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Barclays Kohler Conference – Xcel Energy

Xcel Energy · Aug 20, 2015 · 48 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. Barclays Kohler Conference – Xcel Energy – slide 1
    Delivering Results Barclays Kohler Conference August 20-21, 2015
  2. Barclays Kohler Conference – Xcel Energy – slide 2
    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…
  3. Barclays Kohler Conference – Xcel Energy – slide 3
    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…
  4. Barclays Kohler Conference – Xcel Energy – slide 4
    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…
  5. Barclays Kohler Conference – Xcel Energy – slide 5
    2015 Highlights Increased the dividend 6.7% Increased our annual dividend growth objective to 5% - 7% Resolved major regulatory proceedings - providing revenue certainty and reducing regulatory overhang Colorado electric multi-year…
  6. Barclays Kohler Conference – Xcel Energy – slide 6
    Legislation Passed in Minnesota Legislation became law in June 2015 Provides longer, more holistic multi-year rate plans Ability to implement multi-year plans for up to five years Allowing for recovery of capital investments…
  7. Barclays Kohler Conference – Xcel Energy – slide 7
    Contrasting Multi-Year Plans in Minnesota Previous Multi-Year Plan New Multi-Year Plan Legislation Up to 3 years Up to 5 years Recovery of capital related costs Recovery of capital related costs for known and identifiable based on a…
  8. Barclays Kohler Conference – Xcel Energy – slide 8
    Hypothetical Example of Regulatory Lag Under Previous Multi-Year Plan in Minnesota ( millions) Basis Points (BP) 150 0 BP 0 125 110 -50 100 -75 BP 75 -100 55 50 -150 BP -150 25 0 0 -200 2016 2017 2018 Revenue…
  9. Barclays Kohler Conference – Xcel Energy – slide 9
    Legislation Passed in Texas Legislation became law in June 2015 Legislation will help to reduce regulatory lag Ability to implement temporary rates or surcharge 155 days after rate case filing date Allow the addition of post test…
  10. Barclays Kohler Conference – Xcel Energy – slide 10
    Impact of Texas Legislation On Regulatory Lag Legislation Structurally Reduces Regulatory Lag Legislation Capital Lag Rates Effective 155 Days From Filing Lag Reduction Lag Reduction 7 Months of Lag Reduces lag Reduces Lag by 4…
  11. Barclays Kohler Conference – Xcel Energy – slide 11
    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 12
  12. Barclays Kohler Conference – Xcel Energy – slide 12
    Base Capital Investment Plan Drives Rate Base Growth 2015-2019 Base Capital Expenditures 14.5 Billion Distribution Transmission 22% 4.7% 31% Rate Base Other Drives CAGR 24% 2014 - 2019 Generation 23% Capital forecast…
  13. Barclays Kohler Conference – Xcel Energy – slide 13
    Investing for the Future Natural Gas Assets Transmission: A Two Prong Strategy Take advantage of growth Operating Company opportunities Will defend using ROFR Leverage natural gas footprint ROFR statutes in MN, ND, SD Potential…
  14. Barclays Kohler Conference – Xcel Energy – slide 14
    Xcel Energy States EPAs Final Clean Power Plan 37% 28% -11% 34% 32% 28% 2030 state CO2 reduction targets 28% 21% Mass-based targets, existing units only
  15. Barclays Kohler Conference – Xcel Energy – slide 15
    Clean Power Plan 2030 Emission Reduction Requirements 50% Changes from Proposal: Proposal Final 45% Significant improvement 40% for Minnesota and Texas 35% 30% Colorado and other 25% states in the same range 20% (except for…
  16. Barclays Kohler Conference – Xcel Energy – slide 16
    Proven Track Record Consistent Dividend Growth Dividend CAGR 2013-2015 = 6.9% Dividend 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 2013 2014 2015 Annual…
  17. Barclays Kohler Conference – Xcel Energy – slide 17
    Proven Track Record 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% * Reconciliation of…
  18. Barclays Kohler Conference – Xcel Energy – slide 18
    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 2015 On…
  19. Barclays Kohler Conference – Xcel Energy – slide 19
    Appendix 20
  20. Barclays Kohler Conference – Xcel Energy – slide 20
    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…
  21. Barclays Kohler Conference – Xcel Energy – slide 21
    Improve Utility Performance Existing ROE Gap is About 100 bps Regulatory Lag Contribution by Jurisdiction NSPM 75% Close ROE Objective Gap by 50 bps by 2018 SPS 20% PSCo & NSPW 5% 22
  22. Barclays Kohler Conference – Xcel Energy – slide 22
    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…
  23. Barclays Kohler Conference – Xcel Energy – slide 23
    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…
  24. Barclays Kohler Conference – Xcel Energy – slide 24
    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…
  25. Barclays Kohler Conference – Xcel Energy – slide 25
    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 Capital forecast does not include 300 million…
