- 2023 GAAP diluted earnings per share were $3.21 compared with
$3.17 per share in 2022.
- 2023 ongoing diluted earnings per share were $3.35 compared
with $3.17 per share in 2022.
- Xcel Energy reaffirms 2024 EPS guidance of $3.50 to $3.60 per
share.
Xcel Energy Inc. (NASDAQ: XEL) today reported 2023 GAAP earnings
of $1.77 billion, or $3.21 per share, compared with $1.74 billion,
or $3.17 per share in the same period in 2022 and ongoing earnings
of $1.85 billion, or $3.35 per share, compared with $1.74 billion,
or $3.17 per share in the same period in 2022. See Note 6 for
reconciliation from GAAP to ongoing earnings.
Ongoing earnings reflect regulatory outcomes and lower operating
and maintenance (O&M) expenses, partially offset by higher
depreciation and interest charges.
“2023 was another strong year for Xcel Energy, our customers,
our communities, and our investors. We delivered ongoing earnings
of $3.35 per share. This is the 19th consecutive year we have met
our earnings guidance, which is critical to maintaining a
competitive cost of capital, which benefits our customers and
shareholders,” said Bob Frenzel, chairman, president and CEO of
Xcel Energy.
“In Colorado, we advanced our historic Colorado Energy Plan to
establish the largest clean energy portfolio ever built in the
state and corresponding transmission infrastructure to ensure
reliable, low-cost service for customers. We also retired the first
of three coal-fired units at the Sherburne County Generating
Station in Minnesota, as we make way for the largest solar facility
in the Midwest. This is a milestone as we work to exit coal by 2030
and another sign that we’re leading the nation’s clean energy
transition.”
“All the while, our customer bills remained amongst the lowest
in the country. The average Xcel Energy residential electric and
natural gas bill over the last five years has been 28% and 14%
below the national average, respectively.”
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:
1-866-580-3963
International Dial-In:
400-120-0558
Conference ID:
8637745
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 through Jan. 29.
Replay Numbers
US Dial-In:
1-866-583-1035
Access Code:
8637745
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 2024 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; cybersecurity 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 and wildfire
damages in excess of liability insurance coverage; 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 Dec.
31
Twelve Months Ended Dec.
31
2023
2022
2023
2022
Operating revenues
Electric
$
2,695
$
2,868
$
11,446
$
12,123
Natural gas
719
1,157
2,645
3,080
Other
28
28
115
107
Total operating revenues
3,442
4,053
14,206
15,310
Operating expenses
Electric fuel and purchased power
950
1,233
4,278
5,005
Cost of natural gas sold and
transported
372
776
1,456
1,910
Cost of sales — other
12
12
49
44
Operating and maintenance expenses
580
664
2,444
2,491
Conservation and demand side management
expenses
71
72
286
331
Depreciation and amortization
641
606
2,448
2,413
Taxes (other than income taxes)
168
165
657
688
Loss on Comanche Unit 3 litigation
1
—
35
—
Workforce reduction expenses
72
—
72
—
Total operating expenses
2,867
3,528
11,725
12,882
Operating income
575
525
2,481
2,428
Other income (expense), net
3
7
22
(13
)
Earnings from equity method
investments
8
9
35
36
Allowance for funds used during
construction — equity
28
22
91
75
Interest charges and financing
costs
Interest charges — includes other
financing costs of $8, $8, $32 and $31, respectively
265
248
1,055
953
Allowance for funds used during
construction — debt
(15
)
(9
)
(51
)
(28
)
Total interest charges and financing
costs
250
239
1,004
925
Income before income taxes
364
324
1,625
1,601
Income tax benefit
(45
)
(55
)
(146
)
(135
)
Net income
$
409
$
379
$
1,771
$
1,736
Weighted average common shares
outstanding:
Basic
554
549
552
547
Diluted
554
549
552
547
Earnings per average common
share:
Basic
$
0.74
$
0.69
$
3.21
$
3.18
Diluted
0.74
0.69
3.21
3.17
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.
For instance, to present ongoing earnings and ongoing diluted
earnings per share, we may adjust the related GAAP amounts for
certain items that are non-recurring in nature. We believe these
measurements are useful to investors to evaluate the actual and
projected financial performance and contribution of our
subsidiaries. These non-GAAP financial measures should not be
considered as an alternative to measures calculated and reported in
accordance with GAAP.
Note 1. Earnings Per Share
Summary
Xcel Energy’s 2023 GAAP diluted earnings were $3.21 per share
compared to $3.17 per share in 2022 and ongoing diluted earnings
were $3.35 per share in 2023, compared with $3.17 per share in
2022. The increase in ongoing earnings per share was driven by
increased recovery of infrastructure investments, higher sales and
demand and lower O&M expenses, partially offset by higher
depreciation and interest charges and unfavorable weather.
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 Dec.
31
Twelve Months Ended Dec.
