Xcel Energy (XEL) Q1 2026 Earnings Transcript

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DATE

Thursday, April 30, 2026 at 10 a.m. ET

Call participants

• Chairman, President, and Chief Executive Officer — Bob Frenzel
• Executive Vice President and Chief Financial Officer — Brian Van Abel
• Vice President, Investor Relations — Roopesh Aggarwal

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Risks

• The $4.241 billion disallowance recommendation by the Prairie Island ALJ led to a $37 million expense charge; further adverse regulatory outcomes could have negative financial impact.
• Weather conditions in Colorado resulted in reduced electric and natural gas sales, decreasing earnings by $0.09 per share during the quarter.
• Structural regulatory lag persists in Colorado, with management indicating "50+ basis points of structural lag" and ongoing efforts to close this gap through settlements and capital riders.
• Supply chain constraints and qualified labor scarcity may pressure delivery timelines and execution for ongoing generation, transmission, and distribution projects, according to management commentary.

Takeaways

• Ongoing earnings per share -- $0.91, up from $0.84, driven by a $0.23 gain from higher electric revenue and a $0.10 gain from AFUDC, offset by a $0.18 decrease from higher interest and equity financing, a $0.05 decrease from higher depreciation, and a $0.03 decrease from lower natural gas revenue. The sum of these drivers does not equal the total change due to other minor items.
• GAAP earnings per share -- $0.89, reflecting a $37 million charge ($0.04 per share) for Prairie Island and a $22 million gain ($0.03 per share) from increased Marshall Wildfire insurance proceeds; both excluded from ongoing EPS.
• Capital investment -- Over $3 billion deployed in new infrastructure, marking the start of the largest capital program in company history.
• Major data center agreement -- Announced a 15-year contract with Google requiring 1,900 MW of new wind and solar, plus long-duration storage using 100-hour iron-air batteries; Google will fund all infrastructure, with estimated customer savings of $1 billion to $1.5 billion over the contract.
• Incremental investment visibility -- Management now sees line of sight to more than $7 billion of the $10+ billion incremental capital opportunity highlighted in late 2025.
• Shareholder guidance -- Reaffirmed ongoing EPS guidance of $4.04 to $4.16 per share and expects 6%-8%+ long-term earnings growth, with an average 9% EPS CAGR through 2030.
• Regulatory decisions -- North Dakota commission approved a $27 million electric revenue increase; South Dakota reached a $26 million settlement, pending commission approval.
• Electric sales growth -- Weather-adjusted electric sales rose 2.8%, attributed to oil and gas sector growth in SPS and commercial-and-industrial expansion across regions.
• Rate case updates -- Minnesota ALJ recommended a 9.8% ROE and 52.5% equity ratio; Colorado direct intervenor testimony served as a basis for settlement discussions, with a May 28 settlement deadline.
• Customer bill competitiveness -- Typical residential electric bills are nearly 25% lower after inflation than ten years prior and about 30% below the national average in nominal terms.
• Data center pipeline -- Targeting contracts for 6 gigawatts of large load by year-end 2027, with more than 20 gigawatts of active data center interest across the service territory.
• Tax credit benefits -- Customers are projected to receive over $7 billion in aggregate benefits from renewable project PTCs and ITCs through 2030.
• Financing progress -- Over $1 billion in equity forward contracts executed and $800 million of junior subordinated notes issued; over half of the $7 billion five-year equity need is now addressed.
• Insurance and legal claims -- The Marshall Wildfire liability estimate was raised to $460 million (low end); $397 million has been settled, with $525 million in insurance coverage.
• Strategic partnerships -- Signed a joint development agreement with NextEra Energy and expanded alliances with GE Vernova and key EPC firms to support resource development and execution capability.
• Operational recognition -- Earned the EEI Emergency Recovery Award and a World's Most Ethical Company honor from Ethisphere for the seventh year in a row.

Summary

Management described a 15-year agreement with Google that includes customer protection measures and expands Xcel Energy (NASDAQ:XEL)'s renewable and storage portfolio. Incremental capital investment visibility has increased to over $7 billion within a larger $10+ billion opportunity, driven by transmission and data center-related growth. Executives highlighted continued expansion of the data center pipeline, with 6 gigawatts targeted for contract by 2027 and active engagement with major hyperscalers and partnerships to accelerate execution. Ongoing EPS increased on higher electric sales, despite persistent regulatory lag and weather-related challenges, and guidance for the year remains unchanged. Actions addressing equity needs, legal claims, and operational alliances position Xcel Energy to fund the largest capital program in its history while maintaining its credit profile.

• Executives stated that customer bills are expected to benefit from large-load projects through fixed cost sharing, with the Google agreement specifically noted as driving $1 billion to $1.5 billion in aggregate customer savings.
• The joint development agreement with NextEra is described as non-exclusive and scalable beyond the initial 2 gigawatts, aiming to support large-load and renewable infrastructure needs across the company's footprint.
• Plans include forthcoming large load tariff filings in Texas, New Mexico, and Wisconsin to protect existing customers while accelerating data center service capabilities.
• Safety, risk reduction, and operational resilience efforts—such as asset hardening, updated management systems, and improved situational awareness—were highlighted to address increasing weather and wildfire risk exposure.
• Strategic equity and debt financing flexibility, with 50% of five-year equity need already locked, will enable continuation of capital investment pace without sacrificing credit quality.
• Major RFPs in New Mexico and Minnesota are expected to deliver up to 7,000 megawatts of mainly renewable resources by 2030, with additional Colorado resources potentially contributing beyond 2030.

