2025 Annual Report Annual Report 2025

2025

ANNUAL REPORT

2025 ANNUAL REPORT | 1

MAKING ENERGY WORK BETTER

ON THE COVER

Colorado's Power Pathway, the largest transmission investment in Colorado history, is a major Xcel Energy project designed to strengthen the state's electric grid and expand access to renewable energy. Spanning more than 550 miles across 12 counties, the new high-voltage transmission line

creates the backbone for delivering 5,500 megawatts of wind, solar and other power across the state.

Approved by state regulators in 2022, this $1.7 billion investment is critical to achieving our carbon reduction goals and vision of

delivering 100% carbon-free electricity to customers by 2050 while improving reliability, safeguarding affordability and driving economic prosperity.

Segments 2 and 3 commenced operations in 2025, and construction on Segment 1 will conclude in 2026, with Segments 4 and 5 anticipated to be in service in 2027.

LEARN MORE

COMPANY DESCRIPTION

Xcel Energy is a major U.S. electricity and natural gas company, with operations in eight Western and Midwestern states. Based in Minneapolis, Minnesota, the company provides a comprehensive portfolio of energy-related products and services to millions of electricity and natural gas customers through its regulated operating companies.

EARNINGS PER SHARE

3.21

3.35

3.44

3.50

3.42

3.80

Dollars per share (diluted)

2023 2024 2025

GAAP (generally accepted accounting principles) earnings per share

2

Ongoing earnings per share

To our valued customers and shareholders:

Beginning more than a century ago, the Hennepin Island Hydroelectric Plant lit up downtown Minneapolis - powering streetcars, illuminating neighborhoods and fueling the flour mills that created the economic foundation of a growing city. It was more than an engineering feat; it was a spark of progress that reshaped a community and proved what the power of innovation can unlock.

That legacy is still pushing us forward today, as our Hennepin plant continues to power Minnesota and the Upper Midwest. It's a visible reminder of how generations past made the necessary investments and courageously pushed boundaries to strengthen their communities and build for the future.

Today, Xcel Energy stands at a similar and pivotal inflection point - as the country races to build the technology infrastructure of the future and meet the surging energy demand from artificial intelligence (AI), data centers and the myriad ways customers are using electricity to power their lives and businesses. This is a turning point for our company, our industry, our communities and our very way of life.

The pace of energy development is accelerating, and countries around the world are moving with speed and commitment. In the United States, electric companies spent approximately

2025 ANNUAL REPORT | 3

Bob Frenzel

Chairman, president and chief executive officer

$1.3 trillion over the past decade on modern infrastructure, making it one of the largest growing industries in the U.S. economy. And yet, the industry will double that investment pace in the next five years, spending more than an estimated $1.4 trillion on new generation,

advanced transmission and resilient distribution infrastructure.

Rest assured, we are seizing this moment to make energy work better for our customers. We are embarking on our most ambitious infrastructure investment plan in our company's history. Over the next five years, we will invest more than $60 billion by constructing thousands of miles of new long-distance, high-voltage transmission lines and new state-of-the-art substations. We will also expand gas and other forms of power generation and build stronger, more resilient distribution systems that are prepared to endure the changing climate and related weather threats throughout the communities we serve.

In 2025, the people of Xcel Energy - along with our partners and contractors - demonstrated our capability to work as one to meet this historic moment. And we kept our eyes focused on our three strategic priorities: our customers, our people and our performance.

Making energy work better for our customers We provide reliable, safe and sustainable energy while keeping our customers' bills as low as possible. In 2025, we delivered 99.98% electric reliability across our service area while advancing both regulatory and operational initiatives to ensure our customers have reliable power well into the future.

We are proud and privileged to serve 3.9 million electric and 2.2 natural gas customers across eight states. And our sales growth in 2025 was higher than any year in the past decade. Data centers remain a key driver of our growth. By year-end 2025, we had contracted for more than 2 gigawatts of new data centers, and we have identified another 4 gigawatts we expect to have contracted by the end of 2027. And our backlog of interest exceeds 20 gigawatts.

In 2025, we invested nearly $12 billion in infrastructure to serve our customers, our highest one-year investment in our company's

history. And the needs continue to grow: we were awarded more than 760 miles of new 765-kilovolt transmission lines in our MISO and SPP territories

- reinforcing our 15-year leadership position as the largest builder of transmission lines in the country. We've also identified nearly 13 gigawatts of needed generation - new wind, solar, storage and gas-fired generation - to serve our customers for decades into the future.

We also made tremendous strides to protect communities from severe weather. Throughout last year, Xcel Energy invested in advanced technologies, including tripling our deployment of Pano AI cameras to detect fires more quickly, introducing drone inspections and piloting LiDAR-equipped helicopter patrols to inspect our systems and help assess risk. And we upgraded our infrastructure with advanced reclosers

and leveraged sophisticated modeling tools by Technosylva to guide targeted mitigation efforts in high-risk areas.

We increased our inspection of distribution poles sevenfold to 150,000 per year and developed wildfire prevention plans for every part of our service territory. Altogether, these actions not only reduce wildfire risk - they strengthen reliability and resilience against storms, high winds and aging infrastructure, delivering real benefits for our customers.

Most importantly, we have been able to make these investments while keeping our customers' bills as low as possible. Our customers benefit from some of the country's lowest energy bills. In Colorado, our residential electric customers spend the lowest percentage of their household income

- or "share of wallet" - out of all 50 states - and average bills in our other states occupy five of the top 11 spots. And while we've been able to lower our carbon emissions by 58% from 2005 baseline, we've kept our average electric bill growth well below inflation and well below national and regional averages.

Raising the bar on our performance

Our vision is to be the trusted and preferred provider of the energy our customers need. As a committed, connected team, we strive to deliver excellent performance - operationally and financially. In 2025, we continued to push our performance to new heights.

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We delivered industry-leading affordability to our customers with high reliability and sustainability. And, in parallel, we delivered solid, ongoing earnings for our shareholders of $3.80 per share and successfully met our earnings guidance for the 21st year in a row - one of the strongest track records in the industry.

We are highly focused on operating as efficiently as possible. Through our One Xcel Energy Way continuous improvement program, we have realized more than $1.5 billion in cumulative savings across our business since 2020, and when looking at our five-year average of operations and maintenance expenses per megawatt hour, Xcel Energy was ranked fourth lowest among our peer utilities.

And, finally, Xcel Energy is not only powering AI - we're harnessing it to fuel operational excellence and transformative results. By integrating AI across our operations, we're empowering our people, unlocking efficiencies and guiding our system to a smarter, more resilient energy future.

Better begins with our people

None of this would be possible without our greatest asset: our people. Their energy, commitment and ingenuity make energy work better for our customers, and we are dedicated to providing a rewarding employee experience with opportunities for growth, engagement and recognition.

In 2025, we enhanced professional development, reinforced our safety culture and celebrated outstanding achievements. Thanks to our team, Xcel Energy has been recognized as one of Ethisphere's World's Most Ethical Companies® every year since 2020, and we were, once again, selected as one of Fortune's Most Admired Companies.

We also strengthened our leadership team to guide our future growth, promoting Michael Lamb to executive vice president, chief delivery officer; Ryan Long to executive vice president, chief legal and compliance officer; Scott Sharp to executive vice president, chief generation officer; and Bria Shea to president of Xcel Energy-Minnesota, North Dakota and South Dakota.

Our teams also continued to demonstrate that our commitment is about more than energy: It's about compassion, neighbors helping neighbors and

going above and beyond to build strong, resilient communities. In 2025, our employees, contractors and retirees volunteered nearly 100,000 hours at more than 1,200 nonprofit organizations across our eight-state service area. They raised more than $5.5 million during our annual Power Your Purpose giving campaign.

Beyond this, Xcel Energy and the Xcel Energy Foundation contributed $13.5 million across our territories, including nearly $5 million from the Foundation to support community vitality, environmental sustainability and STEM career

pathways. Our Customer Care group worked with 200,000 customers to provide approximately $180 million of public energy assistance.

These are the kinds of numbers that change lives, and each contribution played a role in building a lasting impact for our customers and our communities.

Transforming for a brighter today - and tomorrow

The same spirit and commitment to innovation that brought our first hydroelectric plant online in Minneapolis more than 140 years ago still drives us today. Xcel Energy is ready to build on our momentum and drive a year of meaningful

transformation while building stronger communities.

As we continue making energy work better for our customers, our communities and our people, our collective skill, grit and determination will turn our vision into reality.

Thank you for your continued confidence and investment in Xcel Energy!

Bob Frenzel

Chairman, president and chief executive officer

2025 ANNUAL REPORT | 5

STRENGTH IN PARTNERSHIPS

Tyler Bryant, Xcel Energy-Colorado area manager, speaks with Einar Jensen, Evergreen Fire Rescue's risk reduction coordinator.

6

W

ildfires can strike anytime, anywhere - and they are reshaping how Xcel Energy and the communities we serve work

together to protect lives, landscapes and the energy systems that power them.

While advanced technology like AI-enabled cameras, drones and predictive modeling are essential, it's the community partnerships that form the foundation of Xcel Energy's wildfire prevention strategy.

"We rely on trusted working relationships with municipalities, counties, emergency

managers and first responders to maximize our wildfire mitigation efforts," said Tyler Bryant,

a community area manager for Xcel Energy-Colorado whose territory includes wildfire-prone communities, such as Evergreen. "These connections help our crews reduce risk and raise public awareness for customers."

BUILDING CONNECTIONS

Last year, Evergreen Fire Rescue, Xcel Energy and contractors launched a public outreach campaign ahead of a planned all-day outage for wildfire system upgrades that impacted nearly 1,200 customers. Together, the team minimized

disruption by notifying customers early, adjusting schedules for residents and businesses and maintaining power at a local school.

"It's important for all of us to work together," said Einar Jensen, Evergreen Fire Rescue's risk reduction coordinator. "A utility or a resident

can't do it alone. And it's important for Xcel Energy to be at the table."

Our collaboration with the American Red Cross is another example of working together to strengthen community resilience and safety. As part of this new partnership, our employees roll up their sleeves alongside Red Cross volunteers to install fire alarms in mobile homes and connect residents with energy bill assistance.

"We need local nonprofits that have the expertise and relationships to organize and deliver life-supporting supplies in emergencies," Bryant said. "These partnerships also help our customers better understand the benefits of our wildfire prevention efforts."