31
Diluted Earnings (Loss) Per
Share
2023
2022
2023
2022
NSP-Minnesota
$
0.33
$
0.29
$
1.28
$
1.23
PSCo
0.29
0.31
1.26
1.33
SPS
0.15
0.12
0.70
0.64
NSP-Wisconsin
0.06
0.04
0.25
0.23
Earnings from equity method investments —
WYCO
0.01
0.01
0.04
0.04
Regulated utility (a)
0.84
0.78
3.52
3.47
Xcel Energy Inc. and Other
(0.10
)
(0.09
)
(0.31
)
(0.29
)
GAAP diluted EPS (a)
$
0.74
$
0.69
$
3.21
$
3.17
Loss on Comanche Unit 3 litigation (See
Note 6)
—
—
0.05
—
Workforce reduction expenses (See Note
6)
0.09
—
0.09
—
Ongoing diluted EPS (a)
$
0.83
$
0.69
$
3.35
$
3.17
(a)
Amounts may not add due to rounding.
NSP-Minnesota — GAAP earnings increased $0.05 per share
and ongoing earnings increased $0.09 per share for 2023 compared to
2022. The change to ongoing earnings was driven by increased
recovery of electric infrastructure investments, partially offset
by increased interest charges and unfavorable weather.
PSCo — GAAP earnings decreased $0.07 per share and
ongoing earnings was flat for 2023. Ongoing earnings primarily
reflects higher recovery of infrastructure investment and lower
O&M expenses, which were partially offset by increased
depreciation, interest charges and unfavorable weather.
SPS — GAAP earnings increased $0.06 per share and ongoing
earnings increased $0.07 per share for 2023. Ongoing earnings were
largely impacted by regulatory rate outcomes, sales growth,
partially offset by increased depreciation, interest charges and
unfavorable weather.
NSP-Wisconsin — GAAP and ongoing earnings increased $0.02
per share for 2023 compared to 2022. The increase in ongoing
earnings was primarily a result of higher recovery of electric
infrastructure investment, partially offset by unfavorable weather
and higher depreciation, O&M expenses and interest charges.
Xcel Energy Inc. and Other — Primarily includes financing
costs and interest income at the holding company and earnings from
Energy Impact Partners (EIP) funds equity method investments.
Fluctuations from 2022 levels were largely attributable to
increased interest rates.
Components significantly contributing to changes in 2023 EPS
compared with 2022:
Diluted Earnings (Loss) Per
Share
Three Months Ended Dec.
31
Twelve Months Ended Dec.
31
GAAP and ongoing diluted EPS —
2022
$
0.69
$
3.17
Components of change — 2023 vs. 2022
Higher electric revenues, net of electric
fuel and purchased power
0.15
0.07
Lower O&M expenses
0.11
0.06
Lower conservation and demand side
management expenses (offset in electric revenues)
—
0.06
(Lower) higher other income (expense)
(0.01
)
0.05
(Higher) lower taxes (other than income
taxes)
(0.01
)
0.04
(Lower) higher natural gas revenues, net
of cost of natural gas sold and transported
(0.04
)
0.03
Higher interest expense
(0.03
)
(0.14
)
Higher depreciation and amortization
(0.05
)
(0.05
)
Workforce reduction expenses
(0.09
)
(0.09
)
Loss on Comanche Unit 3 litigation
—
(0.05
)
Other (net)
0.02
0.06
GAAP diluted EPS — 2023
$
0.74
$
3.21
Workforce reduction expenses (See Note
6)
0.09
0.09
Loss on Comanche Unit 3 litigation (See
Note 6)
—
0.05
Ongoing Diluted EPS — 2023
$
0.83
$
3.35
ROE for Xcel Energy and its utility subsidiaries:
2023
NSP- Minnesota
PSCo
SPS
NSP- Wisconsin
Operating Companies
Xcel Energy
GAAP ROE
8.82
%
7.32
%
9.80
%
10.38
%
8.45
%
10.33
%
Ongoing ROE
9.11
%
7.77
%
9.98
%
10.67
%
8.79
%
10.79
%
2022
NSP- Minnesota
PSCo
SPS
NSP- Wisconsin
Operating Companies
Xcel Energy
GAAP and ongoing ROE
8.76
%
8.23
%
9.36
%
10.57
%
8.74
%
10.76
%
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, electric decoupling mechanisms in Colorado (mechanism
expired in September 2023) and electric sales true-up mechanisms in
Minnesota and electric decoupling mechanism in Minnesota
predominately mitigate the positive and adverse impacts of weather
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 Dec.
31
Twelve Months Ended Dec.
