XCEL ENERGY INC

Previous wording

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. For the three and six months ended June 30, 2024 and 2023, there were no such adjustments to GAAP earnings and therefore GAAP earnings equal ongoing earnings for these periods.

Current wording

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 EPS, 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.

Previous wording

Xcel Energy — Xcel Energy’s second quarter GAAP and ongoing diluted earnings were $0.54 per share, compared with $0.52 per share in the same period in 2023. The increase in earnings per share was primarily driven by increased recovery of infrastructure investments and warmer than normal weather, partially offset by higher depreciation, interest charges and O&M expenses. 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).

Current wording

Xcel Energy — Xcel Energy’s third quarter GAAP earnings were $1.21 per share, compared with $1.19 per share in the same period in 2023 and ongoing earnings were $1.25 per share in 2024, compared with $1.23 per share in 2023. The change in earnings per share was primarily driven by increased recovery of infrastructure investments, partially offset by higher depreciation, interest charges and O&M expenses. 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).

Previous wording

NSP-Minnesota— GAAP and ongoing earnings increased $0.01 per share for the second quarter and $0.13 year-to-date. Year-to-date earnings primarily reflect increased recovery of electric and natural gas infrastructure investments and lower O&M expenses, partially offset by higher depreciation.

Current wording

NSP-Minnesota— GAAP earnings decreased $0.02 per share and ongoing earnings increased 0.02 per share for the third quarter. Year-to-date GAAP earnings increased $0.11 per share and ongoing earnings increased $0.17 per share. Year-to-date earnings primarily reflect increased recovery of infrastructure investments (electric and natural gas), partially offset by higher depreciation and interest charges. See Note 6 for reconciliation from GAAP to ongoing earnings.

Previous wording

PSCo— GAAP and ongoing earnings increased $0.04 in the second quarter and $0.05 year-to-date. The year-to-date change was driven by increased recovery of electric infrastructure investments, which was partially offset by increased depreciation.

Current wording

PSCo— GAAP earnings increased $0.04 per share and ongoing earnings increased $0.01 per share for the third quarter. Year-to-date GAAP earnings increased $0.09 per share and ongoing earnings increased $0.04 per share. Year-to-date ongoing earnings primarily reflect higher recovery of electric infrastructure investments, which was partially offset by increased interest charges, depreciation and O&M expenses.

Previous wording

SPS— GAAP and ongoing earnings increased $0.01 for the second quarter and year-to-date as regulatory rate outcomes and increased sales and demand were partially offset by increased depreciation.

Current wording

SPS— GAAP and ongoing earnings increased $0.01 per share for the third quarter of 2024 and $0.03 year-to-date. Year-to-date earnings reflect the impact of regulatory rate outcomes and sales growth, partially offset by increased depreciation and O&M expenses.

Previous wording

•PSCo — Residential sales decreased due to a 1.6% decrease in use per customer, partially offset by customer growth of 1.3%. The C&I sales decline was related to decreased use per customer, primarily in the manufacturing, information and real estate sectors.

Current wording

•PSCo — Residential sales declined due to a 1.5% decrease in use per customer, partially offset by customer growth of 1.4%. The C&I sales decline was related to decreased use per customer, primarily in the information sector.

Previous wording

•NSP-Minnesota — Residential sales decreased due to a 2.1% decrease in use per customer, partially offset by a 1.5% increase in customers. C&I sales declined due to decreased use per customer, largely in the manufacturing sector.

Current wording

•NSP-Minnesota — Residential sales declined due to a 2.2% decrease in use per customer, partially offset by a 1.5% increase in customers. C&I sales declined due to decreased use per customer, largely in the manufacturing, retail trade and education sectors.

Previous wording

•SPS — Residential sales declined as a result of a 2.9% decrease in use per customer, partially offset by 0.5% customer growth. C&I sales increased due to higher use per customer, primarily driven by the energy sector.

Current wording

•SPS — Residential sales declined as a result of a 2.2% decrease in use per customer, partially offset by 0.6% customer growth. C&I sales increased due to higher use per customer, primarily driven by the energy sector and cryptocurrency mining.

Previous wording

•NSP-Wisconsin — Residential sales declined due to a 3.6% decrease in use per customer, partially offset by 0.8% increase in customers. C&I sales decline was associated with decreased use per customer, experienced largely in the professional services and manufacturing sectors.

