Xcel Energy Inc. · NASDAQ:XEL
Xcel Energy — Berenson – Wall Street Access West Coast Seminar 2007
31 slides from Xcel Energy's conference presentation, Feb 14, 2007
Slide 1: Building the Core Sustainable Growth
Building the Core Sustainable Growth George Tyson Vice President and Treasurer Berenson – Wall Street Access West Coast Seminar February 15, 2007
Slide 2: Safe Harbor
This material includes forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements include projected earnings, cash flows, capital expenditures and other statements and are identified in this document by the words “anticipate,” “estima
Slide 3: Financial Objectives
Financial Objectives 5% – 7% EPS growth * Dividend per share growth 2% – 4% per year Improve credit rating * Excluding any impact from corporate-owned life insurance (COLI) program
Slide 4: Strategy: Building the Core
Strategy: Building the Core Invest in our fully regulated utility operations — Meet customers’ needs — Provide environmental leadership Investment facilitated by constructive regulatory climate Timely regulatory recovery Earn a reasonable authorized return
Slide 5: 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 6: Environmental Leadership
Environmental Leadership Largest U.S. wind provider — 1,300 MW on-line — 2,800 MW projected by year-end 2007 Over 2,000 MW of conservation and DSM achieved Largest U.S. solar photovoltaic project Evaluating an IGCC with sequestration Reducing emissions and increasing efficiency — MERP — Comanche — S
Slide 7: Getting the Rules Right
Getting the Rules Right Helping shape public policy Credibility and leadership to achieve consensus on the appropriate balance: — Customers — Communities — Environmentalists — Regulators — Legislators — Investors
Slide 8: Regulatory & Legislative Accomplishments
Regulatory & Legislative Accomplishments MERP – Forward recovery Comanche 3 – Forward CWIP through rate case filing Transmission investment – Forward recovery – MN & SD Environmental expenditures – Forward recovery – MN Purchased capacity cost adjustment – CO Renewable investments – Forward recovery
Slide 9: Allocation of Capital
Allocation of Capital Investment driven by: — Customer need — Managing cost — Supportive regulatory environment — Risk-adjusted return Increased customer and shareholder value
Slide 10: Significant Capital Investment Pipeline
Significant Capital Investment Pipeline Growing service territory Environmental initiatives Renewable portfolio standards Major projects included in capital forecast: — MERP — Comanche 3 — CapX 2020 — Nuclear life extension and uprates Capital investment will drive sustainable growth
Slide 11: Potential Project – Sherco Upgrade
Potential Project – Sherco Upgrade Increase Xcel Energy’s capacity by 140 MW Upgrade and enhance environmental system Construction would start late 2008 through 2012 Seeking rider recovery in Minnesota Commission approval required Capital investment = approximately $900 million
Slide 12: Potential Project – WYCO
Existing business structure (established 1999) Joint venture with Colorado Interstate Gas (50/50) 168 miles of gas transmission pipeline 7 Bcf of gas storage Xcel Energy investment = approximately $145 million CIG will construct, lease and operate the facility Regulated by FERC Operational in 2009 P
Slide 13: Potential Project – Wind Generation
Potential Project – Wind Generation Acquire 100 MW of wind generation Build-owner-transfer structure Capital investment of approximately $210 million Commission approval required Rider recovery in Minnesota
Slide 14: Potential Project – IGCC
Potential Project – IGCC Potential 300-350 MW demonstration project Committed $3.5 million for project development Determine feasibility of IGCC at higher altitude using western coal Legislation passed providing rider recovery Plan to file with Colorado PUC in 2007 Potential capital investment to be
Slide 15: Constructive Regulation
Constructive Regulation Recent 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 Equi
Slide 16: Texas Electric Rate Case Highlights
Texas Electric Rate Case Highlights Requested $63 million increase, capped at $48 million Electric rate base = $943 million 11.6% return on common equity Equity ratio = 51% Historical test year adjusted for known and measurable Docket also includes fuel reconciliation for 2004-05 Expect rates to be
Slide 17: Minnesota Gas Rate Case Highlights
Minnesota Gas Rate Case Highlights Requested $18.5 million increase Gas rate base = $440 million 11% return on common equity Equity ratio = 52% Partial decoupling Forward test year Interim rates of $15.9 million went into effect January 8, 2007
Slide 18: Colorado Gas Rate Case Highlights
Colorado Gas Rate Case Highlights Requested $41.5 million increase Gas rate base = $1.1 Billion 11% return on common equity Equity ratio = 60% Partial decoupling Historical test year adjusted for known and measurable
Slide 19: Wisconsin Gas and Electric Rate Cases; North Dakota Gas Rate Case
Wisconsin Gas and Electric Rate Cases North Dakota Gas Rate Case Other Rate Case Highlights Expected to be filed in June Rates in effect in early 2008 Requested $2.8 million rate increase Decision expected in the summer of 2007
Slide 20: 2007 Earnings Guidance
2007 Earnings Guidance Range Regulated Utility $1.39 – $1.49 Holding Company and Other (0.15) COLI – Tax Benefit 0.11 Continuing Operations $1.35 – $1.45 Dollars per share 2007
Slide 21: Attractive Total Return
Attractive Total Return Sustainable 5% – 7% earnings per share growth Dividend yield 4% Dividend growth of 2% – 4% per year Sustainable Growth Collaborative process that balances various interests and delivers value to customers and investors Constructive rate case outcomes Forward recovery on signi
Slide 22: Xcel Energy
Q XeelEnergy oil
Slide 23: Northern States Power Company- Minnesota 45% Net Income Public Service Company of Colorado 40%
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 24: Owned Generating Facilities and Energy Supply Mix
Coal 36 8,138 Natural Gas 61 4,918 Nuclear 3 1,617 Hydro 83 508 Oil 24 492 RDF 6 96 Wind - 25 Total 15,794 2005 Owned Generating Facilities Unit Type Number MW Xcel Energy Supply Sources Nuclear 10% Coal ** 45% Gas & Oil 38% * Includes purchases ** Low-sulfur western coal Renewables 7% 2005 Energy S
Slide 25: 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 26: COLI Litigation
COLI Litigation Positive pre-deduction cash flows Mortality gains The buildup of cash values The court’s opinion in the Dow case outlined three indicators of potential economic benefits to be examined in a COLI case. In Xcel Energy’s COLI case, the plans: Were projected to have sizeable pre-deductio
Slide 27: Minnesota Cost Recovery Mechanisms
Minnesota Cost Recovery Mechanisms Projected electric fuel and purchased energy costs billed for the current month with subsequent true-up; MISO energy and ancillary services being recovered through FCA. Projected purchased gas cost billed for the current month with subsequent true-up Conservation I
Slide 28: 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 29: 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 30: 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 31: 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 South Dakota’s fuel and purchased power costs are recovered through a fuel clause, which is reset based on the previous two
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