- 2022 diluted earnings per share (EPS) were $3.17 compared with
$2.96 per share in 2021.
- Xcel Energy reaffirms 2023 EPS guidance of $3.30 to $3.40 per
share.
Xcel Energy Inc. (NASDAQ: XEL) today reported 2022 GAAP and
ongoing earnings of $1.74 billion, or $3.17 per share, compared
with $1.60 billion, or $2.96 per share in the same period in
2021.
Earnings reflect capital investment recovery and other
regulatory outcomes, partially offset by increases in depreciation,
interest charges and operating and maintenance (O&M)
expenses.
“2022 was another solid year for Xcel Energy, where we delivered
for our customers, our communities, our employees, and our
investors. We delivered earnings of $3.17 per share, which is the
18th consecutive year we have met or beat our original earnings
guidance,” said Bob Frenzel, chairman, president and CEO of Xcel
Energy.
“Our execution towards our clean energy future continues to lead
the industry with regulatory approval in Colorado and the Upper
Midwest of our plans to dramatically increase the renewable energy
available to our customers while retiring all of our coal-fired
plants. And as a result of the energy tax provisions in the
Inflation Reduction Act, we are able to reduce the cost to our
customers over the assets’ lives by billions of dollars as we power
the nation’s clean energy transition.
“Xcel Energy also delivered strong reliability for our customers
and communities in 2022 despite increasingly volatile weather
causing high energy demand events during hotter-than-normal summers
in Colorado and the Upper Midwest, and Winter Storm Elliott which
knocked out critical electric and gas service across the
country.”
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:
9804128
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. 30.
Replay Numbers
US Dial-In:
1-866-583-1035
Access Code:
9804128
Except for the historical statements contained in this report,
the matters discussed herein are forward-looking statements that
are subject to certain risks, uncertainties and assumptions. Such
forward-looking statements, including those relating to 2023 EPS
guidance, long-term EPS and dividend growth rate objectives, future
sales, future expenses, future tax rates, future operating
performance, estimated base capital expenditures and financing
plans, projected capital additions and forecasted annual revenue
requirements with respect to rider filings, expected rate increases
to customers, expectations and intentions regarding regulatory
proceedings, and expected impact on our results of operations,
financial condition and cash flows of resettlement calculations and
credit losses relating to certain energy transactions, as well as
assumptions and other statements are intended to be identified in
this document by the words “anticipate,” “believe,” “could,”
“estimate,” “expect,” “intend,” “may,” “objective,” “outlook,”
“plan,” “project,” “possible,” “potential,” “should,” “will,”
“would” and similar expressions. Actual results may vary
materially. Forward-looking statements speak only as of the date
they are made, and we expressly disclaim any obligation to update
any forward-looking information. The following factors, in addition
to those discussed in Xcel Energy’s Annual Report on Form 10-K for
the fiscal year ended Dec. 31, 2021 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: uncertainty around the impacts and
duration of the COVID-19 pandemic, including potential workforce
impacts resulting from vaccination requirements, quarantine
policies or government restrictions, and sales volatility;
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; 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; effects
of geopolitical events, including war and acts of terrorism; cyber
security threats and data security breaches; seasonal weather
patterns; changes in environmental laws and regulations; climate
change and other weather; natural disaster and resource depletion,
including compliance with any accompanying legislative and
regulatory changes; costs of potential regulatory penalties;
regulatory changes and/or limitations related to the use of natural
gas as an energy source; 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
2022
2021
2022
2021
Operating revenues
Electric
$
2,868
$
2,562
$
12,123
$
11,205
Natural gas
1,157
768
3,080
2,132
Other
28
25
107
94
Total operating revenues
4,053
3,355
15,310
13,431
Operating expenses
Electric fuel and purchased power
1,233
1,090
5,005
4,733
Cost of natural gas sold and
transported
776
478
1,910
1,081
Cost of sales — other
12
10
44
38
Operating and maintenance expenses
664
569
2,491
2,321
Conservation and demand side management
expenses
72
82
331
304
Depreciation and amortization
606
535
2,413
2,121
Taxes (other than income taxes)
165
158
688
630
Total operating expenses
3,528
2,922
12,882
11,228
Operating income
525
433
2,428
2,203
Other income (expense), net
7
—
(13
)
5
Earnings from equity method
investments
9
15
36
62
Allowance for funds used during
construction — equity
22
20
75
73
Interest charges and financing
costs
Interest charges — includes other
financing costs of $8, $8, $32 and $29, respectively
248
214
953
842
Allowance for funds used during
construction — debt
(9
)
(8
)
(28
)
(26
)
Total interest charges and financing
costs
239
206
925
816
Income before income taxes
324
262
1,601
1,527
Income tax benefit
(55
)
(53
)
(135
)
(70
)
Net income
$
379
$
315
$
1,736
$
1,597
Weighted average common shares
outstanding:
Basic
549
541
547
539
Diluted
549
542
547
540
Earnings per average common
share:
Basic
$
0.69
$
0.58
$
3.18
$
2.96
Diluted
0.69
0.58
3.17
2.96
XCEL ENERGY INC. AND SUBSIDIARIES Notes
to Investor Relations Earnings Release (Unaudited)
Due to the seasonality of Xcel Energy’s operating results,
quarterly financial results are not an appropriate base from which
to project annual results.
