- First quarter GAAP diluted earnings per share were $0.76 in
2023 compared with $0.70 in 2022.
- Xcel Energy reaffirms 2023 EPS guidance of $3.30 to $3.40.
Xcel Energy Inc. (NASDAQ: XEL) today reported 2023 first quarter
GAAP and ongoing earnings of $418 million, or $0.76 per share,
compared with $380 million, or $0.70 per share in the same period
in 2022.
Earnings reflect recovery of electric and natural gas
infrastructure investment and other regulatory outcomes, partially
offset by higher depreciation, operating and maintenance (O&M)
expenses and interest charges.
“We delivered solid first-quarter results and continue to make
significant progress on leading the clean energy transition. We are
in the process of evaluating thousands of MWs of renewables for our
system as we work through the RFPs across all our service
territories. In addition, we recently submitted two applications to
secure grants from the Department of Energy to develop hydrogen
hubs in Colorado and the Midwest,” said Bob Frenzel chairman,
president and CEO of Xcel Energy.
“Energy affordability for customers remains a top priority for
Xcel Energy, and customers have faced hardships during the recent
period of high natural gas commodity costs. In an effort to support
them, we have lowered the natural gas recovery charge in Colorado
four times, or 58% during the winter, to ensure customers get
immediate relief as natural gas commodity prices decline
nationally. In addition, Xcel Energy took steps this quarter to
continue to support low income customers burdened by high energy
costs. We are also working with stakeholders to evaluate structural
changes in how we purchase natural gas to help reduce costs and
protect customers from future natural price volatility,” Frenzel
added.
At 9:00 a.m. CDT today, Xcel Energy will host a conference call
to review financial results. To participate in the call, please
dial in 5 to 10 minutes prior to the start and follow the
operator’s instructions.
US Dial-In:
(866) 580-3963
International Dial-In:
(400) 120-0558
Conference ID:
5018521
The conference call also will be simultaneously broadcast and
archived on Xcel Energy’s website at www.xcelenergy.com. To access
the presentation, click on Investors under Company. If you are
unable to participate in the live event, the call will be available
for replay from April 27th through May 1st.
Replay Numbers
US Dial-In:
1 (866) 583-1035
Access Code:
5018521#
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 2023 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, and expected impact on our results of operations,
financial condition and cash flows of resettlement calculations and
credit losses relating to certain energy transactions, 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 in Xcel Energy’s Annual Report on Form 10-K for
the fiscal year ended Dec. 31, 2022 and subsequent filings with the
Securities and Exchange Commission, 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; commodity risks
associated with energy markets and production; rising energy prices
and fuel costs; qualified employee work force and third-party
contractor factors; violations of our Codes of Conduct; our ability
to recover costs and our subsidiaries’ ability to recover costs
from 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, the
duration and magnitude of business restrictions including shutdowns
(domestically and globally), the potential impact on the workforce,
including shortages of employees or 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; effects of geopolitical events,
including war and acts of terrorism; cyber security 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; 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.
This information is not given in connection
with any sale, offer for sale or offer to buy any security.
XCEL ENERGY INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
INCOME (UNAUDITED)
(amounts in millions, except per
share data)
Three Months Ended March
31
2023
2022
Operating revenues
Electric
$
2,763
$
2,633
Natural gas
1,288
1,090
Other
29
28
Total operating revenues
4,080
3,751
Operating expenses
Electric fuel and purchased power
1,117
1,094
Cost of natural gas sold and
transported
844
710
Cost of sales — other
12
10
Operating and maintenance expenses
650
602
Conservation and demand side management
expenses
76
92
Depreciation and amortization
624
562
Taxes (other than income taxes)
184
171
Total operating expenses
3,507
3,241
Operating income
573
510
Other income, net
5
1
Earnings from equity method
investments
11
15
Allowance for funds used during
construction — equity
19
13
Interest charges and financing
costs
Interest charges — includes other
financing costs of $8 and $8, respectively
253
214
Allowance for funds used during
construction — debt
(10
)
(5
)
Total interest charges and financing
costs
243
209
Income before income taxes
365
330
Income tax benefit
(53
)
(50
)
Net income
$
418
$
380
Weighted average common shares
outstanding:
Basic
551
545
Diluted
551
545
Earnings per average common
share:
Basic
$
0.76
$
0.70
Diluted
0.76
0.70
XCEL ENERGY INC. AND SUBSIDIARIES Notes
to Investor Relations Earnings Release (Unaudited)
Due to the seasonality of Xcel Energy’s operating results,
quarterly financial results are not an appropriate base from which
to project annual results.
