XEL - Earnings call transcript Q4 2019

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Operator

Good day and welcome to the Xcel Energy Year End 2019 Earnings Call. Today’s conference is being recorded. Questions will only be taken from institutional investors. Reporters can contact media relations with inquiries, individual investors and others can reach out to Investor Relations.

At this time, I would like to turn the conference over to Paul Johnson, Vice President of Investor Relations. ahead. go Please

Paul Johnson

welcome conference and Energy's fourth XXXX Good to earnings call. quarter morning Xcel

today Chairman, and Joining Executive Ben are me Fowke, Bob Executive Officer. Officer; President Frenzel, Vice Financial President Chief and Chief and

addition, answer questions. to have team your members the of In management we available other

financial regulatory available Today will developments. accompany call are on Slides our review objectives, website. share results, update our that we and XXXX recent on and you discuss plans business and today's

conference anticipated call some factors release of the in the today's with information. results comments As SEC. our filings contain a Significant may during that to reminder, forward-looking differ are earnings cause could our from and those described

natural and metrics in are discuss On today's release. including will reconciliations our call, on earnings non-GAAP that we comparable GAAP margins. are gas Information electric included measures ongoing certain and measures earnings and

call the Ben. turn I'll that, over to With

Ben Fowke

accomplishments. with excellent Well, and impressive thank was XXXX you, of an everyone, Paul, good long a morning, year and list

Let a me few. share

of EPS exceeding our delivered we've dividend. or is dividend our straight We raised the which consecutive guidance. by XXth meeting $X.XX annual XXth our is which We year per of earnings share, year in increased XXXX, $X.XX the

subsequently, of a this an hit hit September, of of shareholder Our stock an just high $XX.XX return week. in new all-time total high all-time achieved and $XX.XX We over XX%.

And Longroad assets. in The Minnesota system. wind our Commission we declined O&M investments rate purchase while X%, almost of our incremental Our resolved cases. the making even approved multiple finally,

a also year strong had operationally. We

three megawatts completed Benton and the budget. in projects We These continued Lake of wind completion achieve our our expansion nation-leading projects. XXX under Foxtail, and over represent with milestones important were to Hale program

energy to XXXX. of almost are transition, have and which under in completed customer result clean to savings X,XXX carbon We're in we be projects significant continue which wind our reductions. excited addition, will In megawatts construction, very expected

XX.X% The factor achieved nuclear make performance, a while team cost. transforming of great in with outages. two to in refueling XXXX, reducing fleet Our continues even capacity strides

by We and fleets of nuclear rated NRC the the as country have INPO. one top-performing in the

we our year to XXXX, proud our little our lower addition in results declining is structure, I'm straight of nuclear our fourth O&M over and to O&M and strong performance, operations. declining in And in of the with leadership have a the X% of in and cost continued nuclear this industry. cost our effort employees extremely

wire Moving of our to side business. the

implemented implementation in advanced Minnesota as offerings have and faster grid and November, our to progressed expand planned, Our grid deployment a expect benefit customers, efforts our efficiency software meter foundational commission initial security, we customers. completed decision later enable well restoration, for advanced increased to we new and better full-scale Colorado, will this with and we our XXXX, year. reliability requested and program In storm to follow. our In approval

financial us strong of and opportunities, gave carbon to assistance We've and to employees, performance, the we energy achieve natural we our by mitigate also proactively of XXXX, of and emissions levels, In remain retraining our impacted their Global vision, our offering communities. provided impacts we're our Award on S&P carbon-free and our and transition relocation attrition. levering Excellence, employees clean continue to and Beyond very XXXX In of more reduction we estimate an recognition I'm reduced XXXX. XX% from proud operational than track by leadership. XX% our on we ESG carbon

metal a worked recycling and plant. Sherco new progress generation As sites, we've at by partnered our also hard coal retirements. from impacted those relocate as to coal continued communities to there next build center Google a with communities existing coal with plants to We've a no build to well. plant plant businesses we've layoffs closing new and attract managed closing Minnesota, our of transition is result, In data the our to

coal to solution major worked we which employer to closing we've in Pueblo, is and two solar customer where develop Colorado, are a steel retain our In units. a largest mill, a

And the economic by jobs Magazine's We one Now have development base. both collaborative been Admired results equality. in Most seventh Corporate help Corporate efforts these the as our Equality one others. for will Magazine's terms Campaign's earned of remain were year, among sustain and named local for recognized perfect the Responsibility consecutive of and tax and among economies Most Fortune Companies of score Corporate best We to Best another work Responsible Index, XXX Newsweek's Citizens we Companies. LGBTQ Rights on places Human

