo Conference December 9 33
Slide 35: © 2021 Xcel Energy Inc.
(2) Xcel Energy’ © 2021 Xcel Energy Inc.