HARNESSING TECHNOLOGY

Like Colorado, emergency management agencies in our Texas service territory have 24/7 access

to wildfire detection cameras, enabling them

Drones inspect power lines with 360-degree views to spot defects and aid restoration efforts.

to respond to fires more quickly. In the spring of 2025, when a wildfire that originated along a highway corridor, away from Xcel Energy assets and not associated with Xcel Energy

infrastructure, burned 500 acres and threatened 1,200 homes, emergency responders used our wildfire modeling software, Technosylva, to stay ahead of the flames.

"They could see where to place resources, and it was a miracle because the fire was coming right for the town," said Wes Reeves, senior wildfire community engagement manager for Xcel Energy-Texas and New Mexico.

GROWING OUR NETWORK

The Southwest isn't the only area we are focusing our wildfire prevention efforts. We have wildfire mitigation plans in all eight states we serve and recently expanded our detection technology to the Upper Midwest, installing two cameras in Mankato and Clear Lake,

Minnesota, with plans to add 36 more to high-risk areas by the end of 2026.

"Technology and collaboration are transforming wildfire prevention into a proactive effort rather than a reactive one," said Anna Thill, community relations manager for southwest Minnesota. "We're preparing for

a changing climate, protecting what matters most and helping communities stay safe and strong for the future."

2025 ANNUAL REPORT | 7

DRIVING CUSTOMER CONNECTIONS

Emma Solis, community affairs representive, with the RED Truck.

I

n a world dominated by digital tools and virtual customer service, Xcel Energy

is bringing personal connections back to communities through the RED Truck - Resources. Education. Delivered.

Launched in Colorado in 2023, this mobile resource center helps customers understand their bills, enroll in energy-saving programs and apply for energy assistance. To ensure accessibility, it offers Spanish-language support and plans to expand to additional languages.

"The RED Truck meets customers where they are, creating face-to-face experiences other channels can't match," said Claudette Street, a personal account representative who has worked with the

To better serve communities throughout the Front Range, the program has grown from one electric vehicle to five. It has been so successful that it now operates across Xcel Energy's four operating regions

and in 2026 will roll out a vehicle to serve communities

in Wisconsin and the Upper Peninsula of Michigan. This growth is

Daniel Venegas, community affairs representative, helps a customer.

program since it launched. "These interactions

help customers feel seen, heard and valued - something that's hard to achieve over the phone."

"The RED Truck meets customers where they are, creating face-to-face experiences other channels can't match."

CLAUDETTE STREET

Personal account representative

In its first year in Colorado, the RED Truck attended 43 events. By the end of 2025, the team had exceeded its annual goal of 100 events by more than 30%.

8

especially meaningful for Emma Solis, a Colorado community affairs representative who staffs the RED Truck.

"I grew up in Eau Claire [Wisconsin] in a single-family home, and I enjoy doing what I'm doing because I'm giving back to the community," she said. "Having the RED Truck there on the spot is so meaningful, and I'm really excited because that wasn't available before."

Customers and community organizations, such as food pantries and chambers of commerce, actively request the RED Truck, demonstrating the demand for its services and the positive impact it's making.

"This is a clear sign that what Xcel Energy is doing matters," Street said. "And I'm proud to be part of a team that makes such a difference."

A SERVING WITH PRIDE

s a longtime resident of Wisconsin and graduate of the University of Wisconsin-

Eau Claire, Brian Elwood is deeply connected to the communities Xcel Energy serves in the region. However, it's not just his personal journey that's rooted here. As an employee of Xcel Energy for 30 years, he

takes immense pride in helping customers and communities achieve their energy goals.

"UW-Eau Claire is an important community partner for Xcel Energy and the entire area," said Elwood, Xcel Energy-Wisconsin and Michigan's regional vice president of Customer and Community Relations. "Whenever anything

is happening from a community standpoint, from an economic standpoint, we are always at the table together."

UW-Eau Claire's Sonnentag Center - now the largest events space in western Wisconsin - began as an ambitious vision 11 years ago.

Today, it's a symbol of collaboration, growth and sustainability. And Xcel Energy, which has served Wisconsin for more than a century and champions sustainability through renewable energy, helped bring this vision to life.

Less than 15 miles from the LEED Gold-certified, all-electric Sonnentag Center is the Chippewa Sun solar array. Xcel Energy purchases electricity from the 5-megawatt facility to support subscribing partners like UW-Eau Claire, which uses solar energy to offset 100% of electricity consumption at the Sonnentag Center.

In addition to Elwood, hundreds of Xcel Energy employees are Blugold alumni, making this collaboration with the Sonnentag Center particularly meaningful.

"It's a source of pride to see UW-Eau Claire tackle a project like this," said Elwood. "It's very

personal to see a college that you graduated from do so many good things in the communities you serve and work in."

LEARN MORE

Brian Elwood, Xcel Energy-Wisconsin and Michigan's regional vice president of Customer and Community Relations, at UW-Eau Claire's Sonnentag Center.

2025 ANNUAL REPORT | 9

S

tretching across thousands of acres of open plains is a sea of dark blue panels that stand starkly against the dusty terrain of Earth,

Texas. From the highway, you'd never guess the scale - more than 321,000 solar modules harnessing sunlight to power the clean energy future of the Texas Panhandle. This installation,

the largest solar project in Xcel Energy's Southwest region to date, will deliver 150 megawatts of renewable energy and power to approximately 25,000 homes.

Plant X began operations in 1952.

The solar facility sits on the same site as Plant X,

a natural gas-fired plant that has been delivering reliable power since 1952. At its peak, it was made up of four natural gas-fueled steam generating units.

Today, that legacy is evolving. With Units 1, 2 and 3 retired, Plant X Solar will deliver significant

benefits, such as lower emissions, increased local tax revenue and reduced fuel costs for customers.

"We're enhancing Plant X's role as a versatile energy hub," said Philip Spriggs, Plant X Solar's operations manager. "Adding solar shows Xcel Energy's commitment to innovation and sustainability without replacing what works."

Xcel Energy's power plants have long been the backbone of energy service in Texas and New Mexico, supported by skilled employees and surrounded by tightknit communities that rely on the economic lifeline these plants provide.

Plant X employs more than 25 workers, and during peak construction, the solar project created 300 jobs. It will be operational in April 2026.

"When I walk around Plant X Solar, I'm excited about its scale and innovation," Spriggs said. "Seeing the solar panels capturing West Texas sunlight is a clear sign of our commitment to power local communities."

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PLANT X POWERS ON

Philip Spriggs, operations manager, inspects the panels at Plant X Solar.

(Mark One)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2025 or

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

001-3034

(Commission File Number)

Xcel Energy Inc.

(Exact name of registrant as specified in its charter)

Minnesota 41-0448030

(State or Other Jurisdiction of Incorporation or Organization) (IRS Employer Identification No.)

414 Nicollet Mall Minneapolis Minnesota 55401

(Address of Principal Executive Offices) (Zip Code)

612 330-5500

Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes ☐ No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. ☒ Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

As of June 30, 2025, the aggregate market value of the voting common stock held by non-affiliates of the Registrant was $40,260,845,645. As of Feb. 19, 2026, there were 623,876,813 shares of common stock outstanding, $2.50 par value.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's definitive Proxy Statement for its 2026 Annual Meeting of Shareholders are incorporated by reference into Part III of this Form 10-K.

TABLE OF CONTENTS PART I

PART I

ITEM 1 - BUSINESS

Definitions of Abbreviations

Capital Services Capital Services, LLC

Xcel Energy Inc.'s Subsidiaries and Affiliates (current and former)

Eloigne Eloigne Company

CapX2020 Alliance of electric cooperatives, municipals and investor-owned utilities in the upper Midwest involved in a joint transmission line planning and construction effort

Nicollet Project Holdings

Nicollet Project Holdings, LLC

CCR Rule Final rule (40 CFR 257.50 - 257.107) published by the EPA regulating the management, storage and disposal of CCRs as a nonhazardous waste

NSP System The electric production and transmission system of NSP-Minnesota and NSP-Wisconsin operated on an integrated basis and managed by NSP-Minnesota

PSCo Public Service Company of Colorado

Utility subsidiaries NSP-Minnesota, NSP-Wisconsin, PSCo and SPS WYCO WYCO Development, LLC

Federal and State Regulatory Agencies

CPUC Colorado Public Utilities Commission

DOC Minnesota Department of Commerce

DOT United States Department of Transportation

EPA United States Environmental Protection Agency

FASB Financial accounting standards board

IRS Internal Revenue Service

MPSC Michigan Public Service Commission

NERC North American Electric Reliability Corporation NMPRC New Mexico Public Regulation Commission OAG Minnesota Office of Attorney General

PSCW Public Service Commission of Wisconsin

SDPUC South Dakota Public Utility Commission

CEO Chief executive officer

CERCLA

Comprehensive Environmental Response, Compensation, and Liability Act

CFO Chief financial officer

CO2 Carbon dioxide

CPCN Certificate of public convenience and necessity

DECON Decommissioning method where radioactive contamination is removed and safely disposed of at a requisite facility or decontaminated to a permitted level

EEI Edison Electric Institute

EPS Earnings per share

FTR Financial transmission right

GHG Greenhouse gas

INPO Institute of Nuclear Power Operations

IPP Independent power producing entity

ISO Independent system operator

MGP Manufactured gas plant

Native load Demand of retail and wholesale customers that a utility has an obligation to serve under statute or contract

Electric, Purchased Gas and Resource Adjustment Clauses NEIL Nuclear Electric Insurance Ltd.

CIP Conservation improvement program

DSM Demand side management NOx Nitrogen oxides

GCA Gas cost adjustment

RES Renewable energy standard

ADIT Accumulated deferred income taxes

Other

AFUDC Allowance for funds used during construction ARO Asset retirement obligation

ASC Financial Accounting Standards Board Accounting Standards Codification

OBBB One Big Beautiful Bill Act

PFAS Per- and polyfluoroalkyl substances

Post-65 Post-Medicare

Pre-65 Pre-Medicare

RDF Refuse-derived fuel

RFP Request for proposal

ATM At-the-market

ROU Right-of-use

S&P Standard & Poor's Global Ratings

SOFR Secured overnight financing rate

TCJA

2017 federal tax reform enacted as Public Law No: 115-97, commonly referred to as the Tax Cuts and Jobs Act

SRP System resiliency plan

THI Temperature-humidity index

VaR Value at risk

XLI Xcel Large Industrials

Bcf Billion cubic feet

Measurements

KV Kilovolts

MMBtu Million British thermal units

Where to Find More Information

Xcel Energy's website address is https://www.xcelenergy.com. Xcel Energy makes available through its website, free of charge, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after the reports are electronically filed with or furnished to the SEC.