31
2023 vs. Normal
2022 vs. Normal
2023 vs. 2022
2023 vs. Normal
2022 vs. Normal
2023 vs. 2022
Retail electric
$
(0.022
)
$
0.007
$
(0.029
)
$
0.013
$
0.138
$
(0.125
)
Decoupling and sales true-up
0.008
(0.007
)
0.015
(0.007
)
(0.061
)
0.054
Electric total
(0.014
)
—
(0.014
)
0.006
0.077
(0.071
)
Firm natural gas
(0.034
)
0.018
(0.052
)
(0.010
)
0.037
(0.047
)
Decoupling
0.012
—
0.012
0.013
—
0.013
Gas total
(0.022
)
0.018
(0.040
)
0.003
0.037
(0.034
)
Total
$
(0.036
)
$
0.018
$
(0.054
)
$
0.009
$
0.114
$
(0.105
)
Sales — Sales growth (decline) for actual and
weather-normalized sales in 2023 compared to 2022:
Three Months Ended Dec.
31
NSP-Minnesota
PSCo
SPS
NSP-Wisconsin
Xcel Energy
Actual
Electric residential
(1.7
)%
(2.4
)%
(2.1
)%
(2.7
)%
(2.1
)%
Electric C&I
(2.2
)
(1.4
)
4.2
(1.2
)
—
Total retail electric sales
(2.1
)
(1.8
)
3.2
(1.6
)
(0.6
)
Firm natural gas sales
(15.1
)
(13.1
)
N/A
(12.4
)
(13.7
)
Three Months Ended Dec.
31
NSP-Minnesota
PSCo
SPS
NSP-Wisconsin
Xcel Energy
Weather-normalized
Electric residential
2.5
%
2.2
%
2.0
%
1.7
%
2.3
%
Electric C&I
(2.0
)
(0.8
)
4.3
(1.2
)
0.3
Total retail electric sales
(0.6
)
0.1
3.8
(0.3
)
0.8
Firm natural gas sales
3.0
3.7
N/A
2.9
3.4
Twelve Months Ended Dec.
31
NSP-Minnesota
PSCo
SPS
NSP-Wisconsin
Xcel Energy
Actual
Electric residential
(0.5
)%
(4.0
)%
(3.0
)%
(2.6
)%
(2.3
)%
Electric C&I
(1.1
)
(1.9
)
5.2
(0.5
)
0.5
Total retail electric sales
(0.9
)
(2.6
)
3.6
(1.1
)
(0.3
)
Firm natural gas sales
(12.0
)
(1.5
)
N/A
(12.6
)
(5.7
)
Twelve Months Ended Dec.
31
NSP-Minnesota
PSCo
SPS
NSP-Wisconsin
Xcel Energy
Weather-normalized
Electric residential
1.0
%
1.6
%
1.1
%
0.1
%
1.2
%
Electric C&I
(1.1
)
(0.4
)
5.3
(0.4
)
1.0
Total retail electric sales
(0.4
)
0.3
4.5
(0.3
)
1.0
Firm natural gas sales
—
2.3
N/A
(0.4
)
1.4
Annual weather-normalized electric sales
growth (decline)
- NSP-Minnesota — Residential sales increased due to a 1.2%
increase in customers outpacing declines in use per customer. The
decline in C&I sales was due to lower use per customer,
particularly due to weakness in the manufacturing sector compared
to prior year.
- PSCo — Residential sales increased due to increased use per
customer and a 1.3% increase in customers. The decline in C&I
sales was attributable to decreased use per customer, primarily in
the manufacturing sector.
- SPS — Residential sales growth was primarily attributable to a
0.7% increase in customers and increased use per customer. C&I
sales increased due to higher use per customer, primarily driven by
the energy sector.
- NSP-Wisconsin — The C&I sales decline was associated with
lower use per customer, experienced primarily in the transportation
and manufacturing sectors.
Annual weather-normalized natural gas
sales growth (decline)
- Natural gas sales reflect 1.2% residential and 0.7% C&I
customer growth and an increase in C&I use per customer at
PSCo. Partially offsetting these increases were lower use per
residential customer in all jurisdictions.
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. These price fluctuations generally have minimal impact on
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 Dec.
31
Twelve Months Ended Dec.
31
(Millions of Dollars)
2023
2022
2023
2022
Electric revenues
$
2,695
$
2,868
$
11,446
$
12,123
Electric fuel and purchased power
(950
)
(1,233
)
(4,278
)
(5,005
)
Electric margin
$
1,745
$
1,635
$
7,168
$
7,118
(Millions of Dollars)
Three Months Ended Dec. 31,
2023 vs. 2022
Twelve Months Ended Dec. 31,
2023 vs. 2022
Regulatory rate outcomes (MN, CO, TX, NM,
WI, SD and MI)
$
83
$
100
Non-fuel riders
17
89
Sales and demand (a)
19
57
Wholesale transmission (net)
13
28
Revenue recognition of the Texas rate case
surcharge (b)
—
(85
)
Estimated impact of weather (net of
decoupling/sales true-up)
(11
)
(51
)
Conservation and demand side management
(offset in expense)
6
(43
)
PTCs flowed back to customers (offset by
lower ETR)
5
(28
)
Other (net)
(22
)
(17
)
Total increase
$
110
$
50
(a)
Sales excludes weather impact,
net of partial decoupling in Colorado (mechanism expired in
September 2023) and sales true-up mechanism in Minnesota.
