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WEST COAST INVESTOR MEETINGS – Xcel Energy

Xcel Energy · Apr 1, 2015 · 44 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 1
    A Strategic Plan for Growth West Coast Investor Meetings April 1, 2015
  2. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 2
    2015 Highlights Increased the dividend 6.7% Increased our dividend growth objective to 5% - 7% Resolved major regulatory proceedings - providing revenue certainty and reducing regulatory overhang Colorado electric multi-year plan…
  3. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 3
    Fully Regulated, Diverse Utility NSP-Minnesota (NSPM) NSP-Wisconsin (NSPW) 35-45% of earnings 5-10% of earnings Public Service Co. of Colorado (PSCo) Southwestern 45-55% of earnings Public Service (SPS) 5-15% of earnings Operate in…
  4. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 4
    Xcel Energy Investment Merits Focused strategic plan Offering an attractive total return EPS growth objective of 4% 6% * Dividend growth objective of 5% 7% Dividend payout ratio target of 60% 70% Strong credit metrics Unsecured…
  5. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 5
    Xcel Energy Strategic Plan Objectives Measurable Results Improve Utility Close ROE gap 50 bps by 2018 Performance Derive 75% of revenue from MYPs Drive Operational Manage workforce transition Excellence Limit annual O&M growth to…
  6. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 6
    Improve Utility Performance Existing ROE gap is approximately 100 bps Regulatory Lag Contribution by Jurisdiction NSPM 75% Close ROE Objective Gap by 50 bps by 2018 SPS 20% PSCo & NSPW 5% 7
  7. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 7
    Streamlining Minnesota Regulation Based upon four key objectives Lowering carbon emissions by 40% by 2030 Pioneering distribution grid modernization Providing new services and product offerings Pursuing more predictable and nimble…
  8. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 8
    Legislative Initiatives in Texas Collaborating with other non-ERCOT utilities Pursuing legislative changes to reduce regulatory lag Ability to implement temporary rates 35 days from filing Allow the addition of post test year…
  9. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 9
    Closing the ROE Gap Key Opportunity for EPS Growth 2014 Estimated 20.7 billion 20.7 billion 20.7 billion Rate Base Equity Ratio 54% 54% 54% ROE Improvement 25 bps 50 bps 75 bps Net Income 28 million 56 million 84 million…
  10. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 10
    Impact of Improved Earned ROE Consolidated 5-year EPS Earned ROE CAGR 11.0% 6% - 7% 10.5% 5% - 6% 10.0% 4% - 5% Based on Xcel Energys consolidated GAAP ROE 11
  11. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 11
    Improve Utility Performance Derive 75% of Revenue from Multi-Year Plans Percent of Jurisdiction Status Rate Plan Rate Base Minnesota Electric Approved Multi-Year Plan (2014-15) 35% Colorado Electric Approved Multi-Year Plan…
  12. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 12
    Driving Operational Excellence Bending the Cost Curve Sustainable cost control Standardization of processes Optimize purchasing power Objective Technology Annual O&M Growth Stabilization of nuclear costs Drives 0% - 2% Workforce…
  13. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 13
    Base Capital Investment Plan Five-Year Total of 14.5 Billion Dollars in millions 3,375 2,780 2,825 2,650 2,850 2015 2016 2017 2018 2019 Transmission Generation Distribution Other 14
  14. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 14
    Base Capital Investment Plan Drives Rate Base Growth 2015-2019 Base Capital Expenditures 14.5 Billion Distribution 22% Transmission 4.7% 31% Drives Rate Base Other CAGR 24% 2014 - 2019 Generation 23% 15
  15. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 15