The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically at https://http://www.sec.gov. The information on Xcel Energy's website is not a part of, or incorporated by reference in, this annual report on Form 10-K. Xcel Energy intends to make future announcements regarding Company developments and financial performance through its website, https://www.xcelenergy.com, as well as through press releases, filings with the SEC, conference calls and webcasts.

MWh Megawatt hours

Forward-Looking Statements

Except for the historical statements contained in this report, 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 2026 EPS guidance, long-term EPS and dividend growth rate objectives, future sales, future expenses, future tax rates, future operating performance, estimated base capital expenditures and financing plans, projected capital additions and forecasted annual revenue requirements with respect to rider filings, expected rate increases to customers, expectations and intentions regarding regulatory proceedings, expected pension contributions and expected impact on our results of operations, financial condition and cash flows of interest rate changes, increased credit exposure, and legal proceeding outcomes, as well as assumptions and other statements are intended to be identified in this document by the words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "objective," "outlook," "plan," "project," "possible," "potential," "should," "will," "would" and similar expressions. Actual results may vary materially. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update any forward-looking information. The following factors, in addition to those discussed elsewhere in this Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2025 (including risk factors listed from time to time by Xcel Energy Inc. in reports filed with the SEC, including "Risk Factors" in Item 1A of this Annual Report on Form 10-K), could cause actual results to differ materially from management expectations as suggested by such forward-looking information: operational safety, including our nuclear generation facilities and other utility operations; successful long-term operational planning; risks associated with wildfires; commodity risks associated with energy markets and production; rising energy prices and fuel costs; qualified employee workforce and third-party contractor factors; reputational impacts of actions by employees, directors, or third-parties; our ability to recover costs and our subsidiaries' ability to recover costs from customers; risks associated with the growth in large load customers; changes in regulation; reductions in our credit ratings and the cost of maintaining certain contractual relationships; general economic conditions, including recessionary conditions, inflation rates, monetary fluctuations, supply chain constraints and their impact on capital expenditures and/or the ability of Xcel Energy Inc. and its subsidiaries to obtain financing on favorable terms; availability or cost of capital; our customers' and counterparties' ability to pay their debts to us; assumptions and costs relating to funding our employee benefit plans and health care benefits; our subsidiaries' ability to make dividend payments; tax laws; uncertainty regarding epidemics; effects of geopolitical events, including war and acts of terrorism; cybersecurity threats and data security breaches; seasonal weather patterns; changes in environmental laws and regulations; climate change and other weather events; natural disaster and resource depletion, including compliance with any accompanying legislative and regulatory changes; costs of potential regulatory penalties and wildfire damages in excess of liability insurance coverage; regulatory changes and/or limitations related to the use of natural gas as an energy source; challenging labor market conditions and our ability to attract and retain a qualified workforce; and our ability to execute on our strategies or achieve expectations related to environmental, social and governance matters including as a result of evolving legal, regulatory and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs, the availability of requisite financing, and changes in carbon markets.

Overview

Xcel Energy (the "Company") is a major U.S. regulated electric and natural gas delivery company headquartered in Minneapolis, Minnesota (incorporated in Minnesota in 1909). The Company serves customers in eight states, including portions of Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin. Xcel Energy provides a comprehensive portfolio of energy-related products and services to approximately 3.9 million electric customers and 2.2 million natural gas customers through four utility subsidiaries (NSP-Minnesota, NSP-Wisconsin, PSCo and SPS). Along with the utility subsidiaries, the transmission-only subsidiaries, WYCO (a joint venture formed with CIG to develop and lease natural gas pipelines and storage facilities) and WGI (an interstate natural gas pipeline company) comprise the regulated utility operations. The Company's nonregulated subsidiaries include Eloigne, Capital Services, Venture Holdings and Nicollet Project Holdings.

Subsidiary / Affiliate Function Utility Subsidiary Overview

NSP-Minnesota Electric & Gas

Electric customers 3.9 million

NSP-Wisconsin Electric & Gas

Natural gas customers 2.2 million

SPS Electric

WYCO Gas storage and transportation

Electric generating capacity (owned) 20,800 MW

Electric transmission lines (conductor miles) 115,000 miles

Other Subsidiaries

See Note 1 to the consolidated financial statements for further information.

Natural gas transmission lines 2,100 miles

Service Territory

Strategy

Xcel Energy's vision is to be the preferred and trusted provider of the energy our customers need. We will deliver on this vision while offering a competitive total return to our shareholders. Our mission is to make energy work better for our customers, helping them thrive every day.

We execute on our vision and mission through three strategic priorities.

OUR CUSTOMERS OUR PEOPLE OUR PERFORMANCE

Enhance their experience with Xcel Energy and keep their bills as low as possible

Provide a rewarding employee experience, with development, engagement and growth

Deliver excellent operational, financial and clean energy performance

Our employees are guided by four corporate values: Connected, Committed, Safe and Trustworthy.

Our values, culture and Code of Conduct serve as the foundation upon which Xcel Energy's employees, Board of Directors, contractors and suppliers approach their work in delivering on our three strategic priorities.

OUR CUSTOMERS

Xcel Energy is leading the ongoing clean energy transition while remaining focused on what matters most: providing reliable, affordable energy that meets the increasing demands of our customers as they electrify more parts of their lives. Customer affordability remains central to our strategy. Through disciplined infrastructure investment and the advantages of our geographic footprint, we continue to deliver some of the lowest energy bills in the nation.

Xcel Energy has invested more than $2 billion over the past decade in a portfolio of renewable and conservation programs that provide customers with clean energy options and help keep bills low. New demand remains robust in our territories as we fuel the rapid growth from AI and data centers, industrial electrification and electric vehicle adoption. As such, we are transforming and expanding our electric grid to accommodate this load growth, and supporting our expanded portfolio of renewable energy and distributed energy resources.

Since 2020, our lean operating program has generated $1.5 billion of cumulative savings for our customers, while improving operating outcomes and reducing enterprise risk. At the same time, our Steel for Fuel strategy has saved customers nearly $6 billion since 2017 in avoided fuel costs and PTCs.

In turn, our residential customers in Colorado have the lowest share of wallet out of all 50 states, and average bills in our other states occupy 5 of the next 11 spots. Based on available EIA data, the five-year average residential electric and natural gas bills for an Xcel Energy customer are 28% and 12% below the national average. We continue to support critical programs to help our customers who may need assistance with their energy bills and reached nearly 200,000 customers and provided over $180 million in funding in 2025.

Going forward, our goal is to enable the clean energy transition while keeping long-term customer bill growth at inflation through initiatives including conservation programs, O&M cost control, our One Xcel Energy Way lean management initiative, advanced operational technologies and our Steel for Fuel program.

Investing in our communities means supporting a wide array of industries that strengthen local economies. In 2025, Xcel Energy initiated 15 economic development projects across our communities. Collectively, these projects are projected to generate more than $7 billion in capital investments and nearly 1,400 jobs. Nearly 53% of our supply chain spend was local and we spent nearly $1 billion with small or diverse suppliers.

In 2025, the Xcel Energy Foundation contributed $5 million in grant funding nearly 400 nonprofit organizations. Through our 2025 Power Your Purpose Giving Campaign, Xcel Energy employees, contractors and retirees donated nearly $3 million to over 1,400 nonprofit and community organizations - exceeding our fundraising goal. Combined with the Xcel Energy Foundation match to local United Way chapters, this campaign raised over $5 million for our communities. In 2025, employees volunteered nearly 100,000 hours in their communities. Our annual Day of Service attracted over 2,900 volunteers who committed nearly 8,900 hours at over 100 nonprofit projects across the company's service footprint.

OUR PEOPLE

Champion Safety

Continuously elevating the quality and safety of the workplace is a top priority. We are considered a leader in safety for our Safety Always approach, focused on eliminating life-altering injuries through a trusted, transparent culture and the use of critical controls. All employees have "stop work authority" and are expected to keep each other, our customers and the public safe. Employees are encouraged to speak up, share experiences and learn from events to help protect themselves, their coworkers and the public.

The Board of Directors has oversight for employee and public safety through the Operations, Nuclear, Environmental and Safety committee, which is tied to annual incentive compensation.

Cultivate an Inclusive, Best-in-Class Workforce

We aim to create an inclusive work culture where employees are empowered to create innovative solutions, everyone is respected and there is a collective sense of belonging. We are building a workforce that reflects the broad range of backgrounds, experiences and perspectives within our communities and among our customers. This starts with our Board of Directors.

The Board of Directors has oversight for workforce strategy, through the Governance, Compensation and Nominating Committee, including our inclusion initiatives, employee safety and inclusion KPIs tied to annual incentive compensation.

In 2025, a total of 70% of annual incentive compensation was tied to safety, system reliability and inclusion metrics.

Management evaluates compensation and benefits to maintain a market-competitive, performance-based, shareholder-aligned total rewards package that supports our ability to attract, engage and retain a talented workforce.

We partner with educational and community organizations to recruit employees who reflect the communities we serve and live our values. Xcel Energy had 11,534 full-time employees and workforce demographics as of December 2025 were as follows:

Xcel Energy respects employees' freedom of association and their right to collectively organize. As of Dec. 31, 2025, approximately 44% of our employees (5,036) were covered by collective bargaining agreements.

We are committed to the advancement and protection of human rights, consistent with U.S. human rights laws and the general principles in the International Labour Organization Conventions.

Annual Code of Conduct training is required for all employees and the Board of Directors. We do not tolerate Code of Conduct violations or other unacceptable behaviors. We expect and offer employees multiple avenues to raise concerns or report wrong-doing and do not permit any retaliation.

OUR PERFORMANCE

Deliver a Competitive Total Return to Investors

Successful strategy execution, along with our disciplined approach to growth, operations and management of environmental, social and governance issues, positions us to continue delivering a competitive TSR.

We have consistently achieved our financial objectives, meeting or exceeding our initial ongoing earnings guidance range for 21 consecutive years and delivering dividend growth for 23 consecutive years.

Leading the Clean Energy Transition

Xcel Energy is committed to providing our customers with safe, reliable service at the lowest cost possible, while leading the clean energy transition. Over the next five years, we plan to make $60 billion of capital investments to improve reliability, resiliency and sustainability and support demand growth across our system. Significant investment in our transmission and distribution systems is essential to ensure resiliency and reliability for customers, we have approximately $29 billion in our 2026 -2030 capital plan focused specifically on this.