(b)
The decline in electric margin is
due to the recognition of the Texas rate case outcome in the second
quarter of 2022, which was largely offset by recognition of
previously deferred costs.
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 Dec.
31
Twelve Months Ended Dec.
31
(Millions of Dollars)
2023
2022
2023
2022
Natural gas revenues
$
719
$
1,157
$
2,645
$
3,080
Cost of natural gas sold and
transported
(372
)
(776
)
(1,456
)
(1,910
)
Natural gas margin
$
347
$
381
$
1,189
$
1,170
(Millions of Dollars)
Three Months Ended Dec. 31,
2023 vs. 2022
Twelve Months Ended Dec. 31,
2023 vs. 2022
Regulatory rate outcomes (CO, WI, MI)
$
1
$
50
Estimated impact of weather (net of
decoupling)
(30
)
(25
)
Other (net)
(5
)
(6
)
Total increase
$
(34
)
$
19
O&M Expenses — O&M expenses decreased $47 million
in 2023, primarily due to the impact of management cost containment
efforts, the exit of our appliance repair services business and the
change in deferred costs associated with the Texas Electric Rate
Cases (offset in Electric revenues), offset by higher bad debt
expenses, the impact of inflationary pressures, including labor,
and timing of unplanned maintenance at generating plants.
Depreciation and Amortization — Depreciation and
amortization increased $35 million for the year, primarily related
to system expansion, offset by the change in deferred costs
associated with the Texas Electric Rate Case and depreciation life
extensions implemented in the Minnesota Electric Rate Case.
Taxes (other than Income Taxes) —Taxes (other than income
taxes) decreased $31 million in 2023, primarily due to lower
property tax expense (lower tax rates in Minnesota offset by
increase in Colorado) and deferrals related to the Minnesota
Electric Rate Case and Texas Electric Rate Case.
Other Income (Expense) — Other income (expense) increased
$35 million for the year, primarily related to rabbi trust
performance, which is primarily offset in employee benefit cost in
O&M expenses.
Interest Charges — Interest charges increased $102
million in 2023. The increase was largely due to higher long-term
debt levels to fund capital investments and higher interest
rates.
Income Taxes — Effective income tax rate:
Three Months Ended Dec.
31
Twelve Months Ended Dec.
31
2023
2022
2023 vs 2022
2023
2022
2023 vs 2022
Federal statutory rate
21.0
%
21.0
%
—
%
21.0
%
21.0
%
—
%
State tax (net of federal tax effect)
4.8
4.7
0.1
4.9
4.9
—
Increases (decreases):
Wind PTCs (a)
(30.4
)
(36.0
)
5.6
(28.1
)
(27.4
)
(0.7
)
Plant regulatory differences (b)
(5.8
)
(5.9
)
0.1
(5.6
)
(5.5
)
(0.1
)
Other tax credits, NOL allowances (net)
and tax credit allowances
(1.1
)
(0.9
)
(0.2
)
(1.3
)
(1.3
)
—
Other (net)
(0.9
)
0.1
(1.0
)
0.1
(0.1
)
0.2
Effective income tax rate
(12.4
)%
(17.0
)%
4.6
%
(9.0
)%
(8.4
)%
(0.6
)%
(a)
Wind PTCs net of estimated
transfer discount are credited to customers (reduction to revenue)
and do not have a material impact on net income.
(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)
Dec. 31, 2023
Percentage of Total
Capitalization
Dec. 31, 2022
Percentage of Total
Capitalization
Current portion of long-term debt
$
552
1
%
$
1,151
3
%
Short-term debt
785
2
813
2
Long-term debt
24,913
57
22,813
55
Total debt
26,250
60
24,777
60
Common equity
17,616
40
16,675
40
Total capitalization
$
43,866
100
%
$
41,452
100
%
Liquidity — As of Jan. 23, 2024, 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
$
239
$
1,261
$
1
$
1,262
PSCo
700
442
258
5
263
NSP-Minnesota
700
330
370
8
378
SPS
500
36
464
2
466
NSP-Wisconsin
150
75
75
2
77
Total
$
3,550
$
1,122
$
2,428
$
18
$
2,446
(a)
Expires Sept. 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 Jan. 23, 2024:
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-1
F2
NSP-Wisconsin
P-1
A-2
F2
PSCo
P-2
A-2
F2
SPS
P-2
A-2
F2
Capital Expenditures — Base capital expenditures for Xcel
Energy for 2024 through 2028:
Base Capital Forecast
(Millions of Dollars)
By Regulated Utility
2024
2025
2026
2027
2028
Total
PSCo
$
3,300
$
5,230
$
4,320
$
3,620
$
2,730
$
19,200
NSP-Minnesota
2,660
2,970
2,380
2,500
2,540
13,050
SPS
910
780
660
870
830
4,050
NSP-Wisconsin
570
600
570
600
650
2,990
Other (a)
(20
)
(300
)
10
10
10
(290
)
Total base capital expenditures
$
7,420
$
9,280
$
7,940
$
7,600
$
6,760
$
39,000
(a)
Other category includes intercompany
transfers for safe harbor wind turbines.