  26. Barclays Kohler Conference – Xcel Energy – slide 26
    Strong Credit Ratings and Liquidity 44% equity ratio as of June 30, 2015 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…
  27. Barclays Kohler Conference – Xcel Energy – slide 27
    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…
  28. Barclays Kohler Conference – Xcel Energy – slide 28
    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 29
  29. Barclays Kohler Conference – Xcel Energy – slide 29
    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…
  30. Barclays Kohler Conference – Xcel Energy – slide 30
    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…
  31. Barclays Kohler Conference – Xcel Energy – slide 31
    Regulatory vs. Authorized ROE - 2014 Rate Base OPCO Jurisdiction Authorized ROE W/A Earned ROE Regulatory Plan ( millions) MN Electric 7,047 9.72% 8.39% Plan to File 2016 MYP MN Gas 453 10.09 9.08 NSPM ND Electric 454 10.00 8.76…
  32. Barclays Kohler Conference – Xcel Energy – slide 32
    ROE Sensitivity by Operating Company Sensitivity to 100 bps change in ROE 2014 Revenue Opco Jurisdiction Rate Base Requirement EPS ( millions) ( millions) MN Electric 7,047 57 +/- 0.073 MN Gas 453 4 +/- 0.005 NSPM ND Electric 454 4…
  33. Barclays Kohler Conference – Xcel Energy – slide 33
    ROE Results Ongoing Earnings Twelve Months Ended 06/30/2015 2014 Rate Base NSP-W 5% 10.50% PSCo 9.40% 9.80% 8.24% 8.72% 41% 7.92% NSP-M 41% SPS 13% NSP-M NSP-W PSCo SPS Total Xcel Regulated Energy Xcel Energy anticipates…
  34. Barclays Kohler Conference – Xcel Energy – slide 34
    Minnesota Multi-Year Electric Rate Case Resolved in 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%…
  35. Barclays Kohler Conference – Xcel Energy – slide 35
    Monticello Prudence Filing Resolved in 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 decisions:…
  36. Barclays Kohler Conference – Xcel Energy – slide 36
    South Dakota 2015 Electric Rate Case Resolved in 2015 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…
  37. Barclays Kohler Conference – Xcel Energy – slide 37
    Colorado Multi-Year Gas Rate Case Revised Request 2015 2016 2017 Rate Increase 40.5 million 14.6 million 16.8 million PSIA Increase (.01) million 14.7 million 21.7 million ROE 10.1% 10.1% 10.3% Rate Base 1.26 billion 1.31 billion…
  38. Barclays Kohler Conference – Xcel Energy – slide 38
    Colorado Multi-Year Gas Rate Case 2015 (millions of dollars) Staff OCC PSCos original base rate request 40.5 40.5 ROE (12.8) (13.7) Capital structure and cost of debt (12.8) (4.8) Cherokee pipeline adjustment (11.2) 4.8 Move to 2014…
  39. Barclays Kohler Conference – Xcel Energy – slide 39
    Texas 2015 Electric Rate Case Seeking a revised 2015 electric rate increase of 42 million (4.4%) 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…
  40. Barclays Kohler Conference – Xcel Energy – slide 40
    Texas 2015 Electric Rate Case SPS (millions of dollars) AXM OPUC Staff Rebuttal SPS revised request 58.9 58.9 58.9 58.9 CapEx post-test year adjustments (11.3) (23.8) (23.8) - ROE (10.9) (13.5) (12.1) - Rate base adjustments * (6.2)…
  41. Barclays Kohler Conference – Xcel Energy – slide 41
    Wisconsin 2016 Electric & Natural Gas Rate Case Seeking a 2016 electric rate increase of 27.4 million (3.9%) and a natural gas rate increase of 5.9 million (5.0%). Based on a 2016 forecast test year ROE of 10.2% Equity ratio of…
  42. Barclays Kohler Conference – Xcel Energy – slide 42
    New Mexico 2016 Electric Rate Case SPS filed a New Mexico electric rate case for 2016: Requested base rate increase of 31.5 million Partially offset by base fuel decline of 30.1 million Requested ROE of 10.25% and equity ratio of…
  43. Barclays Kohler Conference – Xcel Energy – slide 43
    Proactive Environmental Leadership Fuel Mix Based on Energy 2005 2014 2020 5% 1% 4% 1% 1% 2% 1% 3% 3% 12% 56% 16% 22% 45% 41% 12% 23% 12% 21% 19% Coal Natural Gas Nuclear Wind Solar Hydro Other 45
  44. Barclays Kohler Conference – Xcel Energy – slide 44
    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…
  45. Barclays Kohler Conference – Xcel Energy – slide 45
    Minnesota Resource Plan Filing In January 2015, NSP filed its resource plan Plan lowers carbon emissions by 40% by 2030 600 MW of wind by 2020 and 1,200 MW by 2027 187 MW of large scale solar by 2016 and 1,700 MW by 2030 500 MW of…
  46. Barclays Kohler Conference – Xcel Energy – slide 46
    Economic, Sales & Customer Data 2015 Q2 W/A Electric Sales Growth 2015 YTD W/A Electric Sales Growth 0.6% 0.3% -0.6% -0.7% -0.5% -0.4% -1.3% -1.2% -0.8% -1.9% NSP-M * NSP-W PSCo SPS Xcel Energy NSP-M * NSP-W PSCo SPS Xcel…
  47. Barclays Kohler Conference – Xcel Energy – slide 47
    Xcel Energy W/A Electric Sales Growth Residential C&I Total 1.7% 1.3% 0.5% 0.2% 0.1% 0.1% 0.1% -1.3% -0.4% 2015 2015 2015 2013 2014 2013 2014 2013 2014 YTD YTD YTD 2015 YTD = Six months ended June 30, 2015 49
  48. Barclays Kohler Conference – Xcel Energy – slide 48
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