Non-GAAP Financial Measures
The following discussion includes financial information prepared
in accordance with generally accepted accounting principles (GAAP),
as well as certain non-GAAP financial measures such as ongoing
return on equity (ROE), ongoing earnings and ongoing diluted EPS.
Generally, a non-GAAP financial measure is a measure of a company’s
financial performance, financial position or cash flows that
adjusts measures calculated and presented in accordance with GAAP.
Xcel Energy’s management uses non-GAAP measures for financial
planning and analysis, for reporting of results to the Board of
Directors, in determining performance-based compensation and
communicating its earnings outlook to analysts and investors.
Non-GAAP financial measures are intended to supplement investors’
understanding of our performance and should not be considered
alternatives for financial measures presented in accordance with
GAAP. These measures are discussed in more detail below and may not
be comparable to other companies’ similarly titled non-GAAP
financial measures.
Ongoing ROE
Ongoing ROE is calculated by dividing the net income or loss of
Xcel Energy or each subsidiary, adjusted for certain nonrecurring
items, by each entity’s average stockholder’s equity. We use these
non-GAAP financial measures to evaluate and provide details of
earnings results.
Earnings Adjusted for Certain Items
(Ongoing Earnings and Ongoing Diluted EPS)
GAAP diluted EPS reflects the potential dilution that could
occur if securities or other agreements to issue common stock
(i.e., common stock equivalents) were settled. The weighted average
number of potentially dilutive shares outstanding used to calculate
Xcel Energy Inc.’s diluted EPS is calculated using the treasury
stock method. Ongoing earnings reflect adjustments to GAAP earnings
(net income) for certain items. Ongoing diluted EPS for Xcel Energy
is calculated by dividing net income or loss, adjusted for certain
items, by the weighted average fully diluted Xcel Energy Inc.
common shares outstanding for the period. Ongoing diluted EPS for
each subsidiary is calculated by dividing the net income or loss
for such subsidiary, adjusted for certain items, by the weighted
average fully diluted Xcel Energy Inc. common shares outstanding
for the period.
We use these non-GAAP financial measures to evaluate and provide
details of Xcel Energy’s core earnings and underlying performance.
We believe these measurements are useful to investors to evaluate
the actual and projected financial performance and contribution of
our subsidiaries. For the three months ended March 31, 2023 and
2022, there were no such adjustments to GAAP earnings and therefore
GAAP earnings equal ongoing earnings for these periods.
Note 1. Earnings Per Share
Summary
Xcel Energy’s first quarter diluted earnings were $0.76 per
share in 2023, compared with $0.70 per share in 2022. The increase
was driven by recovery of electric and natural gas infrastructure
investment, partially offset by higher depreciation, O&M
expenses and interest charges. Fluctuations in electric and natural
gas revenues associated with changes in fuel and purchased power
and/or natural gas sold and transported generally do not
significantly impact earnings (changes in costs are offset by the
related variation in revenues). Summarized diluted EPS for Xcel
Energy:
Three Months Ended March
31
Diluted Earnings (Loss) Per
Share
2023
2022
PSCo
$
0.39
$
0.32
NSP-Minnesota
0.25
0.23
SPS
0.10
0.10
NSP-Wisconsin
0.08
0.09
Earnings from equity method investments —
WYCO
0.01
0.01
Regulated utility (a)
0.83
0.75
Xcel Energy Inc. and Other
(0.07
)
(0.05
)
Total (a)
$
0.76
$
0.70
(a)
Amounts may not add due to rounding.
PSCo — Earnings increased $0.07 per share for the first
quarter of 2023. The higher earnings primarily reflect the timing
of recovery of electric and natural gas infrastructure investment
and the impact of colder than normal weather, partially offset by
increased depreciation, O&M expenses and interest charges.