Base Capital Forecast
(Millions of Dollars)
By Function
2024
2025
2026
2027
2028
Total
Electric transmission
$
1,710
$
2,020
$
2,450
$
2,850
$
2,470
11,500
Electric distribution
1,770
1,960
2,200
2,200
2,470
10,600
Renewables
1,500
2,910
940
240
20
5,610
Electric generation
940
1,290
1,050
1,060
600
4,940
Natural gas
740
680
630
620
570
3,240
Other
760
420
670
630
630
3,110
Total base capital expenditures
$
7,420
$
9,280
$
7,940
$
7,600
$
6,760
$
39,000
The base plan does not include potential renewable generation
additions at the NSP System, SPS and PSCo, which could result in
additional capital expenditures of approximately $5 billion. Xcel
Energy generally expects to fund additional capital investment with
approximately 40% equity and 60% debt.
Xcel Energy’s capital expenditure forecast is subject to
continuing review and modification. Actual capital expenditures may
vary from estimates due to changes in electric and natural gas
projected load growth, safety and reliability needs, regulatory
decisions, legislative initiatives (e.g., federal clean energy and
tax policy), reserve requirements, availability of purchased power,
alternative plans for meeting long-term energy needs, environmental
initiatives and regulation, and merger, acquisition and divestiture
opportunities.
Financing for Capital Expenditures through 2028 — Xcel
Energy issues debt and equity securities to refinance retiring
maturities, reduce short-term debt, fund capital programs, infuse
equity in subsidiaries, fund asset acquisitions and for other
general corporate purposes. Current estimated financing plans of
Xcel Energy for 2024 through 2028 (includes the impact of tax
credit transferability):
(Millions of Dollars)
Funding Capital Expenditures
Cash from Operations (a)
$
22,000
New Debt (b)
13,000
Equity through the DRIP and Benefit
Program
500
Other Equity
3,500
Base Capital Expenditures 2024-2028
$
39,000
Maturing Debt
$
3,780
(a)
Net of dividends and pension funding.
(b)
Reflects a combination of short and
long-term debt; net of refinancing.
2023 Financing Activity — During 2023, approximately $250
million of equity was issued through an at-the-market program. Xcel
Energy also issued approximately $88 million of equity through the
Dividend Reinvestment Program and benefit programs. Xcel Energy and
its utility subsidiaries issued the following long-term debt:
Issuer
Security
Amount (Millions of
Dollars)
Tenor
Coupon
Xcel Energy Inc.
Unsecured Senior Notes
$
800
10 Year
5.45
%
PSCo
First Mortgage Bonds
850
30 Year
5.25
NSP-Minnesota
First Mortgage Bonds
800
30 Year
5.10
NSP-Wisconsin
First Mortgage Bonds
125
30 Year
5.30
SPS
First Mortgage Bonds
100
30 Year
6.00
2024 Planned Financing Activities — During 2024, Xcel
Energy Inc. and its utility subsidiaries anticipate the following
long-term debt issuances:
Issuer
Security
Amount (Millions of
Dollars)
Expected Tenor
Anticipated Timing
Xcel Energy Inc.
Senior Unsecured Notes
$
900
10 Year
First Quarter
PSCo
First Mortgage Bonds
1,200
10 Year and 30 Year
Second Quarter
NSP-Minnesota
First Mortgage Bonds
700
30 Year
First Quarter
SPS
First Mortgage Bonds
550
30 Year
Second Quarter
NSP-Wisconsin
First Mortgage Bonds
400
30 Year
Second Quarter
Xcel Energy may issue equity through its at-the-market program
or other offerings. Financing plans are subject to change,
depending on capital expenditures, regulatory outcomes, internal
cash generation, market conditions, changes in tax policies and
other factors.
Note 4. Rates, Regulation and
Other
NSP-Minnesota — 2024 Minnesota Natural Gas Rate
Case — In November 2023, NSP-Minnesota filed a request with the
Minnesota Public Utility Commission (MPUC) for an annual natural
gas rate increase of approximately $59 million, or 9.6%. The
request is based on a ROE of 10.2%, a 52.5% equity ratio and a 2024
forward test year with rate base of approximately $1.27 billion. In
Dec. 2023, the MPUC approved NSP-Minnesota’s request for interim
rates, subject to refund, of approximately $51 million (implemented
on Jan. 1, 2024).
NSP-Minnesota — 2024 North Dakota Natural Gas Rate
Case — In December 2023, NSP-Minnesota filed a request with the
North Dakota Public Service Commission for an annual natural gas
rate increase of approximately $8 million, or 9.4%. The filing is
based on a ROE of 10.2%, a 52.5% equity ratio and a 2024 forecast
test year with rate base of approximately $168 million.
