Xcel Energy Q1 Earnings Call Highlights

Key Points

• Q1 results: Xcel reported GAAP EPS of $0.89 and ongoing EPS of $0.91, excluding a $37M Prairie Island disallowance charge and a $22M insurance-proceeds adjustment; ongoing EPS rose from $0.84 a year ago, helped by higher electric revenues and AFUDC but reduced about $0.09 by unusually warm winter weather.
• Large capital and data-center push: Management invested >$3B in Q1 and is executing a record $14B 2026 capex plan, placed ~500 MW of solar and battery storage, expects >$7B of tax-credit customer benefits through 2030, and signed a 15-year Google ESA requiring 1,900 MW of new wind/solar plus 100‑hour storage while targeting 6 GW of data-center load by year-end 2027 with a non-exclusive NextEra partnership.
• Guidance, financing and regulatory updates: Xcel reaffirmed 2026 ongoing EPS guidance of $4.04–$4.16 and long-term 6–8%+ earnings growth, has addressed over half of a $7B five-year equity need via >$1B ATM forwards and an $800M subordinated note, and noted regulatory developments including a Minnesota ALJ recommending a 9.8% ROE and updated Smokehouse Creek wildfire liabilities (low end ~$460M with $525M insurance).

Xcel Energy NASDAQ: XEL reported first-quarter 2026 GAAP earnings of $0.89 per share and ongoing earnings of $0.91 per share, excluding two non-recurring items tied to a Prairie Island outage-related disallowance and updated insurance proceeds associated with Marshall Fire litigation.

Vice President of Investor Relations Roopesh Aggarwal said the company recorded a $37 million charge, or $0.04 per share, after an administrative law judge (ALJ) in the Prairie Island outage case recommended an additional $41 million disallowance of replacement power costs for power procured in 2024 tied to an extended outage that began in late 2023. Aggarwal also said Xcel recognized $22 million, or $0.03 per share, due to an increase in estimated insurance proceeds related to Marshall Fire litigation. Both items were excluded from ongoing earnings.

First-quarter performance and key drivers

Chief Financial Officer Brian Van Abel said ongoing earnings rose to $0.91 per share from $0.84 per share in the year-ago quarter. He attributed the increase primarily to higher electric revenues and higher allowance for funds used during construction (AFUDC), partially offset by financing costs, depreciation, and weaker natural gas revenue due to weather.

• Higher electric revenues from rate case outcomes, non-fuel riders, and sales growth increased earnings by $0.23 per share, partially offset by weather.
• Higher AFUDC added $0.10 per share.
• Higher interest charges and common equity financing reduced earnings by $0.18 per share, which Van Abel said reflected funding of infrastructure investments and the company’s focus on maintaining a strong balance sheet.
• Higher depreciation and amortization reduced earnings by $0.05 per share, reflecting capital investment programs.
• Lower natural gas revenues reduced earnings by $0.03 per share due to weather, partially offset by rate outcomes.

Weather weighed on results in the quarter. Van Abel said Colorado experienced its warmest winter on record during the first quarter, and the combined impacts from weather to electric and natural gas sales reduced earnings by $0.09 per share.

On a weather-adjusted basis, the company reported first-quarter electric sales growth of 2.8%, driven by “continued oil and gas growth in SPS and broader C&I growth across jurisdictions,” Van Abel said. Management maintained its expectation for 2026 full-year weather-adjusted electric sales growth of 3%.

Capital investment and project execution focus

Chairman, President and CEO Bob Frenzel said Xcel Energy invested more than $3 billion in new infrastructure during the first quarter to support “growing energy needs for increased resilience and cleaner energy,” and reiterated plans to execute a $14 billion capital investment plan in 2026, which he described as the largest in the company’s history.

Frenzel also said the company placed nearly 500 megawatts of new solar generation and utility-scale battery storage into service in SPS and Colorado during the quarter. He said those projects are expected to deliver resiliency and reliability benefits, along with more than $425 million of tax credit benefits to customers over their lives. Looking across the 2026–2030 portfolio, Frenzel said the company expects customers will see more than $7 billion in aggregate benefits from production and investment tax credits tied to various generation and storage projects.

Management emphasized efforts to address supply chain and labor constraints. Frenzel pointed to alliances with GE Vernova, NextEra Energy, and “strategic agreements with Tier 1 EPC firms” across renewable and gas generation, transmission, and distribution projects. In the Q&A, Frenzel said Xcel has “24 gas turbines through Siemens and General Electric that are slotted and in various stages of production and delivery over the next five years,” adding that he felt “very comfortable” with access to turbines for both the base and “upside case.”