Incremental investment recovery was implemented for electric
operations in April 2022 and natural gas operations in November
2022, resulting in higher revenues in the first quarter of 2023
compared to 2022. The year-over-year impact of these higher
revenues is not expected to continue throughout the rest of the
year. Earnings are not a result of higher natural gas prices as
PSCo does not profit on fuel or power costs purchased for its
customers.
NSP-Minnesota — Earnings increased $0.02 per share for
the first quarter of 2023. The increase is primarily due to
recovery of electric infrastructure investment, partially offset by
increased O&M expenses and depreciation.
SPS — Earnings were flat for the first quarter of 2023.
Recovery of electric infrastructure investment and strong sales
growth were offset by higher depreciation and O&M expenses.
NSP-Wisconsin — Earnings decreased $0.01 per share for
the first quarter of 2023. Recovery of electric and natural gas
infrastructure investment were more than offset by impacts of
warmer winter weather, higher depreciation and O&M
expenses.
Xcel Energy Inc. and Other — Primarily includes financing
costs at the holding company and earnings from Energy Impact
Partners (EIP) funds equity method investments. Earnings decreased
$0.02 per share for the first quarter, largely attributable to
higher interest charges.
Components significantly contributing to changes in 2023 EPS
compared to 2022:
Diluted Earnings (Loss) Per
Share
Three Months Ended March
31
GAAP and ongoing diluted EPS —
2022
$
0.70
Components of change - 2023 vs. 2022
Higher electric revenues, net of electric
fuel and purchased power
0.15
Higher natural gas revenues, net of cost
of natural gas sold and transported
0.09
Lower effective tax rate (ETR) (a)
0.02
Higher depreciation and amortization
(0.08
)
Higher O&M expenses
(0.06
)
Higher interest charges
(0.05
)
Higher taxes (other than income taxes)
(0.02
)
Other, net
0.01
GAAP and ongoing diluted EPS —
2023
$
0.76
(a)
Includes production tax credits (PTCs) and
plant regulatory amounts, which are primarily offset as a reduction
to electric revenues.
Note 2. Regulated Utility
Results
Estimated Impact of Temperature Changes on Regulated
Earnings — Unusually hot summers or cold winters increase
electric and natural gas sales, while mild weather reduces electric
and natural gas sales. The estimated impact of weather on earnings
is based on the number of customers, temperature variances, the
amount of natural gas or electricity historically used per degree
of temperature and excludes any incremental related operating
expenses that could result due to storm activity or vegetation
management requirements. As a result, weather deviations from
normal levels can affect Xcel Energy’s financial performance.
However, decoupling mechanisms in Colorado and proposed decoupling
mechanisms in Minnesota predominately mitigate the positive and
adverse impacts of weather for the electric utility in those
jurisdictions.
Normal weather conditions are defined as either the 10, 20 or
30-year average of actual historical weather conditions. The
historical period of time used in the calculation of normal weather
differs by jurisdiction, based on regulatory practice. To calculate
the impact of weather on demand, a demand factor is applied to the
weather impact on sales. Extreme weather variations, windchill and
cloud cover may not be reflected in weather-normalized
estimates.
Weather — Estimated impact of temperature variations on
EPS compared with normal weather conditions:
Three Months Ended March
31
2023 vs. Normal
2022 vs. Normal
2023 vs. 2022
Retail electric
$
0.002
$
0.020
$
(0.018
)
Decoupling
(0.006
)
(0.010
)
0.004
Electric total
$
(0.004
)
$
0.010
$
(0.014
)
Firm natural gas
0.029
0.016
0.013
Total
$
0.025
$
0.026
$
(0.001
)
Sales — Sales growth (decline) for actual and
weather-normalized sales in 2023 compared to 2022:
Three Months Ended March
31
PSCo
NSP-Minnesota
SPS
NSP-Wisconsin
Xcel Energy
Actual
Electric residential
0.6
%
(4.2
) %
(2.7
) %
(6.4
) %
(2.4
) %
Electric C&I
(1.2
)
(1.8
)
7.3
—
1.0
Total retail electric sales
(0.6
)
(2.6
)
5.3
(2.0
)
—
Firm natural gas sales
5.8
(10.1
)
N/A
(14.3
)
(1.1
)
Three Months Ended March
31
PSCo
NSP-Minnesota
SPS
NSP-Wisconsin
Xcel Energy
Weather-Normalized
Electric residential
(0.9
) %
(1.2
) %
3.1
%
(0.9
) %
(0.4
) %
Electric C&I
(1.4
)
(1.3
)
7.2
0.6
1.1
Total retail electric sales
(1.3
)
(1.3
)
6.3
0.2
0.6
Firm natural gas sales
(0.1
)
(1.4
)
N/A
(2.1
)
(0.7
)
Weather-normalized electric sales growth
(decline) — year-to-date
- PSCo — Residential sales declined due to decreased use per
customer, partially offset by a 1.3% increase in customers. The
C&I sales decline was attributable to decreased use per
customer, primarily due to a two-month outage at a large
manufacturing sector customer.
