Xcel Energy Inc.

Hello and welcome to the Xcel Energy second quarter 2026 earnings conference call. My name is Jordan and I'll be your coordinator for today's event. Please note this conference is being recorded and for the duration of the call, your lines will be in a listen-only mode. The question and answer session will follow the prepared remarks and questions will only be taken from institutional investors and analysts. Reporters can contact Media Relations with inquiries and investors and others can reach out to Investor Relations. I'll now turn the call over to your host today, Mr. Roopesh Aggarwal, Vice President, Investor Relations to begin the conference. Please go ahead, sir.

Thank you, Jordan. Good morning and welcome to Xcel Energy's 2026 Second Quarter Earnings 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 other members of the management team in the room to answer your questions if needed. This morning, we will review our 2026 second quarter results and highlights, provide updated 2026 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 for your passion. Good morning, everyone. And I'm often reminded of the quote that we are living in interesting times. But regardless of the times, we know that access to abundant, affordable energy is highly correlated to a nation's competitiveness, its security, its economic growth, and its quality of life. We at Xcel Energy are here, as we have been for over 100 years, ready to meet the moment and help our customers, Our states and our country build the infrastructure we need to fuel economic prosperity and growth for decades to come. While this opportunity is extraordinary, we've not lost sight of what matters most to our customers and remain acutely focused on customer satisfaction and affordability, system reliability and resiliency, financial discipline, in meeting both the pace of needed infrastructure as well as the clean energy goals of our communities. And in 2026, Xcel Energy continues to demonstrate strong execution across all aspects of these priorities. Xcel Energy remains the largest builder of new high voltage transmission lines in the country. It's one of the largest providers of renewable generation for our utility customers. And during the second quarter, we invested $3 billion and over $6 billion year to date and critical generation transmission and distribution infrastructure across all eight of our states. This includes achieving commercial operations of Group 2 of the Colorado Power Pathway and beginning construction on our 150-mile, 345 kV transmission project in the Upper Midwest. We also placed into service phase three of our SHRCO solar facility, bringing its total capacity to 710 megawatts, making it one of the largest utility-scale solar facilities in the country. Last week, the independent monitor for our SPS RFP filed a report on our selection of 2,600 megawatts of new company-owned generation, representing 70% of the total recommended portfolio and $6 billion of new investment needs in Texas and New Mexico. We now have a line of sight to the $70-plus billion of total investments that we described in our five-year plan from last November, all for the benefit of our customers and our community. We received approval for our large load tariff in Minnesota and made additional large load tariff filings in Colorado and Wisconsin. And we've advanced these critical initiatives with strong focus on our customers and a commitment to keeping their bills as low as possible. And finally, we delivered for our investors with strong second quarter earnings of 93 cents per share. We remain confident in our ability to deliver on our earnings guidance for the 22nd year in a row. continuing one of the best track records in the industry. Regulatory execution has been a focus all year for the company. I'm proud to say that we advanced settlements and or reached decisions in six active rate cases, all while keeping long-term bill growth at or below the rate of inflation and total energy bills among the lowest in the country. This includes commission decisions in our Minnesota electric rate case and South Dakota electric rate case settlement. and proposed settlements in our Colorado electric and natural gas cases, New Mexico electric and Minnesota natural gas rate cases. At the same time, we improved and invested in programs for the most vulnerable in our community who struggle with affordability, even with our low bills. Our settlements in our Colorado rate case provide a path to nearly double the size and participation in our energy assistance programs. While in Minnesota, our recent electric rate case significantly expands both accessibility and funding for customer assistance programs. In addition, we made integrated customer program filings in Colorado and Minnesota, which bundle voluntary customer programs into a single, coordinated plan, making it easier for customers to compare options, to find rebates, and to choose solutions that best fit their needs and their budgets. This extraordinary progress reflects strong preparation, early engagement with stakeholders, and disciplined execution. A regulatory strategy is consistent. Invest in reliability and resiliency in cleaner energy while pursuing outcomes that are fair, transparent, balanced, and mindful of customer bill impacts. Moving to capital delivery, we believe that Xcel Energy's approach to project execution is a differentiator in the industry and a benefit to our customers, enabling our ability to deliver a growing portfolio of capital investments on budget, on time, and on scope. The first part of our formula is strategic partnerships. And as I