Data center growth: Google agreement and NextEra development partnership

Management devoted significant discussion to large-load development, highlighting a long-term agreement with Google for a new data center in the upper Midwest. Frenzel said the 15-year agreement requires Google to cover “the entire cost of its service and infrastructure requirements,” including 1,900 megawatts of new wind and solar generation and long-duration storage using Form Energy’s 100-hour iron-air battery technology. Frenzel said the contract includes credit protections and is expected to save customers $1 billion to $1.5 billion over the term of the electric service agreement (ESA), which the company filed with the Minnesota Public Utilities Commission.

Frenzel also said Google plans to limit water needs through the use of air-cooled technology rather than water-cooled systems.

In April, the company reached a “definitive, non-exclusive” joint development agreement with NextEra Energy that Frenzel said is intended to co-develop generation, storage, and interconnections to accelerate data center development across Xcel’s operating companies. Frenzel said the arrangement could include a mix of company-owned resources and power purchase agreements, spanning wind, solar, batteries, storage, and natural gas. He added that the joint development agreement is “unbounded” and could expand beyond the 2 gigawatts he said the companies are actively engaged in, though it is not exclusive.

Frenzel said Xcel expects to secure 6 gigawatts of data center load by year-end 2027, with in-service dates extending into the early 2030s. In response to analyst questions, Frenzel said the company’s “high probability” pipeline includes contracting 4 additional gigawatts by the end of 2027, and he clarified that the 2 gigawatts referenced with NextEra is included within that total.

Van Abel said the company is also evaluating “alternative financings” for incremental growth, but described the company’s base approach as funding incremental capital expenditures with “incremental equity of roughly 40%,” while maintaining credit metrics. He noted the company is one quarter into its five-year plan and has already addressed more than half of the plan’s equity needs (details below).

Regulatory activity and financing updates

Van Abel provided multiple regulatory updates across jurisdictions. In North Dakota, he said the commission approved a previously announced settlement authorizing a $27 million revenue increase. In South Dakota, Xcel reached a “constructive black box settlement” with staff for a net $26 million revenue increase, with a decision expected in the second quarter.

In Colorado, Van Abel said intervener testimony in the company’s electric rate case was “relatively consistent” with the last case and provides “a decent starting point” for settlement discussions. He noted the settlement deadline is May 28 and said the company has settled three of the past four electric cases in the state. He also discussed the importance of equity ratio and maintaining credit quality in Colorado.

For Minnesota, Van Abel said the company received the ALJ report “late yesterday,” recommending a 9.8% return on equity and a 52.5% equity ratio, with commission deliberations expected in June and an order in July. He described the recommendation as “generally a balanced overall” and “constructive,” while noting the company was still digesting details such as trackers.

In New Mexico, Van Abel said intervener testimony is due May 1 and a commission decision is expected in the fourth quarter.

On financing, Van Abel said Xcel issued forward contracts for more than $1 billion of equity through its at-the-market (ATM) program during the first quarter and also issued an $800 million junior subordinated note at the holding company that receives 50% equity credit with rating agencies. Van Abel said these actions, combined with unsettled forwards and collared forward contracts from 2025, address “over half” of the company’s $7 billion equity need in its five-year base plan. When asked about timing for the remaining equity, Van Abel said the company does not provide specific timing, but emphasized that ATM forwards can be pushed out a couple years, providing flexibility to match capital investment needs.

Van Abel also discussed progress related to the Smokehouse Creek wildfire claims process. He said Xcel has resolved 231 of 304 submitted claims and has reached settlements with 79 of 107 potential claims presented for mediation by parties represented by attorneys. He added that 26 of 73 complaints have been settled or dismissed and have reached the statute of limitations for property loss claims. The company updated the low end of its estimated liability to $460 million and has committed $397 million in settlement agreements, with $525 million of insurance coverage.

Looking ahead, Van Abel reaffirmed Xcel Energy’s 2026 ongoing EPS guidance of $4.04 to $4.16 per share. He also reiterated the company’s long-term targets, saying management remains confident in delivering “6%–8%+ long-term earnings growth” and expects to deliver “9% EPS growth on average through 2030.”

About Xcel Energy NASDAQ: XEL

Xcel Energy NASDAQ: XEL is a Minneapolis-based, publicly traded utility holding company that develops, owns and operates regulated electricity and natural gas delivery systems. The company's core activities include generation, transmission and distribution of electricity, the delivery of natural gas to customers, and related customer service operations. Xcel provides a mix of utility services to residential, commercial and industrial customers and participates in wholesale energy markets where appropriate.

Its generation portfolio combines nuclear, natural gas, coal and a growing share of renewable resources such as wind and solar.

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