Industry glossary

• AFUDC: Allowance for Funds Used During Construction; a regulatory accounting mechanism allowing utilities to capitalize interest expense or return on equity related to construction projects.
• ATMs: At-the-market equity offering programs; allow companies to issue equity shares incrementally at prevailing market prices over time.
• ESA: Energy Services Agreement; a long-term contract to supply and manage energy services for specific facilities or customers.
• PTC / ITC: Production Tax Credit and Investment Tax Credit; U.S. federal incentives for renewable energy production or capital investment in qualifying projects.
• EPC: Engineering, Procurement, and Construction; contractual term for firms that design, acquire equipment, and build infrastructure for utility-scale projects.
• JDA: Joint Development Agreement; a formal partnership to jointly pursue infrastructure, generation, or development projects.
• ALJ: Administrative Law Judge; presides over regulatory cases, issues recommendations, and may influence utility rate or prudence outcomes.
• SPP / MISO: Southwest Power Pool and Midcontinent Independent System Operator; regional transmission organizations coordinating electricity markets and transmission planning in the central United States.

Full Conference Call Transcript

Roopesh Aggarwal: Thank you, Jordan. Good morning, and welcome to Xcel Energy Inc.'s 2026 First 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 first 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. In 2026, the ALJ for the Prairie Island outage case recommended an additional $4.241 billion disallowance of replacement power cost for power procured in 2024 associated with an extended outage at the plant starting late 2023. As a result, Xcel Energy Inc. recorded a charge of $37 million, or 4¢ per share, in the first quarter. Additionally, in 2026, Xcel Energy Inc. recognized $22 million, or 3¢ per share, due to an increase in estimated insurance proceeds for the Marshall Wildfire litigation.

Given the nonrecurring nature of these items, they have been excluded from first quarter ongoing earnings. As a result, our GAAP earnings for 2026 were $0.89 per share, while our ongoing earnings, which exclude these nonrecurring charges, were $0.91 per share. All further references to earnings, drivers, and variances in our discussion today will refer to ongoing earnings. For more information on this, please see the disclosures in our earnings release. I will now turn the call over to Bob.

Bob Frenzel: Thank you, Roopesh, and good morning, everybody. At Xcel Energy Inc., our mission is to make energy work better for our customers, helping them thrive. Our past quarter showcased our commitment to this mission through focused execution and delivering on our plans to strengthen and modernize the grid, expand our energy sources, and deploy innovative technologies to ensure that the energy we provide our customers remains reliable, affordable, and safe, both now and well into the future. And on these fronts, we are off to a great start this year.

In the first quarter, Xcel Energy Inc. invested over $3 billion in new infrastructure to support our customers' and states' growing energy needs for increased resilience and cleaner energy, and we are on track to deliver our most extensive capital investment plan in the company's history this year. We identified additional transmission and generation needs in our states, delivering on our expectation of incremental investment above our base plan. We announced details of our contract with Google for a new data center in the Upper Midwest that we believe is a model for large load development that benefits customers and communities. We filed that contract with the Minnesota PUC.

We continue to use our scale and our balance sheet to ensure that we have the right partnerships with critical suppliers, tier-one EPC firms, and developers to execute on budget, on time, and on scope on our growing portfolio of projects. We delivered strong ongoing earnings of $0.91 per share, and we remain confident in our ability to deliver on our annual investment plans and our earnings guidance for the twenty-second year in a row, one of the best track records in the industry. On our fourth quarter call, we announced progress on our data center pipeline with a signed ESA with a large data center in the Upper Midwest.

During the first quarter, we provided further details about this groundbreaking agreement with Google. As demand for electricity accelerates across the country, we believe that utilities have a responsibility to lead with solutions that balance innovation, reliability, sustainability, and affordability. Xcel Energy Inc.'s customers already have some of the lowest energy bills in the country. In fact, when you adjust for inflation, the typical Xcel Energy Inc. residential energy bill is almost 25% lower today than it was ten years ago, and in nominal terms, Xcel Energy Inc. residential electric bills are approximately 30% below the national average.

Under a 15-year agreement, Google will cover the entire cost of its service and infrastructure requirements to power its new data center, including 1,900 megawatts of new wind and solar generation and long-duration storage using Form Energy's innovative 100-hour iron-air battery. With credit protections in place, we estimate that this new data center will save customers $1 billion to $1.5 billion over the term of the ESA, helping keep customer bills low long into the future. In addition, and as part of our shared sustainability goals, water needs for the data center will be limited through Google's use of air-cooled technology in lieu of water-cooled.

In April, we also reached a definitive nonexclusive agreement on our previously announced MOU with NextEra Energy to co-develop generation, storage, and interconnections to accelerate data center development across our operating companies. We expect this joint development agreement will deliver a balance of company-owned resources and purchase power agreements with NextEra across all forms of generation, including wind, solar, battery storage, and natural gas. We are already underway developing solutions for 2 gigawatts of new data center capacity with plans to expand in the near future. In April, we also filed our large load tariff in Colorado, with proposed terms that are similar in scope to our Google ESA and the Minnesota large load tariff filing.

Data centers will commit to a long-term contract, minimum bills, termination fees, credit requirements, and incremental cost tests to ensure that our existing customers are protected from new large load customer needs. In the coming months, we plan to make similar filings in Texas, New Mexico, and Wisconsin. We believe our partnerships with hyperscalers, regulators, communities, and developers set a high bar for responsible large load development. We are partnering to ensure large load growth strengthens our overall system, benefits our local communities, and maintains our states' clean energy goals, and does not increase cost for our existing customers.