In addition, employer. various strong continue publications to veteran recognize leadership a as our

important ESG an record, outstanding of increasingly this up adds becoming investors. is which to All to

forward, with I'm and pleased opportunities So XXXX the about have really I'm our looking beyond. accomplishments. we excited in And

by our wind executing affordable term, XXXX. system multistate solar, provide of by as program, Longer our to add will continue emissions XX% more firm energy will investment clean, to reduce universal and we will which carbon plan on part We capacity our storage to our customers.

while investment Implementation our keep significant grid program new of also others of opportunities well We'll the the while solve congestion it next also our with maintaining will decade. critical transmission offerings and integration allow work renewables efficient grid for more more the system, projects and the reliable, added to deliver are over planned future. into creates for enabling advanced to and our customers. collaborating as renewables secure This to on is issues the reliability

reduce will other which customers, the transportation continue our to the and policymakers experience EV sector. improve and will stakeholders build nation-leading emissions working with across customer programs, We

update. Bob, let with our call Bob? well to me results as provide financial more the that, So a and outlook on over detail turn who'll as regulatory

Bob Frenzel

will everyone. morning, Thanks, results. year today comments full Ben, good and focus XXXX My on

release. ongoing $X.XX results, achieved on We strong earnings increase and see We results. XXXX $X.XX year quarter compared X.X% which of operational almost normal. positive range delivered earnings our per XXXX. in to $X.XX was result financial share, with contributing fourth $X.XX $X.XX guidance our share compared represents a share. last original factor, please of end to another top details For to per our of weather per Similar This year, per share the of a is

include $X.XX earnings O&M natural incurred also for drivers we $X.XX the storms, gas per However, most rate margins, our benefit. capital increased share including effective $X.XX the per Lower expenses earnings to and by investments. earnings share, approximately due which electric to additional per and O&M share higher share. including riders significant The rate by increased recover increases tax partially increased year offsetting lower weather expense, per by in $X.XX earnings

increased credits lower reform neutral. back reduced largely ETR earnings due majority And investment and which an flow by earnings impacts, AFUDC increase production which which interest positive these decreased and drivers per due However, customers is share. depreciation $X.XX capital in Offsetting $X.XX through are were to tax electric reflecting the project tax by lower margin timing, of of expense, share. the both to per our program, earnings to

Turning sales. to

offset in and customer, electric continued frac Wisconsin. demand and in weather-adjusted by result XXXX our partially partially mining customer usage be cogeneration as offset X.X% certain growth, the experienced almost which per sales of declines use in declines sales unfavorable. lower due in all we customer. sales per X.X% mining across jurisdictions customer to sand strong gas lower sales, a discrete the Weather-adjusted growth Our higher XXXX. increased caused of space, to customer natural And the with by in large sand frac sales declined use saw We positive by in residential C&I

natural includes X%, and impact For year. sales anticipate approximately of the gas we electric growth which XXXX, of leap

storm risk have and Turning and five and We partially expenses. customers, result, And customer than almost to year, essentially for for further the past business continued in costs experience taking offset years. generation efficiency consolidated fossil were O&M unexpected out and strategic as remain committed reduce we in O&M by a gains our the to incremental improving to of operating our flat. lower X% operations. by in fleets, cost our driven base the last transmission as costs nuclear the our on forecast of areas spending our and is benefit efficiencies enhance

and However, customer do continuing and wind new the invest which O&M adding rider incremental cybersecurity, recoverable wildfire mitigation is XXXX, areas largely enhancing we well expect strategic as in experience. generation in as of to from XXXX

a result, total will to expect XXXX. we in As approximately expense increase X% O&M X%

the as Minnesota regulatory affiliate and proposal, the to Next, out tax Commission integrated December, natural this grid it provide January, property us capital our the mechanisms, of as our case activities, of expansion gas concentrate view PPAs. existing outcome increases sales, a the with rate constructive will allow costs. on strategic and including let and other Commission approved our true-up quick approved advanced along resource the our extension of In plant update. assumption efforts. the a vehicle the Mankato deferral stay for In We in decommissioning Minnesota filing including electric Minnesota plan, me the nuclear initiative

to Midwest plants. Mankato the believe to and month, substantial our this as earlier and Upper retire will acquisition we the and value customers, the coal additional reliability on closed especially We asset bring system

the this discussed its in As past, anticipate over generate utility-like life. we returns asset we will

However, near non-regulatory will of back forecast. the be robust slightly and lower we the expect end term in returns the towards the more

We propose continue and company. to we do to to with to alignment. expect future our strategy, we stakeholders ensure continue are – unregulated not regulatory We acquisition progress on the acquisitions progress the working into asset better improve PPA process the

which with capital operational for an test provide. clean other low in Colorado. XXXX deliberations an disappointed more ROE, to year support equity approved rate and structure for verbally improving as current test ROE reflect and our strong case performance our of does a in leadership Moving that decisions. We of and positives, August outstanding view year the particularly But The XX.X%, support December on ratio held transition. electric and progress along not the in we're commission credit X.X%, the ended the energy current they a in

order, reconsideration to revenue however, commission written certain we a to we on the need on final expect impacts; seek waiting are We issues. which calculate