Our current sustainability commitments are summarized as follows:

See Item 1A for risks and uncertainties related to strategic and sustainability goals and objectives.

Zero-Carbon Electricity by 2050

Xcel Energy's operating footprint includes some of the best wind and solar resources in the country, providing for higher capacity factors and lower electricity costs.

Xcel Energy's wind capacity is now approximately 11,000 MW, including nearly 4,500 MW of owned wind. In 2025, we completed the second phase of our Sherco Solar project in Minnesota, with a third phase coming online in 2026, making it the largest solar facility in the upper Midwest. We are also proposing to add a fourth phase, which would bring the facility's total generating capacity to 910 MW by 2029, providing enough clean energy to power 190,000 homes across the upper Midwest.

In our base 2026 - 2030 capital investment plan, we have ~9,500 MW of new and repowered wind, solar, and battery storage resources included and ~3,000 MW of new natural gas generation to ensure reliability.

Through 2025, we reduced carbon emissions from generation serving customers by an estimated 58% (from 2005 levels) and remain on track to fully exit coal by the end of 2030.

Natural Gas Use in Buildings - Net-Zero GHG by 2050

Xcel Energy continues on the path to achieve our 2050 goal to provide net-zero natural gas service to our customers. Our net-zero natural gas frameworks include the following priorities:

• Operating a safe, reliable gas system with net-zero methane gas service by 2030.

• Optimizing the energy system with voluntary electrification-first approaches for new growth.

• Providing customers with a portfolio of energy solutions while ensuring we meet requirements of our regulators.

Electrification of the Transportation Sector

We are also helping reduce carbon emissions in other sectors, including transportation. By 2035, Xcel Energy aims to enable the charging infrastructure for 1.5 million electric vehicles across the areas we serve. We have approved clean transportation programs and plans in Colorado, New Mexico, Minnesota and Wisconsin.

Wildfire Resiliency and Mitigation

Protecting our customers and our system from the threats of extreme weather is a top priority for Xcel Energy. In 2025, we received commission approvals from both the Colorado and Texas commissions for our wildfire mitigation and system resiliency plans, as well as have public facing wildfire mitigation plans in each of our states. This includes investments in advanced camera and weather station technologies, enhanced powerline safety setting installations, pole inspections and replacements, and operational measures such as wildfire safety operations and public safety power shutoffs.

In 2025, supportive utility wildfire legislation also passed in Texas and North Dakota, and we continue to explore similar structures in our other states.

Utility Subsidiaries

NSP-Minnesota

NSP-Wisconsin conducts business in Wisconsin and Michigan and generates, purchases, transmits, distributes and sells electricity. NSP-Minnesota and NSP-Wisconsin electric operations are managed on the NSP System. NSP-Wisconsin also purchases, transports, distributes and sells natural gas to retail customers and transports customer-owned natural gas.

NSP-Wisconsin

PSCo

SPS

NSP-Minnesota conducts business in Minnesota, North Dakota and South Dakota and has electric operations in all three states including the generation, purchase, transmission, distribution and sale of electricity. NSP-Minnesota and NSP-Wisconsin electric operations are managed on the NSP System. NSP-Minnesota also purchases, transports, distributes and sells natural gas to retail customers and transports customer-owned natural gas in Minnesota and North Dakota.

PSCo conducts business in Colorado and generates, purchases, transmits, distributes and sells electricity. PSCo also purchases, transports, distributes and sells natural gas to retail customers and transports customer-owned natural gas.

SPS conducts business in Texas and New Mexico and generates, purchases, transmits, distributes and sells electricity.

Operations Overview

Utility operations are generally conducted as either electric or gas utilities in our four utility subsidiaries.

Electric Operations

Electric operations consist of energy supply, generation, transmission and distribution activities across all four utility subsidiaries. Xcel Energy had electric sales volume of 109,401 (millions of KWh), 3.9 million customers and electric revenues of $12,160 million for 2025.

Electric Energy Sources

Total electric energy generation by source for the year ended Dec. 31:

Electric Operations

(percentage of total) Sales Volume

Number of

Customers Revenues

(a) See Note 6 to the consolidated financial statements for further information.

Owned and Purchased Energy Generation - 2025

57%

59%

Xcel Energy NSP System PSCo SPS

Owned Purchased

Carbon-Free

Xcel Energy's carbon-free energy portfolio includes wind, nuclear, hydroelectric, biomass and solar power from both owned generation facilities and PPAs. Carbon-free percentages will vary year-over-year based on system additions, commodity costs, weather, system demand and transmission constraints.

See Item 2 - Properties for further information.

Wind

Wind capacity is shown as net maximum capacity. Net maximum capacity is attainable only when wind conditions are sufficiently available.

Owned - Owned and operated wind farms with corresponding capacity:

2025 2024

PPAs - Solar PPAs capacity by type:

1. Includes battery storage capacity of 225 MW.

Average Cost - Average cost per MWh of solar energy under existing distributed and utility-scale generation PPAs:

Utility

PPAs - Number of PPAs with capacity range:

1. Average cost per MWh includes projects placed in service in 2024. For projects placed

   NSP System	95	1 - 206	116	1 - 206
   PSCo	16	23 - 301	16	23 - 301
   SPS	15	1 - 250	16	1 - 250
   PPAs - Contracted wind capacity (MW) for PPAs:
   Utility Subsidiary	2025			2024
   NSP System			2,026		2,061
   PSCo			2,996		2,996
   SPS			1,482		1,562

   Utility Subsidiary

   2025 2024

   PPAs Range (MW) PPAs Range (MW)

   in service in 2025, cost per MWh will be available after a full year of operations.

2. Includes the impact of PTCs.

Nuclear

Xcel Energy has two nuclear plants with approximately 1,700 MW of total 2025 net summer dependable capacity that safely and reliably generates carbon free electricity for the NSP System. Xcel Energy secures contracts for uranium concentrates, uranium conversion, uranium enrichment and fuel fabrication to operate its nuclear plants. We use varying contract lengths as well as multiple producers for uranium concentrates, conversion services and enrichment services to minimize potential impacts caused by

Average Cost - Average cost per MWh of wind energy from owned generation and existing PPAs:

supply interruptions due to geographical and world political issues.

Nuclear Fuel Cost - Delivered cost per MMBtu of nuclear fuel consumed

PPA PSCo 44 43

Owned Generation (a) SPS 3 1

PPA SPS 27 28

1. Includes the impact of PTCs.

Solar

Owned - Owned and operated solar projects with corresponding capacity:

2025 2024

NSP System Cost Percent

2025 $ 0.82 54 %

2024 $ 0.83 43 %

Other - Xcel Energy's other carbon-free energy portfolio includes hydro from owned generating facilities.

See Item 2 - Properties for further information.

Fossil Fuel

Utility Subsidiary

Solar

Projects Capacity (MW)

Solar

Projects Capacity (MW)

Xcel Energy's fossil fuel energy portfolio includes coal and natural gas

power from both owned generating facilities and PPAs.

Coal

Xcel Energy owned and operated coal units with approximately 4,500 MW of total 2025 net summer dependable capacity. This amount includes the coal unit at Pawnee, which is in the process of being converted to natural gas (net summer dependable capacity of 505 MW) and approximately 100 MW derived from RDF and wood fuel sources.

Xcel Energy has plans to retire or convert to natural gas all of its existing coal generation by the end of 2030. Approved early coal plant retirements:

2026

PSCo

Craig 1 (a)

42 (b)

Year Utility Subsidiary Plant Unit Capacity (MW)

Natural Gas Cost - Delivered cost per MMBtu of natural gas consumed for owned electric generation and the percentage of total fuel requirements (nuclear, natural gas and coal):

2026 PSCo Comanche 2 (c) 330

2028

PSCo

Hayden 1

135 (b)

2027 PSCo Hayden 2 98 (b)

2028 PSCo Craig 2 40 (b)

2028 SPS Tolk 1 532

2030 NSP-Minnesota Sherco 3 517 (b)

2030

PSCo

Comanche 3

500 (b)

1. In December 2025, the DOE issued an emergency order pursuant to section 202(c) of the Federal Power Act to Tri-State Generation and Transmission Association and other co-owners - including Xcel Energy - directing the co-owners to take all measures necessary to ensure that Unit 1 at the Craig Station in Craig, Colorado is available to operate. This order is in effect from December 30, 2025 through March 30, 2026. PSCo is working with Tri-State and the other partners in complying with the order.

2. Based on Xcel Energy's ownership interest.

3. In December 2025, the CPUC issued a decision approving a variance that allows for the continued operation of Comanche Unit 2 in 2026, past the previously established retirement date of Dec. 31, 2025. The decision was issued in response to a joint petition filed by the trial staff of the CPUC, the Colorado Energy Office, the Colorado Office of the Utility Consumer Advocate, and PSCo seeking to modify the Comanche Unit 2 retirement date. PSCo also entered into an agreement with the Colorado Department of Public Health and Environment that establishes compliance obligations for continued operation of the unit through 2026.

Coal Fuel Cost - Delivered cost per MMBtu of coal consumed for owned electric generation and the percentage of fuel requirements (nuclear, natural gas and coal):

Coal (a)

Utility Subsidiary Cost Percent NSP System

2024 2.24 22

2025 1.71 42

SPS

2024 2.87 34

1. Includes RDF and wood for the NSP System.

Natural Gas

Natural Gas

Capacity and Demand

Uninterrupted system peak demand and occurrence date:

distances from power sources to substations closer to customers. A strong transmission system ensures continued reliable and affordable service, ability to meet state and regional energy policy goals, and support for a diverse generation mix, including renewable energy. Xcel Energy owns approximately 115,000 conductor miles of transmission lines across its service territory.

See Item 2 - Properties for further information.

Distribution

Distribution lines allow electricity to travel at lower voltages from substations directly to customers. Xcel Energy has a vast distribution network, owning and operating approximately 225,000 conductor miles of distribution lines across our eight-state service territory.

See Item 2 - Properties for further information.

Natural Gas Operations

Natural gas operations consist of purchase, transportation and distribution of natural gas to end-use residential, C&I and transport customers in NSP-Minnesota, NSP-Wisconsin and PSCo. Xcel Energy had natural gas deliveries of 400,982 (thousands of MMBtu), 2.2 million customers and natural gas revenues of $2,452 million for 2025.

Xcel Energy owned and operated natural gas plants with approximately 9,000 MW of total 2025 net summer dependable capacity.