These collective actions give confidence in our ability to deliver on our forecast to secure 6 gigawatts of data center load by year-end 2027 with in-service dates into the early 2030s. In October, we outlined our plan to meet the growing infrastructure needs of our customers. We detailed a $60 billion base investment plan to continue our energy transition and to make needed investments to strengthen our transmission and distribution systems. At that time, we also expected that our base plan would likely need to be augmented based on anticipated but unapproved transmission and generation needs.

Through the first quarter, we now believe we have line of sight to at least $7+ billion of the $10+ billion opportunity that we highlighted last year. This incremental investment includes the 765 kV Crawfish Draw to Phantom transmission line in our SPS company that was allocated by SPP in February; two-thirds, or over 1,200 megawatts, of the generation and storage needed for the Google data center project; and 800 megawatts of generation approved by the Colorado Commission in February and April as part of the near-term procurement portfolio.

From here, we continue to see additional infrastructure investment needed to serve our growing customer needs, including active generation RFPs in PSCO, NSP, and SPS; additional regional transmission investments in SPP and MISO; and the generation to support the 3 gigawatts of data center demand that we added to our target plan on the Q4 earnings call. As these opportunities materialize, they will drive additional growth and investment both within and beyond our five-year capital plan. As we continue to add to capital backlog, it is also important to execute on the projects that are in the queue. In the first quarter, Xcel Energy Inc. invested over $3 billion in new infrastructure for our customers.

We brought online nearly 500 megawatts of new solar generation and utility-scale battery storage in SPS and in Colorado. In total, these projects will deliver system resiliency and reliability as well as $425 million of tax credit benefits to our customers over the life of the project. Across our entire portfolio of projects, 2026 to 2030, we expect customers will see more than $7 billion in aggregate benefits from PTCs and ITCs associated with various generation and storage projects, helping keep our customer bills among the lowest in the country. With continued growth across our industry, we also recognize that supply chains and qualified labor for generation, transmission, and distribution projects will become more constrained.

That is why our recently announced alliances with GE Vernova and NextEra and strategic agreements with tier-one EPC firms across our portfolio of renewable and gas generation, transmission, and distribution projects are critical to delivering on our growing investment pipeline well into the 2030s. Finally, our field teams continue to operate at the highest levels and were recently recognized by EEI with an Emergency Recovery Award for outstanding effort to restore service quickly and safely following severe thunderstorms that came through our Upper Midwest service territory in 2025.

And for the seventh year in a row, Xcel Energy Inc. was named a World's Most Ethical Company honoree by Ethisphere, which measures the company's corporate governance, culture of ethics, and environmental and societal impact.

As we look forward to the rest of 2026, Xcel Energy Inc. will continue our focus to deliver customers safe, clean, reliable, and affordable energy; execute with excellence on our 2026 $14 billion capital investment plan, our most extensive in the company's history; realize the unprecedented opportunities for growth that we laid out in base and incremental investment plans; secure incremental large customer loads that can benefit all customers and meet this moment in our country's growing demand for energy; reach constructive outcomes on rate cases and resource solicitations; make operational and system hardening investments to protect our communities from the risks of extreme weather; and deliver on our earnings guidance for the twenty-second year in a row.

With that, I will turn it over to Brian.

Brian Van Abel: Thanks, Bob. Good morning, everyone. Starting with our financial results, Xcel Energy Inc. had ongoing earnings of $0.91 per share in 2026, compared to earnings of $0.84 per share in 2025. The most significant earnings drivers for the quarter include the following. Higher electric revenues due to rate case outcomes, nonfuel riders, and sales growth, partially offset by weather, increased earnings by 23¢ per share. Higher APDC increased earnings by 10¢ per share. Offsetting these positive drivers, higher interest charges and common equity financing decreased earnings by 18¢ per share, reflecting funding of our infrastructure investments and discipline to maintain a strong balance sheet. Higher depreciation and amortization decreased earnings by 5¢ per share, reflecting our capital investment programs.

Lower natural gas revenues due to weather, partially offset by rate case outcomes, decreased earnings by 3¢ per share. Turning to weather and sales, Colorado overall experienced its warmest winter on record during the fourth quarter. As a result, impacts from weather to electric and natural gas sales reduced earnings by $0.09 per share. On a weather-adjusted basis, first quarter electric sales increased by 2.8%, driven by continued oil and gas growth in SPS and broader C&I growth across jurisdictions. For 2026, we continue to expect full-year weather-adjusted electric sales to increase 3%. Moving to recent regulatory activity, in our North Dakota electric rate case, the commission approved our previously announced settlement authorizing a $27 million revenue increase.

In our South Dakota electric rate case, we reached a constructive black box settlement with staff for a net revenue increase of $26 million. A commission decision is expected in the second quarter. This Tuesday, we received the intervenor testimony in our Colorado electric rate case, which we believe provides a starting point for ongoing settlement discussions over the next month. Late yesterday, we received the ALJ report in our Minnesota electric rate case recommending a 9.8% ROE and a 52.5% equity ratio, with a final commission decision early in the third quarter. In the New Mexico electric rate case, intervenor testimony is due on May 1, and we expect the commission decision in the fourth quarter.

As we look to our financing plan, Xcel Energy Inc. continues our commitment to maintain a strong balance sheet upon accretive growth with the balance of equity and debt. In the first quarter, we issued forward contracts over $1 billion of equity from our ATM program. Additionally, we issued an $800 million junior subordinated note at the holding company, which receives 50% equity credit with the rating agencies. This, combined with our unsettled forwards and collared forward contracts from 2025, addresses over half of our $7 billion of equity need in our five-year base plan.