Current wording

•NSP-Wisconsin — Residential sales declined due to a 3.2% decrease in use per customer, partially offset by 0.9% increase in customers. C&I sales decline was associated with decreased use per customer, experienced largely in the manufacturing and professional services sectors.

Previous wording

•Increase in natural gas sales was driven by residential and C&I customer growth in all jurisdictions and increased use per customer in PSCo. Overall residential and C&I customer growth was 1.1% and 0.6%, respectively.

Current wording

•Increase in natural gas sales was driven by residential and C&I customer growth in all jurisdictions and increased residential use per customer in PSCo offset by decreased use per customer in PSCo C&I and other jurisdictions.

Previous wording

(b)Recognition of revenue from the Texas rate case outcome is largely offset by recognition of previously deferred costs.

Current wording

(a)Recognition of revenue from the Texas rate case outcome is largely offset by recognition of previously deferred costs.

Previous wording

Electric fuel and purchased power expenses decreased $175 million for the second quarter and $344 million year-to-date. The decrease is primarily due to timing of fuel recovery mechanisms and lower commodity prices.

Current wording

Electric fuel and purchased power expenses decreased $121 million for the third quarter and $465 million year-to-date. The decrease is primarily due to timing of fuel recovery mechanisms and lower commodity prices.

Previous wording

Natural gas sold and transported decreased $52 million for the second quarter and $413 million year-to-date. The decrease is primarily due to lower commodity prices and volumes.

Current wording

Natural gas sold and transported decreased $7 million for the third quarter and $420 million year-to-date. The decrease is primarily due to lower commodity prices and volumes.

Previous wording

O&M Expenses — O&M expenses increased $34 million for the second quarter and decreased $11 million year-to-date. The year-to-date decrease was primarily due to decreased labor and benefit costs, gain on a land sale in the first quarter and lower bad debt expenses, partially offset by recognition of previously deferred costs associated with the Texas Electric Rate Case and planned generation outages that both occurred in the second quarter, as well as increased wildfire mitigation costs.

Current wording

O&M Expenses — O&M expenses increased $69 million for the third quarter and increased $58 million year-to-date. The year-to-date increase was primarily due to operational activities (generation maintenance, damage prevention, storm response and wildfire mitigation) and recognition of previously deferred costs associated with the Texas Electric Rate Case, partially offset by gain on land sale in the first quarter and lower bad debt expense.

Previous wording

Depreciation and Amortization— Depreciation and amortization increased $138 million for the second quarter and $172 million year-to-date. The year-to-date increase was largely the result of system expansion as well as recognition of previously deferred costs and depreciation rate changes associated with the Texas Rate Case, partially offset by wind and nuclear life extensions implemented in 2023 in the Minnesota Electric Rate Case.

Current wording

Depreciation and Amortization— Depreciation and amortization increased $63 million for the third quarter and $235 million year-to-date. The year-to-date increase was largely the result of system expansion partially offset by recognition of previously deferred costs and depreciation rate changes associated with various rate cases.

Previous wording

Interest Charges— Interest charges increased $51 million for the second quarter and $89 million year-to-date, largely due to increased debt levels and higher interest rates.

Current wording

Interest Charges— Interest charges increased $57 million for the third quarter and $146 million year-to-date, largely due to increased debt levels and higher interest rates.

Previous wording

AFUDC, Equity and Debt— AFUDC increased $24 million for the second quarter and $46 million year-to-date, driven by increased investment in renewable and transmission projects.

Current wording

AFUDC, Equity and Debt— AFUDC increased $25 million for the third quarter and $71 million year-to-date, driven by increased investment in renewable and transmission projects.

Previous wording

2024 Minnesota Natural Gas Rate Case — In November 2023, NSP-Minnesota filed a request with the MPUC for a 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 December 2023, the MPUC approved NSP-Minnesota’s request for interim rates, subject to refund, of approximately $51 million (implemented on Jan. 1, 2024).

Current wording

2024 Minnesota Natural Gas Rate Case — In November 2023, NSP-Minnesota filed a request with the MPUC for a natural gas rate increase of approximately $59 million, or 9.6%. The request was 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 December 2023, the MPUC approved NSP-Minnesota’s request for interim rates, subject to refund, of approximately $51 million (implemented on Jan. 1, 2024).

Previous wording

A MPUC decision and order is expected by the end of 2024.

Current wording

A NDPSC decision and order is expected by the end of 2024.

