Xcel Energy (XEL) Q3 2026 Earnings: Sales Growth Back to 3%, Colorado Rates Set

Xcel Energy (XEL) Q3 2026 earnings, released on October 29, 2026 in an 8-K earnings release and a 10-Q for the quarter ended September 30, showed weather-normalized electricity sales returning close to the company's assumption and new Colorado rates taking effect [1]. Four questions mattered going in: whether investment recovery could outpace interest, whether weather-normalized sales could return to about 3%, whether Colorado subsidiary PSCo could repair its return with new rates, and how much equity the new five-year plan would need. The quarter confirmed the sales and PSCo points, and ongoing earnings per share (EPS) rose 22.6% year over year to $1.52 [1]. The growth in interest costs, however, has caught up with the growth in investment recovery, and a substantial part of the profit came from weather and investment gains. The new plan raises base investment to $70 billion while equity needs rise only modestly.

Xcel Energy is a regulated US electric and natural gas utility that serves about 3.9 million electric customers in eight states through four subsidiaries [2]. The company turns capital spending into regulated assets and recovers that investment, plus profit, at the return on equity (ROE) its regulators authorize. Fuel costs are passed through to customers.

Weather-normalized sales growth returned to about 3%

Weather-normalized retail electric sales, which strip out unusual temperatures, grew 3.0% year over year in the third quarter, twice the 1.5% rate of the second quarter [3][4]. Growth for the first nine months was 2.5%. In the third quarter, commercial and industrial (C&I) sales at SPS, which serves Texas and New Mexico, grew 5.2%, while PSCo grew only 1.0% [3].

Existing customers using more power drove the increase. SPS C&I use per customer rose 5.6% in the first nine months, which the company attributed to energy-sector activity and manufacturing across its service areas [5]. The "sales and demand" line added $42 million to electric revenue year over year, up from $25 million in the second quarter [6][7].

The company kept its 2026 weather-normalized sales growth assumption of about 3% and introduced a 2027 assumption of about 5% [8][9]. Whether the full year reaches about 3% depends on the fourth quarter. Data centers do not yet contribute to sales. Xcel announced no new supply agreement this quarter; management said it is negotiating with a large counterparty to reach its target of signing 1 GW by year-end, and its target of another 3 GW in 2027 is unchanged [10][11]. SPS has filed large-load tariff changes in Texas for loads above 75 MW, and a Colorado large-load tariff decision is expected in late 2026 or early 2027 [12].

New Colorado rates are in place and PSCo earnings recovered

PSCo's earnings contribution rose year over year in the third quarter. Its GAAP contribution was $0.57 per share, compared with $0.08 a year earlier, when results included the wildfire settlement charge; on an ongoing basis the contribution rose $0.13 [13][14]. The company attributed year-to-date growth to higher recovery of electric infrastructure investment and higher AFUDC, an accounting credit for the financing cost of construction, partly offset by higher interest and depreciation [14].

Both rate cases are now settled. Colorado regulators decided in September on an annual electric revenue increase of $184 million at an authorized ROE of 9.3%, and PSCo must file a prudence review of the outage at the Comanche Unit 3 coal plant in June 2027 [15]. The natural gas settlement, a $123 million revenue increase, was approved with minor modifications and took effect in October [16]. PSCo's ongoing ROE was only 7.55% in 2025 [17].

Not all of the quarter's gain came from the new rates. Colorado has no sales true-up mechanism that adjusts revenue to actual volumes, and PSCo's actual sales rose 7.1% against 1.0% weather-normalized growth, which points to a clear contribution from hot weather [18][3]. The company did not split PSCo's increase between weather and rates. Repair of the return has to be confirmed in the fourth quarter, the first full quarter under the new electric rates, and under normal weather.