We also continue to make strong progress on the 231 of the 304 submitted claims; we have reached settlements with 79 of 107 potential claims presented for mediation by parties represented by attorneys. Finally, 26 of 73 complaints have been settled or dismissed and have reached the statute of limitations for property loss claims. We have updated the low end of our estimated liability to $460 million. We have committed $397 million in settlement agreements, including agreements with the subrogated insurance plaintiffs and the three largest claims by acreage. In total, we have $525 million of insurance coverage. Moving to guidance, we are reaffirming our 2026 ongoing EPS guidance range of $4.04 to $4.16 per share.

We remain confident in our ability to deliver 6% to 8%+ long-term earnings growth and expect to deliver 9% EPS growth on average through 2030. Updates to key assumptions are included in our slides and earnings release. With that, I will wrap up with a quick summary. Xcel Energy Inc. posted strong ongoing first quarter 2026 earnings of $0.91 per share. We continue to lead a clean energy transition, ensuring safe, clean, and reliable service and keeping customer bills as low as possible. We have line of sight to $7+ billion of opportunities in our incremental $10+ billion investment plan.

We have announced details of our data center agreement with Google, which we believe is a model for driving large load growth while protecting and throwing benefits to our other customers and communities. We partnered with multiple tier-one EPC firms, critical suppliers, and developers to ensure we have the resources needed to execute on a growing portfolio of investment opportunities on budget, on time, and on scope. We continue to work to reach constructive outcomes, including settlements in our active rate cases. We maintain a strong balance sheet and credit metrics and have addressed over half of our $7 billion five-year base equity need. We are reaffirming our 2026 ongoing EPS guidance of $4.04 to $4.16 per share.

Finally, we remain confident in our ability to deliver 6% to 8%+ long-term earnings growth and expect to deliver 9% EPS growth on average through 2030. We will now open the call for questions.

Operator: It is now the question-and-answer session. If you would like to ask a question, please press star then 1 on your telephone keypad. Your first question comes from the line of Richard Sunderland from Truist Securities. Your line is live.

Analyst: Hey. Good morning, everyone.

Bob Frenzel: Good morning.

Analyst: Thank you. Starting with some of the regulatory progress this week, I guess Colorado with the intervenor testimony. Could you expand a little bit more on the sort of settlement potential over the next month that you referenced in the script, and any other takeaways you would highlight there? Then similarly on Minnesota with the ALJ recommendation, any other thoughts you could offer would be helpful. Thank you.

Bob Frenzel: Absolutely, and good morning. I would start with Colorado Electric and take a step back from a macro view. We have the lowest bills in the country in Colorado, about 1% share of wallet. We have one of the fastest transitioning clean energy systems and generation fleets in the country, so we are achieving state policy, and we hope that is recognized by our policymakers. On the rate case, the intervenor direct testimony is relatively consistent with what we saw in the last case. In our last case in Colorado, we had a near-unanimous settlement, and we have settled three of the past four electric cases. We think we have a decent starting point.

The procedural schedule shows the settlement deadline on May 28, so we will start settlement discussions and look forward to working with the parties early in May. Hopefully, we can reach a constructive settlement like we have in the last few rate cases. On the Minnesota side, we received the Minnesota ALJ report late yesterday after we had already shipped off our earnings release, so it is not referenced there. You will see details in our 10-Q that we file later today. We think it is generally a balanced overall recommendation. It is constructive to see a 9.8% ROE and a 52.5% equity ratio.

We are digesting a few of the other trackers and pieces in it, but overall we think it is a constructive recommendation. Procedurally, we will see MPUC deliberations in June and then an MPUC order in July. We are working through a lot of rate cases and looking to reach constructive outcomes this year to deliver for both our customers and our shareholders.

Analyst: Great, thanks for running through all of that. Turning to some of the data center activity, you had a lot of commentary around the Google agreement and the landmark effort there. On Slide 14, the 4 gigawatts contracted by year-end 2027—what are the gating factors to signing? The $6 billion to $8 billion incremental CapEx framework you called out elsewhere in the deck, is that applicable there? Any highlights on the financing side of those advances as well—any unique ways to finance that?

Bob Frenzel: Let me kick it off, and then I will ask Brian to weigh in. Not surprisingly, yesterday's hyperscaler announcements continue to show high interest in data center development, and we are seeing a lot of interest across all eight of our states in terms of activity and backlog. At the top of the slide you mentioned is a 20 gigawatt backlog, and that continues to be greater than 20 gigawatts; the interest level continues to grow in our service territories. We have a gigawatt either built or through construction and another one that we are in front of the commissions with approvals on, particularly the Google transaction.

As we said in our fourth quarter call, we expect to execute on enough ESAs this year to get to a 3 gigawatt target, and another 3 gigawatts next year. We are actively engaged with our customers. These are long and deliberate discussions to make sure that we can reach innovative and constructive outcomes like we did with Google. I think we have proven we can do competitive, highly renewable, low-carbon data center development in our regions. We have the most links in our company in the Upper Midwest, and that has been a focus area for us and a focus area with our JDA with NextEra.

With the large load tariff filing in Colorado and the ability it allows us to bring generation, transmission, and the load together in a package to the Colorado commission—and we have those capabilities as well through both SPP and SPS processes in Texas and New Mexico—we do expect to file a large load tariff in Texas as well this year to help expedite that, but it does not preclude us from coming forward with contracts in the near term. We are active on the engagement front with all the hyperscalers and large data center developers.