Natural gas supplies, transportation and storage services for power plants are procured to provide an adequate supply of fuel. Remaining requirements are procured through a liquid spot market. Generally, natural gas supply contracts have variable pricing that is tied to natural gas indices. Natural gas supply and transportation agreements include obligations for the purchase and/or delivery of specified volumes or payments in lieu of delivery.

Natural Gas

(percentage of total) Deliveries

Number of

Customers Revenues

1. See Note 6 to the consolidated financial statements for further information.

2. Fluctuations in natural gas revenues associated with changes in natural gas sold and transported generally do not significantly impact earnings.

Capability and Demand

Natural gas supply requirements are categorized as firm or interruptible. Maximum daily output (firm and interruptible) and occurrence date:

2025 2024

Utility Subsidiary MMBtu Date MMBtu Date

Natural Gas Supply and Cost

Xcel Energy seeks natural gas supply, transportation and storage alternatives to yield a diversified portfolio, which increases flexibility and decreases interruption, financial risks and customer rates. In addition, the utility subsidiaries conduct natural gas price hedging activities approved by their states' commissions.

Average delivered cost per MMBtu of natural gas for regulated retail distribution:

NSP-Minnesota $ 4.31 $ 3.97

Utility Subsidiary 2025 2024

NSP-Wisconsin 4.31 3.77

NSP-Minnesota, NSP-Wisconsin and PSCo have natural gas supply transportation and storage agreements that include obligations for purchase and/or delivery of specified volumes or to make payments in lieu of delivery.

General

General Economic Conditions

Economic conditions may have a material impact on Xcel Energy's operating results. Management cannot predict the impact of fluctuating energy or commodity prices, pandemics, terrorist activity, war or the threat of war. We could experience a material impact to our results of operations, future growth or ability to raise capital resulting from a sustained general slowdown in economic growth or a significant increase in interest rates or inflation.

Seasonality

Demand for electric power and natural gas is affected by seasonal differences in the weather. In general, peak sales of electricity occur in the summer months and peak sales of natural gas occur in the winter months. As a result, the overall operating results may fluctuate substantially on a seasonal basis. Additionally, Xcel Energy's operations have historically generated less revenues and income when weather conditions are warmer in the winter and cooler in the summer. Sales true-up and decoupling mechanisms mitigate the impacts of weather in certain jurisdictions.

Competition

Xcel Energy is subject to public policies that promote competition and development of energy markets. Xcel Energy's industrial and large commercial customers have the ability to generate their own electricity. In addition, customers may have the option of substituting other fuels or relocating their facilities to a lower cost region.

Customers have the opportunity to supply their own power with distributed generation including solar generation and can currently avoid paying for most of the fixed production, transmission and distribution costs incurred to serve them in most jurisdictions.

Several states have incentives for the development of rooftop solar, community solar gardens and other distributed energy resources. Distributed generating resources are potential competitors to Xcel Energy's electric service business with these incentives and federal tax subsidies.

The FERC has continued to promote competitive wholesale markets through open access transmission and other means. Xcel Energy's wholesale customers can purchase energy from other generation resources and transmission services from other service providers to serve their native load.

FERC Order No. 1000 established competition for ownership of certain new electric transmission facilities under Federal regulations. Some states have state laws that allow the incumbent a Right of First Refusal to own these transmission facilities.

FERC Order 2222 requires that RTO and ISO markets allow participation of aggregations of distributed energy resources. This order is expected to incentivize distributed energy resource adoption, however implementation is expected to vary by RTO/ISO and the near, medium, and long-term impacts of Order 2222 remain unclear.

Xcel Energy Inc.'s utility subsidiaries have franchise agreements with cities subject to periodic renewal; however, a city could seek alternative means to access electric power or gas, such as municipalization. No municipalization activities are occurring presently.

While each utility subsidiary faces these challenges, Xcel Energy believes their rates and services are competitive with alternatives currently available.

Governmental Regulations Public Utility Regulation

See Item 7 for discussion of public utility regulation.

Environmental Regulation

Our facilities are regulated by federal and state agencies that have jurisdiction over air emissions, water quality, wastewater discharges, solid and hazardous wastes or substances. Certain Xcel Energy activities require registrations, permits, licenses, inspections and approvals from these agencies.

Xcel Energy has received necessary authorizations for the construction and continued operation of its generation, transmission and distribution systems. Our facilities strive to operate in compliance with applicable environmental standards and related monitoring and reporting requirements.

There are significant environmental regulations to encourage use of clean energy technologies and regulate emissions of GHGs. We have undertaken numerous initiatives to meet current requirements and prepare for potential future regulations, reduce GHG emissions and respond to state renewable and energy efficiency goals. Future environmental regulations may result in substantial costs. However, costs to comply with past environmental regulations have largely been recoverable through rates.

Emerging Environmental Regulation

Throughout 2025, the EPA has announced various regulatory actions addressing a wide range of environmental regulations. Xcel Energy will continue to monitor these proposed rules as they move toward final action. Additionally, any other amendments and changes to rules will be evaluated as proposed by the EPA.

Clean Air Act

Power Plant Greenhouse Gas Regulations - In April 2024, the EPA published final rules addressing control of CO2emissions from the power sector. The rules regulate new natural gas generating units and emission guidelines for existing coal and certain natural gas generation.

Based on current estimates and assumptions, Xcel Energy has determined that due to scheduled plant retirements, there is minimal financial or operational impact associated with these requirements and believes that the cost of these initiatives or replacement generation would be recoverable through rates based on prior state commission practices.

In June 2025, the EPA proposed to repeal these and all other GHG emissions standards for the power sector. In the alternative, the EPA proposed to repeal a narrower subset of the 2024 regulations.

In February 2026, the EPA issued a final rule repealing the 2009 Endangerment Finding and associated regulations addressing GHG emissions from the transportation sector under the Clean Air Act. Xcel Energy will monitor any additional proposed rules and evaluate the impacts of any final rule on the utility sector.

Waste-to-Energy Air Regulations - In January 2024, the EPA proposed air regulations addressing new and existing large municipal waste combustors. The proposed rules lower current emission standards for certain pollutants and would require installation of new pollution controls and/or more intense use of existing pollution controls at French Island Generating Station, Red Wing Generating Plant and Wilmarth Generating Plant. Until final rules are issued, it is not certain what the impact will be on Xcel Energy. Xcel Energy believes that the cost of these initiatives or replacement generation would be recoverable through rates based on prior state commission practices.

Regional Haze - In July 2025, the EPA proposed to partially approve and partially disapprove the 2022 Colorado SIP revision implementing the Regional Haze rule in Colorado. The proposal sought to remove mandatory retirement dates as enforceable provisions in the SIP.

In January 2026, the EPA issued a final rule fully disapproving the 2022 Colorado SIP revision, thereby removing the mandatory retirement dates. The removal of the retirement dates from a federally approved SIP would only impact whether the SIP provisions become federally enforceable. Colorado has a state regulation that reflects the SIP requirements, including retirement dates for Cherokee Unit 4, Comanche Unit 2, Craig Units 1 and 2, and Hayden Units 1 and 2 at a state level and would require amendment to modify or remove retirement dates.

Emerging Contaminants of Concern

PFAS are man-made chemicals that are widely used in consumer products and can persist and bio-accumulate in the environment. Xcel Energy does not manufacture PFAS, but because PFAS are so ubiquitous in products and the environment, it may impact our operations.

In June 2024, the EPA finalized a rule that designated certain PFAS as hazardous substances under CERCLA. In July 2024, the EPA finalized another rule that set enforceable drinking water standards for certain PFAS.

Potential costs for these rules and any additional proposed regulations related to PFAS are uncertain and will be determined on a site specific basis where applicable. If costs are incurred, Xcel Energy believes the costs will be recoverable through rates based on prior state commission practices.

Effluent Limitation Guidelines

In April 2024, the EPA published final rules under the Clean Water Act, setting Effluent Limitations Guidelines and Standards for steam generating coal plants. This rule establishes more stringent wastewater discharge standards for bottom ash transport water, flue-gas desulfurization wastewater, and combustion residuals leachate from steam electric power plants, particularly coal-fired power plants. Based on current estimates and assumptions, Xcel Energy has determined that there is minimal financial or operational impact associated with these requirements and that any costs would be recoverable through rates based on prior state commission practices.

Environmental Costs

Environmental costs include amounts for nuclear plant decommissioning and payments for storage of spent nuclear fuel, disposal of hazardous materials and waste, remediation of contaminated sites, monitoring of discharges to the environment and compliance with laws and permits with respect to emissions.

Costs charged to operating expenses for spent nuclear fuel disposal, environmental monitoring and remediation and disposal of hazardous materials and waste and depreciation of previously incurred capital expenditures for environmental improvements were approximately:

• $280 million in 2025.

• $290 million in 2024.

• $275 million in 2023.

  Average annual expense of approximately $295 million from 2026 - 2030 is estimated for similar costs. The precise timing and amount of environmental costs, including those for site remediation and disposal of hazardous materials, are unknown. Additionally, the extent to which environmental costs will be recovered through rates may fluctuate.

  Capital expenditures for environmental improvements were approximately:

• $35 million in 2025.

• $25 million in 2024.

• $20 million in 2023.

  Certain previously collected nuclear storage costs for the federal nuclear waste program are reimbursed to customers by the federal government as a result of a settlement we pursued regarding the government's failure to deliver a disposal program. Installments received are reimbursed to customers as approved by the MPUC and other state regulators.

  Information about our Executive Officers (a)

  Other

  Our operations are subject to workplace safety standards under the Federal Occupational Safety and Health Act of 1970 ("OSHA") and comparable state laws that regulate the protection of worker health and safety. In addition, the Company is subject to other government regulations impacting such matters as labor, competition, data privacy, etc. Based on information to date and because our policies and business practices are designed to comply with all applicable laws, we do not believe the effects of compliance on our operations, financial condition or cash flows are material.

  Capital Spending and Financing

  See Item 7 for discussion of capital expenditures and funding sources.