Non-GAAP Financial Measures
The following discussion includes financial information prepared
in accordance with generally accepted accounting principles (GAAP),
as well as certain non-GAAP financial measures such as ongoing
return on equity (ROE), ongoing earnings and ongoing diluted EPS.
Generally, a non-GAAP financial measure is a measure of a company’s
financial performance, financial position or cash flows that
adjusts measures calculated and presented in accordance with GAAP.
Xcel Energy’s management uses non-GAAP measures for financial
planning and analysis, for reporting of results to the Board of
Directors, in determining performance-based compensation and
communicating its earnings outlook to analysts and investors.
Non-GAAP financial measures are intended to supplement investors’
understanding of our performance and should not be considered
alternatives for financial measures presented in accordance with
GAAP. These measures are discussed in more detail below and may not
be comparable to other companies’ similarly titled non-GAAP
financial measures.
Ongoing ROE
Ongoing ROE is calculated by dividing the net income or loss of
Xcel Energy or each subsidiary, adjusted for certain nonrecurring
items, by each entity’s average stockholder’s equity. We use these
non-GAAP financial measures to evaluate and provide details of
earnings results.
Earnings Adjusted for Certain Items
(Ongoing Earnings and Ongoing Diluted EPS)
GAAP diluted EPS reflects the potential dilution that could
occur if securities or other agreements to issue common stock
(i.e., common stock equivalents) were settled. The weighted average
number of potentially dilutive shares outstanding used to calculate
Xcel Energy Inc.’s diluted EPS is calculated using the treasury
stock method. Ongoing earnings reflect adjustments to GAAP earnings
(net income) for certain items. Ongoing diluted EPS for Xcel Energy
is calculated by dividing net income or loss, adjusted for certain
items, by the weighted average fully diluted Xcel Energy Inc.
common shares outstanding for the period. Ongoing diluted EPS for
each subsidiary is calculated by dividing the net income or loss
for such subsidiary, adjusted for certain items, by the weighted
average fully diluted Xcel Energy Inc. common shares outstanding
for the period.
We use these non-GAAP financial measures to evaluate and provide
details of Xcel Energy’s core earnings and underlying performance.
We believe these measurements are useful to investors to evaluate
the actual and projected financial performance and contribution of
our subsidiaries. For the three and twelve months ended Dec. 31,
2022 and 2021, there were no such adjustments to GAAP earnings and
therefore GAAP earnings equal ongoing earnings for these
periods.
Note 1. Earnings Per Share
Summary
Xcel Energy’s 2022 earnings were $3.17 per share compared to
$2.96 per share in 2021. The increase was driven by regulatory
outcomes, partially offset by higher depreciation, O&M expenses
and interest charges. Costs for natural gas significantly increased
in 2022 due to market conditions. However, 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 revenues are
offset by the related variation in costs). Summarized diluted EPS
for Xcel Energy:
Three Months Ended Dec.
31
Twelve Months Ended Dec.
31
Diluted Earnings (Loss) Per
Share
2022
2021
2022
2021
PSCo
$
0.31
$
0.27
$
1.33
$
1.22
NSP-Minnesota
0.29
0.22
1.23
1.12
SPS
0.12
0.11
0.64
0.59
NSP-Wisconsin
0.04
0.05
0.23
0.20
Earnings from equity method investments —
WYCO
0.01
0.01
0.04
0.05
Regulated utility (a)
0.78
0.65
3.47
3.18
Xcel Energy Inc. and Other
(0.09
)
(0.06
)
(0.29
)
(0.22
)
Total (a)
$
0.69
$
0.58
$
3.17
$
2.96
(a)
Amounts may not add due to rounding.
