Xcel Energy Inc. · NASDAQ:XEL
Xcel Energy — Non-Deal Roadshow (March 2007)
32 slides from Xcel Energy's roadshow presentation, Mar 19, 2007
Slide 1: Sustainable Growth Midwest Investor Meetings March 20-21, 2007
Sustainable Growth Midwest Investor Meetings March 20-21, 2007
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: Investment Thesis
Investment Thesis Rate base growth company Significant capital investment opportunity Fully regulated Constructive regulatory environment with enhanced recovery of major capital projects Environmental leader, well-positioned for changing rules Low risk, transparent business model Stable and predicta
Slide 4: Investment Merits
Investment Merits * Represents expected average annual normalized EPS growth, excluding any impact from COLI program Sustainable EPS growth of 5% – 7%* Dividend growth of 2% – 4% per year Dividend yield 4%
Slide 5: Strategy: Building the Core
Strategy: Building the Core Get the rules right Invest in fully regulated utility operations Earn a reasonable return
Slide 6: Northern States Power Company-Minnesota 45% Net Income
Northern States Power Company-Minnesota 45% Net Income Public Service Company of Colorado 40% Net Income Southwestern Public Service 8% Net Income Northern States Power Company-Wisconsin 7% Net Income 5th Largest Combination Electric and Gas Utility (based on customers) Traditional Regulation 2006 E
Slide 7: Environmental Leadership
Environmental Leadership Largest U.S. wind provider — 1,300 MW on-line — 2,800 MW projected by year-end 2007 Over 2,000 MW of conservation and DSM achieved Largest U.S. solar photovoltaic project Evaluating an IGCC with sequestration Reducing emissions and increasing efficiency — MERP — Comanche — S
Slide 8: Getting the Rules Right
Getting the Rules Right MERP – Forward recovery Comanche 3 – Forward CWIP through rate case filing Transmission investment – Forward recovery – MN & SD Environmental expenditures – Forward recovery – MN Purchased capacity cost adjustment – CO Renewable investments – Forward recovery – CO IGCC – Supp
Slide 9: Constructive Regulation: 2006 rate case outcomes
Constructive Regulation 2006 rate case outcomes Dollars in millions Colorado Gas $34.5 $22.0 11.0% 10.5% Wisconsin Electric 53.1 43.4 11.9% 11.0% Wisconsin Gas 7.8 3.9 11.9% 11.0% Minnesota Electric 156 131/115 * 11.0% 10.54% Colorado Electric 208 151 ** 11.0% 10.50% Dollar Increase Return on Equity
Slide 10: Pending Rate Cases
Pending Rate Cases Dollars in millions Minnesota Gas $18.5 11.0% $15.9 Summer 2007 Colorado Gas $41.9 11.0% NA Summer 2007 North Dakota Gas $2.8 11.3% $2.2 Summer 2007 Texas Electric $48.0 11.6% NA Spring 2007 Revenue Requested Interim Jurisdiction Request ROE Rates Decision
Slide 11: Significant Capital Investment Pipeline
Significant Capital Investment Pipeline Growing service territory Environmental initiatives Renewable portfolio standards Capital investment will drive sustainable growth
Slide 12: Capital Expenditure Forecast
Capital Expenditure Forecast Dollars in millions Denotes enhanced recovery process 2007 2008 2009 2010 2011 Base & Other Cap Ex $ 955 $ 950 $ 950 $ 1,000 $ 965 MERP 275 170 35 10 0 Comanche 3 345 275 55 15 0 MN Wind Transmission 150 20 50 15 0 CapX 2020 5 20 110 240 180 Sherco Upgrade 10 65 200 245
Slide 13: Renewable Portfolio Standards (RPS)
Renewable Portfolio Standards (RPS) In 2007, a law was passed in Minnesota requiring a 30% renewable standard by 2020 Potential renewable portfolio standards by 2020 — Colorado 20% — New Mexico 20% RPS creates investment opportunities for wind generation and transmission lines
Slide 14: Xcel Energy and Wind Potential
Wind Density High Low Source: National Renewable Energy Laboratory Xcel Energy and Wind Potential
Slide 15: Projected Wind Generation
Projected Wind Generation MW 1,300 2,800 6,000 2006 2007 2020
Slide 16: 2007 Earnings Guidance Range
2007 Earnings Guidance Range Regulated Utility $1.39 – $1.49 Holding Company and Other (0.15) COLI – Tax Benefit 0.11 Continuing Operations $1.35 – $1.45 Dollars per share 2007
Slide 17: Attractive Total Return
Attractive Total Return Sustainable 5% – 7% earnings per share growth Dividend yield 4% Dividend growth of 2% – 4% per year Sustainable Growth Collaborative process that balances various interests and delivers value to customers and investors Constructive rate case outcomes Forward recovery on signi
