Xcel Energy Inc.

Good day and welcome to the Xcel Energy's first quarter 2022 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 their investor relations. At this time, I would like to turn the conference over to Paul Johnson, Vice President, Treasurer and Investor Relations.

Good morning and welcome to Xcel Energy's 2022 first quarter earnings call. Joining me today are Bob Frenzel, Chairman, President, Chief Executive Officer, and Brian Van Abel, Executive Vice President and Chief Financial Officer. In addition, we have other members of the management team in the room to answer your questions if needed. This morning we'll review our 2022 results, share recent business and regulatory developments. Slides that accompany today's call are available on our website. As a reminder, some of the comments during today's call may contain forward-looking information. Significant factors that could cause results different from those anticipated are described in our earnings release and our SEC filings. In addition, today we will 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 the call over to Bob.

Thank you, Paul. Good morning, everybody. At Xcel, we had another strong quarter recording earnings of 70 cents per share for 2022 compared with 67 cents per share in 2021. And as a result, we're reaffirming our 2022 earnings guidance of $3.10 to $3.20 per share. During the quarter, we made strong progress on our clean energy plans, achieving significant and constructive regulatory outcomes. In February, the Minnesota Commission approved our resource plan. which achieves an 85% carbon reduction in a full coal exit by 2030. Other key components include an early retirement of the King Coal Plant in 2028 and the Sherco Unit 3 in 2030, 10-year extension of our Monticello Nuclear Facility, and the addition of approximately 6,000 megawatts of new wind and solar resources. The ownership of two new generation tie lines associated with the retiring coal plants, as well as the associated 2,600 megawatts of renewable resources on those lines. And finally, the Commission recognized the need for approximately 800 megawatts of firm, dispatchable resources, which will go through a separate certificate of need process. As you can tell, based on the latest MISO capacity auction results, it's critical that we add these firm, dispatchable resources to ensure the reliability and affordability of the transition for our customers. Shifting to Colorado earlier this week, we reached a revised settlement on our electric resource plan. As a result, additional parties joined that settlement. The revised agreement further accelerates the retirement of our Comanche 3 coal unit to no later than January 1st of 2031, which we believe addresses the concerns expressed by the Commission during previous deliberations. The settlement includes approximately 4,000 megawatts of renewable additions in the conversion of our Pawnee coal plant to natural gas no later than January 1st of 2026. This resource plan is expected to reduce carbon by at least 85 percent by 2030. We believe the revised segment will enable the Commission to rule on the resource plan in June. Together, our Minnesota and Colorado resource plans will add nearly 10,000 megawatts of renewables to our system and achieve an 85% carbon reduction by 2030. This is consistent with our steel for fuel strategy, which provides a significant hedge against rising commodity prices. and is projected to generate over $1 billion of fuel-related customer savings in 2022 alone. In terms of next steps, we anticipate issuing RFPs in the second half of this year with insight into the preferred portfolios early next year and commission decisions in the first half of 2023. We expect the recommended portfolio generation assets will include self-build, build-owned transfers, as well as some power purchase agreements. This timeline represents a modest delay in our original plans, but provides additional time for more clarity given the solar supply chain considerations. Last quarter, the Colorado Commission approved our $1.7 billion pathway transmission project to enable access to 5,500 megawatts of new renewables and some of the richest wind and solar resources in the region. The Commission also conditionally approved the 90-mile May Valley to Longhorn Line Extension with an additional investment opportunity of approximately $250 million. These constructive regulatory outcomes reflect our alignment with our commissions on our clean energy transition. It's critical as we work to deliver reliable, affordable, and sustainable energy to the states, the communities, and the customers that we serve. We also remain excited about the transmission expansion opportunities in our Midwest region. MISO's future one scenario, which reflects an estimated $30 billion of investment opportunity, is expected to be awarded in four discrete tranches. Tranche one includes roughly $10 billion of projects, and a MISO decision on that tranche is anticipated this July. Our preliminary estimates suggest a $1 to $2 billion investment opportunity for Xcel Energy within tranche one. We expect to have more clarity this summer after MISO provides more detail on the recommended portfolio. Longer term, we expect to be awarded approximately five to six billion dollars in total future one investments. And 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 our clean energy transition while keeping our customer bills affordable. While that legislation has stalled, there is ongoing discussion of a more modest version potentially moving forward this year. We would expect it to include new and extended tax credits for wind, solar, hydrogen, storage, nuclear, and even transmission, along with a direct pay option for those tax credits. We continue to work with our federal delegation as well as the EEI to advocate for these provisions, which we believe would benefit our customers and accelerate a clean energy transition nationally. Shifting to electric vehicles, we are executing well on our approved Colorado and New Mexico plans, and we recently received approval of our transportation plan in Minnesota. which outline future program focus areas and allows for implementation of new fast chargers in our service territory in Minnesota. We're also supporting comprehensive transportation legislation in Minnesota that includes the potential for customer rebates similar to what we're implementing in Colorado. We're planning a more substantial update around these programs this summer to coincide with potential federal funding from the IIJA And these are important steps in helping drive electric vehicle adoption as we support the goals of our states. Given strong alignment with our states on EV goals and our progress to date, we continue to anticipate significant long-term investment opportunities and load growth from electric vehicles. We've made significant progress this quarter, and I'm proud of the way our teams delivered those results. Our regulatory settlements and outcomes reflect our diligent efforts to listen, engage and collaborate with our many stakeholders, not just through regulatory processes, but also through our sustainability priorities and our core values. We have a history of strong storm restoration and earlier this month had another opportunity to showcase our operational excellence when we experienced two feet of snow in North Dakota. Our teams were prepared and restored power to customers quickly, despite battling frigid conditions. Our system resilience and storm preparedness are great examples of our continued discipline and proactive planning, strong execution, and our employees' commitment to customer service. We strive to live our company values every day, and as a result, we were again named as one of the world's most ethical companies by Ethisphere and the world's most admired companies by Fortune. We're also recognized by Military Times and GI Jobs for our continued commitment to veteran hiring. And finally, I want to pause and remember that today, April 28th, is Workers Memorial Day, which for more than 50 years has been a day of remembrance for workers who've been injured or killed in the line of work. And I want to acknowledge that all the women and men of Xcel Energy, our contractor partners, and all utility workers across the country who sacrificed to provide the critical energy needs of our customers and our communities. And with that, I'll turn it over to Brian.