Xcel Energy Inc. · NASDAQ:XEL
Xcel Energy — AGA Financial Forum 2007
32 slides from Xcel Energy's conference presentation, Apr 27, 2007
Slide 1: Sustainable Growth
Sustainable Growth AGA Financial Forum April 29 – May 1, 2007 Ben Fowke Vice President and CFO
Slide 2: Safe Harbor
This material includes forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements include projected earnings, cash flows, capital expenditures and other statements and are identified in this document by the words “anticipate,” “estima
Slide 3: Investment Merits
Investment Merits * Represents expected average annual normalized EPS growth, excluding any impact from COLI program Sustainable EPS growth of 5% – 7%* Dividend growth of 2% – 4% per year Dividend yield 4%
Slide 4: Strategy: Building the Core
Strategy: Building the Core Get the rules right Invest in fully regulated utility operations — Meet customers’ needs — Provide environmental leadership Earn a reasonable return
Slide 5: Environmental Leadership
Environmental Leadership Number 1 utility wind provider — 1,300 MW on-line — 2,800 MW projected by year-end 2007 Over 2,000 MW of conservation and DSM achieved Largest U.S. solar photovoltaic project Evaluating an IGCC with sequestration Reducing emissions and increasing efficiency — MERP — Comanche
Slide 6: Getting the Rules Right
Getting the Rules Right MERP – Forward recovery Comanche 3 – Forward CWIP through rate case filing Transmission – Forward recovery – MN, CO, ND & SD Environmental – Forward recovery – MN, ND & SD Purchased capacity cost adjustment – CO Renewable investments – Forward recovery – CO IGCC – Supportive
Slide 7: Constructive Regulation
Constructive Regulation 2006 rate case outcomes Dollars in millions Colorado Gas $34.5 $22.0 11.0% 10.5% Wisconsin Electric 53.1 43.4 11.9% 11.0% Wisconsin Gas 7.8 3.9 11.9% 11.0% Minnesota Electric 156 131/115 * 11.0% 10.54% Colorado Electric 208 151 11.0% 10.50% Dollar Increase Return on Equity Re
Slide 8: Texas Electric Rate Case Settlement
Texas Electric Rate Case Settlement Requested rate increase of $48 million Unanimous settlement reached: — $23 million base rate increase — $27 million of 2004-2005 fuel expense disallowed; reserve was established prior to 2007 — Potential disallowance for the El Paso contract capped at $6.3 million
Slide 9: Pending Gas Rate Cases
Pending Gas Rate Cases Dollars in millions Minnesota $16.8 10.75% $15.9 Summer 2007 Colorado $41.9 11.0% NA Summer 2007 North Dakota $2.8 11.3% $2.2 Summer 2007 Revenue Requested Interim Jurisdiction Request ROE Rates Decision
Slide 10: Significant Capital Investment Pipeline
Significant Capital Investment Pipeline Growing service territory Environmental initiatives Renewable portfolio standards Capital investment will drive sustainable growth
Slide 11: Capital Expenditure Forecast
Capital Expenditure Forecast Dollars in millions Denotes enhanced recovery process 2007 2008 2009 2010 2011 Base & Other Cap Ex $ 955 $ 950 $ 950 $1,000 $ 965 MERP 275 170 35 10 0 Comanche 3 345 275 55 15 0 MN Wind Transmission 150 20 50 15 0 CapX 2020 5 20 110 240 180 Sherco Upgrade 10 65 200 245 1
Slide 12: Renewable Portfolio Standards (RPS)
Renewable Portfolio Standards (RPS) In 2007, a law was passed in Minnesota requiring a 30% renewable standard by 2020 In 2007, a law was passed in Colorado requiring a 20% renewable standard by 2020 RPS creates investment opportunities for wind generation and transmission lines
Slide 13: Xcel Energy and Wind Potential
Wind Density High Low Source: National Renewable Energy Laboratory Xcel Energy and Wind Potential Xcel Energy States Served
Slide 14: Projected Wind Generation
Projected Wind Generation MW 1,300 2,800 6,000 2006 2007 2020
Slide 15: MERP Update
MERP Update Dollars in millions In Service June 2007 May 2008 May 2009 Cost to Date $415 $210 $65 $690 Forecast $425 $340 $245 $1,010 ROE 10.55% 11.00% 10.55% 10.74% Percent Complete < 95% 45% 5% Capacity Increase 0 MW 245 MW 55 MW 300 MW High King Bridge Riverside Total
Slide 16: Comanche Update
Comanche 3 Update Percent complete: Design 75% Procurement 95% Construction 15% Permitting for construction is complete and all environmental permits have been attained Budget: $1,350 million* Project costs are on track with budget Cost to date: $470 million * Includes costs for transmission line up
Slide 17: Strong Operational Performance
Strong Operational Performance Nuclear Capacity Factors 2003 2004 2005 2006 System Reliability (SAIDI) - Minutes 2003 2005 2006 2004 105 81.4 99.5 79.2 92.3 91.2 90.4 92.8 OSHA Incident Rate 2003 2005 2006 2004 3.62 3.40 2.76 2.53 Residential Satisfaction 88% 85% 85% 85% 2003 2005 2006 2004
