XCEL ENERGY INC Q2 FY2025 earnings call

• Xcel Energy invested $2.6 billion in resilient and reliable energy infrastructure during the quarter.
• The company identified an additional $15 billion of capital investment need to meet customer demands, driven by generation and transmission projects in regions like Texas, New Mexico, Minnesota, and Colorado.
• Regulatory updates included filing generation plans in Texas and New Mexico, receiving approval in Minnesota for certain projects, and working on the Colorado resource plan.
• Wildfire risk reduction efforts continued with investments in technologies and operational measures, supported by state commissions.
• Progress on data centers included active negotiations on ESAs and progress on the Smokehouse Creek wildfire claims process, with reaffirmed liability estimates.

In the second quarter of 2025, Xcel Energy delivered earnings of $0.75 per share. Revenue from electric and natural gas service increased due to rate case outcomes and sales growth. Weather-normalized electric sales saw a 3.5% increase in the second quarter. Electric and natural gas service contributed to higher revenue, with AFUDC and rate case outcomes driving earnings, offset by higher interest charges, depreciation, and O&M. The company's financial performance also included a focus on infrastructure investment and progress in various regional projects.

• Reaffirmed 2025 EPS guidance range of $3.75 to $3.85 per share.
• Confident in delivering long-term earnings growth in the upper half of the 6%-8% target range.
• Expected to formally update the 5-year forecast through 2030 in the third quarter earnings update.

• Uncertainty in the energy policy landscape, including federal legislation impacts on tax credits and permitting.
• Wildfire litigation, such as the Marshall Fire trial, with ongoing preparation and potential settlement discussions.
• Regulatory approvals needed for various generation and transmission projects in different regions.

Q: On the CapEx upside and how it will convert to the base capital plan next quarter?

A: Brian and Bob discuss the incremental CapEx from generation and transmission projects, emphasizing transparency in the Q3 update regarding what's in the base plan and what's outside.

Q: On the SPS resource plan and turbine procurement?

A: Robert and Brian discuss turbine reservations, readiness for gas generation projects in the SPS portfolio, and the company's position in procuring turbines to support projects.

Q: On OBB and the treasury order?

A: Brian discusses being well-positioned with the base plan and ongoing projects, noting the company's progress in starting physical work on projects.

Q: On the Marshall Fire trial?

A: Bob discusses trial preparation, the company's stance that its equipment didn't cause the second ignition, and the possibility of settlement discussions before and during the trial.

Q: On competitive transmission and data centers?

A: Brian and Bob discuss the disciplined approach to competitive transmission projects outside service territories and progress on data center contracts, including ongoing negotiations and pipeline details.

Q: On federal land and Marshall Fire damages?

A: Brian confirms no Xcel Energy projects are on federal land. Bob discusses the trial details regarding the fire spread and the company's position on causality in the Marshall Fire.

Q: On equity needs and asset sales?

A: Brian discusses using equity issuance to fund accretive growth and the company's disciplined approach to asset sales, indicating no interest in minority interest sales for funding investments.