  Name	Age	Current and Recent Positions	Time in Position
  Robert C. Frenzel	55	Chairman of the Board of Directors, Xcel Energy Inc.	December 2021 - Present
  		President and Chief Executive Officer and Director, Xcel Energy Inc.	August 2021 - Present
  		Chief Executive Officer, NSP-Minnesota, NSP-Wisconsin, PSCo and SPS	August 2021 - Present
  		President and Chief Operating Officer, Xcel Energy Inc.	March 2020 - August 2021
  		Executive Vice President, Chief Financial Officer, Xcel Energy Inc.	May 2016 - March 2020
  Patricia Correa	52	Senior Vice President, Chief Human Resources Officer, Xcel Energy Inc.	February 2022 - Present
  		Senior Vice President, Human Resources, Eaton Corporation, a power management company	July 2019 - January 2022
  Michael Lamb	61	Executive Vice President, Chief Delivery Officer Xcel Energy Inc.	May 2025 - Present
  		Senior Vice President, Customer Delivery, Xcel Energy Inc.	September 2024 - April 2025
  		Senior Vice President, Distribution and Gas, Xcel Energy Inc.	June 2023 - August 2024
  		Senior Vice President, Transmission, Xcel Energy Inc.	April 2018 - May 2023
  		Mr. Lamb has been with Xcel Energy since 1985
  Ryan Long	41	Executive Vice President, Chief Legal and Compliance Officer, Xcel Energy Inc.	June 2025 - Present
  		Interim President, NSP-Minnesota	June 2025 - October 2025
  		President, NSP-Minnesota	January 2024 - June 2025
  		Interim General Counsel, Xcel Energy Inc.	October 2023 - January 2024
  		Vice President, Deputy General Counsel, Xcel Energy Services Inc.	May 2021 - October 2023
  		Managing Attorney, Xcel Energy Services Inc.	June 2020 - May 2021
  		Mr. Long has been with Xcel Energy since 2015
  Amanda Rome	45	Executive Vice President, Group President, Utilities, and Chief Customer Officer, Xcel Energy Inc.	October 2023 - Present
  		Interim General Counsel, Xcel Energy Inc.	January 2024 - May 2024
  		Executive Vice President, Chief Legal and Compliance Officer, Xcel Energy Inc.	June 2022 - October 2023
  		Executive Vice President, General Counsel, Xcel Energy Inc.	June 2020 - June 2022
  		Ms. Rome has been with Xcel Energy since 2015
  Scott Sharp	57	Executive Vice President, Chief Generation Officer, Xcel Energy Inc.	May 2025 - Present
  		Senior Vice President, Energy Supply and Commercial Operations, Xcel Energy Inc.	April 2023 - April 2025
  		Vice President, Energy Supply Operations, Xcel Energy Inc.	October 2020 - April 2023
  		Mr. Sharp has been with Xcel Energy since 2014
  Brian J. Van Abel	44	Executive Vice President, Chief Financial Officer, Xcel Energy Inc.	March 2020 - Present
  		Senior Vice President, Finance and Corporate Development, Xcel Energy Services Inc.	September 2018 - March 2020
  		Mr. Van Abel has been with Xcel Energy since 2010

  (a) No family relationships exist between any of the executive officers or directors.

  ITEM 1A - RISK FACTORS

  Xcel Energy is subject to a variety of risks, many of which are beyond our control. Risks that may adversely affect the business, financial condition, results of operations or cash flows are described below. Although the risks are organized by heading, and each risk is described separately, many of the risks are interrelated. These risks should be carefully considered together with the other information set forth in this report and future reports that Xcel Energy files with the SEC.

  While we believe we have identified and discussed below the key risk factors affecting our business, there may be additional risks and uncertainties that are not presently known or that are not currently believed to be significant that may adversely affect our business, financial condition, results of operations or cash flows in the future.

  Risks Associated with Our Business Operational Risks

  Our natural gas and electric generation/transmission and distribution operations involve numerous risks that may result in accidents and other operating risks and costs.

  Our natural gas transmission and distribution activities include inherent hazards and operating risks, such as leaks, explosions, outages and mechanical problems. Our electric generation, transmission and distribution activities include inherent hazards and operating risks such as contact, fire and outages.

  These risks could result in loss of life, significant property damage, environmental pollution, impairment of our operations and substantial financial losses to customers, the public, employees or third-party contractors. We maintain insurance against most, but not all, of these risks and losses.

  The occurrence of these events, if not fully covered by insurance, could have a material effect on our financial condition, results of operations and cash flows as well as potential reputational impact.

  Additionally, compliance with existing and potential new regulations related to the operation and maintenance of our natural gas infrastructure could result in significant costs. The PHMSA is responsible for administering the DOT's national regulatory program to assure the safe transportation of natural gas, petroleum and other hazardous materials by pipelines. The PHMSA continues to develop regulations and other approaches to risk management to assure safety in design, construction, testing, operation, maintenance and emergency response of natural gas pipeline infrastructure. We have programs in place to comply with these regulations, however, a significant incident or material finding of non-compliance could result in penalties and higher costs of operations.

  Our natural gas and electric transmission and distribution operations are dependent upon complex information technology systems and network infrastructure, the failure of which could disrupt our normal business operations, which could have a material adverse effect on our ability to process transactions and provide services.

  Other uncertainties and risks inherent in operating and maintaining Xcel Energy's facilities include, but are not limited to:

• Risks associated with facility start-up operations, such as whether the facility will achieve projected operating performance on schedule and otherwise as planned.

• Failures in the availability, acquisition or transportation of fuel or other supplies.

• Impact of adverse weather conditions and natural disasters, including, wildfires, tornadoes, avalanches, icing events, floods, high winds, droughts and the availability or changes to wind patterns.

• Performance below expected or contracted levels of output or efficiency.

• Availability of replacement or new equipment.

• Availability of adequate water resources and ability to satisfy water intake and discharge requirements.

• Inability to identify, manage properly or mitigate equipment defects.

• Use of new or unproven technology.

• Inability to use information effectively given the rapidly increasing volume of data.

• Risks associated with dependence on a specific type of fuel or fuel source, such as commodity price risk, availability of adequate fuel supply and transportation and lack of available alternative fuel sources.

• Risks associated with increased reliance on natural gas generation, including gas price volatility and supply constraints during extreme weather events.

• Increased competition due to, among other factors, new facilities, excess supply, shifting demand and regulatory changes.

• Risks of thermal runaway incidents associated with large battery storage facilities

• Risks associated with aging infrastructure.

• Risks associated with failures of other business processes and systems.

• Risks associated with regulatory requirements that may extend the operation of our coal facilities beyond planned retirement dates and require additional investments.

• Inability to deliver energy across transmission facilities, including due to congestion, outages, extreme weather, physical or cyber events, delays in construction or upgrades, permitting or siting challenges, or interconnection constraints.

  Our utility operations, resource adequacy and system reliability are subject to long-term planning and project risks.

  Our ability to reliably serve customer demand depends on the availability of sufficient generation and capacity resources. Changes in load growth, resource retirements, accreditation of resources, generation performance, extreme weather events, or delays in development or delivery of new resources, including the necessary transmission infrastructure, could affect resource adequacy and system reliability.

  Most utility investments are planned to be used for decades. Transmission and generation investments typically have long lead times and are planned well in advance of in-service dates and typically subject to long-term resource plans. These plans are based on numerous assumptions such as: sales growth, customer usage, commodity prices, economic activity, costs, regulatory mechanisms, customer behavior, available technology, equipment availability and public policy. Xcel Energy's long-term resource plan is dependent on our ability to obtain required approvals (including regulatory approval in jurisdictions where Xcel Energy operates), develop necessary technical expertise, allocate and coordinate sufficient resources and adhere to budgets and timelines.

  In addition, the long-term nature of both our planning processes and our asset lives are subject to risk. The utility sector is undergoing significant change (e.g., the addition of large loads, increases in energy efficiency, wider adoption of distributed generation and shifts away from fossil fuel generation to renewable generation). Customer adoption of these technologies and increased energy efficiency or other reductions in expected sales growth could result in excess transmission and generation resources, downward pressure on sales growth, and potentially stranded costs if we are not able to fully recover costs and investments. Additionally, increasing uncertainty surrounding federal policy to renewable deployment could negatively impact wind, solar and storage development.

  The magnitude and timing of resource additions and changes in customer demand may not coincide with evolving customer preference for generation resources and end-uses, which introduces further uncertainty into long-term planning. Efforts to electrify the transportation and building sectors to reduce GHG emissions may result in higher electric demand and lower natural gas demand over time. New data centers and crypto mining facilities could generate significant increase in demand. Higher electric demand may require us to adopt new technologies and make significant generation, transmission and distribution investments including advanced grid infrastructure, which increases exposure to overall grid instability and technology obsolescence. Enterprise level financial and customer billing technology systems may be unable to support the increasing customer complexity. Evolving stakeholder preference for lower emissions from generation sources and end-uses, like heating, may impact our resource mix and put pressure on our ability to recover capital investments in natural gas generation and delivery. Multiple states may not agree as to the appropriate resource mix, which may lead to costs to comply with one jurisdiction that are not recoverable across all jurisdictions served by the same assets.

  We require inputs such as coal, natural gas, uranium and water. Lack of availability of these resources could jeopardize long-term operations of our facilities or make them uneconomic to operate.

  Our utilities are highly dependent on suppliers to deliver components in accordance with short and long-term project schedules.

  Our products contain components that are globally sourced from suppliers. A shortage of key components in which an alternative supplier is not identified could significantly impact operations and project plans for Xcel Energy and our customers. Such impacts could include timing of projects and the potential for project cancellation. Failure to adhere to project budgets and timelines could adversely impact our results of operations, financial condition or cash flows.

  We are subject to physical and financial risks associated with climate change and other weather, natural disaster and resource depletion impacts.

  Climate change can create physical and financial risk. Physical risks include changes in weather conditions and extreme weather events. Our customers' energy needs vary with weather. To the extent weather conditions are affected by climate change, customers' energy use could increase or decrease. Increased energy use due to weather changes over the long-term may require us to invest in generating assets, transmission and infrastructure. Decreased energy use due to weather changes may result in decreased revenues.

  Severe weather impacts our service territories, primarily when thunderstorms, flooding, tornadoes, wildfires, snow, ice storms or extreme temperatures (high heating/cooling days) occur. Extreme weather conditions in general require system backup and can contribute to increased system stress, including service interruptions. Extreme weather conditions creating high energy demand may raise electricity prices, increasing the cost of energy we provide to our customers.

  To the extent the frequency of extreme weather events increases, this could increase our cost of providing service and result in more frequent service interruptions. Periods of extreme temperatures could also impact our ability to meet demand.

  Drought or water depletion could adversely impact our ability to provide electricity to customers, cause early retirement of power plants that require water or increase the cost for energy.

  Adverse events may result in increased insurance costs and/or decreased insurance availability. We may not recover all costs related to mitigating these physical and financial risks.

  Our utilities have significant risks associated with wildfires.

