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Renewable energy will account for nearly three-fourths of new generation built under Xcel Energy’s five-year, $70 billion capital plan that the company unveiled Thursday during its third-quarter earnings call.
The new plan — up 17% from its previous $60 billion spending plan — calls for building 9.2 GW of renewable generation, 2.3 GW of energy storage and 3.3 GW of natural gas generation. Xcel expects the renewable portion of the buildout would cost about $21.7 billion. The plan also includes 2,400 miles of new transmission and $4 billion for wildfire mitigation.
“These investments are critical to serve growing electric demand, to keep customer bills low, to deliver clean energy, and to ensure system safety and reliability,” Chairman, President and CEO Bob Frenzel said, later adding that Xcel “continue[s] to lead a clean energy transition” and believes its commitment to clean energy will attract additional data centers to its service territory.
$70B
Five-year capital plan, including $7 billion to serve contracted data centers.
25 GW
Pipeline of new generation projects.
4 GW
Data center service agreements expected to close by year end 2027.
2.5%
Weather-adjusted, year-to-date increase in electric sales.
About $7 billion of the capital plan will go to data center projects already under contract at Xcel. Xcel could spend an additional $10 billion for projects not included in its spending plan, according to Frenzel. That spending would cover the more than 15 GW that is included in pending utility requests for proposals, high-voltage transmission projects and infrastructure needed to serve the 4 GW of new data centers the company expects to contract before the end of next year, he said.
“As we think about future data center growth, our contracting principles are based on our longstanding commitment to ensure that the needs of our customers and our communities are met,” Frenzel said. “We believe in responsible development. We believe that existing customers should not subsidize new large loads.”
To finance the updated capital plan, Xcel will take on $26 billion in debt and issue $8 billion in equity, about 40% of which is already contracted, CFO Brian Van Abel said. The company also agreed earlier this month to sell gas and electric assets in Michigan — including 9,000 electric customers and 6,000 gas customers — valued at $150 million to Upper Peninsula Power Co. and SEMCO ENERGY Gas Co. Van Abel said the sale should close by the end of 2027 and that the price was confidential.
Xcel’s net income jumped 83% to $960 million in the third quarter, up from $524 million a year ago, the company said. Favorable weather, increasing electric sales and this year’s “heavy rate case calendar” all helped Xcel increase its third-quarter earnings, Van Abel said.
A July order by the Minnesota Public Utilities Commission approved a 2.9% annual rate increase expected to generate $211 million over two years. Xcel filed a rate stability plan in Minnesota on Oct. 9 that would freeze rates at this level in 2027 and 2028, as an alternative to the rate case it is due to file in 2027. In Colorado, a September decision by the CPUC approved a 1.7% annual rate that will bring in $184 million. The company expects a final decision on a rate case in New Mexico by the end of this year.
Xcel cannot yet estimate its total liability for the 2024 Smokehouse Creek fire pending litigation initiated by the Texas Attorney General’s office that is expected to continue into 2027, according to the company’s quarterly U.S. Securities and Exchange Commission filing. The company has so far settled 358 claims related to the fire for $410 million; claims by 141 plaintiffs remain unresolved. The Smokehouse Creek Fire burned more than 1 million acres in the Texas Panhandle. Liabilities associated with the fire could exceed Xcel’s $525 million insurance policy, according to the SEC filing.
Source: www.utilitydive.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