- NSP-Minnesota — Residential sales declined due to decreased use
per customer, partially offset by a 1.0% increase in customers. The
C&I sales decline was attributable to lower use per customer,
primarily driven by declines in the educational, transportation and
warehousing and retail trade sectors.
- SPS — Residential sales growth was primarily attributable to
increased use per customer, in addition to a 0.8% increase in
customers. C&I sales increased due to higher use per customer,
primarily driven by the energy sector.
- NSP-Wisconsin — Residential sales declined due to decreased use
per customer, primarily offset by a 0.7% increase in customers.
C&I sales growth was primarily associated with customer growth,
experienced primarily in the transportation and professional
services sectors.
Weather-normalized natural gas sales
growth (decline) — year-to-date
- Natural gas sales reflect a lower use per residential customer
in all jurisdictions, partially offset by an increase in C&I
use per customer in PSCo. In addition, residential and C&I
customer growth was 1.2% and 0.7%, respectively.
Electric Margin — Electric margin is presented as
electric revenues less electric fuel and purchased power expenses.
Expenses incurred for electric fuel and purchased power are
generally recovered through various regulatory recovery mechanisms.
As a result, changes in these expenses are generally offset in
operating revenues.
Electric revenues and fuel and purchased power expenses are
impacted by fluctuations in the price of natural gas, coal and
uranium. However, these price fluctuations generally have minimal
earnings impact due to fuel recovery mechanisms. In addition,
electric customers receive a credit for PTCs generated, which
reduce electric revenue and income taxes.
Electric revenues, fuel and purchased power and margin:
Three Months Ended March
31
(Millions of Dollars)
2023
2022
Electric revenues
$
2,763
$
2,633
Electric fuel and purchased power
(1,117
)
(1,094
)
Electric margin
$
1,646
$
1,539
(Millions of Dollars)
Three Months Ended March 31,
2023 vs. 2022
Regulatory rate outcomes (Minnesota,
Colorado, Texas, New Mexico, South Dakota and Wisconsin)
$
88
Sales and demand (a)
18
Wholesale transmission (net)
17
Non-fuel riders
15
Conservation and demand side management
(offset in expense)
(17
)
PTCs flowed back to customers (offset by a
lower ETR)
(12
)
Estimated impact of weather, net of
decoupling
(10
)
Other (net)
8
Total increase
$
107
(a)
Sales excludes weather impact, net of
decoupling in Colorado and proposed decoupling in Minnesota.
Natural Gas Margin — Natural gas margin is presented as
natural gas revenues less the cost of natural gas sold and
transported. Expenses incurred for the cost of natural gas sold are
generally recovered through various regulatory recovery mechanisms.
As a result, changes in these expenses are generally offset in
operating revenues.
Natural gas expense varies with changing sales and the cost of
natural gas. However, fluctuations in the cost of natural gas
generally have minimal earnings impact due to cost recovery
mechanisms.