  In recent years, wildfires have impacted the utility industry. More frequent and severe drought conditions, extreme swings in amount and timing of precipitation, changes in availability of vegetation, unseasonably warm temperatures, very low humidity, stronger winds and other environmental factors have increased both the frequency and duration of fire weather conditions and the potential impact of an event. The expansion of the wildland urban interface increases the wildfire risk to surrounding communities and Xcel Energy's electric and natural gas infrastructure. Also, wildfires could jeopardize Xcel Energy's electric and gas infrastructure and third-party property and result in temporary power outages or shortages in our service territories. Our current wildfire mitigation initiatives may not be effective in preventing or reducing ignitions and wildfire-related losses.

  Other potential risks associated with wildfires and other climate events include the inability to secure sufficient insurance coverage, increased costs of insurance, or ability for insurers to meet their obligations, regulatory recovery risk, and the potential for a credit downgrade and subsequent additional costs to access capital markets.

  While we carry liability insurance, given an extreme event, damage amounts could exceed our coverage (as experienced with the Marshall Wildfire settlement in 2025) and negatively impact our results of operations, financial condition or cash flows.

  We are subject to commodity risks and other risks associated with energy markets and energy production.

  A significant increase in fuel costs could cause a decline in customer demand, adverse regulatory outcomes and an increase in bad debt expense which may have a material impact on our results of operations. Despite existing fuel cost recovery mechanisms in most of our states, higher fuel costs could significantly impact our results of operations if costs are not recovered. Delays in the timing of the collection of fuel cost recoveries could impact our cash flows and liquidity.

  A significant disruption in supply could cause us to seek alternatives at potentially higher costs. Additionally, supply shortages may not be fully resolved, which negatively impacts our ability to provide services to our customers. Failure to provide service due to disruptions may also result in fines, penalties or cost disallowances through the regulatory process.

  We also engage in wholesale sales and purchases of electric capacity, energy and energy-related products as well as natural gas. In many markets, emission allowances and/or RECs are also needed to comply with various statutes and commission rulings. As a result, we are subject to market supply and commodity price risk.

  Commodity price changes can affect the value of our commodity trading derivatives. We mark certain derivatives to estimated fair market value on a daily basis. Settlements can vary significantly from estimated fair values recorded and significant changes from the assumptions underlying our fair value estimates could cause earnings variability. The management of risks associated with hedging and trading is based, in part, on programs and procedures which utilize historical prices and trends.

  Public perception often does not distinguish between pass through commodity costs and base rates. High commodity prices that are passed through to customer bills could impact our ability to recover costs for other improvements and operations.

  Additionally, due to the uncertainty involved in price movements and potential deviation from historical pricing, our risk management programs may not be effective to protect against significant adverse market fluctuations and our results of operations, financial condition or cash flows could be materially impacted.

  Failure to attract and retain a qualified workforce could have an adverse effect on operations.

  The competition for talent has become increasingly prevalent, and we have experienced increased employee turnover due to the condition of the labor market and decisions related to strategic workforce planning. In addition, specialized knowledge and skills are required for many of our positions, which may pose additional difficulty for us as we work to recruit, retain and motivate employees in this climate.

  Failure to hire, adequately train replacement employees, transfer knowledge/expertise or future availability and cost of contract labor may adversely affect the ability to manage and operate our business. Inability to attract and retain these employees could adversely impact our results of operations, financial condition or cash flows.

  Our businesses have collective bargaining agreements with labor unions. Failure to renew or renegotiate these contracts could lead to labor disruptions, including strikes or boycotts. Such disruptions or any negotiated wage or benefit increases could have a material adverse impact to our results of operations, financial condition or cash flows.

  National unionization efforts could affect our business, as an increase in unionized workers could challenge our operational efficiency and increase costs.

  Our operations use third-party contractors in addition to employees to perform periodic and ongoing work.

  We rely on third-party contractors to perform operations, maintenance and construction work. Poor vendor performance or contractor unavailability could impact ongoing operations, restoration operations, regulatory recovery and our reputation and could introduce financial risk or risks of fines. Also, suppliers of key assets critical to long-term planning may be limited, creating vendor concentration risk that could increase costs and negatively impact investment execution.

  Actions of our employees, directors, third-party contractors or suppliers could expose us to reputational risks.

  We could suffer negative impacts to our reputation as a result of actual or perceived fraud, misconduct, legal or regulatory violations, violations of corporate policies, inappropriate use of social media, or other actions by our employees, directors, third-party contractors or suppliers. Reputational damage could have a material adverse effect and could result in negative customer perception, litigation and increased regulatory oversight.

  Our subsidiary, NSP-Minnesota, is subject to the risks of nuclear generation.

  NSP-Minnesota has two nuclear generation plants, Prairie Island and Monticello. Risks of nuclear generation include:

• Hazards associated with the use of radioactive material in energy production, including management, handling, storage and disposal.

• Limitations on insurance available to cover losses that may arise in connection with nuclear operations, as well as obligations to contribute to an insurance pool in the event of damages at a covered U.S. reactor.

• Technological and financial uncertainties related to the costs of decommissioning nuclear plants may cause our funding obligations to change.

The NRC has authority to impose licensing and safety-related requirements for the operation of nuclear generation facilities, including the ability to impose fines and/or shut down a unit until compliance is achieved. NRC safety requirements could necessitate substantial capital expenditures or an increase in operating expenses. In addition, the INPO reviews NSP-Minnesota's nuclear operations. Compliance with the INPO's recommendations could result in substantial capital expenditures or a substantial increase in operating expenses.

If a nuclear incident did occur, it could have a material impact on our results of operations, financial condition or cash flows. Furthermore, noncompliance or the occurrence of a serious incident at other nuclear facilities could result in increased industry regulation, which may increase NSP-Minnesota's compliance costs.

Financial Risks

Our profitability depends on the ability of our utility subsidiaries to recover their costs and changes in regulation may impair the ability of our utility subsidiaries to recover costs from their customers.

We are subject to comprehensive regulation by federal and state utility regulatory agencies, including siting and construction of facilities, customer service and the rates that we can charge customers.

The profitability of our utility operations is dependent on our ability to recover the costs of providing energy and utility services and earn a return on capital investment. Our rates are generally regulated and are based on an analysis of the utility's costs incurred in a test year. The utility subsidiaries are subject to both future and historical test years depending upon the regulatory jurisdiction. Thus, the rates a utility is allowed to charge may or may not match its costs at any given time. Rate regulation is premised on providing an opportunity to earn a reasonable rate of return on invested capital.

There can also be no assurance that our regulatory commissions will judge all the costs of our utility subsidiaries to be prudent, which could result in disallowances, or that the regulatory process will always result in rates that will produce full recovery.

Overall, management believes prudently incurred costs are recoverable given the existing regulatory framework. However, there may be changes in the regulatory environment that could impair the ability of our utility subsidiaries to recover costs historically collected from customers, or these subsidiaries could exceed caps on capital costs required by commissions and result in less than full recovery.

Changes in the long-term cost-effectiveness or to the operating conditions of our assets may result in early retirements of utility facilities. While regulation typically provides cost recovery for these types of changes, there is no assurance that regulators would allow full recovery of all remaining costs.

Higher than expected inflation, shortages of skilled labor, tariffs or federal policies may increase costs of construction and operations. Also, rising fuel costs could increase prices to consumers, all of which could increase the risk that our utility subsidiaries will not be able to fully recover their costs from their customers.

Regulators may challenge rate increases due to increased customer affordability pressures. Public policy developments, including legislative actions and electoral changes at the state level, may affect recovery mechanisms or allowed returns and may limit recovery timing or cost allocation, negatively impacting our results of operations, financial condition or cash flows.

Growth in large load customers, including data centers, may increase customer concentration, capital requirements and revenue variability risks.

Additional demand from a limited number of customers may increase our credit risk exposure and require incremental infrastructure investment. If anticipated load growth does not materialize as expected or regulatory cost allocation mechanisms evolve, it could negatively impact our results of operations, financial condition or cash flows.

Any reductions in our credit ratings could increase our financing costs and the cost of maintaining certain contractual relationships.

Our credit ratings are subject to change, and our credit ratings may be lowered or withdrawn by a rating agency. Significant events including disallowance of costs, use of historic test years, elimination of riders or interim rates, increasing depreciation lives, lower returns on equity, changes to equity ratios, impacts of tax policy and unfavorable litigation outcomes may impact our cash flows and credit metrics, potentially resulting in a change in our credit ratings. In addition, our credit ratings may change as a result of the differing methodologies or change in the methodologies used by the various rating agencies.

Any credit ratings downgrade could lead to higher borrowing costs or lower proceeds from equity issuances. It could also impact our ability to access capital markets. Also, our utility subsidiaries may enter into contracts that require posting of collateral or settlement if credit ratings fall below investment grade. The credit rating agencies may change their assessment or our regulatory or business risk, such as with the increase of climate events, which could negatively impact our credit ratings.

We are subject to capital market and interest rate risks.

Utility operations require significant capital investment. As a result, we frequently need to access capital markets. Any disruption in capital markets could have a material impact on our ability to fund our operations. Capital market disruption and financial market distress could prevent us from issuing commercial paper, issuing new securities or cause us to issue securities with unfavorable terms and conditions, such as higher interest rates or lower proceeds from equity issuances. Higher interest rates on short-term borrowings with variable interest rates could also have an adverse effect on our operating results.

The performance of capital markets impacts the value of assets held in trusts to satisfy future obligations to decommission NSP-Minnesota's nuclear plants and satisfy our defined benefit pension and postretirement benefit plan obligations. These assets are subject to market fluctuations and yield uncertain returns, which may fall below expected returns. A decline in the market value of these assets may increase funding requirements. Additionally, the fair value of the debt securities held in the nuclear decommissioning and/or pension trusts may be impacted by changes in interest rates.

We are subject to credit risks.

Credit risk includes the risk that our customers will not pay their bills, which may lead to a reduction in our cash flows and liquidity and an increase in bad debt expense. Credit risk is comprised of numerous factors including the price of products and services provided, the overall economy and unemployment rates.

Credit risk also includes the risk that counterparties that owe us money or product will become insolvent and may breach their obligations. Should the counterparties fail to perform, we may be forced to enter into alternative arrangements. In that event, our financial results could be adversely affected and we may incur losses. This could be particularly impactful for long-lead time equipment contracts that require significant deposits and milestone payments, for items that may be difficult to procure elsewhere in the event of non-performance.