mentioned earlier, Xcel Energy is one of the largest regulated builders of renewable and dispatchable generation and the largest builder of new transmission line miles in the country. So effective execution of projects on this scale are not new for us. Neither are the partnerships with key supply chain and EPC vendors that are needed to deliver for our customers. What is changing is the structure and the depth of these partnerships. Over the past three to four years, we have shifted our approach to ensure that we are a partner of choice with our tier one suppliers and EPC partners over our five plus year portfolio. which includes nearly 13 gigawatts of new renewable generation and battery storage, over 3 gigawatts of new natural gas generation, and nearly 2,000 high voltage transmission line miles. These partnerships help ensure that we have access to the labor and equipment capacity that we need to deliver with certainty for our customers well into the 2030s. In addition, we've consolidated and standardized major project planning and execution under one organization, ensuring consistency, accountability, and visibility across our generation, transmission, and distribution investments. By using repeatable designs and strong governance, we're driving greater capital efficiency, reducing execution risk, and increasing schedule certainty across our portfolio. And finally, we know that our people and access to critical talent is essential to long-term success. We have an incredibly talented and tenured workforce. We're also investing in workforce development through partnerships with our EPC firms, high schools, trade programs, and universities. These efforts are supporting thousands of students, apprentices, and trainees, helping us build the skilled workforce needed to deliver projects safely and the community that we serve. Accordingly, Xcel Energy continues to demonstrate that our regulated development team is one of the best in the industry, helping build 16 gigawatts of new generation and storage and over 2,000 miles of new transmission for our communities while keeping costs low for our customers. Last week, the Independent Monitor filed its report in our SPS competitive RFP process that was seeking 1,500 to 3,000 megawatts of incremental nameplate capacity. SPS was selected to provide 2,400 megawatts of renewables and 200 megawatts of natural gas fire generation, representing 70% of the overall portfolio and approximately $6 billion of investment that supports continued economic growth in Texas and New Mexico. This portfolio allocation brings line of sight in our incremental investment plan to $10-plus billion. We're six months into our five-year plan, and we've already executed on the original pipeline we identified, with more opportunities to come. From here, we see additional opportunities not in our base plan to invest and serve our growing customer needs, including ongoing and upcoming generation RFPs in Colorado and the Upper Midwest, transmission investments in each of our operating companies, and generations to support three gigawatts of data center demand that we added to our target plan on our Q4 earnings call. Our base capital plan remains anchored in the core investments needed to retire legacy coal generation assets this decade and make critical investments into our transmission and distribution systems to support reliability, resiliency and industrial growth. Capital investments and rising from future data center opportunities are generally ascribed to our upside plan and we're taking a disciplined approach to ensure that new load growth is supported by appropriate commercial structures and regulatory frameworks. This includes large load tariffs that were recently approved in Minnesota and filed in Colorado and Wisconsin, each of which protect and lower bills for existing customers while creating long-term benefits for our communities and investors. We remain confident in our ability to deliver on our data center forecast. We have one gigawatt of data centers in operation or under construction, an additional gigawatt of data centers under signed ESAs, and we expect to secure an additional four gigawatts of data center load by year end 2027, including at least one gigawatt by the end of this year. Our confidence is supported by the strength and depth of our customer pipeline. our proven ability to execute large-scale infrastructure projects, and the differentiated position of our service territories, which includes geographic diversity across our high probability pipeline. Finally, I want to highlight Xcel Energy's 21st Sustainability Report, which we released this quarter. At Xcel Energy, we are balancing reliability and affordability while supporting safety, economic vitality, and environmental stewardship. As our customer needs evolve and expectations of the energy system continue to grow, our responsibility is to lead with transparency, purpose, and disciplined execution. The report reflects meaningful progress at scale. Over the past two decades, Xcel Energy has reduced carbon emissions nearly 60%, reduced water consumption more than 35%, and enabled nearly 14,000 megawatts of wind and solar in our system. all while maintaining a resilient grid and keeping customer bills amongst the lowest in the country. As we look ahead, the energy system will continue to change with growing demand from economic development, electrification, and new large loads. But our destination has not changed. We remain committed to leading the energy transition in a way that is reliable, affordable, sustainable, and grounded in customer value. And with that, I'll turn it over to Brian.