PSCo — Earnings increased $0.11 per share for 2022,
driven by regulatory outcomes and favorable weather. Higher
revenues were partially offset by higher depreciation, O&M
expenses and interest charges.
NSP-Minnesota — Earnings increased $0.11 per share for
2022 compared to 2021, driven by regulatory rate outcomes,
partially offset by additional depreciation and O&M
expenses.
SPS — Earnings increased $0.05 per share for 2022,
largely related to regulatory rate outcomes, strong sales growth
and favorable weather, partially offset by higher depreciation and
O&M expenses.
NSP-Wisconsin — Earnings increased $0.03 per share for
2022 compared to 2021. The increase is due to regulatory rate
outcomes and sales growth, partially offset by higher depreciation
and O&M expenses.
Xcel Energy Inc. and Other — Earnings decreased $0.07 per
share year-to-date due to higher interest charges and decreased
earnings from Energy Impact Partners (EIP) investments.
Components significantly contributing to changes in 2022 EPS
compared with 2021:
Diluted Earnings (Loss) Per
Share
Three Months Ended Dec.
31
Twelve Months Ended Dec.
31
GAAP and ongoing diluted EPS —
2021
$
0.58
$
2.96
Components of change — 2022 vs. 2021
Higher electric revenues, net of electric
fuel and purchased power
0.22
0.89
Higher natural gas revenues, net of cost
of natural gas sold and transported
0.12
0.16
Lower ETR (a)
0.03
0.15
Higher depreciation and amortization
(0.10
)
(0.40
)
Higher O&M expenses
(0.13
)
(0.24
)
Higher interest expense
(0.05
)
(0.15
)
Higher taxes (other than income taxes)
(0.01
)
(0.08
)
Other (net)
0.03
(0.12
)
GAAP and ongoing diluted EPS —
2022
$
0.69
$
3.17
(a)
Includes production tax credits (PTCs) and
plant regulatory amounts, which are primarily offset as a reduction
to electric revenues.
ROE for Xcel Energy and its utility subsidiaries:
2022
PSCo
NSP- Minnesota
SPS
NSP- Wisconsin
Operating Companies
Xcel Energy
GAAP and ongoing ROE
8.23
%
8.76
%
9.36
%
10.57
%
8.74
%
10.76
%
2021
PSCo
NSP- Minnesota
SPS
NSP- Wisconsin
Operating Companies
Xcel Energy
GAAP and ongoing ROE
8.23
%
8.45
%
9.22
%
9.92
%
8.58
%
10.58
%
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, sales true-up and decoupling mechanisms in Minnesota and
Colorado predominately mitigate the positive and adverse impacts of
weather.
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
2022 vs. Normal
2021 vs. Normal
2022 vs. 2021
2022 vs. Normal
2021 vs. Normal
2022 vs. 2021
Retail electric
$
0.007
$
(0.026
)
$
0.033
$
0.138
$
0.096
$
0.042
Decoupling and sales true-up
(0.007
)
0.011
(0.018
)
(0.061
)
(0.066
)
0.005
Electric total
$
—
$
(0.015
)
$
0.015
$
0.077
$
0.030
$
0.047
Firm natural gas
0.018
(0.030
)
0.048
0.037
(0.025
)
0.062
Total
$
0.018
$
(0.045
)
$
0.063
$
0.114
$
0.005
$
0.109
Sales — Sales growth (decline) for actual and
weather-normalized sales in 2022 compared to 2021:
Three Months Ended Dec.
31
PSCo
NSP-Minnesota
SPS
NSP-Wisconsin
Xcel Energy
Actual
Electric residential
3.7
%
(0.4
)%
12.8
%
0.4
%
2.9
%
Electric C&I
1.3
—
7.0
2.2
2.5
Total retail electric sales
2.0
(0.1
)
7.7
1.7
2.6
Firm natural gas sales
26.4
15.0
N/A
11.3
21.8
Three Months Ended Dec.