Natural gas revenues, cost of natural gas sold and transported
and margin:
Three Months Ended March
31
(Millions of Dollars)
2023
2022
Natural gas revenues
$
1,288
$
1,090
Cost of natural gas sold and
transported
(844
)
(710
)
Natural gas margin
$
444
$
380
(Millions of Dollars)
Three Months Ended March 31,
2023 vs. 2022
Regulatory rate outcomes (Colorado and
Wisconsin)
$
47
Estimated impact of weather
9
Infrastructure and integrity riders
4
Other (net)
4
Total increase
$
64
O&M Expenses — O&M expenses increased $48 million
for the first quarter. Increase was primarily due to timing of
regulatory recovery mechanisms, generation outages and emergent
work; higher bad debt expenses; the impact of inflationary
pressures, including labor increases, and investments in electric
vehicle programs and other customer products.
Depreciation and Amortization — Depreciation and
amortization increased $62 million for the first quarter, primarily
driven by system expansion and the implementation of new
depreciation rates in Colorado and Minnesota.
Interest Charges — Interest charges increased $39 million
for the first quarter, largely due to higher interest rates and
increased long-term debt levels to fund capital investments.
Income Taxes — Effective income tax rate:
Three Months Ended March
31
2023
2022
2023 vs. 2022
Federal statutory rate
21.0
%
21.0
%
—
%
State tax (net of federal tax effect)
4.8
4.9
(0.1
)
(Decreases) increases:
Wind PTCs (a)
(33.1
)
(34.4
)
1.3
Plant regulatory differences (b)
(5.5
)
(4.8
)
(0.7
)
Other tax credits, net operating loss
& tax credits allowances
(1.6
)
(1.5
)
(0.1
)
Other (net)
(0.1
)
(0.4
)
0.3
Effective income tax rate
(14.5
) %
(15.2
) %
0.7
%
(a)
Wind PTCs are credited to customers (reduction to revenue) and
do not materially impact earnings.
(b)
Plant regulatory differences primarily relate to the credit of
excess deferred taxes to customers through the average rate
assumption method. Income tax benefits associated with the credit
are offset by corresponding revenue reductions.
Note 3. Capital Structure, Liquidity,
Financing and Credit Ratings
Xcel Energy’s capital structure:
(Millions of Dollars)
March 31, 2023
Percentage of Total
Capitalization
Dec. 31, 2022
Percentage of Total
Capitalization
Current portion of long-term debt
$
901
2
%
$
1,151
3
%
Short-term debt
1,079
3
813
2
Long-term debt
22,818
55
22,813
55
Total debt
24,798
60
24,777
60
Common equity
16,818
40
16,675
40
Total capitalization
$
41,616
100
%
$
41,452
100
%
Liquidity — As of April 24, 2023, Xcel Energy Inc. and
its utility subsidiaries had the following committed credit
facilities available to meet liquidity needs:
(Millions of Dollars)
Credit Facility (a)
Drawn (b)
Available
Cash
Liquidity
Xcel Energy Inc.
$
1,500
$
367
$
1,133
$
1
$
1,134
PSCo
700
27
673
155
828
NSP-Minnesota
700
92
608
4
612
SPS
500
55
445
2
447
NSP-Wisconsin
150
30
120
1
121
Total
$
3,550
$
571
$
2,979
$
163
$
3,142
(a)
Expires September 2027.
(b)
Includes outstanding commercial paper and
letters of credit.
Credit Ratings — Access to the capital markets at
reasonable terms is partially dependent on credit ratings. The
following ratings reflect the views of Moody’s, S&P Global
Ratings and Fitch. The highest credit rating for debt is Aaa/AAA
and the lowest investment grade rating is Baa3/BBB-. The highest
rating for commercial paper is P-1/A-1/F-1 and the lowest rating is
P-3/A-3/F-3. A security rating is not a recommendation to buy, sell
or hold securities. Ratings are subject to revision or withdrawal
at any time by the credit rating agency and each rating should be
evaluated independently of any other rating.
Credit ratings assigned to Xcel Energy Inc. and its utility
subsidiaries as of April 24, 2023:
Credit Type
Company
Moody’s
S&P Global Ratings
Fitch
Senior unsecured debt
Xcel Energy Inc.
Baa1
BBB+
BBB+
Senior secured debt
NSP-Minnesota
Aa3
A
A+
NSP-Wisconsin
Aa3
A
A+
PSCo
A1
A
A+
SPS
A3
A
A-
Commercial paper
Xcel Energy Inc.