Xcel Energy may have direct credit exposure in our short-term wholesale and commodity trading activity to financial institutions trading for their own accounts or issuing collateral support on behalf of other counterparties. We may also have some indirect credit exposure due to participation in organized markets, (e.g., MISO, SPP, ERCOT and California ISO), in which any credit losses are socialized to all market participants.

We have additional indirect credit exposure to financial institutions from letters of credit provided as security by power suppliers under various purchased power contracts. If any of the credit ratings of the letter of credit issuers were to drop below investment grade, the supplier would need to replace that security with an acceptable substitute. If the security were not replaced, the party could be in default under the contract.

Increasing costs of our defined benefit retirement plans and employee benefits may adversely affect our results of operations, financial condition or cash flows.

We have defined benefit pension and postretirement plans that cover most of our employees. Assumptions related to future costs, return on investments, interest rates and other actuarial assumptions have a significant impact on our funding requirements of these plans. Estimates and assumptions may change. In addition, the Pension Protection Act sets the minimum funding requirements for defined benefit pension plans. Therefore, our funding requirements and contributions may change in the future.

Also, the payout of a significant percentage of pension plan liabilities in a single year, due to high numbers of retirements or employees leaving, would trigger settlement accounting and could require Xcel Energy to recognize incremental pension expense related to unrecognized plan losses in the year liabilities are paid. Changes in industry standards utilized in key assumptions (e.g., mortality tables) could have a significant impact on future obligations and benefit costs.

Increasing costs associated with health care plans may adversely affect our results of operations.

Increasing levels of large individual health care claims and overall health care claims could have an adverse impact on our results of operations, financial condition or cash flows. Health care legislation could also significantly impact our benefit programs and costs.

We must rely on cash from our subsidiaries to make dividend payments.

Investments in our subsidiaries are our primary assets. Substantially all our operations are conducted by our subsidiaries. Consequently, our operating cash flows and ability to service our debt and pay dividends depends upon the operating cash flows of our subsidiaries and their payment of dividends.

Our subsidiaries are separate legal entities that have no obligation to pay any amounts due pursuant to our obligations or to make any funds available for dividends on our common stock. In addition, each subsidiary's ability to pay dividends depends on statutory and/or contractual restrictions which may include requirements to maintain minimum levels of equity ratios, working capital or assets.

If the utility subsidiaries were to cease making dividend payments, our ability to pay dividends on our common stock or otherwise meet our financial obligations could be adversely affected. Our utility subsidiaries are regulated by state utility commissions, which possess broad powers to prioritize that the needs of the utility customers are met. We may be negatively impacted by the actions of state commissions that limit the payment of dividends by our utility subsidiaries.

Federal tax law may significantly impact our business.

Our utility subsidiaries collect estimated federal, state and local tax payments through their regulated rates. Changes to federal tax law may benefit or adversely affect our earnings and customer costs. Tax depreciable lives and the value/availability of various tax credits or the timeliness of their utilization may impact the economics or selection of resources. If tax rates are increased, there could be timing delays before regulated rates provide for recovery of such tax increases in revenues. In addition, certain IRS tax policies, such as tax normalization, may impact our ability to economically deliver certain types of resources relative to market prices. Changes to the availability of tax credit transferability could impact our cash flows and the cost of certain types of resources.

Macroeconomic Risks

Economic conditions impact our business.

Xcel Energy's operations are affected by economic conditions, which correlates to customers/sales growth (decline). Economic conditions may be impacted by recessionary factors, rising interest rates, inflation, the impacts of federal policy and insufficient financial sector liquidity leading to potential increased unemployment, which may impact customers' ability to pay their bills, which could lead to additional bad debt expense.

Our utility subsidiaries face competitive factors, which could have an adverse impact on our financial condition, results of operations and cash flows. Further, worldwide economic activity impacts the demand for basic commodities necessary for utility infrastructure, which may inhibit our ability to acquire sufficient supplies. We operate in a capital-intensive industry and federal trade policy could significantly impact the cost of materials we use. There may be delays before these additional material costs can be recovered in rates.

The oil and gas industry represents our largest C&I customer base. Oil and natural gas prices are sensitive to market risk factors which may impact demand.

We face risks related to health epidemics and other outbreaks, which may have a material effect on our financial condition, results of operations and cash flows.

Health epidemics impact countries, communities, supply chains and markets. Uncertainty continues to exist regarding epidemics; the duration and magnitude of business restrictions including shutdowns (domestically and globally); the potential impact on the workforce including shortages of employees and third-party contractors due to quarantine policies, vaccination requirements or government restrictions; impacts on the transportation of goods, and the generalized impact on the economy.

We cannot ultimately predict whether an epidemic will have a material impact on our future liquidity, financial condition or results of operations. Nor can we predict the impact on the health of our employees, our supply chain or our ability to recover higher costs associated with managing an outbreak.

Operations could be impacted by war, terrorism or other events.

Our generation plants, fuel storage facilities, transmission and distribution facilities and information and control systems may be targets of terrorist activities. Any disruption could impact operations or result in a decrease in revenues and additional costs to repair and insure our assets. These disruptions could have a material impact on our financial condition, results of operations or cash flows.

The potential for terrorism has subjected our operations to increased risks and could have a material effect on our business. We have incurred increased costs for security and capital expenditures in response to these risks. The insurance industry has also been affected by these events and the availability of insurance may decrease. In addition, insurance may have higher deductibles, higher premiums and more restrictive policy terms.

A disruption of the regional electric transmission grid, interstate natural gas pipeline infrastructure or other fuel sources, could negatively impact our business, brand and reputation. Because our facilities are part of an interconnected system, we face the risk of possible loss of business due to a disruption caused by the actions of a neighboring utility.

We also face the risks of possible loss of business due to significant events such as severe storms, temperature extremes, wildfires, widespread pandemic, generator or transmission facility outage, pipeline rupture, railroad disruption, operator error, sudden and significant increase or decrease in wind generation or a workforce disruption.

In addition, major catastrophic events throughout the world may disrupt our business. While we have business continuity plans in place, our ability to recover may be prolonged due to the type and extent of the event. Xcel Energy participates in a global supply chain, which includes materials and components that are globally sourced. A prolonged disruption could result in the delay of equipment and materials that may impact our ability to connect, restore and reliably serve our customers.

A major disruption could result in a significant decrease in revenues, additional costs to repair assets, and an adverse impact on the cost and availability of insurance, which could have a material impact on our results of operations, financial condition or cash flows.

A cybersecurity incident or security breach could have a material effect on our business.

We operate in an industry that requires the continued operation of sophisticated information technology, control systems and network infrastructure. In addition, we use our systems and infrastructure to create, collect, use, disclose, store, dispose of and otherwise process sensitive information, including Company data, customer energy usage data, and personal information regarding customers, employees and their dependents, contractors, shareholders and other individuals.

Xcel Energy's generation, transmission, distribution and fuel storage facilities, information technology systems and other infrastructure or physical assets as well as information processed in our systems (e.g., information regarding our customers, employees, operations, infrastructure and assets) could be affected by cybersecurity incidents, including those caused by human error.

The utility industry has been the target of several attacks on operational systems and has seen an increased volume and sophistication of cybersecurity incidents from international activist organizations, other countries and individuals. We expect to continue to experience attempts to compromise our information technology and control systems, network infrastructure and other assets.

Cybersecurity incidents could harm our businesses by limiting our generation, transmission and distribution capabilities, delaying our development and construction of new facilities or capital improvement projects to existing facilities, disrupting our customer operations or causing the release of customer information, all of which would likely receive state and federal regulatory scrutiny and could expose us to liability.

Xcel Energy's generation, transmission systems and natural gas pipelines are part of an interconnected system. Therefore, a disruption caused by the impact of a cybersecurity incident on the regional electric transmission grid, natural gas pipeline infrastructure or other fuel sources of our third-party service providers' operations, could also negatively impact our business.

Advancements in artificial intelligence and large language models may increase cybersecurity threats and operational risks. Threat actors may use artificial intelligence to enhance their attacks, increasing the frequency, sophistication and potential impact of cyber incidents affecting our IT and OT environment.

Our supply chain for procurement of digital equipment and services may expose software or hardware to these risks and could result in a breach or significant costs of remediation. We are unable to quantify the potential impact of cybersecurity threats or subsequent related actions. Cybersecurity incidents and regulatory action could result in a material decrease in revenues and may cause significant additional costs (e.g., penalties, third-party claims, repairs, insurance or compliance) and potentially disrupt our supply and markets for natural gas, oil and other fuels.

We maintain security measures to protect our information technology and control systems, network infrastructure and other assets. However, these assets and the information they process may be vulnerable to cybersecurity incidents, including asset failure or unauthorized access to assets or information.

A failure or breach of our technology systems or those of our third-party service providers could disrupt critical business functions and may negatively impact our business, our brand, and our reputation. The cybersecurity threat is dynamic and evolves continually, and our efforts to prioritize network protection may not be effective given the constant changes to threat vulnerability.

While the Company maintains insurance relating to cybersecurity events, such insurance is subject to a number of exclusions and may be insufficient to offset any losses, costs or damages experienced. Also, the market for cybersecurity insurance is relatively new and coverage available for cybersecurity events is evolving as the industry matures.

Our operating results may fluctuate on a seasonal and quarterly basis and can be adversely affected by milder weather.

Our electric and natural gas utility businesses are seasonal, and weather patterns can have a material impact on our operating performance. Demand for electricity is often greater in the summer and winter months associated with cooling and heating. Because natural gas is heavily used for residential and commercial heating, the demand depends heavily upon weather patterns. A significant amount of natural gas revenues are recognized in the first and fourth quarters related to the heating season. Accordingly, our operations have historically generated less revenues and income when weather conditions are milder in the winter and cooler in the summer. Unusually mild winters and summers could have an adverse effect on our financial condition, results of operations or cash flows.

Public Policy Risks

Increased risks of regulatory penalties could negatively impact our business.

The Energy Act increased civil penalty authority for violation of FERC statutes, rules and orders. FERC can impose penalties of up to $1.5 million per violation per day, particularly as it relates to energy trading activities for both electricity and natural gas. In addition, NERC electric reliability standards and critical infrastructure protection requirements are mandatory and subject to potential financial penalties. Also, the PHMSA, Occupational Safety and Health Administration and other federal agencies have the authority to assess penalties.

In the event of serious incidents, these agencies may pursue penalties. In addition, certain states have the authority to impose substantial penalties. If a serious reliability, cybersecurity or safety incident did occur, it could have a material effect on our results of operations, financial condition or cash flows.