There is a lot of interest in the footprint that our company provides in terms of high penetrations of low-cost renewables that our existing customers have benefited from and we think these large load customers can benefit from as well.

Brian Van Abel: Just a couple of things to make sure we get all parts of your question. You referenced the $6 billion to $8 billion number. That is something we have had in our slides before for what we view as the incremental investment opportunity to serve every gigawatt of data center. If you look at Google being a model, it is served with a lot of renewables and long-duration storage—very different than if you are serving it with just a CCGT. Moving forward our clean energy policies and priorities and meeting our state objectives gives us a really good investment opportunity in how we are going to serve these.

On the slide about our $10+ billion investment pipeline, we talk about 10 to 12 gigawatts of RFPs in flight and the 3 additional gigawatts of data centers we expect to contract. Those 3 gigawatts of data centers will drive another 6 to 10 gigawatts of generation that we need. So it is a huge long-term opportunity to fill in the back end of this five-year plan and deliver transparency and growth visibility into the early 2030s. It is not only about filling in our investment pipeline here in the back half of this decade but really driving the investment pipeline in the early 2030s.

We also have to mention the customer affordability opportunity this drives—we can bring forth the clean energy opportunity with the resources advantage we have in the middle of the country paired with the affordability benefits for our current customers. We are super excited about this opportunity.

Bob Frenzel: You asked about alternative financing. We are certainly looking at all those alternative financings just like our peers are. Right now, our base plan to beat is how we have talked about it—funding incremental CapEx with incremental equity of roughly 40%. We are already ahead—one quarter into our five-year plan, and we have 50% of our equity taken down for our base five-year plan. We are staying ahead of it and will continue to deliver growth, happy to fund accretive growth with equity, and maintain that strong balance sheet because it is really important as you go through this cycle of long-term extended growth.

Analyst: I appreciate the comprehensive response. Thank you.

Operator: Your next question comes from the line of Nicholas Campanella from Barclays. Your line is live.

Nicholas Joseph Campanella: Hey. Good morning. Thanks for taking my questions.

Bob Frenzel: Morning, Nick.

Nicholas Joseph Campanella: I appreciate all the regulatory follow-up. You have line of sight now to the $7 billion of incremental versus, I think, $10 billion of upside. Could you give us some clarity on the shaping of that spend and, as you roll forward the plan to 2031, how much of that is going to get encapsulated?

Brian Van Abel: Hey, Nick. Good morning. On that slide—Slide 8 in our earnings deck—we highlight the different pieces of that $7+ billion. Think of the 765 kV transmission line in SPS; the goal is in-service by 2031, so a lot of that will be in our current five-year plan, using the back part of that five-year plan. The Colorado generation—800 megawatts, some gas and 600 megawatts of wind—again should be in service by around 2030, particularly the wind where the goal is to capture the production tax credits. We have not specified the in-service dates on the assets to serve Google; that is not public.

If it is wind and solar, the goal is to get those in to capture the tax credits to ensure low-cost renewables, and long-duration storage has a longer potential runway in terms of tax credits. We always provide our comprehensive update in Q3, but that is a good way to think about how this rolls into the front five years with a little bit flowing into the early 2030s.

Nicholas Joseph Campanella: Great. As you get to the back end of that plan, the large loads are going to be ramping, hopefully. At what point would you revisit the 40% equity financing assumption? Secondly, any thoughts on defending the Baa1 outlook with Moody's?

Brian Van Abel: Longer term, it is important to maintain a strong balance sheet and good credit metrics. We understand where we are with Moody’s. Over the long term, we think about that 17% CFO-to-debt type of metric. In a large build cycle, it gets pressured a little bit, but it is important to maintain a strong balance sheet over the long term. In terms of the equity financing, that has generally been our rule of thumb. Every time we roll forward a new five-year plan, depending on cash generation, project timing, and tax benefits, we incorporate all that. So 40% is a rule of thumb, and we will continue to be consistent with what maintains our metrics.

We think in this type of build cycle and capital investment, with volatility in the market, it is important to have a good balance sheet to weather through things.

Nicholas Joseph Campanella: One more we were curious on is the MISO capacity print. It came down a little bit earlier this past week. Do you see that as a tailwind at all to the territories you operate in? As you think about capacity planning while you are doing data center development, how is that maybe changing thoughts there?

Bob Frenzel: One of the interesting things about the MISO market and the capacity auction itself is it has been much more volatile and less predictable than some other regions given the large bilateral nature of MISO. The print itself is not something we look at in the near term because we have a bit of length in the Upper Midwest and have been able to sell into that market. Over time, it is not the signal that we use to drive new capacity additions and new load forecasting. So, relatively uninteresting in the short term for the MISO capacity auction.

Our long-term forecast is in partnership with MISO—where we see asset additions, asset reductions, and load growth—which still leads to a really exciting region and an area that data centers definitely want to be energized by. Not much to the auction itself.

Operator: Next question comes from the line of Julien Dumoulin-Smith from Jefferies. Your line is live.

Julien Patrick Dumoulin-Smith: Hey. Good morning, team. Thank you very much. Let me nitpick on a few things you have already said. On Colorado intervenor testimony, hearing some decent confidence on settlement—you never say it is done till it is done—but how do you think about the prior guidance of 50 to 60 basis points of lag here? Is that attainable? What are the permutations? Also, given in parallel the comprehensive capital riders now available, how do you think about the future cadence of cases and trying to establish a longer duration here?

