Xcel Energy Inc. · NASDAQ:XEL
Xcel Energy — FY2022 Earnings Presentation
31 slides from Xcel Energy's earnings presentation, Jan 26, 2023
Slide 1: 2022 Year End Earnings Report Presentation
2022 YEAR END EARNINGS REPORT PRESENTATION JANUARY 26, 2023
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 those relating to 2023 EPS guidance, long-term EPS
Slide 3: 2022 Highlights
2022 Highlights • Delivered earnings of $3.17 per share - 18th consecutive year of meeting or exceeding guidance • Raised annual dividend by 12 cents per share (6.6%) - 19th consecutive annual increase • Minnesota and Colorado approved resource plans to add ~10,000 MW of utility scale renewables • R
Slide 4: Recognition
Recognition • MSCI upgraded Xcel Energy’s ESG rating to AAA from AA • World’s Most Ethical Companies ® – Ethisphere (3rd consecutive year) • World’s Most Admired Companies – Fortune (9th consecutive year) • Best for Vets employer – Military Times (8th consecutive year) • Military Friendly employer –
Slide 5: Generation RFPs Outstanding
Generation RFPs Outstanding RFP Scope* Key Dates • IRP needs through 2028 • Bids due 3/23 • 2,800 MW renewables • Recommended portfolio Summer 2023 PSCo • 200 MW storage • CPUC decision Fall 2023 • 1,176 MW firm peaking • PSCo will file additional RFPs for remaining requirements • Bids received 10/2
Slide 6: EPS Results by Operating Company
EPS Results by Operating Company Fourth Quarter Full Year Operating Company 2022 2021 2022 2021 PSCo $ 0.31 $ 0.27 $ 1.33 $ 1.22 NSPM 0.29 0.22 1.23 1.12 SPS 0.12 0.11 0.64 0.59 NSPW 0.04 0.05 0.23 0.20 Earnings from equity method investments 0.01 0.01 0.04 0.05 Regulated utility 0.78 0.65 3.47 3.18
Slide 7: Quarterly GAAP and Ongoing EPS Change
Quarterly GAAP and Ongoing EPS Change $0.03 $0.03 ( $0.13) $0.12 $0.22 ($0.10) ($0.05) $0.01 ( ) $0.69 $0.58 2021 Q4 2022 Q4 EPS EPS * Combined electric and natural gas margins include ~$0.06 of positive weather impacts (post regulatory mechanisms) ** Includes PTCs and plant regulatory amounts, whic
Slide 8: Annual GAAP and Ongoing EPS Change
Annual GAAP and Ongoing EPS Change $0.16 $0.15 ($0.40) $0.89 ( $0.24) ($0.15) ($0.12) ($0.08) $2.96 $3.17 2021 2022 EPS EPS * Combined electric and natural gas margins include ~$0.11 of positive weather impacts (post regulatory mechanisms) ** Includes PTCs and plant regulatory amounts, which are pri
Slide 9: Sales and Customer Data
Sales and Customer Data 2022 W/A Retail Electric Sales Growth 2022 YoY Electric Customer Growth 6.9% 2.4% 1.8% 1.0% 1.1% 0.7% 1.0% 1.3% 0.6% -1.4% NSPM NSPW PSCo SPS Xcel Energy NSPM NSPW PSCo SPS Xcel Energy 2022 W/A Natural Gas Sales Growth 2022 YoY Natural Gas Customer Growth 5.5% 5.8% 1.4% 1.0%
Slide 10: NSPM Minnesota Natural Gas Rate Case
NSPM Minnesota 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 forward test year • In 2021, the MPUC approved interim rates of
Slide 11: NSPM Minnesota Electric Rate Case
NSPM Minnesota Electric Rate Case Proceeding No. 21-630 • In October 2021, NSPM filed a three-year electric rate case: – Revised rate request seeking an increase of $498 million over three years – ROE of 10.2% and equity ratio of 52.5% – 2022 - 2024 forward test years $ Millions 2022 2023 2024 Total
Slide 12: PSCo Colorado Electric Rate Case
PSCo Colorado Electric Rate Case Proceeding No. 22AL-0530E • In November 2022, PSCo filed an electric rate case requesting: − Net base rate increase of ~$262 million − ROE of 10.25% and equity ratio of 55.7% − 2023 forward test year − Rate base of $11.3 billion • Requested effective date of Septembe
Slide 13: SPS New Mexico Electric Rate Case
SPS New Mexico Electric Rate Case Proceeding No. 22-00286-UT • In November 2022, SPS filed an electric rate case requesting: − Base rate increase of ~$78 million − ROE of 10.75% and equity ratio of 54.7% − Rate base of ~$2.4 billion − Acceleration of Tolk coal plant depreciation life from 2032 to 20
Slide 14: Inflation Reduction Act
Inflation Reduction Act Wind and Solar PTC • Reduces levelized cost of solar projects by 25-40% and wind projects by 50-60%* • Solar PTC reduces cost of utility projects compared to solar ITC Nuclear and Hydrogen PTC • Nuclear PTC provides significant customer credits, depending on MISO marginal pri
Slide 15: 2023 GAAP and Ongoing EPS Guidance: $3.30 - $3.40