Previous wording

In November 2023, NSP-Minnesota filed an appeal of the decision to the Minnesota Court of Appeals. In June 2024, a group of Minnesota utilities filed an amicus brief supporting NSP-Minnesota’s position related to prepaid pension assets. The appeal is pending a court decision.

Current wording

In November 2023, NSP-Minnesota filed an appeal to the Minnesota Court of Appeals regarding MPUC decisions relating to executive compensation, insurance expense and treatment of prepaid pension assets. The appeal is pending a court decision expected in the first quarter of 2025.

Previous wording

Wisconsin 2025 Stay-Out Proposal — In June 2024, NSP-Wisconsin filed a 2025 stay-out proposal with the PSCW. The filing proposes to offset $28 million and $3 million of the Company’s forecasted 2025 electric and natural gas revenue deficiency, respectively, by amortizing IRA deferrals, stopping a deferral related to IRA benefits ordered in a previous rate case, and deferring revenue requirement impacts of two gas capital projects. The Company expects to have a Commission decision before year-end 2024.

Current wording

Wisconsin 2025 Stay-Out Proposal — In June 2024, NSP-Wisconsin filed a 2025 stay-out proposal with the PSCW. The filing proposes to offset 2025 revenue deficiencies of $28 million for electric and $3 million for natural gas, by amortizing IRA deferrals, stopping a deferral related to IRA benefits ordered in a previous rate case, and deferring revenue requirement impacts of two natural gas capital projects. NSP-Wisconsin expects to have a PSCW decision by year-end 2024.

Previous wording

2022 Upper Midwest IRP Resource Acquisition —NSP-Minnesota and NSP-Wisconsin have been engaged in multiple resource acquisition processes and proceedings to meet the need identified in the approved Upper Midwest IRP.

Current wording

2022 Upper Midwest IRP Resource Acquisition —NSP-Minnesota and NSP-Wisconsin are actively engaged in multiple processes and proceedings to acquire resources to meet their identified generation resource needs.

Previous wording

•In the second quarter of 2023, NSP-Minnesota initiated the process with the MPUC for acquisition of 800 MW of firm dispatchable resources. In January 2024, NSP-Minnesota and other companies submitted proposed resources and filed for project approval with the MPUC. NSP-Minnesota expects a decision by the second quarter of 2025.

Current wording

•In the second quarter of 2023, NSP-Minnesota initiated the process with the MPUC for acquisition of firm dispatchable resources. In October 2024, a settlement was reached with various parties, pending MPUC approval. See below for more details.

Previous wording

•In June and July 2024, respectively, NSP-Minnesota and NSP-Wisconsin each issued an RFP collectively seeking up to 1,600 MW of wind, solar, storage or hybrid resources to interconnect to the NSP System. Among other things, the RFP will seek to reutilize interconnection rights associated with the retiring Sherco and King coal units in NSP-Minnesota. Dependent on the proposals received, NSP-Minnesota or NSP-Wisconsin plan to file for the requisite approvals of the selected resources with the MPUC and PSCW, respectively, in the second quarter of 2025.

Current wording

•In 2024, NSP-Minnesota and NSP-Wisconsin each issued an RFP collectively seeking up to 1,600 MW of wind, solar, storage or hybrid resources to interconnect to the NSP System, including reutilization of the interconnection rights associated with the retiring Sherco coal units, and 650 MW of solar and storage resources to specifically reutilize the interconnection rights associated with the retiring King coal unit. Bids are currently under evaluation; NSP-Minnesota and NSP-Wisconsin expect to announce short listed projects in December 2024 and plan to file for the requisite approvals of the selected resources with the MPUC and PSCW, respectively, in the second quarter of 2025.

Previous wording

2024 Upper Midwest Resource Plan —In February 2024, NSP filed its Upper Midwest Resource Plan with the MPUC which included the following key items:

Current wording

2024 Upper Midwest Resource Plan —In February 2024, NSP filed its Upper Midwest Resource Plan with the MPUC. In October 2024, NSP-Minnesota filed a settlement with several parties reaching agreement on the targeted resource additions for the 5-year Action Plan and the process under which those resources will be secured, as well as the proposed projects to be approved in the pending 800 MW firm dispatchable resource acquisition.

Previous wording

•Extends the operation of Prairie Island and Monticello through the early 2050s.

Current wording

•Planned life extensions of the Prairie Island and Monticello nuclear plants through the early 2050s.