Brian Van Abel: Good morning. Certainly, if we can reach a constructive settlement, the prior guidance remains intact. If you look at where staff and UCA are—about a 9.0% midpoint ROE for staff and 9.2% for UCA—it is a decent starting point for settlement negotiations. Our equity ratios are important in Colorado; overall it is really important to maintain credit quality in Colorado, so that equity ratio is a significant point. We have a good history and track record of settling on the electric side. On the riders and opportunity, there is an opportunity to have a longer-term path to not filing rate cases maybe every year as we have been.

It depends on a constructive settlement here on the electric case to set that base framework. We look forward to engaging the parties over the next month to see if we can reach something constructive.

Julien Patrick Dumoulin-Smith: Going back to the data center large load—what is the geographic footprint you are contemplating for incremental announcements? Different states have different tax regimes. You alluded to Texas filing something. How might that geography be proportioned relative to your others, and how might that impact the Colorado comments? Also, on the NextEra partnership, you throw 2 gigawatts out in that pipeline. Is that separate and distinct from the 3 gigawatts by 2027, and help tie the numbers out?

Bob Frenzel: We started with generation length and transmission capabilities, and that has led people to be most interested in the Upper Midwest—the Minnesota, Wisconsin, and Dakotas—where we have more length in the near term. In the longer term, we are working on a large load tariff in Colorado. There is active legislation in Colorado around making Colorado a place with a framework to attract data centers. In the Southwest, Texas and New Mexico are hugely popular given the price of electricity and general attractiveness.

When we talk to the large hyperscalers and developers, they like working with us because we have multiple regions of the country, and we can deliver solutions in different parts of the country that help them meet portfolio needs across a large swath of the United States. On the high-probability pipeline, we expect 4 more gigawatts to be contracted by 2027. That is inclusive of the 2 gigawatts we referenced with NextEra, and the NextEra partnership could be larger than that. We are actively engaged in two; it could be bigger to serve all four, and we are working on that.

Julien Patrick Dumoulin-Smith: Inasmuch as nitpicking on cost, starting the year out well—any updates on Sherco and timeline there?

Bob Frenzel: Yes, our plans are to continue to retire Sherco at the end of this year, and we have both the transmission and generation needed to serve that interconnection on a go-forward basis in the Upper Midwest as part of our long-term resource plan. Those plans are still intact, and we have not heard anything that would lead us to do anything differently at this point.

Julien Patrick Dumoulin-Smith: Awesome. Best of luck. You have a lot cooking. We will talk soon.

Bob Frenzel: Thanks, Julien.

Operator: Your next question comes from the line of Carly Davenport from Goldman Sachs. Your line is live.

Carly S. Davenport: Good morning. Maybe just a couple quick ones on Colorado. First, I think the PUC sunset bill came out of committee last week. What are your latest views on some of the provisions around securitization and potential changes like expanding the size of the PUC, and your thoughts around that?

Bob Frenzel: You are accurate. Each of the agencies in the state undergoes sunset review; the PUC was up this year, usually on a seven- to ten-year cycle. The goal is to look at the effectiveness and efficiency of the agency and the necessity of the functions for the future of the state. One of the provisions in the legislation was the expansion of the use of securitization as a tool. We have been thoughtful in proposing securitization in cases where it makes a lot of sense. We have permission to securitize the remaining balance of Comanche 3 when that plant retires at 2030. We have looked at securitization for portions of our wildfire investment in the state.

We proposed—and did not execute—on securitization around fuel costs, particularly around Winter Storm Uri. It is a good tool to have in the tool chest. We want to make sure it is used for the right things as we go forward. We are very engaged in the legislation as drafted; there is a little bit of time between now and the end of session. We continue to talk with all parties about how to bring efficiency and effectiveness to the state—whether it is speed of filings or decision-making on resource plans. There is a lot we think we can do in this era of energy growth to partner with the PUC as we move forward, working with all stakeholders.

Carly S. Davenport: As we move more into the core of wildfire season in Colorado over the next couple of months, can you talk about expectations going in based on current weather forecasts and the mild winter you had in Colorado? Also touch on some of the risk reduction work you have done in the last couple of years to get ahead of that risk.

Bob Frenzel: Thank you. I appreciate you recognizing all the great work the team has done over the last number of years. It goes in a number of buckets. We talk about situational awareness and our ability to understand weather patterns and take action on them more discreetly and accurately, with less customer impact—it has really grown over the last [inaudible]. Situational awareness is higher than it was [inaudible]. Public safety power shutoffs are, in limited cases, [inaudible]. They are modestly grown in our ability to [inaudible] and make it safe or cover the back end as best we can. Underneath situational awareness, [inaudible] hardened assets in fire-prone areas as sufficiently volatile weather might see it as we go forward.

Communications to our customers, our new outage management systems, new customer notification systems, and more engagement on the community side have all improved. We are in a low snowpack in Colorado this year and drier conditions. We think with all the things we have done on the operational side, the situational awareness side, and the community engagement side, it is going to lead us to have a high-performing summer in Colorado.

Carly S. Davenport: Great. Thank you for all that color.

Operator: Your next question comes from the line of Jeremy Tonet from JPMorgan. Your line is live.

Jeremy Bryan Tonet: Hi. Good morning.

Bob Frenzel: Hey, Jeremy.

Jeremy Bryan Tonet: Coming back to the Google agreement—if Google is willing to pay for newer technologies like Form, do you see this as a trend? Are you seeing these threads in your other conversations at this point as far as appetite?

