Xcel Energy (XEL) Q4 FY25 earnings call: guidance and Q&A

How will upcoming Colorado filings for JTS and the large tariff integrate with data center capacity needs? Will capacity needs be submitted individually or grouped? How does this tie into the 6 GW target?

Xcel plans to file the large load tariff in Colorado in early Q2. Once approved, large loads will be brought forward within this framework, likely packaged with generation to serve them, focusing on customer benefit. The 6 GW target is contemplated across the system, with current focus on the Upper Midwest, but opportunities exist in Colorado, Texas, and New Mexico once tariffs are in place.

“As we think about it, we're aiming to file that large load tariff in Colorado early in Q2 and work through that regulatory proceeding in Colorado. And once we have that kind of large load tariff in that construct, we'll seek to bring forward large loads within that framework, along with likely a package of generation to serve that large load, really focused on driving customer benefit for all of our current customers.”

asked by Brian Russo · answered by Brian Van Abel

Does the $10 billion CapEx pipeline only include the low end of potential data center needs, implying significant upside?

The $10 billion CapEx pipeline did not include significant data center growth in Colorado. Therefore, additional generation to serve data center opportunities in Colorado, post large-load tariff filing, would represent additional upside.

“Yes, that's absolutely a fair characterization as we think about it. And really, that kind of that low end didn't include a significant data center growth in Colorado. So as we look to look at data center opportunities there after the large-load tariff filing, it would include additional generation to serve those resources.”

asked by Brian Russo · answered by Brian Van Abel

How will the ramp to 5% sales CAGR be affected by data centers, and is 3% still expected from data centers, given the increased 6 GW target?

The 5% sales CAGR was based on 3 GW of data centers. While the target is now 6 GW, the timing of these new contracts (by end of 2027) means energization and ramp-up are likely in the 2029-2030s, extending growth opportunities beyond the current 5-year forecast. A holistic update to the 5-year sales forecast will be provided in Q3.

“Now we'll update our 5-year sales forecast as we typically do on Q3. That 5% sales CAGR was based on the 3 gigawatts of data center that we had all tied in our last Q3 update. Clearly, we've updated that from 3 gigawatts to 6 gigawatts. But I think there's some of it when you look at the timing, and we expect to have these contracts signed by the end of 2027, and the construction cycle, a lot of those may come in kind of that '29 type period. And then it's really about energizing in the 2030 and the early 2030s and about extending our capital investment opportunity, our generation need.”

asked by Diana Niles · answered by Brian Van Abel

What roles will Xcel and NextEra play in developing data center projects, and what are the time-to-market advantages?

The partnership aims for increased speed and scale by combining the expertise of both companies in sales, development, and analytics to deliver solutions for sophisticated data center customers. Xcel brings its backlog and conversations with hyperscalers, while NextEra offers a national platform. The goal is to bring incremental generation to Xcel's networks with speed, certainty, price transparency, and competitiveness. The arrangement is not exclusive and not fuel-type limited, leveraging NextEra's renewable development experience.

“I think about us having a great backlog and visibility and conversations with hyperscalers and data center developers. We know NextEra has a national platform of this as well. And bringing those 2 together and being able to sit in a room and compare notes of who are we talking to, where is the best place to do this as it pertains to our regulated footprint. And then where do we have generation that we can bring to the table that we need to bring to the table with speed, with certainty, with price transparency and with competitiveness.”

asked by Carly Davenport · answered by Robert Frenzel

What does the tranching of Colorado near-term RFPs mean for the proposed 2.1 GW company-owned portfolio, and what is the timeline for updates?

The commission approved about 1 GW of projects, including a gas plant, in the first tranche. They are now analyzing additional proposals, which could include up to 1 GW of company-owned solar plus storage in a second tranche, with a potential third tranche in the first half of the year. Any projects not selected in the near-term procurement will shift to the overall resource plan and subsequent RFPs later in the year.

“And then they ask for some additional analysis over the next, call it 1 or 2 months that we're working on expeditiously. And so they're going to look at a new portfolio, which could potentially include up to 1 gigawatt of our company-owned solar plus storage in that next tranche and then potentially a tranche 3, the timing is unclear, but likely in the first half.”

asked by Stephen D'Ambrisi · answered by Brian Van Abel

Given significantly under-authorized earned returns in 2025, especially in Colorado and SPS, what is the path to authorized ROE, and what's embedded in the plan?

SPS's under-earnings in Q4 2025 were due to challenging weather and unique items, expected to improve with rider recovery and the New Mexico rate case. Colorado had significant under-earnings, but with the Marshall trial settlement complete, electric and gas rate cases filed late last year are expected to lead to revenue decisions in late Q3 2026, with full impact and annualization in 2027, driving significant ROE improvement.

“Colorado specifically, yes, significant under earnings. But I think maybe refresh from that perspective, we really wanted to get through the Marshall trial and get a constructive settlement with that respect. And we did. If you didn't catch the opening remarks, we only have 3 known plaintiffs left to settle out of 4,000 plaintiffs. So we feel really good about where we are with that.”

asked by Nicholas Campanella · answered by Brian Van Abel

What is Xcel's view on data centers bringing their own generation, and what are the implications for the system and reliability?

Xcel believes 'bring your own gen' is a construct to avoid data centers taking existing supply. Most data centers prefer not to own and operate their own generation. In Xcel's regulated markets, the company aims to bring incremental generation to support large loads, protecting existing customers from incremental costs. This approach allows all customers to benefit from spreading fixed grid assets across more production units. While some developers may build their own generation, Xcel sees this as a small segment.

“We think that as you think -- as you look across the country and the sort of different regulatory frameworks that are out there, we think data centers, by and large, and our conversations with them have affirmed this that they don't really want to own and operate their own generation. They'd rather have someone own and operate for them.”

asked by Travis Miller · answered by Robert Frenzel