Xcel Energy Inc.

Hello and welcome to the Xcel Energy 2026 third quarter earnings call. My name is Tracy and I'll be your moderator 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. Thank you, Tracy.

Good morning and welcome to Xcel Energy's 2026 Third 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 Third Quarter results and highlights, share recent business and regulatory updates, update our five-year capital and financing plan, and provide updated 2026 assumptions and 2027 guidance. 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 gap measures and reconciliations are included in our earnings release. I will now turn the call over to Bob.

Thank you, Roopesh, and good morning, everybody. The build-out and modernization of our U.S. energy system is well underway. Utilities across the country are investing substantial time and money to upgrade, fortify, and modernize the U.S.'s critical grid infrastructure. Power developers are working to build more than 80 gigawatts of new utility-scale generating capacity in the United States this year, eclipsing last year's record build of 53 gigawatts. And this growth is fueled by a number of factors, including meeting the growing and evolving power and resiliency demands of existing and new residential and business customers, serving the growing demand for power by technology companies as they build data infrastructure for cloud and AI compute needs, and advancing the nation's generation fleet to newer, more sustainable energy sources. As one of the nation's largest builders of new generation and high voltage transmission, Xcel Energy is meeting this extraordinary moment in our nation's history and helping lead America's energy renaissance. We're investing in the infrastructure that our customers and our communities need while staying focused on what's always mattered the most, safety, reliability, affordability and disciplined execution. We've made considerable progress on our priorities this quarter, resulting in ongoing earnings of $1.52 per share for our investors who remain on track for a strong 2026. Our updated five-year investment plan that we're sharing today gives us a clear path to extend our growth cycle and continue to deliver the affordable and reliable energy that our customers need well into the next decade. Let's start with our accomplishments. We invested $3.5 billion this quarter, $10 billion year-to-date, and are on track for over $14 billion of critical infrastructure investment for our customers this year. This month, we'll place into service our 335-megawatt Arroyo II solar facility, which will be the largest solar facility in the state of Colorado. We started construction on over 1,500 megawatts of new renewable and natural gas generation and battery storage projects in the Upper Midwest. we reached constructed decisions or settlements across rate cases representing 90% of our rate base. We were selected for another Department of Energy grant. This time it's a $250 million award under the SPARC program that supports a one plus billion dollar investment to modernize a critical interconnection between the Western and the Eastern grids. And we continue to see steady improvements in customer satisfaction as measured by J.D. Power with third quarter performance scoring well within the first quartile while we maintain a strong focus on reliability and a commitment to keeping bills as low as possible. Based on our results through the third quarter, we're narrowing our 2026 ongoing earnings guidance range to $4.10 to $4.16 per share and remain on track to deliver on full year guidance for the 22nd year in a row. In addition, we're initiating our 2027 earnings guidance range of $4.48 to $4.62 per share. Today, we're introducing an updated $70 billion five-year investment plan designed to serve increasing energy demand, to make needed investments to strengthen and modernize our transmission and distribution systems, to provide a cleaner and more sustainable energy portfolio, and to keep energy safe, reliable, and affordable for all of our customers. In total, we expect this plan will deliver more than nine gigawatts of renewable generation, more than three gigawatts of natural gas fire generation and more than two gigawatts of energy storage to ensure system reliability. 2,400 new high voltage transmission line miles to support demand growth and regional delivery needs and approximately $4 billion of investments in our distribution and transmission systems to improve resiliency and reduce future risk of wildfires. In addition to our base capital plan, we have a robust pipeline of additional investment opportunities that exceeds $10 billion and extends into the early 2030s. We see additional investments driven by multi-gigawatt RFPs in all three of our regions. Future high-voltage transmission projects in each of our regions and infrastructure needed to serve four gigawatts of new data centers that we expect to contract before the end of next year. Our confidence in delivering this portfolio on budget, on time, and on scope is rooted in our track record as one of the nation's leading builders of energy infrastructure. Xcel Energy is the number one builder of new transmission line miles since 2008 and the number two builder of renewable and natural gas generation since 2015. Our approach to project execution, which combines strategic partnerships with key EPCs and OEMs, Standardized project management, integrated system planning, and a dedicated major projects group is a differentiator in the industry. And our ability to deliver infrastructure with excellence combined with the access to some of the country's best wind and solar resources allows our customers to benefit from some of the lowest energy bills in the country. Over the past five years, our residential electric and natural gas bills have been 29 and 11% below the national average respectively. Our residential electric customers in Colorado continue to have the lowest share of wallet out of all 50 states, and average bills in our other states occupy five of the next 11 spots. Typical residential Xcel Energy electric and natural gas bill, when adjusted for inflation, is 14 and 20% lower than it was in 2014. Our innovative Steel for Fuel program that was started in 2017 is on pace to save customers a total of approximately $18 billion from PTCs and avoided fuel costs by 2031. And since starting our Red Truck initiative in Colorado in 2023, we have more than doubled our energy assistance adoption rate. In fact, the Red Truck has been so effective, we're expanding it to the Upper Midwest, Texas, and New Mexico.