NSP-Minnesota requested interim rates, subject to refund, of
approximately $8 million to be implemented on March 1, 2024.
NSP-Wisconsin — Wisconsin Rate Case — In April
2023, NSP-Wisconsin filed a Wisconsin rate case seeking an electric
increase of $40 million (rate increase of 4.8%) and a natural gas
increase of $9 million (rate increase of 5.3%). The filing is based
on a 2024 forecast test year, a ROE of 10.25%, an equity ratio of
52.5% and a forecasted average net rate base of approximately $2.1
billion for the electric utility and $284 million for the natural
gas utility.
In September 2023, NSP-Wisconsin filed rebuttal testimony and
updated its request for depreciation life extensions and other
updates. NSP-Wisconsin revised its requested rate increase to $25
million for the electric utility and $7 million for the natural gas
utility.
In November 2023, the Public Service Commission of Wisconsin
(PSCW) approved a ROE of 9.8% and an equity ratio of 52.5% as well
as a rate increase of approximately $1 million for the electric
utility. Adjustments to NSP-Wisconsin’s rate request included
removal of a proposed residential affordability program and other
earnings neutral adjustments and fuel and purchased power costs.
The PSCW also approved a $5 million rate increase for the natural
gas utility in 2024. The new rates were implemented on Jan. 1,
2024.
PSCo — Colorado Resource Plan — In August 2022,
the Colorado Public Utilities Commission (CPUC) approved a
settlement for the Colorado Resource Plan, which provides for an
expected carbon reduction and the retirement of PSCo’s remaining
coal plant by the end of 2030.
In September 2023 (updated in October 2023), PSCo filed its
recommended Preferred Portfolio of resources, which proposed a
total of 7,521 megawatts of generation resources, including 4,716
owned MW and 2,805 purchased power MW. The filing also included
several other alternative portfolios.
In December 2023, the CPUC verbally approved an alternative
portfolio of 5,835 megawatts. The decision provides additional
flexibility to assess timing and levels of incremental renewable
resources to be addressed in the Just Transition Plan filing
expected to be submitted by June 1, 2024.
Approved portfolio includes the following resources:
Generation Resource (in
MW)
Company Owned
PPAs
Total
Wind Resources
1,325
375
1,700
Solar
858
760
1,618
Storage
500
1,348
1,848
Natural Gas
450
219
669
Total
3,133
2,702
5,835
PSCo expects to invest approximately $4.8 billion in generation
resources under the alternative portfolio for the benefit of its
customers and achieving the state’s clean energy goals. The CPUC
did not approve the May Valley to Longhorn Transmission Line, which
was estimated at $250 million.
In December 2023, the CPUC verbally approved two Performance
Incentive Mechanisms (PIMs) associated with the generation projects
in the portfolio, including a two-way sharing measure related to
capital construction costs and another related to on-going
levelized energy costs. These PIMs will be further defined in the
written order and related proceedings throughout 2024.
SPS — 2023 Texas Electric Rate Case — In 2023, SPS
filed a Texas electric rate case seeking an increase in base rate
revenue of $158 million (14%). The request was based on a ROE of
10.65%, an equity ratio of 54.6% and rate base of $3.6 billion.
Additionally, the request reflects the 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.
In December 2023, SPS, PUCT Staff and intervenors filed a black
box settlement. Key terms include:
- A base rate increase of $65 million effective back to July 13,
2023.
- A 9.55% ROE, a 54.51% equity ratio and a 7.11% weighted average
cost of capital for purposes of calculating SPS’ allowance for
funds used during construction and in other proceedings
filings.
- Acceleration of the depreciation life for Tolk to 2028.
A PUCT decision is expected in the first quarter of 2024.
SPS — New Mexico Resource Plan — In October 2023,
SPS filed its Integrated Resource Plan (IRP) with the New Mexico
Public Regulation Commission, which supports projected load growth
and secures replacement energy and capacity for retiring resources.
Based on load forecast scenarios, SPS’ initial IRP modeling
projects a total resource need ranging from approximately 5,300 MW
to 10,200 MW by 2030. Upon acceptance of the IRP, SPS expects to
issue an RFP for new generation in mid-2024. The RFP will be
evaluated in the latter half of 2024 with portfolio selection
expected in early 2025.
Note 5. Marshall Wildfire
Litigation
In December 2021, a wildfire ignited in Boulder County, Colorado
(the “Marshall Fire”), which burned over 6,000 acres and destroyed
or damaged over 1,000 structures. On June 8, 2023, the Boulder
County Sheriff’s Office released its Marshall Fire Investigative
Summary and Review and its supporting documents (the “Sheriff’s
Report”). According to an October 2022 statement from the Colorado
Insurance Commissioner, the Marshall Fire is estimated to have
caused more than $2 billion in property losses.