Previous wording

Colorado Natural Gas Rate Case —In January 2024, PSCo filed a request with the CPUC seeking an increase to retail natural gas rates of $171 million (9.5%). The request is based on a 10.25% ROE, an equity ratio of 55%, a 2023 test year and a $4.2 billion retail rate base which includes projected capital additions through Dec. 31, 2023. PSCo has requested a proposed effective date of Nov. 1, 2024.

Current wording

Colorado Natural Gas Rate Case —In January 2024, PSCo, filed a request with the CPUC seeking an increase to retail natural gas rates of $171 million (9.5%). The request was based on a 10.25% ROE, an equity ratio of 55%, a 2023 test year and a $4.2 billion year-end rate base.

Previous wording

In December 2023, the CPUC approved two PIMs associated with the generation projects in the portfolio, including a PIM related to capital construction costs and another related to ongoing levelized energy costs. These PIMs will be further defined in related proceedings throughout 2024.

Current wording

In December 2023, the CPUC approved two PIMs associated with the generation projects in the portfolio, including a PIM related to capital construction costs and another related to ongoing levelized energy costs. These PIMs will be further defined in related proceedings throughout 2024. In September 2024, PSCo filed a proposed framework for CPUC review of pricing adjustments for both company owned and PPA resources to enable delivery of the approved portfolio in light of supply chain and geopolitical developments. A decision is expected in the fourth quarter of 2024.

Previous wording

PSCo filed or expects to file generation and transmission certificates of public convenience and necessity throughout 2024.

Current wording

PSCo filed or expects to file generation and transmission CPCNs throughout 2024 and early 2025.

Previous wording

Wildfire Mitigation Plan —In June 2024, PSCo filed an Updated Wildfire Mitigation Plan (the Plan) and request for recovery of costs covering the years 2025 to 2027 with the CPUC. The estimated total cost for this plan is approximately $1.9 billion. A CPUC decision is expected in early 2025.

Current wording

Wildfire Mitigation Plan —In June 2024, PSCo filed an updated WMP and request for recovery of costs covering the years 2025 to 2027 with the CPUC. The estimated total cost for this plan is approximately $1.9 billion. A CPUC decision is expected in the third quarter of 2025.

Previous wording

The Plan is a key component of keeping our customers and communities safe while providing reliable and affordable electric service. The Plan integrates industry experience; incorporates evolving risk assessment methodologies; adds new technology; and expands the scope, pace and scale of our work to reduce wildfire risk in a comprehensive and efficient manner under four core programs that include the following:

Current wording

The WMP is a key component of keeping our customers and communities safe while providing reliable and affordable electric service. The WMP integrates industry experience; incorporates evolving risk assessment methodologies; adds new technology; and expands the scope, pace and scale of our work to reduce wildfire risk in a comprehensive and efficient manner under four core programs that include the following:

Previous wording

Total capital investments and O&M expenses associated with the proposed plan are estimated at the following:

Current wording

The CPUC requested that PSCo file supplemental testimony including the impacts of potential securitization of the proposed wildfire mitigation plan investments. Total capital investments and O&M expenses associated with the proposed plan are estimated at the following:

Previous wording

CPUC Proactive Line De-Energization Investigation— In April 2024, PSCo proactively de-energized certain lines in Colorado due to winds that were over 90 MPH to reduce potential wildfire risk.

Current wording

CPUC Proactive Line De-Energization Investigation— In April 2024, PSCo proactively de-energized certain lines in Colorado due to winds that were over 90 miles per hour to reduce potential wildfire risk.

Previous wording

In November 2023, the CPUC approved PSCo’s natural gas price risk plan to manage customer bill volatility from commodity price changes, establishing upper and lower limits for changes in the GCA rate. As a result, costs above the upper limit are deferred for future recovery, with interest, and costs below the lower limit are deferred as a reserve against future cost increases.

Current wording

In November 2023, the CPUC approved PSCo’s natural gas price risk plan to manage customer bill volatility from commodity price changes, establishing upper and lower limits for changes in the gas cost adjustment rate. As a result, costs above the upper limit are deferred for future recovery, with interest, and costs below the lower limit deferred as a reserve against future cost increases.

Previous wording

The legislation also calls for the CPUC to adopt rules to establish fuel cost mechanisms to align the financial incentives of a utility with the interests of the utility’s customers by Jan. 1, 2025. The CPUC issued a written notice of the proposed rule in the second quarter of 2024 and held a hearing on comments in July 2024. A CPUC decision and final rule is expected later in 2024. The Commission's proposed rules for electric utilities are also expected later in 2024.