P-2
A-2
F2
NSP-Minnesota
P-1
A-2
F2
NSP-Wisconsin
P-1
A-2
F2
PSCo
P-2
A-2
F2
SPS
P-2
A-2
F2
2023 Financing Activity — During 2023, Xcel Energy plans
to issue approximately $85 million of equity through the DRIP and
benefit programs. Xcel Energy and its utility subsidiaries issued
or plan to issue the following long-term debt:
Issuer
Security
Amount (in millions)
Status
Tenor
Coupon
PSCo
First Mortgage Bonds
$ 850
Completed (a)
30 Year
5.25 %
NSP-Wisconsin
First Mortgage Bonds
125
Second Quarter (b)
30 Year
5.30
NSP-Minnesota
First Mortgage Bonds
800
Second Quarter
N/A
N/A
Xcel Energy
Unsecured Senior Notes
500
Third Quarter
N/A
N/A
SPS
First Mortgage Bonds
100
Third Quarter
N/A
N/A
(a)
Bond was issued on April 3, 2023.
(b)
NSP-Wisconsin priced a 30-year first mortgage bond on April 21,
2023 and will close on the proceeds in June 2023.
Financing plans are subject to change, depending on legislative
initiatives (e.g., federal tax law changes), capital expenditures,
the development of a tax credit transferability market, regulatory
outcomes, internal cash generation, market conditions and other
factors.
Note 4. Rates, Regulation and
Other
NSP-Minnesota — 2022 Minnesota Electric Rate Case
— In October 2021, NSP-Minnesota filed a three-year electric rate
case with the MPUC. The rate case is based on a requested ROE of
10.2%, a 52.5% equity ratio and forward test years.
In December 2021, the MPUC approved interim rates, subject to
refund, of $247 million, effective Jan. 1, 2022. In November 2022,
NSP-Minnesota revised its rate request to $498 million over three
years.
On March 31, 2023, the ALJ’s report was issued. NSP-Minnesota
estimates that the ALJ recommendation would result in a rate
increase of approximately $386 million over three years from
2022-2024, based on a ROE of 9.87% and an equity ratio of 52.5%. In
addition, it also reflects rate reductions associated with certain
wind and nuclear generation life extensions and MISO capacity
revenues and related tracker, as proposed in NSP-Minnesota’s
revised rate request. A MPUC order is expected by June 30,
2023.
Proposed ALJ modifications to NSP-Minnesota’s request were as
follows:
(Millions of Dollars)
2022
2023
2024
NSP-Minnesota’s revised revenue
request
$
234
$
328
$
498
ALJ recommended adjustments:
PTC forecast
(28
)
(2
)
(1
)
Impact of ROE change
(27
)
(29
)
(30
)
O&M expenses
(15
)
(17
)
(18
)
Property tax
—
(11
)
(23
)
Sherco 3 and A.S. King remaining life
—
—
(35
)
Other, net
3
(9
)
(5
)
Total adjustments
(67
)
(68
)
(112
)
Total proposed revenue change
$
167
$
260
$
386
NSP-Minnesota — 2022 Minnesota Natural Gas Rate
Case — In November 2021, NSP-Minnesota filed a request with the
MPUC for an annual natural gas rate increase of $36 million, or
6.6%. The filing is based on a 2022 forecast test year and includes
a requested ROE of 10.5%, an equity ratio of 52.5% and a rate base
of $934 million. In December 2021, the MPUC approved an interim
rate increase of $25 million, subject to refund, effective Jan. 1,
2022.
In March 2023, the MPUC approved a settlement between
NSP-Minnesota and various parties, which includes the following key
terms:
- Base rate revenue increase of $21 million, with a true up to
weather normalized actual sales for 2022.
- Revenue decoupling mechanism.
- Symmetrical property tax true-up.
- ROE of 9.57%.
- Equity ratio of 52.5%.
NSP-Minnesota — 2022 South Dakota Electric Rate Case — In
June 2022, NSP-Minnesota filed a South Dakota electric rate case
(first since 2014) seeking a revenue increase of approximately $44
million. The filing was based on a 2021 historic test year adjusted
for certain known and measurable changes for 2022 and 2023, a
requested return on equity of 10.75%, rate base of approximately
$947 million and an equity ratio of 53%. A commission decision is
expected later this year.