31
PSCo
NSP-Minnesota
SPS
NSP-Wisconsin
Xcel Energy
Weather-normalized
Electric residential
(3.4
) %
(2.6
)%
1.2
%
(1.9
)%
(2.3
)%
Electric C&I
0.3
—
6.7
2.1
2.1
Total retail electric sales
(0.9
)
(0.8
)
5.7
1.0
0.9
Firm natural gas sales
(4.5
)
4.5
N/A
2.4
(1.4
)
Twelve Months Ended Dec.
31
PSCo
NSP-Minnesota
SPS
NSP-Wisconsin
Xcel Energy
Actual
Electric residential
(1.5
)%
(1.2
)%
6.5
%
1.1
%
(0.1
)%
Electric C&I
—
1.7
8.9
3.3
3.3
Total retail electric sales
(0.5
)
0.8
8.4
2.6
2.3
Firm natural gas sales
5.4
18.3
N/A
17.3
10.1
Twelve Months Ended Dec.
31
PSCo
NSP-Minnesota
SPS
NSP-Wisconsin
Xcel Energy
Weather-normalized
Electric residential
(3.6
)%
(0.2
)%
0.8
%
—
%
(1.3
)%
Electric C&I
(0.3
)
2.1
8.4
3.4
3.2
Total retail electric sales
(1.4
)
1.3
6.9
2.4
1.8
Firm natural gas sales
(3.1
)
5.5
N/A
5.8
0.1
Weather-normalized electric sales growth
(decline) — year-to-date
- PSCo — Residential sales declined due to decreased use per
customer, partially offset by a 1.1% increase in customers. C&I
sales decline was attributable to decreased use per customer,
primarily in the manufacturing sector (largely due to an
alternative generation arrangement with a significant customer),
partially offset by strong small C&I sales in the food services
and health care sectors.
- NSP-Minnesota — Residential sales decline reflects a decreased
use per customer, partially offset by a 1.1% increase in customers.
Growth in C&I sales was primarily due to higher use per
customer, particularly in the manufacturing, real estate and
leasing, and food service sectors.
- SPS — Residential sales growth was primarily attributable to a
0.9% increase in customers, partially offset by lower use per
customer. C&I sales increased due to higher use per customer,
primarily driven by the energy sector.
- NSP-Wisconsin — C&I sales growth was associated with higher
use per customer, experienced primarily in the transportation and
manufacturing sectors.
Weather-normalized natural gas sales
growth (decline) — year-to-date
- Natural gas sales reflect growth in NSP-Minnesota and
NSP-Wisconsin attributable primarily to increased residential use
per customer and customer growth as well as increases in C&I
sales due to higher use per customer. These increases were offset
by a reduction in PSCo natural gas sales, primarily driven by
declines in residential use per customer.
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)
2022
2021
2022
2021
Electric revenues
$
2,868
$
2,562
$
12,123
$
11,205
Electric fuel and purchased power
(1,233
)
(1,090
)
(5,005
)
(4,733
)
Electric margin
$
1,635
$
1,472
$
7,118
$
6,472
Change in electric margin:
(Millions of Dollars)
Three Months Ended Dec. 31,
2022 vs. 2021
Twelve Months Ended Dec. 31,
2022 vs. 2021
Regulatory rate outcomes (Minnesota,
Colorado, Texas, New Mexico and Wisconsin)
$
146
$
506
Revenue recognition for the Texas rate
case surcharge (a)
—
85
Sales and demand (b)
2
80
Non-fuel riders
16
64
Wholesale transmission (net)
25
50
Estimated impact of weather (net of
decoupling/sales true-up)
11
33
PTCs flowed back to customers (offset by
lower ETR)
(30
)
(150
)
Other (net)
(7
)
(22
)
Total increase
$
163
$
646
(a)
Recognition of revenue from the Texas rate
case outcome is largely offset by recognition of previously
deferred costs.
(b)
Sales excludes weather impact, net of
decoupling in Colorado and proposed sales true-up mechanism in
Minnesota.
Natural Gas Margin — Natural gas margin is presented as
natural gas revenues less the cost of natural gas sold and
transported. Expenses incurred for the cost of natural gas sold are
generally recovered through various regulatory recovery mechanisms.
As a result, changes in these expenses are generally offset in
operating revenues.
Natural gas expense varies with changing sales and the cost of
natural gas. However, fluctuations in the cost of natural gas
generally have minimal earnings impact due to cost recovery
mechanisms.
Natural gas revenues, cost of natural gas sold and transported
and margin:
Three Months Ended Dec.
31
Twelve Months Ended Dec.
