Xcel Energy Inc. · NASDAQ:XEL
Xcel Energy — EEI Financial Conference 2007
34 slides from Xcel Energy's conference presentation, Nov 2, 2007
Slide 1: Financial Success Through Environmental Leadership
Financial Success Through Environmental Leadership EEI Financial Conference November 3-7, 2007 Orlando, Florida
Slide 2: 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 words “anticipate,” “estima
Slide 3: Dick Kelly, Chairman, President and CEO
Dick Kelly Chairman, President and CEO
Slide 4: Climate Change: the Disruptive Policy
Climate Change: the Disruptive Policy Public policy and potential legislation highlights the need to address climate change Climate change policy will require: Significant emission reductions Significant capital investments Technology transformation Plant retirements
Slide 5: Xcel Energy States at Forefront
Xcel Energy States at Forefront N/A 5% by 2015 TX N/A N/A 10% by 2015 WI 10% by 2020 (over 2000) 20% by 2020 NM N/A 20% by 2020 CO 30% by 2025 (over 2005) 1.5% 30% by 2020 MN Carbon Reduction Demand-Side Management (annual MWh savings) Renewable Portfolio Standards State .6% .3% .2%
Slide 6: Why Create a Stability/Reduction Plan?
Why Create a Stability/Reduction Plan? Climate regulation is inevitable Reduction mandates are likely “Policy makers” rather than “policy takers” Opportunity to shape policy to achieve company success Meet customer and political expectations
Slide 7: Benefits of a Stability/Reduction Plan
Benefits of a Stability/Reduction Plan Reduce risk Federal and state carbon regulation Community and litigation risks Mitigate long-term costs to customers Demonstrate continued environmental leadership Potential for investment opportunities
Slide 8: Carbon Strategy
Carbon Strategy By 2020, stabilize or reduce carbon emissions associated with electric service Implement strategy by operating company Maintain reasonable rates Ensure appropriate regulatory treatment
Slide 9: Clean Energy Actions
Clean Energy Actions Increase renewable energy Uprate and extend lives of nuclear plants Expand DSM, energy efficiency and conservation efforts Increase investment in transmission Upgrade environmental systems and improve efficiencies of generation plants Replace/repower inefficient generation Evalu
Slide 10: Changing Supply Mix
Changing Supply Mix Coal ** 46% Gas 17% Nuclear 13% Estimated 2020 Energy Supply Mix* * Includes purchases ** Low-sulfur western coal 2006 Energy Supply Mix* Nuclear 12% Coal ** 52% Gas 27% Renewables 9% Renewables 24%
Slide 11: Keys to Creating Shareholder Value
Keys to Creating Shareholder Value Continue collaborative approach with stakeholders Get the rules right Provides for rate base growth Continue disciplined portfolio management – fix or exit underperformers Mitigate customer rate increases
Slide 12: Positioned for Success
Positioned for Success Environmental leadership has created credibility Competitive advantages through geography Wind Solar Carbon sequestration Biomass Partnering with key stakeholders to provide a cleaner energy product that everyone wants Customers Environmentalists Regulators Legislators Constru
Slide 13: Upcoming Analyst Meeting
Upcoming Analyst Meeting Date: December 5th Location: New York Marriott Marquis Times Square
Slide 14: Ben Fowke, Vice President and CFO
Ben Fowke Vice President and CFO
Slide 15: Success Factors
Success Factors Key components of future growth Transmission riders (MN, CO, ND, SD) Favorable wind recovery (MN, CO) Environmental rider (MN) Planned forward test year (CO) SPS Key components of past growth Improving utility ROE’s MERP Comanche 3
Slide 16: Capital Expenditure Forecast
Capital Expenditure Forecast Dollars in millions Denotes enhanced recovery mechanism 2007 2008 2009 2010 2011 Base & Other $1,080 $ 1,245 $ 1,310 $ 1,310 $ 1,300 MERP 290 170 25 10 0 Comanche 3 360 330 60 10 0 MN Wind Tran/CapX 2020 160 40 65 115 270 Sherco Upgrade 5 5 20 75 230 MN Wind Generation 8
Slide 17: Potential Resource Plan Projects
Potential Resource Plan Projects Wind generation 2,800 MW of wind on-line by year-end 2007 Projected 6,000 MW of wind on-line by 2020 Objective to increase owned vs. purchased Gas generation Backup for wind resources Transmission Support renewable development initiatives proposed in resource plans