NSP-Wisconsin — Wisconsin Rate Case — On April 28, 2023,
NSP-Wisconsin expects to file a base rate filing with the Public
Service Commission of Wisconsin (PSCW) seeking an electric increase
of $40 million (an overall rate increase of 4.8%) and a natural gas
increase of $9 million (an overall rate increase of 5.3%). The rate
request is based on a 2024 forward-looking test year with a
requested ROE of 10.25% and a 52.5% equity ratio. A final decision
by the PSCW is expected late fourth quarter 2023.
PSCo — Electric Rate Case — In November 2022, PSCo filed
an electric rate case seeking a net increase of $262 million, or
8.2%. The total request reflects a $312 million increase, which
includes $50 million of authorized costs currently recovered
through various rider mechanisms. The request is based on a 10.25%
ROE, an equity ratio of 55.7% and a 2023 forecast test year with a
2023 year-end rate base of $11.3 billion. PSCo requested rates
effective in September 2023.
Next steps in the procedural schedule are expected to be as
follows:
- Answer testimony May 3, 2023.
- Rebuttal testimony: May 31, 2023.
- Settlement deadline: June 14, 2023.
- Hearing: July 6-21, 2023.
- Statement of position: August 10, 2023.
A CPUC decision is expected in the third quarter of 2023.
SPS — 2022 New Mexico Electric Rate Case — In November
2022, SPS filed an electric rate case with the New Mexico Public
Regulation Commission (NMPRC) seeking a revenue increase of $78
million, or 10%. The request is based on a future test year (FTY)
ending June 30, 2024, a ROE of 10.75%, an equity ratio of 54.7% and
rate base of $2.4 billion. Additionally, the request reflects
further acceleration of the Tolk coal plant depreciation life from
2032 to 2028. In March 2023, the NMPRC issued an Order extending
the suspension period by one month. Additionally, SPS filed a
supplemental filing, which decreased the requested increase to $76
million.
On April 21, 2023, the following parties filed testimony: NMPRC
Staff (Staff), Occidental Permian Ltd. (OPL), the New Mexico
Attorney General (AG), New Mexico Large Customer Group (NMLCG),
Louisiana Energy Services & Federal Executive Agencies
(LES-FEA) and Walmart, with all except Walmart providing a proposed
revenue change.
(Millions of Dollars)
Staff
OPL
AG
NMLCG
LES-FEA
SPS direct testimony
$
76
$
76
$
76
$
76
$
76
Recommended base rate
adjustments:
Test year present revenues and
allocators
(1
)
2
(1
)
1
(47
)
ROE (a)
(24
)
(29
)
(37
)
(29
)
(21
)
Capital structure
—
(22
)
—
(22
)
—
Adjustment to FTY plant additions/rate
base items
—
(4
)
(10
)
(5
)
—
Tolk Generating Station depreciation
expense
—
(7
)
—
(7
)
(11
)
Other, net
(14
)
(1
)
(19
)
(13
)
—
Total adjustments
(39
)
(61
)
(67
)
(75
)
(79
)
Total proposed revenue change
$
37
$
15
$
9
$
1
$
(3
)
(a)
AG recommends a reduction of $37 million reflecting its combined
recommendation for ROE and capital structure.
Recommended Position
Staff
OPL
AG
NMLCG
LES-FEA
Walmart
ROE
9.35
%
8.70
%
9.00
%
8.70
%
9.40
%
9.61
%
Equity Ratio
54.70
45.00
50.57
45.00
54.70
N/A
The next steps in the revised procedural schedule are as
follows:
- Rebuttal testimony: May 10, 2023.
- Stipulation: May 17, 2023.
- Hearing: June 20, 2023.
- End of rate suspension: Oct. 19, 2023.
SPS — 2023 Texas Electric Rate Case — In February 2023,
SPS filed an electric rate case with the Public Utility Commission
of Texas (PUCT) seeking an increase in base rate revenue of $149
million (13%). In March 2023, SPS updated the filing based on a
historical test year period ended Dec. 31, 2022, which increased
the rate revenue request to $158 million (14% impact to customer
bills). The request is based on a ROE of 10.65%, an equity ratio of
54.6% and retail rate base of $3.6 billion. Additionally, the
request reflects further acceleration of the Tolk coal plant
depreciation life from 2034 to 2028. SPS is requesting a surcharge
from July 13, 2023 through the effective date of new base
rates.