Conclusion

The report confirms two revenue improvements, but earnings quality deserves a discount. Equity-method investment income added $0.09 per share in the third quarter, mainly from unrealized gains in energy technology funds, and weather added about $0.063 year over year; together they account for more than half of the $0.28 EPS increase [19][20]. Interest charges rose $100 million in the quarter, roughly matching the $93 million revenue increase from non-fuel riders [21][6]. The company narrowed its 2026 guidance to $4.10 to $4.16; after the $3.37 earned in the first nine months, the range implies fourth-quarter EPS below the prior-year quarter [22][1][23].

The new five-year plan expands investment and adds debt. Base capital spending for 2027 to 2031 is $70 billion, funded by $35.8 billion of operating cash, $26.19 billion of new debt and $8 billion of equity; the prior plan's equity need was $7 billion [24][25][26]. The company issued 2027 EPS guidance of $4.48 to $4.62 [27]. The next tests are whether the 1 GW data center agreement is signed by year-end, how PSCo earns under normal weather, and whether investment recovery can cover rising interest on the new debt.

Sources

[1] XEL 8-K filed 2026-10-29 (3Q26 results) · EPS summary (2026-10-29)

[2] XEL 10-K filed 2026-02-25 · company overview (2026-02-25)

[3] XEL 8-K filed 2026-10-29 (3Q26 results) · weather-normalized sales (2026-10-29)

[4] XEL 8-K filed 2026-07-30 (2Q26 results) · retail sales growth (2026-07-30)

[5] XEL 8-K filed 2026-10-29 (3Q26 results) · sales drivers (2026-10-29)

[6] XEL 8-K filed 2026-10-29 (3Q26 results) · electric revenue bridge (2026-10-29)

[7] XEL 8-K filed 2026-07-30 (2Q26 results) · electric revenue bridge (2026-07-30)

[8] XEL 8-K filed 2026-10-29 (3Q26 results) · 2026 guidance assumptions (2026-10-29)

[9] XEL 8-K filed 2026-10-29 (3Q26 results) · 2027 guidance assumptions (2026-10-29)

[10] XEL earnings call 2026-10-29 (3Q26) summary · data center demand (2026-10-29)

[11] XEL earnings call 2026-10-29 (3Q26) summary · Q&A data center (2026-10-29)

[12] XEL 10-Q filed 2026-10-29 · large load tariffs (2026-10-29)

[13] XEL 8-K filed 2026-10-29 (3Q26 results) · EPS by subsidiary (2026-10-29)

[14] XEL 8-K filed 2026-10-29 (3Q26 results) · subsidiary earnings commentary (2026-10-29)

[15] XEL 8-K filed 2026-10-29 (3Q26 results) · Colorado electric rate case (2026-10-29)

[16] XEL 8-K filed 2026-10-29 (3Q26 results) · Colorado natural gas rate case (2026-10-29)

[17] XEL 10-K filed 2026-02-25 · utility subsidiary rate base and ROE (2026-02-25)

[18] XEL 8-K filed 2026-10-29 (3Q26 results) · actual sales (2026-10-29)

[19] XEL 8-K filed 2026-10-29 (3Q26 results) · EPS change components (2026-10-29)

[20] XEL 8-K filed 2026-10-29 (3Q26 results) · weather impact on EPS (2026-10-29)

[21] XEL 8-K filed 2026-10-29 (3Q26 results) · consolidated income statement (2026-10-29)

[22] XEL 8-K filed 2026-10-29 (3Q26 results) · 2026 earnings guidance (2026-10-29)

[23] XEL 10-K filed 2026-02-25 · 2025 diluted EPS by subsidiary (2026-02-25)

[24] XEL 8-K filed 2026-10-29 (3Q26 results) · 2027-2031 base capital forecast (2026-10-29)

[25] XEL 8-K filed 2026-10-29 (3Q26 results) · financing plan 2027-2031 (2026-10-29)

[26] XEL earnings call 2026-07-30 (2Q26) · equity financing progress (2026-07-30)

[27] XEL 8-K filed 2026-10-29 (3Q26 results) · 2027 earnings guidance (2026-10-29)