    Investing for the Future Potential Natural Gas Investment Take advantage of organic growth opportunities Leverage existing natural gas footprint Potential incremental investment opportunities Natural gas pipelines Natural gas…
  16. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 16
    Xcel Energy An Experienced Natural Gas Provider Sixth largest natural gas consumer in the country Annual natural gas usage 450 Bcf Spend 1.5 - 2.0 billion annually 2013 Natural Gas Consumption NSPM 28% Operating Miles of Gas…
  17. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 17
    Transmission: A Two-Pronged Strategy Operating Company: A low risk base business Driven by reliability standards & state/regional energy policies Incumbent in areas with a substantial need for investment Will defend using ROFR…
  18. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 18
    Transmission Base Capital Investment Plan Majority of base plan is driven by reliability targets, state & regional energy policies and asset renewal Plan is not subject to competition - minimal execution risk Transmission CapEx of…
  19. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 19
    Proven Track Record of Delivering Value Consistent Dividend Growth Dividend growth CAGR 2013-2015 = 6.9% Dividend growth CAGR 2005-2015 = 4.1% 1.28 1.20 1.12 1.08 1.01 1.04 0.98 0.92 0.95 0.86 0.89 2005 Annual Dividend Increase…
  20. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 20
    Proven Track Record of Delivering Value Consistent Ongoing EPS Growth Ongoing EPS CAGR 2005-2014 = 6.5% 2.00- 2.15 2.03 1.15 2005 2015 Ongoing Earnings Guidance Range 2014 2015E Ongoing EPS Annual Growth Objective = 4-6% *…
  21. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 21
    Proven Track Record Delivering on Financial Objectives EPS Guidance 2005 Achieved 2006 Achieved 2007 Exceeded 2008 Achieved 2009 Achieved 2010 Achieved 2011 Achieved 2012 Achieved 2013 Achieved 2014 Achieved 22
  22. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 22
    Appendix 23
  23. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 23
    Reconciliation Ongoing EPS to GAAP EPS 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Ongoing EPS 1.15 1.30 1.43 1.45 1.50 1.62 1.72 1.82 1.95 2.03 PSRI-COLI 0.05 0.05 (0.08) 0.01 (0.01) (0.01) - - - - Prescription Drug Tax…
  24. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 24
    Strong Credit Ratings and Liquidity 44% equity ratio as of December 31, 2014 2.75 billion credit line with a maturity of October 2019 Moodys * S&P Fitch Xcel Unsecured A3 BBB+ BBB+ NSPM Secured Aa3 A A+ NSPW Secured Aa3 A A+ PSCo…
  25. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 25
    Modest Financing Needs Financing Plan 2015-2019 Funding capital expenditures millions 14,480 11,500 2,605 2,995 0 375 Cap CFO * New Equity ** DRIP & Refinanced Ex Debt Benefits Debt * Cash from operations is net of dividend…
  26. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 26
    Manageable Debt Maturities Dollars in millions 1,600 Hold Co NSPM NSPW PSCo SPS 1,200 800 400 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 27
  27. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 27
    Projected Rate Base Growth Dollars in billions CAGR 2014 2019 = 4.7% 25.2 26.1 24.5 23.5 22.5 CAGR 2005 2013 = 7.5% 20.7 19.2 17.6 16.9 15.2 14.4 13.3 12.5 11.7 10.8 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015…
  28. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 28
    Capital Expenditures by Function Dollars in millions 2015 2016 2017 2018 2019 Total Electric Generation 1,190 630 620 415 450 3,305 Electric Transmission 875 780 905 975 1,000 4,535 Electric Distribution 605 630 640 650 680 3,205…
  29. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 29
    Capital Expenditures by Company Dollars in millions 2015 2016 2017 2018 2019 Total NSPM 1,625 990 975 845 950 5,385 PSCO 950 820 815 885 1,010 4,480 SPS 570 710 735 595 565 3,175 NSPW 230 260 300 325 325 1,440 Total 3,375 2,780…
  30. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 30