31
(Millions of Dollars)
2022
2021
2022
2021
Natural gas revenues
$
1,157
$
768
$
3,080
$
2,132
Cost of natural gas sold and
transported
(776
)
(478
)
(1,910
)
(1,081
)
Natural gas margin
$
381
$
290
$
1,170
$
1,051
Change in natural gas margin:
(Millions of Dollars)
Three Months Ended Dec. 31,
2022 vs. 2021
Twelve Months Ended Dec. 31,
2022 vs. 2021
Regulatory rate outcomes (Minnesota,
Colorado, Wisconsin, North Dakota)
$
45
$
61
Estimated impact of weather
35
46
Conservation revenue (offset in
expenses)
4
13
Infrastructure and integrity riders
2
9
Winter Storm Uri disallowances
—
(20
)
Other (net)
5
10
Total increase
$
91
$
119
O&M Expenses — O&M expenses increased $170
million year-to-date due to the following approximately equal
drivers: inflation and impacts of supply chain constraints;
operational activities (vegetation management, repairs/maintenance
and storms); costs for technology and customer programs;
insurance-related costs; recognition of previously deferred amounts
related to the 2021 Texas rate case; and other.
Depreciation and Amortization — Depreciation and
amortization increased $292 million year-to-date. The increase was
primarily driven by capital investment, recognition of previously
deferred costs related to the Texas Electric Rate Case and several
wind farms going into service.
Other Income (Expense) — Other income (expense) decreased
$18 million year-to-date, largely related to rabbi trust
performance, which is primarily offset in O&M expenses
(employee benefit costs).
Earnings from Equity Method Investments — Earnings from
equity method investments decreased $26 million year-to-date. The
year-to-date change was largely attributable to the performance of
the EIP funds, which invest in energy technology companies.
Interest Charges — Interest charges increased $111
million year-to-date. 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
2022
2021
2022 vs 2021
2022
2021
2022 vs 2021
Federal statutory rate
21.0
%
21.0
%
—
%
21.0
%
21.0
%
—
%
State tax (net of federal tax effect)
4.7
4.9
(0.2
)
4.9
5.0
(0.1
)
Increases (decreases):
Wind PTCs (a)
(36.0
)
(39.9
)
3.9
(27.4
)
(23.4
)
(4.0
)
Plant regulatory differences (b)
(5.9
)
(7.2
)
1.3
(5.5
)
(6.2
)
0.7
Other tax credits, NOL allowances (net)
and tax credit allowances
(0.9
)
(1.4
)
0.5
(1.3
)
(1.1
)
(0.2
)
Other (net)
0.1
2.4
(2.3
)
(0.1
)
0.1
(0.2
)
Effective income tax rate
(17.0
)%
(20.2
)%
3.2
%
(8.4
)%
(4.6
)%
(3.8
)%
(a)
Wind PTCs are credited to customers
(reduction to revenue) and do not have a material impact on net
income.
(b)
Regulatory differences for income tax
primarily relate to the credit of excess deferred taxes to
customers through the average rate assumption method. Income tax
benefits associated with the credit of excess deferred credits are
offset by corresponding revenue reductions.
Income tax benefit increased $65 million year-to-date. The
year-to-date increase was primarily driven by an increase in wind
PTCs due to greater production at existing wind farms, several new
wind farms going into service and an increase in the PTC rate
partially offset by higher pretax earnings.
Note 3. Capital Structure, Liquidity,
Financing and Credit Ratings
Xcel Energy’s capital structure:
(Millions of Dollars)
Dec. 31, 2022
Percentage of Total
Capitalization
Dec. 31, 2021
Percentage of Total
Capitalization
Current portion of long-term debt
$
1,151
3
%
$
601
1
%
Short-term debt
813
2
1,005
3
Long-term debt
22,813
55
21,779
56
Total debt
24,777
60
23,385
60
Common equity
16,675
40
15,612
40
Total capitalization
$
41,452
100
%
$
38,997
100
%
Liquidity — As of Jan. 23, 2023, Xcel Energy Inc. and its
utility subsidiaries had the following committed credit facilities
available to meet liquidity needs:
(Millions of Dollars)
Credit Facility (a)
Drawn (b)
Available
Cash
Liquidity
Xcel Energy Inc.