Bob Frenzel: Great question. We think about aligning with state policies and how we move this forward. One example is in Colorado, where an advanced geothermal bill is moving through the legislature. That could be another place where a hyperscaler could help fund an advanced geothermal project in Colorado, given the state's focus on the clean energy transition. This is a great blueprint as we think about longer-term opportunities not only in Minnesota but other parts of our service territory. New technology is generally more expensive; it takes investment to commercialize. This is a great model to align the data center and hyperscaler opportunity with our state policy objectives.

I will add that these large customers are committed to the long-term sustainability of their own product. They are highly interested in our regions of the country where the wind blows and the sun shines, and we can deliver both renewable energy and innovative technologies. We have seen real receptivity at our commission levels to do that, particularly when it is protecting existing customers. We will continue to be innovative and sustainable, and we are working with a customer set that is aligned with us.

Jeremy Bryan Tonet: Maybe taking a step back on your ability to win more data center load—you kind of stand out versus others. What are the key offerings—market-by-market or the type of solutions? What is key to the rate of wins you have posted?

Bob Frenzel: The diversity of our company and regions, the ability to deliver various fuel sources and deliver speed to power to these customers, are really important. Speed is very important to these folks today, and sustainability is going to be very important to them as we roll through time. For example, how we handled the water situation—even in the land of 10,000 lakes in Minnesota, water is a key topic. The ability for us to partner with a large data center owner and come up with an innovative, creative air-cooled versus water-cooled solution can be a template for development going forward. We are talking with all the hyperscalers and data center developers.

Depending on their customer mix and perspectives, they will find value across the portfolio of states we serve, and we are here to meet that moment.

Brian Van Abel: On the execution side, if we are going to deliver a portfolio of clean energy resources, that takes a development team and scale. In our base plan, we have 10 gigawatts of generation and storage, 7 gigawatts of which are renewables. It takes a platform—our partnerships on the EPC and OEM side matter—because another gigawatt this year and three more next year take a significant pipeline of clean energy resources to execute. The hyperscalers have confidence in what we are doing and our track record delivering renewable projects, which is really important.

Jeremy Bryan Tonet: Understood, very helpful. One quick last one—recognize this is premature—but seeing the ALJ just now, any thoughts on prospects for settling given this very early time of review?

Brian Van Abel: On the Minnesota electric side, generally the most likely time to settle is leading into hearings, and we have had the hearings. We would be willing to discuss settlement, but the impetus is usually before hearings. We look forward to MPUC deliberations in June and seeing the order in July.

Operator: Your next question comes from the line of Ross Fowler from Bank of America. Your line is live.

Analyst: Morning, Bob. Morning, Brian. How are you?

Brian Van Abel: Doing great, Ross. Thanks.

Analyst: On the JDA with NextEra, do you see potential to expand that beyond 2 gigawatts? How are you thinking about expanding that?

Bob Frenzel: The JDA itself is unbounded as far as I am concerned. We partnered with a national development platform to pair nicely with our very strong strength in generation and transmission development. We did this for speed to power, to expand the pie, and to deliver on this moment of the country's needs. It could be the partnership we go through for all of our generation needs for large loads. It is not exclusive; we can still have great relationships with other generation developers and data center developers. There is no limit on it.

Analyst: We are all focused on growth, but what about the layer of execution risk behind that? You have the GE Vernova strategic alliance—on those five natural gas turbines, is that just in the queue or priced? Then generally, can you point to some things since you have a different execution risk profile than most?

Bob Frenzel: We have 24 gas turbines through Siemens and General Electric that are slotted and in various stages of production and delivery over the next five years. I feel very comfortable with access to gas turbines and the ability to meet our base and upside cases. With respect to risk profile, we sit in a great spot. We are excited about where we sit with our key vendors and suppliers—GE Vernova being one, NextEra being another. We have negotiated and framework agreements with both EPC vendors and equipment vendors across transmission, distribution, and gas businesses. We have wind turbines available, solar, breakers, high-voltage transformers—a lot of equipment—and access to people through our partnerships.

We feel very confident in our ability to meet our base and upside capital plans.

Brian Van Abel: That is why you see the slide on base generation we are executing over the next five years. EPCs and OEMs see that we have a long pipeline—scale matters—and that is how we get partnerships with tier-ones. These are long-term partnerships; moving from site to site to drive crew efficiencies avoids mobilization and demobilization costs. There are a lot of efficiencies we can drive—ordering multiple gigawatts of CTs or wind turbines. Huge benefits of scale help de-risk execution and make us competitive in RFPs to deliver the most competitive projects for the benefit of our customers.

Analyst: Definitely meant to be complimentary. Have a great day, guys. Thank you.

Operator: Your next question comes from the line of Steve Fleishman from Wolfe Research. Your line is live.

Steven Isaac Fleishman: Hey. Good morning. On Slide 8—the famous Slide 8—can you spend a quick minute on the non–check mark items and when we will have visibility on them? Also, how much of the CapEx would show up by 2030 on some of those?

Brian Van Abel: Happy to take that. Nearest term is the SPS RFP. We received bids in January and are going through the evaluation. We will make a filing with the New Mexico Commission later in Q2. That is 1,500 to 3,000 megawatts nameplate capacity, a lot of renewables as part of meeting New Mexico renewable energy standards. I expect renewables related to that would come in prior to 2030—good opportunity to filter into the back part of our five-year plan. The NSP RFP—we recently received bids, are working through the evaluation, and will file with the Minnesota Commission later this year.