Slide 18: Recovery on Capital Investment
Recovery on Capital Investment Dollars in millions Depreciation * Capital forecast based on middle of range $0 $400 $800 $1,200 $1,600 $2,000 $2,400 2007 2008 2009 2010 2011 Traditional Recovery Enhanced Recovery
Slide 19: Delivering on Rate Base Growth
Delivering on Rate Base Growth* CAGR = 7.5% Dollars in billions * Growth based on middle of capital forecast range $16.9 $15.7 $14.9 $14.0 $12.8 $11.7 2006 2007 2008 2009 2010 2011
Slide 20: Financing Plan
Financing Plan Cash from operations NOL tax benefits DRIP Debt Hybrid Potential equity
Slide 21: Rate Cases with Impact on 2008
Rate Cases with Impact on 2008 Wisconsin Electric/Gas 2007 Q2 Early 2008 New Mexico Electric 2007 Q3 Mid-2008 North Dakota Electric 2007 Q4 Interim 2008 Q1 FERC Cases 2007- 08 Mid-2008 Texas Electric 2008 Q2 Interim rates for PPA capacity costs mid-2008 Filing Financial Impact
Slide 22: Riders with Impact on 2008
Riders with Impact on 2008 MERP Colorado transmission Minnesota transmission Minnesota renewable energy The following riders are expected to increase revenue by $65 - $75 million over 2007 levels
Slide 23: Earnings Guidance Range 2007 - 2008
Regulated Utility $1.51 – $1.55 $1.61 – $1.71 Holding Company $(0.13) $(0.16) Continuing Operations $1.38 – $1.42 $1.45 – $1.55 Disc Ops - COLI ($0.07) – Total $1.31 – $1.35 $1.45 – $1.55 Earnings Guidance Range 2007 - 2008 2008 Dollars per share 2007
Slide 24: Delivering on 5-7% EPS Growth
Delivering on 5-7% EPS Growth $1.15 $1.30 $1.38 - $1.42 2005 Actual 2006 Actual 2007 Guidance Guidance Range 13% >7%* $1.45 - $1.55 2008 Guidance Earnings per share from continuing operations ~ ~ * Estimated growth rate based on middle of guidance range 7%*
Slide 25: Attractive Value Proposition
Attractive Value Proposition Low risk, fully regulated and integrated utility Constructive regulatory environment with enhanced recovery of major capital projects Pipeline of investment opportunities Environmental leader, well-positioned for changing rules Attractive Total Return Sustainable annual
Slide 26: Q&A / Xcel Energy's
Q2 Xcel Energy’
Slide 27: Company Profile
Company Profile NSP- Wisconsin 7% of net income NSP- Minnesota 47% of net income SPS 8% of net income PSCo 38% of net income 2006 EPS $1.30 continuing operations 2007 Dividend $0.92 per share annualized Traditional Regulation Operate in 8 States Combination Utility: Electric 85% of net income Gas 15
Slide 28: Debt Maturities
Debt Maturities Dollars in millions Xcel Energy: $104 million due 11/27/2007 @ 7.50% $0 $200 $400 $600 $800 $1,000 $1,200 2007 2008 2009 2010 2011 2012 2013 2014 2015 SPS PSCo NSPW NSPM Xcel
Slide 29: Senior Debt Ratings
Senior Debt Ratings Secured Unsecured Holding Co. BBB+ Baa1 BBB NSPM A+ A2 A A A3 BBB NSPW A+ A2 A A A3 BBB+ PSCo A A3 A A- Baa1 BBB SPS BBB+ Baa1 BBB+ Fitch Moody’s S&P Fitch Moody’s S&P
Slide 30: 2006 Rate Case Outcomes
2006 Rate Case Outcomes Dollars in millions Colorado Electric $208 $151 11.0% 10.5% Minnesota Electric $156 $131/115* 11.0% 10.54% Wisconsin Electric $53.1 $43.4 11.9% 11.0% Colorado Gas $34.5 $22.0 11.0% 10.5% Wisconsin Gas $7.8 $3.9 11.9% 11.0% Dollar Increase Return on Equity Requested Granted Re
Slide 31: 2007 Rate Case Outcomes
2007 Rate Case Outcomes Dollars in millions Texas Electric $48.0 $23.0 11.6% NA Colorado Gas $41.9 $32.3 11.0% 10.25% Minnesota Gas $18.5 $11.9 11.0% 9.71% North Dakota Gas $2.8 $2.3 11.3% 10.75% Dollar Increase Return on Equity Requested Granted Requested Granted
Slide 32: Pending Rate Cases
Pending Rate Cases Dollars in millions Wisconsin Electric $67.4 11.0% NA Dec. 2007 Wisconsin Gas $5.3 11.0% NA Dec. 2007 New Mexico Electric $17.3 11.0% NA Summer 2008 Revenue Requested Interim Jurisdiction Request ROE Rate Decision
Slide 33: 2006 Rate Base and ROE
2006 Rate Base and ROE Minnesota Electric $3,599 10.3% Minnesota Gas 441 6.1 North Dakota Electric 188 8.9 North Dakota Gas 44 7.5 South Dakota Electric 232 11.1 Colorado Electric 3,292 7.7 Colorado Gas 1,106 7.8 Wisconsin Electric 556 10.7 Wisconsin Gas 77 4.6 Texas Electric 977 6.5 New Mexico Elec
Slide 34: Xcel Energy and Wind Potential
Source: National Renewable Energy Laboratory Xcel Energy and Wind Potential Wind Density High Low Xcel Energy States Served