Current wording

The legislation also calls for the CPUC to adopt rules to establish fuel cost mechanisms to align the financial incentives of a utility with the interests of the utility’s customers by Jan. 1, 2025. In September 2024, the CPUC issued a recommended decision in adopting rules to implement a natural gas PIM prior to Jan. 1, 2025. Per the recommended decision, natural gas costs incurred will be compared to the prior year to determine any incentive/penalty. In October 2024, PSCo filed targeted exceptions. A final decision is expected in fourth quarter of 2024.

Previous wording

Colorado Senate Bill 24-218 — In May 2024, Colorado Senate Bill 24-218 was signed into law. The bill includes a suite of policy changes to accelerate investment in electric distribution, including a framework to develop distribution planning and performance requirements and the opportunity for current cost recovery for many distribution investments. In July 2024, the CPUC approved PSCo’s request to collect $17 million through a rider, over the remainder of 2024, subject to true-up, associated with forecasted capital investments covered by the new legislation.

Current wording

Colorado Senate Bill 24-218 — In May 2024, Colorado Senate Bill 24-218 was signed into law. The bill includes a suite of policy changes to accelerate investment in electric distribution, including a framework to develop distribution planning and performance requirements and the opportunity for current cost recovery through a rider for distribution investments. In July 2024, the CPUC approved PSCo’s request to collect $17 million through a rider, over the remainder of 2024, subject to true-up, associated with forecasted capital investments covered by the new legislation. PSCo expects to file an updated 2025 rider in November 2024.

Previous wording

Cabin Creek Prudency Review —In 2015, the CPUC granted a CPCN for an $88 million upgrade project to renew the FERC operating license and increase the generating and storage capacity of the Cabin Creek hydroelectric storage facility, which anticipated project completion in 2020. Due to significant and unforeseen challenges, the project was not completed until 2023 and cost approximately $110 million. In July 2024, PSCo filed a prudency review for the upgrade project, which reviews the project’s timelines, costs, benefits and challenges. A procedural schedule is expected in the third quarter of 2024 with a final CPUC decision in 2025.

Current wording

Cabin Creek Prudency Review —In 2015, the CPUC granted a CPCN for an $88 million upgrade project to increase the generating and storage capacity of the Cabin Creek hydroelectric storage facility, which anticipated project completion in 2020. Due to significant and unforeseen challenges, the project was not completed until 2023 and cost approximately $110 million. In July 2024, PSCo filed a prudency review for the upgrade project, which reviews the project’s timelines, costs, benefits and challenges.

Previous wording

2023 Texas Electric Rate Case— In 2023, SPS filed an electric rate case with the PUCT seeking an increase in base rate revenue of $158 million (14%). Interim rates went into effect on Feb. 1, 2024. In April 2024, the PUCT approved a black box settlement between SPS and intervening parties, which reflect the following terms:

Current wording

2023 Texas Electric Rate Case— In 2023, SPS filed an electric rate case with the PUCT seeking an increase in base rate revenue of $158 million (14%). Interim rates went into effect on Feb. 1, 2024.

Previous wording

In July 2024, SPS filed to surcharge the final under-recovered amount, estimated to be $37 million. This will be largely offset by previously deferred costs including depreciation, O&M, and taxes other than income tax.

Current wording

In July 2024, SPS filed to surcharge the final under-recovered amount, estimated to be $37 million. This will be largely offset by previously deferred costs. A PUCT decision is expected in the fourth quarter of 2024.

Previous wording

New Mexico Resource Plan (IRP)— In October 2023, SPS filed its IRP with the NMPRC, which supports projected load growth and increasing reliability requirements, and secures replacement energy and capacity for retiring resources. SPS’ initial IRP modeling projected resource needs ranging from approximately 5,300 MW to 10,200 MW by 2030. In February 2024, the NMPRC accepted the IRP.

Current wording

New Mexico Resource Plan (IRP)— In October 2023, SPS filed its IRP with the NMPRC, which supports projected load growth and increasing reliability requirements, and secures replacement energy and capacity for retiring resources. SPS’ projected resource needs ranging from approximately 5,300 MW to 10,200 MW by 2030. In February 2024, the NMPRC accepted the IRP.