The next steps in the procedural schedule are as follows:
- Intervenor direct testimony: August 4, 2023.
- Staff direct testimony: August 11, 2023.
- Rebuttal testimony: August 25, 2023.
- Hearings: Sept. 12-21, 2023.
- Proposed findings: Oct. 25, 2023.
A PUCT decision is expected in the first quarter of 2024.
Note 6. Earnings Guidance and Long-Term
EPS and Dividend Growth Rate Objectives
Xcel Energy 2023 Earnings Guidance — Xcel Energy’s 2023
GAAP and ongoing earnings guidance is a range of $3.30 to $3.40 per
share.(a)
Key assumptions as compared with 2022 levels unless noted:
- Constructive outcomes in all rate case and regulatory
proceedings.
- Normal weather patterns for the remainder of the year.
- Weather-normalized retail electric sales are projected to
increase ~1%.
- Weather-normalized retail firm natural gas sales are projected
to be relatively flat.
- Capital rider revenue is projected to increase $70 million to
$80 million (net of PTCs). The change from the previous estimate is
largely due to a change in the projected levels of PTCs, which are
offset in the ETR and largely earnings neutral.
- O&M expenses are projected to decline ~2%.
- Depreciation expense is projected to increase approximately
$130 million to $140 million.
- Property taxes are projected to increase approximately $30
million to $40 million.
- Interest expense (net of AFUDC - debt) is projected to increase
$100 million to $110 million.
- AFUDC - equity is projected to increase $0 million to $10
million.
- ETR is projected to be ~(7%) to (9%). The change from the
previous estimate is largely due to a change in the projected
levels of PTCs, which are offset in the capital riders and fuel
mechanisms and are largely earnings neutral.
(a)
Ongoing earnings is calculated using net
income and adjusting for certain nonrecurring or infrequent items
that are, in management’s view, not reflective of ongoing
operations. Ongoing earnings could differ from those prepared in
accordance with GAAP for unplanned and/or unknown adjustments. Xcel
Energy is unable to forecast if any of these items will occur or
provide a quantitative reconciliation of the guidance for ongoing
EPS to corresponding GAAP EPS.
Long-Term EPS and Dividend Growth Rate Objectives — Xcel
Energy expects to deliver an attractive total return to our
shareholders through a combination of earnings growth and dividend
yield, based on the following long-term objectives:
- Deliver long-term annual EPS growth of 5% to 7% based off of a
2022 base of $3.15 per share, which represents the mid-point of the
original 2022 guidance range of $3.10 to $3.20 per share.
- Deliver annual dividend increases of 5% to 7%.
- Target a dividend payout ratio of 60% to 70%.
- Maintain senior secured debt credit ratings in the A
range.
XCEL ENERGY INC. AND
SUBSIDIARIES
EARNINGS RELEASE SUMMARY
(UNAUDITED)
(amounts in millions, except per
share data)
Three Months Ended March
31
2023
2022
Operating revenues:
Electric and natural gas
$
4,051
$
3,723
Other
29
28
Total operating revenues
4,080
3,751
Net income
$
418
$
380
Weighted average diluted common shares
outstanding
551
545
Components of EPS —
Diluted
Regulated utility
$
0.83
$
0.75
Xcel Energy Inc. and other costs
(0.07
)
(0.05
)
GAAP and ongoing diluted EPS
(a)
0.76
0.70
Book value per share
$
30.54
$
28.86
Cash dividends declared per common
share
0.52
0.4875
(a)
For the three months ended March 31, 2023,
there were no adjustments to GAAP earnings and therefore GAAP
earnings equal ongoing earnings for these periods.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230427005139/en/
Paul Johnson, Vice President - Treasurer & Investor
Relations (612) 215-4535 For news media inquiries only, please call
Xcel Energy Media Relations (612) 215-5300 Xcel Energy website
address: www.xcelenergy.com
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