$
1,500
$
200
$
1,300
$
1
$
1,301
PSCo
700
260
440
6
446
NSP-Minnesota
700
320
380
18
398
SPS
500
78
422
2
424
NSP-Wisconsin
150
82
68
1
69
Total
$
3,550
$
940
$
2,610
$
28
$
2,638
(a)
Expires September 2027.
(b)
Includes outstanding commercial paper and
letters of credit.
Credit Ratings — Access to the capital markets at
reasonable terms is partially dependent on credit ratings. The
following ratings reflect the views of Moody’s, S&P Global
Ratings, and Fitch. The highest credit rating for debt is Aaa/AAA
and the lowest investment grade rating is Baa3/BBB-. The highest
rating for commercial paper is P-1/A-1/F-1 and the lowest rating is
P-3/A-3/F-3. A security rating is not a recommendation to buy, sell
or hold securities. Ratings are subject to revision or withdrawal
at any time by the credit rating agency and each rating should be
evaluated independently of any other rating.
Credit ratings assigned to Xcel Energy Inc. and its utility
subsidiaries as of Jan. 23, 2023:
Credit Type
Company
Moody’s
S&P Global Ratings
Fitch
Senior Unsecured Debt
Xcel Energy Inc.
Baa1
BBB+
BBB+
Senior Secured Debt
NSP-Minnesota
Aa3
A
A+
NSP-Wisconsin
Aa3
A
A+
PSCo
A1
A
A+
SPS
A3
A
A-
Commercial Paper
Xcel Energy Inc.
P-2
A-2
F2
NSP-Minnesota
P-1
A-2
F2
NSP-Wisconsin
P-1
A-2
F2
PSCo
P-2
A-2
F2
SPS
P-2
A-2
F2
2022 Financing Activity — During 2022, approximately $300
million of equity was issued through an at-the-market program. Xcel
Energy also issued approximately $84 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
$
700
10 Year
4.60
%
PSCo
First Mortgage Bonds
300
10 Year
4.10
PSCo
First Mortgage Bonds
400
30 Year
4.50
SPS
First Mortgage Bonds
200
30 Year
5.15
NSP-Minnesota
First Mortgage Bonds
500
30 Year
4.50
NSP-Wisconsin
First Mortgage Bonds
100
30 Year
4.86
2023 Planned Financing Activities — During 2023, Xcel
Energy Inc. and its utility subsidiaries anticipate the
following:
- Xcel Energy Inc. — approximately $500 million of unsecured
bonds during the third quarter.
- PSCo — approximately $700 million of first mortgage bonds
during the second quarter.
- NSP-Minnesota — approximately $750 million of first mortgage
bonds during the second quarter.
- SPS — approximately $100 million of first mortgage bonds during
the third quarter.
- NSP-Wisconsin — approximately $125 million of first mortgage
bonds during the second quarter.
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 and
Regulation
NSP-Minnesota — 2022 Minnesota Electric Rate Case
— In October 2021, NSP-Minnesota filed a three-year electric rate
case with the Minnesota Public Utilities Commission (MPUC). The
request is based on a ROE of 10.2%, a 52.5% equity ratio and
forward test years. In December 2021, the MPUC approved interim
rates, subject to refund, of $247 million, effective Jan. 1, 2022.
In November 2022, NSP-Minnesota revised its rate request to $498
million over three years.
The revised request is detailed as follows:
(Amounts in Millions)
2022
2023
2024
Total
Rate request (annual increase)
$
234
$
94
$
170
$
498
Rate base
$
10,923
$
11,425
$
11,902
N/A
In 2022, several parties filed testimony with various
recommendations. The Minnesota Department of Commerce (DOC)
provided the following recommendations in surrebuttal
testimony.
(Millions of Dollars)
2022
2023
2024
NSP-Minnesota’s filed base revenue
request
$
396
$
546
$
677
Recommended adjustments:
Rate base and rate of return
(72
)
(65
)
(65
)
MISO capacity credits
(66
)
(112
)
(111
)
Sales forecast update
(51
)
—
—
Monticello and wind farm life
extension
(21
)
(54
)
(51
)
PTC forecast
(28
)
(1
)
(1
)
Property tax
(14
)
(23
)
(34
)
Prepaid pension asset and liability
(13
)
(21
)
(32
)
O&M expenses
(37
)
(39
)
(44
)
Sherco 3 and King remaining life
—
29
28
Other, net
(23
)
(33
)
(43
)
Total adjustments
(325
)
(319
)
(353
)
Total proposed revenue change
$
71
$
227
$
324
Positions on NSP-Minnesota’s filed rate request:
Recommended Position
DOC
Xcel Large Industrial
Customers
Citizens Utility Board of
Minnesota
Just Solar Coalition
ROE
9.25%
9.17%
8.80-9.00%
9.06%
Equity
52.5%
N/A
N/A
N/A
Next steps in the procedural schedule are expected to be as
follows:
- Administrative Law Judge (ALJ) Report: March 31, 2023.
