Xcel Energy Inc.

Good day, everyone, and welcome to Xcel Energy's year-end 2021 earnings conference call. Today's conference is being recorded. Questions will only be taken from institutional investors. Reporters can contact media relations with inquiries, and individual investors and others can reach out to investor relations. And now at this time, I'd like to turn the call over to Mr. Paul Johnson, Vice President, Treasurer, and Investor Relations. Please go ahead, sir.

Good morning, and welcome to Xcel Energy's 2021 year-end conference call. Joining me today are Bob Frenzel, Chairman, President, and Chief Executive Officer, and Brian Van Abel, Executive Vice President and Chief Financial Officer. In addition, we have others from our management team here to help answer any questions you might have. This morning, we will review our 2021 results and share recent business and regulatory developments. Slides that accompany today's call are available on our website. As a reminder, some of the comments made during today's call may contain forward-looking information. Significant factors that could cause results to differ from those anticipated are described in our earnings release and our SEC filings. Today, we'll discuss certain metrics that are non-GAAP measures. Information on the comparable GAAP measures and reconciliations are included in our earnings release. With that, I'll turn it over to Bob.

Thank you, Paul, and good morning, everyone. Before we walk through year-end results, I want to reflect on the devastating wildfires that tore through Boulder County, Colorado just before the New Year. It's been a long four weeks since this historic tragedy ravaged our communities and resulted in two people losing their lives and over 1,200 homes and buildings being destroyed or damaged. Our hearts and thoughts are with all members of these communities who lost their homes, suffered damage, or were displaced, including 17 of our own employees and their families. I'm truly grateful for our hundreds of employees, contractors, and partners who exercise incredible diligence in keeping each other and our customers safe while working around the clock to get the lights and the heat back on, especially over a holiday weekend with below zero temperatures and more than a foot of fresh snow in some areas. More than 100,000 electric customers experienced a sustained outage and service was largely restored within 48 hours. Our wildfire protocols required that we turn off natural gas service to over 13,000 customers as a safety precaution. And once it was safe, our employees with mutual aid assistance went door to door to manually relight pilot lights restoring service within just three days. In addition to our crews, I want to extend my heartfelt thanks to our many employees and community members who volunteered alongside emergency responders, handing out space heaters and water bottles and collecting clothing donations. I'm so proud of how our team and partners led with compassion and delivered for our customers and communities in this extreme time of need. Officials continue to investigate the cause of the fire. They've confirmed there were no downed power lines in the ignition area. Our systems remained resilient even as 100 mile per hour winds propelled the fires due to our previously approved wildfire mitigation plan and our continued focus on operational excellence. As we always do, our team rallied to the call, guided by our four values, connected, committed, trustworthy, and safe. Moving on to our 2021 results, we had another very successful year continuing to execute on our strategy while delivering strong financial and operational performance. First and foremost, throughout the pandemic, we continued to provide safe, reliable service to our customers and support to our employees and our communities. Financially, we delivered EPS of $2.96, representing 17th consecutive year of meeting or exceeding our earnings guidance. We raised our annual dividend for the 18th straight year, increasing it by 11 cents per share. We reached constructive rate case settlements in Colorado, Texas, New Mexico, Wisconsin, North Dakota, and Michigan. We also reached constructive settlements in several additional regulatory proceedings in Colorado, including URI storm cost recovery, our resource plan, and the pathway transmission project. We anticipate commission decisions on these settlements by the end of the first quarter. Our nuclear fleet remains the top performing fleet in the country, achieved a capacity factor of over 92% last year. We also installed over 300,000 smart meters as part of our advanced grid program and plan to install more than 1 million in 2022. Continue to lead the country in carbon reduction. In 2021, our estimated carbon emissions were approximately 50% below 2005 levels. and we remain on track to achieve 80% carbon reduction by 2030. As planned, we completed four wind farms with 800 megawatts of capacity, which provides significant environmental benefits and cost savings for our customers. We also accelerated our timeline for transitioning out of coal and now expect to be coal-free by the end of 2034. 2021, we extended our clean energy leadership to our natural gas business, committing to reduce greenhouse gas emissions by 25% by 2030 and deliver net zero natural gas service by 2050 for scope one, two, and three emissions. We continue to execute on our electric vehicle vision, implementing 12 new programs for our customers, receiving approval for our New Mexico plan, and preparing for increased levels of electric vehicle adoption across our eight states. We're also recognized for our continued ESG leadership, named among the world's most ethical companies, the best veteran employers, and for disability inclusion in the workplace. And finally, we introduced a compensation-based diversity metric and earned a perfect score on the Corporate Equality Index for the sixth consecutive year. I'm proud to lead a team that can deliver on financial, operational, environmental, customer, and diversity goals simultaneously. Looking ahead, we're well positioned for sustainable organic growth over the next decade, including affordable, renewable additions in our proposed Minnesota and Colorado resource plans, the transmission needed to enable those carbon-free resources, and responsible transitions as we retire our coal plants. Together, our resource plans will add nearly 10,000 megawatts of renewables to our system and achieve an 85% carbon reduction by 2030. In December, we reached a settlement in our Colorado resource plan that will accelerate the retirement of our Comanche III coal unit to 2034 and advance our Pawnee plant conversion to natural gas to 2026. while maintaining plans to add approximately 4,000 megawatts of renewables and reduce carbon 87% by 2030. We also reached a settlement in our $1.7 billion pathway transmission project in Colorado. The pathway will provide 560 miles of double-circuit 345 kV lines to enable 5,500 megawatts of new renewables in the state. The settlement includes a certificate of need, rider recovery, and a potential for a 90-mile line extension with an additional investment of $250 million to enable access to some of the richest wind resources in the region. We expect decisions on both the Minnesota and the Colorado resource plans and the pathway transmission project in the first quarter of the year. As we've previously discussed, Our capital investment plan is not dependent on changes in federal policy. However, the energy provisions that were included in the Build Back Better legislation would provide substantial customer benefits and help enable the clean energy transition. While that legislation has stalled, there is some discussion that a more modest version could potentially move forward this year. This could include new and extended tax credits for wind, solar, hydrogen, storage, nuclear, and transmission, along with a direct pay option for the tax credits. Continue to advocate for these provisions, which would be beneficial for our customers. And as President Biden has suggested, there may be congressional support for energy and climate bill with a more modest price tag than the original Build Back Better bill. With that, I'll turn it over to Brian.