Slide 18: Appendix
Appendix
Slide 19: Delivering Competitively Priced Energy
Delivering Competitively Priced Energy Summer 2006 EEI Typical Bills Milwaukee Cents per kWh (Retail) 7.01 Des Moines Amarillo Kansas City Denver Mpls/St. Paul Boston Chicago Phoenix Salt Lake City St. Louis Miami New York Washington DC 6.64 7.79 0 3 6 9 12 15 18 21
Slide 20: Xcel Energy Supply Sources and Energy Supply Mix
Coal 36 8,138 Natural Gas 61 4,918 Nuclear 3 1,617 Hydro 83 508 Oil 24 492 RDF 6 96 Wind - 25 Total 15,794 2005 Owned Generating Facilities Unit Type Number MW Xcel Energy Supply Sources Nuclear 10% Coal ** 45% Gas & Oil 38% * Includes purchases ** Low-sulfur western coal Renewables7% 2005 Energy Su
Slide 21: 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- BBB+ Baa1 BBB- SPS BBB+ Baa1 BBB Fitch Moody’s S&P Fitch Moody’s S&P
Slide 22: Debt Maturities
Debt Maturities Dollars in millions PSCo $100M due 3/1/07 @ 7.11% Xcel $230M due 11/1/07 @ 7.50% 0 200 400 600 800 1,000 1,200 2007 2008 2009 2010 2011 2012 2013 2014 2015 Xcel NSPM NSPW PSCo SPS
Slide 23: COLI Litigation
COLI Litigation Positive pre-deduction cash flows Mortality gains The buildup of cash values The court’s opinion in the Dow case outlined three indicators of potential economic benefits to be examined in a COLI case. In Xcel Energy’s COLI case, the plans: Were projected to have sizeable pre-deductio
Slide 24: Minnesota Cost Recovery Mechanisms
Minnesota Cost Recovery Mechanisms Projected electric fuel and purchased energy costs billed for the current month with subsequent true-up; MISO energy and ancillary services being recovered through FCA. Projected purchased gas cost billed for the current month with subsequent true-up Conservation I
Slide 25: Colorado Cost Recovery Mechanisms
Colorado Cost Recovery Mechanisms Quarterly Energy Cost Adjustment to recover electric fuel and purchased energy costs Monthly Gas Cost Adjustment recovers natural gas commodity, interstate pipeline and storage costs Annual Purchased Capacity Adjustment to recover capacity costs of purchased power c
Slide 26: SPS Cost Recovery Mechanisms
SPS Cost Recovery Mechanisms Fuel and purchased energy costs are recovered through a fixed-fuel and purchased energy recovery factor, which is part of the retail electric rates The Texas ECA retail fuel factors change each May 1st and November 1st based on projected costs Material over or under reco
Slide 27: Wisconsin Cost Recovery Mechanisms
Wisconsin Cost Recovery Mechanisms Projected electric fuel and purchased energy costs are included in base rates Prospective adjustments are handled via the fuel rules monitoring process which allows for positive or negative adjustments to be applied to the fuel recovery rate The fuel recovery rate
Slide 28: Dakota Cost Recovery Mechanisms
Dakota Cost Recovery Mechanisms North Dakota’s fuel and purchased power costs are recovered through a fuel clause, which is reset based on the previous four months average rate North Dakota South Dakota South Dakota’s fuel and purchased power costs are recovered through a fuel clause, which is reset
Slide 29: Texas Electric Rate Case Highlights
Texas Electric Rate Case Highlights Requested $63 million increase, capped at $48 million Electric rate base = $943 million 11.6% return on common equity Equity ratio = 51% Historical test year adjusted for known and measurable Docket also includes fuel reconciliation for 2004-05 Expect rates to be
Slide 30: Minnesota Gas Rate Case Highlights
Minnesota Gas Rate Case Highlights Requested $18.5 million increase Gas rate base = $440 million 11% return on common equity Equity ratio = 52% Partial decoupling Forward test year Interim rates of $15.9 million went into effect January 8, 2007
Slide 31: Colorado Gas Rate Case Highlights
Colorado Gas Rate Case Highlights Requested $41.9 million increase Gas rate base = $1.1 billion 11% return on common equity Equity ratio = 60% Partial decoupling Historical test year adjusted for known and measurable
Slide 32: Wisconsin Gas and Electric, North Dakota Gas Rate Cases
Wisconsin Gas and Electric Rate Cases North Dakota Gas Rate Case Other Rate Case Highlights Expected to be filed in June Rates in effect in early 2008 Requested $2.8 million rate increase Decision expected in the summer of 2007