According to the Sheriff’s Report, on Dec. 30, 2021, a fire
ignited on a residential property in Boulder, Colorado, located in
PSCo’s service territory, for reasons unrelated to PSCo’s power
lines. According to the Sheriff’s Report, approximately one hour
and 20 minutes after the first ignition, a second fire ignited just
south of the Marshall Mesa Trailhead in unincorporated Boulder
County, Colorado, also located in PSCo’s service territory.
According to the Sheriff’s Report, the second ignition started
approximately 80 to 110 feet away from PSCo’s power lines in the
area.
The Sheriff’s Report states that the most probable cause of the
second ignition was hot particles discharged from PSCo’s power
lines after one of the power lines detached from its insulator in
strong winds, and further states that it cannot be ruled out that
the second ignition was caused by an underground coal fire.
According to the Sheriff’s Report, no design, installation or
maintenance defects or deficiencies were identified on PSCo’s
electrical circuit in the area of the second ignition. PSCo
disputes that its power lines caused the second ignition.
PSCo is aware of 298 complaints, certain of which have also
named Xcel Energy Inc. and Xcel Energy Services, Inc. as a
defendant, on behalf of at least 4,047 plaintiffs relating to the
Marshall Fire. The complaints generally allege that PSCo’s
equipment ignited the Marshall Fire and assert various causes of
action under Colorado law, including negligence, premises
liability, trespass, nuisance, and inverse condemnation. In
September 2023, the Boulder County District Court Judge
consolidated eight lawsuits that were pending at that time into a
single action for pretrial purposes and has subsequently
consolidated additional lawsuits that have been filed.
Colorado courts do not apply strict liability in determining an
electric utility company’s liability for fire-related damages. For
inverse condemnation claims, Colorado courts assess whether a
defendant acted with intent to take a plaintiff’s property or
intentionally took an action which has the natural consequence of
taking the property. For negligence claims, Colorado courts look to
whether electric power companies have operated their system with a
heightened duty of care consistent with the practical conduct of
its business, and liability does not extend to occurrences that
cannot be reasonably anticipated.
Under Colorado law, in a civil action other than a medical
malpractice action, the total award for noneconomic loss is capped
at $0.6 million per defendant for claims that accrued at the time
of the Marshall Fire unless the court finds justification to exceed
that amount by clear and convincing evidence, in which case the
maximum doubles. Colorado law does not impose joint and several
liability in tort actions. Instead, under Colorado law, a defendant
is liable for the degree or percentage of the negligence or fault
attributable to that defendant, except where the defendant
conspired with another defendant. A jury’s verdict in a Colorado
civil case must be unanimous.
Colorado law caps punitive or exemplary damages to an amount
equal to the amount of the actual damages awarded to the injured
party, except the court may increase any award of punitive damages
to a sum up to three times the amount of actual damages if the
conduct that is the subject of the claim has continued during the
pendency of the case or the defendant has acted in a willful and
wanton manner during the action which further aggravated
plaintiff’s damages.
In the event Xcel Energy Inc. or PSCo was found liable related
to this litigation and were required to pay damages, such amounts
could exceed our insurance coverage of approximately $500 million
and have a material adverse effect on our financial condition,
results of operations or cash flows. However, due to uncertainty as
to the cause of the fire and the extent and magnitude of potential
damages, Xcel Energy Inc. and PSCo are unable to estimate the
amount or range of possible losses in connection with the Marshall
Fire.
Note 6. Non-GAAP
Reconciliation
Xcel Energy’s reported earnings are prepared in accordance with
GAAP. Xcel Energy’s management believes that ongoing earnings, or
GAAP earnings adjusted for certain items, reflect management’s
performance in operating the company and provides a meaningful
representation of the underlying performance of Xcel Energy’s core
business. In addition, Xcel Energy’s management uses ongoing
earnings internally for financial planning and analysis, reporting
of results to the Board of Directors and when communicating its
earnings outlook to analysts and investors. This non-GAAP financial
measure should not be considered as an alternative to measures
calculated and reported in accordance with GAAP.
Earnings Adjusted for Certain Items (Ongoing
Earnings)
Reconciliation of GAAP earnings (net income) to ongoing
earnings:
Three Months Ended Dec.
31
Twelve Months Ended Dec.
31
(Millions of Dollars)
2023
2022
2023
2022
GAAP net income
$
409
$
379
$
1,771
$
1,736
Loss on Comanche Unit 3 litigation
1
—
35
—
Workforce reduction expenses
72
—
72
—
Less: tax effect of adjustment
(19
)
—
(27
)
—
Ongoing earnings
$
463
$
379
$
1,851
$
1,736
Reconciliation of GAAP diluted EPS to ongoing diluted EPS by
operating company:
Twelve Months Ended Dec. 31,
2023
Twelve Months Ended Dec. 31,
2022
Diluted Earnings (Loss)
Per Share
GAAP Diluted EPS
Impact of Adjustments
Ongoing Diluted EPS
GAAP Diluted EPS
Impact of Adjustments
Ongoing Diluted EPS
NSP-Minnesota
$
1.28
$
0.04
$
1.32
$
1.23
—
$
1.23
PSCo (a)
1.26
0.08
1.33
1.33
$
—
1.33
SPS
0.70
0.01
0.71
0.64
—
0.64
NSP-Wisconsin
0.25
—
0.25
0.23
—
0.23
Earnings from equity method investments —
WYCO
0.04
—
0.04
0.04
—
0.04
Regulated utility (a)
3.52
0.14
3.66
3.47
—
3.47
Xcel Energy Inc. and Other
(0.31
)
—
(0.31
)
(0.29
)
—
(0.29
)
Total (a)
3.21
0.14
3.35
3.17
—
3.17
(a)
Amounts may not add due to rounding.