- MPUC Order: June 30, 2023.
NSP-Minnesota — 2022 Minnesota Natural Gas Rate
Case — In November 2021, NSP-Minnesota filed a request with the
MPUC for a natural gas rate increase of $36 million, or 6.6%. The
filing is based on a 2022 forecast test year and includes a
requested ROE of 10.5%, an equity ratio of 52.5% and a rate base of
$934 million. In December 2021, the MPUC approved an interim rate
increase of $25 million, subject to refund, effective Jan. 1,
2022.
In October 2022, NSP-Minnesota and various parties filed an
uncontested settlement, which includes the following key terms:
- Base rate revenue increase of $21 million, with a true up to
weather normalized actual sales for 2022.
- Revenue decoupling mechanism.
- Symmetrical property tax true-up.
- ROE of 9.57%.
- Equity ratio of 52.5%.
In December 2022, the ALJ recommended MPUC approval of the
settlement. A MPUC order is expected in the first half of 2023.
NSP-Minnesota — 2021 North Dakota Natural Gas Rate
Case — In September 2021, NSP-Minnesota filed a request with
the North Dakota Public Service Commission (NDPSC) for a natural
gas rate increase of $7 million, or 10.5%. The filing is based on a
ROE of 10.5%, an equity ratio of 52.54%, a 2022 forecast test year
and a rate base of $124 million. Interim rates of $7 million,
subject to refund, were implemented on Nov. 1, 2021.
In May 2022, NSP-Minnesota and NDPSC Staff reached a settlement,
which reflects a rate increase of $5 million, based on a 9.8% ROE
and 52.54% equity ratio. In October 2022, the NDPSC approved the
settlement and final rates were implemented on Nov. 1, 2022.
NSP-Minnesota — 2022 South Dakota Electric Rate Case — In
June 2022, NSP-Minnesota filed a South Dakota electric rate case
seeking a revenue increase of approximately $44 million. The filing
is based on a 2021 historic test year adjusted for certain known
and measurable changes for 2022 and 2023, a ROE of 10.75%, rate
base of approximately $947 million and an equity ratio of 53%.
Interim rates were implemented on Jan. 1, 2023. A decision from the
South Dakota Public Utilities Commission and final rates are
expected to be approved in mid-2023.
PSCo — Colorado Electric Rate Case — In November 2022,
PSCo filed an electric rate case seeking a net increase of $262
million, or 8.2%. The total request reflects a $312 million
increase, which includes $50 million of authorized costs currently
recovered through various rider mechanisms. The request is based on
a 10.25% ROE, an equity ratio of 55.7% and a 2023 forecast test
year with a 2023 year-end rate base of $11.3 billion. PSCo
requested rates effective in September 2023. A procedural schedule
is expected to be established by the Colorado Public Utilities
Commission (CPUC) in the first quarter of 2023.
SPS — New Mexico Electric Rate Case — In November 2022,
SPS filed an electric rate case with the New Mexico Public
Regulation Commission seeking a revenue increase of $78 million, or
10%. The request is based on a future test year ending June 30,
2024, a ROE of 10.75%, an equity ratio of 54.7% and rate base of
$2.4 billion.
Next steps in the procedural schedule are expected to be as
follows:
- Staff and intervenor testimony: March 31, 2023.
- Rebuttal testimony: April 25, 2023.
- Stipulation: May 8, 2023.
- Hearing: June 5, 2023.
- End of rate suspension: Sept. 19, 2023.
SPS — Texas Fuel Reconciliation — In 2021, SPS filed to
recover $88 million of Winter Storm Uri costs over 24 months, as
part of the Texas fuel surcharge filing, with total under-recovered
costs of $121 million. In April 2022, interim rates designed to
recover $121 million over 30 months were approved, subject to
Public Utility Commission of Texas (PUCT) approval through the
triennial Fuel Reconciliation proceeding.