2023 GAAP and Ongoing EPS Guidance: $3.30 - $3.40 Earnings Drivers Key Assumptions (as compared to 2022 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 16: Appendix
APPENDIX 15
Slide 17: Base Capital Expenditures by Function
Base Capital Expenditures by Function $ Millions 2023 2024 2025 2026 2027 Total Electric Distribution $1,610 $1,790 $1,680 $2,000 $2,450 $9,530 Electric Transmission $1,280 $1,650 $1,890 $1,690 $1,900 $8,410 Electric Generation $710 $910 $900 $560 $650 $3,730 Natural Gas $740 $730 $760 $650 $680 $3,
Slide 18: Base Capital Expenditures by Company
Base Capital Expenditures by Company $ Millions 2023 2024 2025 2026 2027 Total NSPM $2,000 $2,400 $2,530 $2,200 $2,580 $11,710 NSPW $540 $570 $500 $450 $540 $2,600 PSCo $2,140 $2,440 $2,550 $1,980 $2,190 $11,300 SPS $710 $780 $720 $770 $900 $3,880 Other* $10 $10 ($30) $10 $10 $10 Total $5,400 $6,200
Slide 19: Financing Plan 2023 - 2027
Financing Plan 2023 - 2027* $ Millions $325 $425 $8,210 $3,800 $3,800 $29,500 $20,540 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 18
Slide 20: 2023 Debt Financing Plan
2023 Debt Financing Plan $ Millions Issuer Security Amount Anticipated Timing Hold Co Senior Unsecured Bonds $500 Q3 NSPM First Mortgage Bonds $750 Q2 NSPW First Mortgage Bonds $125 Q2 PSCo First Mortgage Bonds $700 Q2 SPS First Mortgage Bonds $100 Q3 Financing plans are subject to change, depending
Slide 21: Strong Credit Metrics
Strong Credit Metrics Plan 2023 2024 2025 2026 2027 FFO/Debt ~18% ~19% ~18% ~18% ~18% Debt/EBITDA 4.9x 4.9x 4.9x 4.9x 4.9x Equity Ratio 40% 40% 40% 40% 40% Hold Co Debt/Total Debt 24.1% 24.3% 24.9% 24.7% 24.9% Credit Ratings Moody’s S&P Fitch Xcel Energy Unsecured Baa1 BBB+ BBB+ NSPM Secured Aa3 A A
Slide 22: Colorado Resource Plan
Colorado Resource Plan 85% Carbon Reduction & Coal Exit by 2030 Full coal exit by 2030 Significant renewable additions • Hayden 1 & 2 (233 MW) retire 2028/2027 • ~2,300 MW wind • Pawnee (505 MW) conversion to natural • ~1,600 MW universal scale solar gas no later than January 2026 • ~1,200 MW distri
Slide 23: 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 24: Long-Term Transmission Buildout
Long-Term Transmission Buildout Major Expansion to Enable More Renewables NSP PSCo NSP Tranche 1 cap ex of ~$1.2 billion ~$1.7 billion Pathway enables 5.5 GW renewables via 560 miles of 345 kV lines NSP Futures 1: Estimated cumulative $4 - $5 billion investment (over 10-15 years) Additional $0.5 - $
Slide 25: Transmission Expansion - MISO Tranche 1
Transmission Expansion - MISO Tranche 1 MISO Tranche 1 (in service by 2030) • 18 projects totaling $10.3 billion 3 2 Xcel Energy Preliminary Estimates 5 4 • ~$1.2 billion based on the following:* 6 2 Alexandria - Cassie’s Crossing 3 Iron Range - Benton - Cassie’s Crossing 4 Wilmarth - North Rocheste
Slide 26: NSPM South Dakota Electric Rate Case
NSPM South Dakota Electric Rate Case Proceeding No. EL22-017 • In June 2022, NSPM filed an electric rate case requesting: • Rate increase of ~$44 million • ROE of 10.75% and equity ratio of 53% • Rate base of ~$947 million • 2021 historic test year • Interim rates of ~$44 million implemented in Janu
Slide 27: ROE Results – GAAP and Ongoing Earnings
ROE Results – GAAP and Ongoing Earnings GAAP and Ongoing ROE 2021 Rate Base Twelve Months Ended 12/31/2022 SPS 10.57% 10.76% 18% 8.76% 9.36% 8.74% NSPM 8.23% ~$36 39% PSCo Billion 38% NSPM NSPW PSCo SPS Total Xcel NSPW OpCo Energy 5% 26
Slide 28: 2022 W/A Electric Sales Growth
2022 W/A Electric Sales Growth NSPM NSPW PSCo SPS Residential C&I Total Retail 8.4% 6.9% 3.4% 2.1% 1.3% 2.4% 0.0% 0.8% -0.2% -0.3% -1.4% -3.6% Extreme weather variations, windchill and cloud cover may not be reflected in growth (decline) estimates 27
Slide 29: 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% 2.1% 3.2% 0.8% 1.7% 1.8% 0.7% 0.4% 0.1% -1.3% -3.1% -5.4% 2020* 2021* 2022 2020* 2021* 2022 2020* 2021* 2022 2020* 2021* 2022 * Leap year adjusted Extreme weather variations, windchill and cloud
Slide 30: 2023 Q1 Events
2023 Q1 Events Events Dates Credit Suisse Conference February 28 Barclays Fixed Income Conference February 28 Morgan Stanley Conference February 28 BofA Conference March 1 MUFG Japan Conference March 6-8 Australia Non-deal Roadshow March 27-28 29
Slide 31: © 2023 Xcel Energy Inc.
(2) Xcel Energy’ © 2023 Xcel Energy Inc.