Comanche Unit 3 Litigation — In the third quarter of
2023, PSCo recognized a $34 million loss due to a jury verdict in
Denver County District Court awarding CORE lost power damages and
other costs. PSCo intends to file an appeal of this decision. Given
the non-recurring nature of this specific item, it has been
excluded from ongoing earnings.
Workforce Reduction — In 2023, Xcel Energy implemented
workforce actions to align resources and investments with our
evolving business and customer needs, and streamline the
organization for long-term success. Xcel Energy initiated a
Voluntary Retirement Program, under which approximately 400
eligible non-bargaining employees retired. Xcel Energy also
eliminated approximately 150 non-bargaining employees through an
involuntary severance program.
Workforce reduction expenses of $72 million were recorded in the
fourth quarter of 2023. Given the non-recurring nature of this
item, it has been excluded from ongoing earnings.
Note 7. Earnings Guidance and Long-Term
EPS and Dividend Growth Rate Objectives
Xcel Energy 2024 Earnings Guidance — Xcel Energy’s 2024
ongoing earnings guidance is a range of $3.50 to $3.60 per
share.(a)
Key assumptions as compared with 2023 actual levels unless
noted:
- Constructive outcomes in all pending rate case and regulatory
proceedings.
- Normal weather patterns for the remainder of the year.
- Weather-normalized retail electric sales are projected to
increase 2% to 3%.
- Weather-normalized retail firm natural gas sales are projected
to be flat.
- Capital rider revenue is projected to increase $70 million to
$80 million (net of PTCs).
- O&M expenses are projected to increase 1% to 2%.
- Depreciation expense is projected to increase approximately
$250 million to $260 million.
- Property taxes are projected to increase $50 million to $60
million.
- Interest expense (net of AFUDC - debt) is projected to increase
$130 million to $140 million, net of interest income.
- AFUDC - equity is projected to increase $45 million to $55
million.
- ETR is projected to be ~(4%) to (6%). The negative ETR is
largely offset by PTCs flowing back to customers in the capital
riders and fuel mechanisms and is largely earnings neutral. The
projected ETR does not reflect the potential impact of nuclear
PTCs, which are also expected to flow back to customers. (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. As Xcel Energy is unable to quantify
the financial impacts of any additional adjustments that may occur
for the year, we are unable to 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
2023 actual ongoing earnings base of $3.35 per share.
- Deliver annual dividend increases of 5% to 7%.
- Target a dividend payout ratio of 50% to 60%.
- 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 Dec.
31
2023
2022
Operating revenues:
Electric and natural gas
$
3,414
$
4,025
Other
28
28
Total operating revenues
3,442
4,053
Net income
$
409
$
379
Weighted average diluted common shares
outstanding
554
549
Components of EPS — Diluted
Regulated utility
$
0.84
$
0.78
Xcel Energy Inc. and other costs
(0.10
)
(0.09
)
GAAP diluted EPS (a)
$
0.74
$
0.69
Loss on Comanche Unit 3 litigation (See
Note 6)
—
—
Workforce reduction expenses (See Note
6)
0.09
—
Ongoing diluted EPS (a)
$
0.83
$
0.69
Book value per share
$
31.79
$
30.37
Cash dividends declared per common
share
0.52
0.4875
Twelve Months Ended Dec.
31
2023
2022
Operating revenues:
Electric and natural gas
$
14,091
$
15,203
Other
115
107
Total operating revenues
14,206
15,310
Net income
$
1,771
$
1,736
Weighted average diluted common shares
outstanding
552
547
Components of EPS — Diluted
Regulated utility
$
3.52
$
3.47
Xcel Energy Inc. and other costs
(0.31
)
(0.29
)
GAAP diluted EPS (a)
$
3.21
$
3.17
Loss on Comanche Unit 3 litigation (See
Note 6)
0.05
—
Workforce reduction expenses (See Note
6)
0.09
—
Ongoing diluted EPS (a)
$
3.35
$
3.17
Book value per share
$
31.90
$
30.48
Cash dividends declared per common
share
2.08
1.95
(a) Amounts may not add due to
rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240125490435/en/
Paul Johnson, Vice President - Treasurer & Investor
Relations (612) 215-4535
Roopesh Aggarwal, Senior Director - Investor Relations (303)
571-2855
Xcel Energy website address: www.xcelenergy.com (612)
215-5300
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