In July 2022, the intervenors filed recommendations. The Texas
Industrial Energy Consumers and PUCT staff recommended
disallowances of approximately $10 million (off-system sales
margins). The Office of Public Utility Counsel recommended
disallowances of approximately $15 million (off-system sales
margins and adjustment to energy loss factors). The Alliance of
Xcel Municipalities recommended disallowances of approximately $100
million (natural gas storage, contracted capability and off-system
sales margins).
In November 2022, the ALJs found that costs were prudently
incurred and recommended no disallowances. A final PUCT decision is
anticipated in the first quarter of 2023.
Note 5. Earnings Guidance and Long-Term
EPS and Dividend Growth Rate Objectives
Xcel Energy 2023 Earnings Guidance — Xcel Energy’s 2023
GAAP and ongoing earnings guidance is a range of $3.30 to $3.40 per
share.(a)
Key assumptions as compared with 2022 levels unless noted:
- Constructive outcomes in all rate case and regulatory
proceedings.
- Normal weather patterns for the year.
- Weather-normalized retail electric sales are projected to
increase ~1%.
- Weather-normalized retail firm natural gas sales are projected
to increase ~1%.
- Capital rider revenue is projected to increase $90 million to
$100 million (net of PTCs).
- O&M expenses are projected to decline ~2%.
- Depreciation expense is projected to increase approximately
$130 million to $140 million.
- Property taxes are projected to increase approximately $35
million to $45 million.
- Interest expense (net of AFUDC - debt) is projected to increase
$100 million to $110 million.
- AFUDC - equity is projected to increase $0 million to $10
million.
- ETR is projected to be ~(5%) to (7%).
(a)
Ongoing earnings is calculated using net
income and adjusting for certain nonrecurring or infrequent items
that are, in management’s view, not reflective of ongoing
operations. Ongoing earnings could differ from those prepared in
accordance with GAAP for unplanned and/or unknown adjustments. Xcel
Energy is unable to forecast if any of these items will occur or
provide a quantitative reconciliation of the guidance for ongoing
EPS to corresponding GAAP EPS.
Long-Term EPS and Dividend Growth Rate Objectives — Xcel
Energy expects to deliver an attractive total return to our
shareholders through a combination of earnings growth and dividend
yield, based on the following long-term objectives:
- Deliver long-term annual EPS growth of 5% to 7% based off of a
2022 base of $3.15 per share, which represents the mid-point of the
original 2022 guidance range of $3.10 to $3.20 per share.
- Deliver annual dividend increases of 5% to 7%.
- Target a dividend payout ratio of 60% to 70%.
- Maintain senior secured debt credit ratings in the A
range.
XCEL ENERGY INC. AND
SUBSIDIARIES
EARNINGS RELEASE SUMMARY
(UNAUDITED)
(amounts in millions, except per
share data)
Three Months Ended Dec.
31
2022
2021
Operating revenues:
Electric and natural gas
$
4,025
$
3,330
Other
28
25
Total operating revenues
4,053
3,355
Net income
$
379
$
315
Weighted average diluted common shares
outstanding
549
542
Components of EPS —
Diluted
Regulated utility
$
0.78
$
0.65
Xcel Energy Inc. and other costs
(0.09
)
(0.06
)
GAAP and ongoing diluted EPS
(a)(b)
$
0.69
$
0.58
Book value per share
$
30.37
$
28.83
Cash dividends declared per common
share
0.4875
0.4575
Twelve Months Ended Dec.
31
2022
2021
Operating revenues:
Electric and natural gas
$
15,203
$
13,337
Other
107
94
Total operating revenues
15,310
13,431
Net income
$
1,736
$
1,597
Weighted average diluted common shares
outstanding
547
540
Components of EPS —
Diluted
Regulated utility
$
3.47
$
3.18
Xcel Energy Inc. and other costs
(0.29
)
(0.22
)
GAAP and ongoing diluted EPS
(a)(b)
$
3.17
$
2.96
Book value per share
$
30.48
$
28.93
Cash dividends declared per common
share
1.95
1.83
(a)
For the three and twelve months ended Dec.
31, 2022 and 2021, there were no adjustments to GAAP earnings.
(b)
Amounts may not add due to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230126005181/en/
Paul Johnson, Vice President - Treasurer & Investor
Relations (612) 215-4535
For news media inquiries only, please call Xcel Energy Media
Relations (612) 215-5300
Xcel Energy website address: www.xcelenergy.com
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