    SPP Scoring Methodology Criteria Xcel Energy Brings Engineering Design 200 pts Accomplished development team Project Management 200 pts Skillful project execution Operating Ability 250 pts Seasoned operator Cost Analysis 225 pts…
  31. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 31
    Proven Low Cost Leader 345 kV Lines Dollars in millions per mile Average Cost per Mile, Adjusted * 2.5 Overall Average = 2.1 million/mile 2.0 1.5 1.0 0.5 of 13 25 55 12 35 projects 0.0 Xcel Energy SPP ERCOT WECC MISO Average…
  32. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 32
    Regulatory vs. Authorized ROE - 2013 Rate Base Authorized W/A Earned OPCO Jurisdiction Regulatory Plan ( millions) ROE ROE MN Electric 6,719 9.83% 8.22% 2014-2015 MYP MN Gas 436 10.09 9.76 NSPM ND Electric 389 9.75 9.54 2013-2016…
  33. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 33
    Colorado Multi-year Electric Rate Case Resolved in February 2015 PSCo requested a 2015 rate increase of 107 million (3.8%), based on an ROE of 10.25%, an equity ratio of 56%, a rate base of 6.39 billion In February 2015, the CPUC…
  34. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 34
    Monticello Prudence Filing Resolved in March 2015 Original estimate was 320 million and final cost was 665 million (total capitalized costs were 748 million, which includes AFUDC) In March 2015, the MPUC made the following…
  35. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 35
    Minnesota Multi-Year Electric Rate Case Resolved in March 2015 NSP-Minnesota filed a two-year, electric rate case seeking a revised net increase of 221 million over two years The filing is based on a requested ROE of 10.25%, a 52.5%…
  36. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 36
    Minnesota MYP Electric Rate Case Outcome 2014 (millions of dollars) NSP-M ALJ MPUC NSP-Minnesotas original request 192.7 192.7 192.7 Sales forecast (trued up to weather-normalized sales in 2014) (38.5) (38.5) (38.5) ROE (ALJ = 9.77%,…
  37. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 37
    Pending Regulatory Cases Requested Expected Rate Case Requested Increase ROE Decision South Dakota Electric 16 million 10.25% Mid-2015 Texas Electric 65 million 10.25% Mid-2015 66 million 10.1% Colorado Gas 2015 Q4 Over Three…
  38. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 38
    Colorado Multi-Year Gas Rate Case Request 2015 2016 2017 Rate Increase 40.5 million 7.6 million 18.1 million PSIA Increase (.01) million 21.7 million 21.2 million ROE 10.1% 10.1% 10.3% Rate Base 1.26 billion 1.31 billion 1.36…
  39. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 39
    Texas 2015 Electric Rate Case Seeking a revised 2015 electric rate increase of 58.9 million Based on a June 2014 historic test year with known and measurable adjustments ROE of 10.25% and equity ratio of 53.97% Electric rate base of…
  40. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 40
    South Dakota 2015 Electric Rate Case Seeking a 2015 electric rate increase of 15.6 million Requested ROE of 10.25% and equity ratio of 53.86% Average rate base of 433 million 2013 historic test year with known and measurable…
  41. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 41
    Proactive Environmental Leadership Fuel Mix Based on Energy 2005 2014 2020 5% 1% 4% 1% 2% 1% 2% 3% 16% 22% 12% 56% 45% 41% 13% 23% 12% 21% 20% Coal Natural Gas Nuclear Wind Solar Hydro Other 42
  42. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 42
    Proactive Environmental Leadership Emission Reductions Nitrogen Oxide Emissions (tons) CO2 Emissions 150,000 100,000 Million tons 95 50,000 0 90 05 06 07 08 09 10 11 12 13 14 20 20 20 20 20 20…
  43. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 43
    Minnesota Resource Plan Filing In January 2015, NSP filed its resource plan, which recommends: Adding 600 MW of wind by 2020 and 1,200 MW by 2027 Adding 187 MW of large scale solar by 2016 and 1,700 MW by 2030 500 MW of…
  44. WEST COAST INVESTOR MEETINGS – Xcel Energy – slide 44
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