That accelerates resource acquisition to secure renewables and capture tax credits—looking at 4,000+ megawatts of renewable generation and storage by 2030, which would also filter into our base five-year plan. In Colorado, we are working through the JTS and will file an RFP later this year. That will play out into next year; for renewables, the goal will be to get them in by 2030, but there is likely some baseload and thermal generation that could slip into the early 2030s depending on when we need the resources. On the 765 kV transmission lines in SPP, that is a competitive bid we will submit later this year; we likely will not get a decision until next year.

On data centers, we will execute on 1 gigawatt this year, and the 3 gigawatts would be a significant opportunity next year; it depends on the resource mix. I view that as how we deliver longer-term growth visibility post-2030. We have great line of sight into 2030 and the early 2030s; we want to continue to extend that and give shareholders visibility into executing our long-term growth objectives.

Steven Isaac Fleishman: Quick follow-up on the NSP and SPS renewables RFPs—do you expect most of that to be company-owned or some PPAs?

Brian Van Abel: It is a balance. We have not disclosed details. Publicly we guide to 50/50. We have done better in some RFPs—in the last SPS RFP we did north of 75%. In Minnesota we have opportunities to reuse transmission interconnections. Our goal is to bring competitive projects for the benefit of our customers. We guide to 50/50 and aim to do better because we think we have really competitive projects.

Operator: Your next question comes from the line of Sophie Karp from KeyBanc. Your line is live.

Sophie Ksenia Karp: Hi. Good morning, and congrats on a good update here. Is there a way for you to quantify customer benefits from incremental data center load as it materializes like some of your peers are doing? Thinking through potential community relations issues—could it be helpful to show that benefit more directly? Is it possible?

Bob Frenzel: It is a great question. On the Google data center—close to a gigawatt—it led to $1 billion to $1.5 billion of customer savings. That translates to about 1% to 2% residential electric customer net benefit. That is probably not a bad rule of thumb, but we have not given guidance on that. A lot of the benefit comes from sharing the fixed costs of the grid, especially transmission investment, where adding large load shares costs more broadly among more megawatt-hours. In particular, the addition of 1,900 megawatts of wind, solar, and storage is beneficial as we think about dispatch priority in the Upper Midwest—a knock-on effect beneficial for our customers. The carbon neutrality is also beneficial.

We have not given firm guidance; it is probably in that zip code, and we can work on something like that in the future.

Sophie Ksenia Karp: Thank you. That is all for me. Appreciate it.

Operator: Our next question will come from the line of Anthony Crowdell from Mizuho Securities. Your line is live.

Anthony Crowdell: Hey. Thanks for squeezing me in, guys. Two quick ones. You have been very aggressive in doing, I guess, 50% of your equity over five years just in the first quarter. Any cadence on the remaining half? Are you looking to take care of it all in 2026? Any color?

Brian Van Abel: Generally, we do not give specific timing on equity issuances. We have been very proactive. The forward component in the ATM will be pushed out a couple of years, giving flexibility in when you issue and when you actually draw down the equity proceeds. That helps time with capital investment needs. We will continue to be proactive and get out ahead. We are pretty proud of having half of our equity need locked down one quarter into a five-year plan—three months into a sixty-month plan.

Anthony Crowdell: Quickly on Smokehouse Creek—you give a lot of detail on the slide, appreciate it. You are still under the insurance cap—I think $525 million. You have been aggressive on working through settlements. Any color on resolving all of it, or out of the 107 potential claims, any color?

Brian Van Abel: The statute of limitations on property claims hit the two-year mark in February. Those that have come in—we are early in the process, but our goal is to work expeditiously through them like we have through our settlement process. We have been very successful with over 300+ claims and lawsuits settled. We have a low-end accrual of $460 million and finalized settlements of approximately $400 million. It is really that $60 million delta that is the low-end estimate. We will continue to provide updates quarterly, and we feel really good about what we have done so far.

Anthony Crowdell: Thanks so much. Congrats on a good quarter.

Operator: Our final question will come from the line of Steven D’Ambrisi from RBC Capital Markets. Your line is live.

Steven D’Ambrisi: Hey, Bob and Brian. Thanks for fitting me in. Hopefully, I can bring it home strong. Quickly, what do you think large loads do for earned returns or structural under-earning that you have in any of your jurisdictions as they come online? You have a 9% EPS CAGR, but rate base growth is very front-end loaded and the capital plan is back-end loaded, and we have talked about adding incremental capital to the plan mostly in the tail. How does the shape of earned returns look as you see rate base growth accelerating?

Brian Van Abel: On earned returns, we have talked about closing the gap, particularly in Colorado, where we are working through things and have filed rate cases that go in effect next year in terms of full annualization. Structurally, there is 50+ basis points of structural lag; we will continue to work on that. On data centers and overall sales growth—whether it is oil and gas growth in SPS or diversified growth—we have an opportunity to drive better returns between rate cases or stay out of rate cases longer term as sales growth materializes. That is a great long-term opportunity—not only bringing affordability benefits with data center loads, but also helping stay out of rate cases over the long term.

It will take a while for data centers to ramp late in this period, but it is a great long-term opportunity on both affordability and driving earned returns.

Steven D’Ambrisi: Appreciate it, guys. Thanks very much.

Operator: That concludes the question-and-answer session. I will now turn the call over to Brian Van Abel for closing remarks.

Brian Van Abel: Thank you all for participating in our earnings call this morning. Please contact our investor relations team with any follow-up questions. Have a great day.

Operator: That concludes today's meeting. You may now disconnect.

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