Xcel Energy Inc.

Hello and welcome to Xcel Energy's second quarter 2025 earnings conference call. My name is George and I'll be a coordinator for today's event. Please note this conference is being recorded at duration of the call. Your lines will be in the listen only mode. A question at the session will follow the prepared remarks and questions will be taken from institutional investors and analysts. Reporters can contact media relations with inquiries and individual investors and others can reach out to investor relations. To register for questions, please press star one on your phone keypad. If you require assistance at any point, please press star zero and you will be connected to an operator. I'm going to call all of your hosts today, Mr. Rupesh Agrawal, Vice President of Investor Relations speaking at this conference. Please go ahead,

sir. Thank you, George. Good morning and welcome to Xcel Energy's second quarter 2025 earnings call. Joining me today are Bob Frenzel, Chairman, President and Chief Executive Officer and Brian Van Able, 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 will review our second quarter 2025 results and highlights, provide updated 2025 assumptions and share recent business and regulatory updates. Slides that accompany today's call are available on our website. Some comments 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 SEC filings. 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. I will now turn the call over to Bob.

Thank you, Rupesh, and good morning, everybody. In the second quarter of 2025, Xcel Energy continued to demonstrate our commitment to our customers, investors and communities to make energy work better. During the quarter, we delivered strong earnings of 75 cents per share. We invested $2.6 billion in resilient and reliable energy infrastructure for our customers, navigated an evolving energy policy landscape to ensure that we can continue to provide safe, clean, reliable and affordable electric and natural gas service. We continued our wildfire risk reduction efforts to enable safer and more resilient communities. Based on our results through the first half of the year, we remain confident in our ability to deliver on our earnings guidance for the 21st year in a row, one of the best track records in our industry. At Xcel Energy, we believe that we're in the early stages of an infrastructure investment cycle in the United States that will define many industries for decades. Not just the often discussed AI boom, we see potential investment in on-shoring and reshoring of manufacturing and other energy-intensive industries. Given our competitive reliability, cost and sustainability, we believe we will be attractive to those industries. Of course, we see strong investment in oil and gas and other energy infrastructure, particularly in our SPS region, where we power large portions of the Permian and Delaware basins. We continue to see strong energy demand from electrification of transportation, manufacturing and home heating. Xcel Energy is here to meet the moment for our customers. We set our capital plan, our five-year capital plan last fall. Last fall, we outlined a $45 billion infrastructure investment forecast to serve increased energy demand and make needed investments to strengthen our transmission and distribution systems. At that time, we also expected that our customers' needs could exceed that base forecast. Today we now believe that we're likely to need an additional $15 billion of capital investment to meet our customer needs, largely within our current five-year forecast and some beyond. There are several drivers to that incremental need. In June, we filed a generation plan to support energy needs in our fast-growing Texas and New Mexico region. Our recommended portfolio included nearly 5,200 megawatts of generation storage to be placed in service by 2030. Over 4,500 megawatts is expected to be company-owned and operated. This includes 1,300 megawatts of wind, 700 megawatts of solar, 2,100 megawatts of natural gas, CTs, and 500 megawatts of storage. We anticipate filing for regulatory approval of these projects over the remainder of this year with Commission decisions in 2026. We also anticipate issuing a second RFP later this year for additional resource needs in that region. In the upper Midwest, we received approval in Minnesota for two firm dispatchal projects totaling 720 megawatts and at least an additional 2,800 megawatts of company-owned wind that will use our new Minnesota Energy Connection Transmission Line when it's placed in service in 2029. RFPs for additional generation projects that are needed to meet customer demand and grid reliability are ongoing, and we expect Commission decisions in 2026. We expect to invest an incremental $3 to $4 billion in regional transmission projects to support reliability and regional growth, including two 765KV lines, one from the MISOTRONCH 2.1 and the other from the Southwest Power Pools ITP portfolio. In addition to this $15 billion of incremental need, we are actively working through the resource planning process in Colorado that likely requires between 5 and 14 gigawatts of new generation to meet reliability and customer demand through 2031. We are still working through required regulatory approvals for a number of these projects and will provide updates as they materialize. We expect to formally update our five-year forecast through 2030 on our third quarter earnings update. We move to aggressively build the generation and transmission that the grid requires to support both growth and reliability needs. We're also navigating a rapidly evolving energy policy landscape. While we predominantly navigate resource plans and transition initiatives at a state level, we're also very focused on federal legislation that pertains to how tax credits and permitting can impact customer outcomes. On July 4th, the budget reconciliation bill was signed into law. While we saw some challenges to wind and solar tax credits, there are also positive outcomes for customers in the bill. Lower corporate tax rates result in lower energy bills, all else being equal. Accelerated depreciation of capital is beneficial to customers, as is the efficiency of transferability of eligible credits, both of which were continued in the one big beautiful bill. As with the incentives for qualifying energy storage and for carbon-free dispatchal resources like advanced geothermal, nuclear generation, and carbon sequestration, all beneficial for customers and the country's energy future. Not surprisingly, renewable tax credits were front and center in the debate around this legislation. Accordingly, we expected limitations to credits as Congress tried to narrow a significant budget gap. For several years now, we've been working with our state commissions and other stakeholders on the substantial generation required in our operating regions to meet the reliability and growth needs of our customers. In total, we estimate that we need between 15 and 29 gigawatts of new generation before 2031, of which a significant amount could be sourced from wind and solar. Accordingly, we've already invested substantial capital and or physically commenced construction of the clean energy resources included in our base capital plan, as well as enough to execute on our incremental investment pipeline, which we believe are necessary to meet the data center and electrification needs of our customers. We'll continue to monitor and manage through the recent executive orders, agency rulemaking, and trade and tariff actions and make adjustments as needed as we continue to develop the energy assets that we need in our regions. In addition, we've procured 19 gas turbine reservations to meet the reliability needs of our customers. We serve customers in the most resource-rich regions of the country, impairing wind and and energy storage and gas backup means that we can deliver clean, reliable, and affordable energy for our customers at the speed that they require. Xcel Energy also continues to make progress to mitigate risk from wildfires and extreme weather. This includes investments in advanced camera and weather station technologies, enhanced power line safety setting installations, pole inspections and replacements, and operational measures such as wildfire safety operations and public safety power shutoff. We've also seen strong support from our commissions and states to invest in wildfire risk reduction. In June, the Colorado PUC approved our unanimous settlement for our $1.9 billion wildfire mitigation plan, which included a partial securitization mechanism to manage customer bill impacts and an extension of our excess liability insurance deferral. And in July, the Texas Commission approved our $500 million system resiliency plan. Both investment plans enhance the reliability and resiliency of these systems to mitigate the impact of evolving and volatile weather patterns. And on the legislative front, in both Texas and North Dakota, constructive wildfire legislation was signed into law. In North Dakota, legislation passed establishing that when a utility is in compliance with an improved wildfire mitigation plan, it has exercised a reasonable standard of care. In Texas, similar legislation passed that states an electric utility is not liable for damages from a wildfire, provided it's not negligent and is in compliance with an improved wildfire mitigation plan. Finally, I want to take a moment to thank our incredible line worker crews and other employees who've been working in tough conditions this week to get the lights back on for our customers after two rounds of major storms in the upper Midwest. All told, about 200,000 customers experienced outages from storms Sunday and Monday nights, mainly in Minnesota, Wisconsin, and South Dakota. More than 2,000 crew members joined in the effort, including crews from our Colorado and our Texas service areas, as well as contractors and mutual aid partners. Their dedication to serving our customers when things get challenging is what they're And I am very proud of everything they've accomplished in the past few days. With that, let me turn it over to Brian.