Slide 18: 2007 Earnings Guidance Range
2007 Earnings Guidance Range Dollars per share $1.20 $1.35 $1.35-$1.45 Regulated Utility $1.39 – $1.49 Holding Company (0.15) COLI – Tax Benefit 0.11 Cont. Operations $1.35 – $1.45 2005 Actual 2006 Actual 2007 Guidance Guidance Range
Slide 19: Attractive Total Return
Attractive Total Return Sustainable 5% – 7% earnings per share growth Dividend yield 4% Dividend growth of 2% – 4% per year Summary Low risk, fully regulated and integrated utility Constructive regulatory environment with enhanced recovery of major capital projects Pipeline of investment opportuniti
Slide 20: Appendix
Appendix
Slide 21: Delivering Competitively Priced Energy
Delivering Competitively Priced Energy Summer 2006 EEI Typical Bills Milwaukee Cents per kWh (Retail) 7.01 Des Moines Amarillo Kansas City Denver Mpls/St. Paul Boston Chicago Phoenix Salt Lake City St. Louis Miami New York Washington DC 6.64 7.79 0 3 6 9 12 15 18 21
Slide 22: Northern States Power Company-Minnesota
Northern States Power Company- Minnesota 45% Net Income Public Service Company of Colorado 40% Net Income Southwestern Public Service 8% Net Income Northern States Power Company- Wisconsin 7% Net Income 5th Largest Combination Electric and Gas Utility (based on customers) Traditional Regulation 2006
Slide 23: CapX 2020 Update
CapX 2020 Update South Dakota Iowa Minnesota Wisconsin North Dakota Group II Group III Group I Group I Total Cost $1.3 Billion Xcel Share $700 Million Certificate of Need to be filed in early summer In Service 2011 – 2012 Group II In Service 2012 – 2020 Group III In Service 2014 – 2020
Slide 24: 2006 Owned Generating Facilities
Coal 35 8,182 Natural Gas 58 4,987 Nuclear 3 1,668 Hydro 83 508 Oil 24 460 RDF 6 67 Wind 37 27 Total 15,899 2006 Owned Generating Facilities Unit Type Units MW Xcel Energy Supply Sources Nuclear 12% Coal ** 52% Gas & Oil 27% * Includes purchases ** Low-sulfur western coal Renewables 9% 2006 Energy S
Slide 25: Senior Debt Ratings
Senior Debt Ratings Secured Unsecured Holding Co. BBB+ Baa1 BBB- NSPM A+ A2 A- A A3 BBB- NSPW A+ A2 A- A A3 BBB PSCo A- A3 A- BBB+ Baa1 BBB- SPS BBB+ Baa1 BBB Fitch Moody’s S&P Fitch Moody’s S&P
Slide 26: Debt Maturities
Debt Maturities Dollars in millions PSCo $100M due 3/1/07 @ 7.11% Xcel $230M due 11/1/07 @ 7.50% 0 200 400 600 800 1,000 1,200 2007 2008 2009 2010 2011 2012 2013 2014 2015 Xcel NSPM NSPW PSCo SPS
Slide 27: COLI Litigation
COLI Litigation Positive pre-deduction cash flows Mortality gains The buildup of cash values The court’s opinion in the Dow case outlined three indicators of potential economic benefits to be examined in a COLI case In Xcel Energy’s COLI case, the plans: Were projected to have sizeable pre-deduction
Slide 28: Minnesota Cost Recovery Mechanisms
Minnesota Cost Recovery Mechanisms Projected electric fuel and purchased energy costs billed for the current month with subsequent true-up; MISO energy and ancillary services being recovered through FCA Projected purchased gas cost billed for the current month with subsequent true-up Conservation Im
Slide 29: Colorado Cost Recovery Mechanisms
Colorado Cost Recovery Mechanisms Quarterly Energy Cost Adjustment to recover electric fuel and purchased energy costs Monthly Gas Cost Adjustment recovers natural gas commodity, interstate pipeline and storage costs Annual Purchased Capacity Adjustment to recover capacity costs of purchased power c
Slide 30: SPS Cost Recovery Mechanisms
SPS Cost Recovery Mechanisms Fuel and purchased energy costs are recovered through a fixed-fuel and purchased energy recovery factor, which is part of the retail electric rates The Texas ECA retail fuel factors change each May 1st and November 1st based on projected costs Material over or under reco
Slide 31: Wisconsin Cost Recovery Mechanisms
Wisconsin Cost Recovery Mechanisms Projected electric fuel and purchased energy costs are included in base rates Prospective adjustments are handled via the fuel rules monitoring process which allows for positive or negative adjustments to be applied to the fuel recovery rate The fuel recovery rate
Slide 32: Dakota Cost Recovery Mechanisms
Dakota Cost Recovery Mechanisms North Dakota’s fuel and purchased power costs are recovered through a fuel clause, which is reset based on the previous four months average rate North Dakota South Dakota South Dakota’s fuel and purchased power costs are recovered through a fuel clause, which is reset