We be expect February, XXXX. new effective rates will in

Mexico rate New electric have also cases in We Texas. and

X.XX%, In Mexico, regional quarter as growth. as see and coal parties. the February the and rate strong depreciation an reflects Hale on largely The for request February, in an of $XXX constructive XX.X% the wind million settlement We to capital second and increase are an scheduled $XX Hearings that in New ROE an in of we based an to reached commission to XX.XX%. a of In increase ratio will to of settlement of equity a in ROE early million, a if a ratio we're well retirement. in acceleration a an investment decision past, top anticipate we'll historic seeking equity reflect with reach Intervener XX.X% decision the an we of approximately be filed test reflects a can project commission in XXXX. plant with testimony year, of support follow. Texas, various recently as other work the

both first natural share, which in a quarter file effective file file cases to the we Colorado Texas our Minnesota We'll rate December. is consistent Mexico We February, in expected wind gas with of the X% Sagamore next of XXXX. planning reaffirming case We're several will long-term objective also behind to strong rate the to year. the in guidance Colorado growth cases EPS $X.XX are year X%. electric November. a in to rates electric and a to us, recover to filing cost case range XXXX intend a be project per new New earnings finally, case of In likely And for With $X.XX we'll file November. in we in with consider

above We of delivered dividend of representing XXXX XXth We issued Energy. wrap another XXth for for guidance next earnings our year. In range over five We the needs the years. our With was majority for increased equity, the year. summary, up. our I'll great that, or the straight equity million Xcel within consecutive $XXX year

to yet The an hit of and rate over high XXXX acquisition of more XXX demonstrate in and stock rate Minnesota approved and and Longroad service, environmental, earnings base, for deliver X%. total put growth We our three in shareholder S&P positioned on continue January. wind achieved and We objectives eclipsing remain year. arenas. range September all-time leadership the that to social our Commission earnings projects, cases, largely Our in return we of recently, the XX%, to a into long-term and just resolved multiple We under our we on assets governance in of budget. TSR X% another time dividend and guidance well

now remarks. This concludes take prepared we'll questions. Operator, our

Operator

of Instructions] Gordon [Operator our question Evercore We'll you. Thank Greg ISI. take from first

Greg Gordon

everybody. Thanks, good morning

Ben Fowke

Hi, Greg.

Greg Gordon

long-term to doesn't last like real look it there outlook medium- changes any were substantive So, your disclosures. your from to

year wondering, Your it, but cost and a in – did then you as of modest as CapEx have growth. slightly some tweak say in lag. for you leaner XXXX, look et a over job, this in the your you regulatory improvements curve wonder done deploying renewables, and circle budget the how planning the guess to out – specifically regard you look guys guidance do and I'm you get I great about reduce industry, technology of your Xcel, is at the as wondering I controlling like think general, including you drivers costs but can I'm you And expected to same, in you cetera? with bending back and organization, also O&M reduction just horizon five-year a look the how given much around – cost

Bob Frenzel

Greg, great question. a its It’s Bob. Thanks,

areas next the mitigations. two cyber we As over we system, O&M give do the money very wildfire we expect some strategic guidance, and year or the and spend risk modest we increases onto wind in like as bring in

to period. increases flat, upticks expect substantial as we things curve bargaining and salaries contracts in includes in O&M we increases our cost for that and from suppliers, that. keep term, the longer And the probably absorb and increases unit XXXX looking beyond bending Over like

is So it's effort, continuous flat but I to and what for XXXX. us the in is guidance think XXXX beyond a

Greg Gordon

Great.

question. last and Second

got we're regulatory expecting, still have decision bit unless and where a lower competitors, There's later your that – rate but Centerpoint you've of would great changed, think Texas decisions until not in it's in average. a in How they're guys I think expected a where I than know and CenterPoint have year. both two you to about state. a out coming looks outcome for case industry that risk, like AEP. pending tomorrow, not this relative ratios landed, otherwise been differentiate? do you concern is things equity ROEs lower they little that better

Ben Fowke

Ben. it's Greg, Well,

of times as of I the last what And with lot well Centerpoint. and pure utility no the And are like think, five years we've historically, customers been company, been the that integrated there's outside regulator the are the you of vertically like in numerous a front as see ERCOT. ERCOT, T&D ratios differences ROE. a in equity SPS, in they in

the get I how in case the settlement had to more Mexico. that it's about think as think actually resolved, I'd So Texas I relevant we look might New

same As you are know, interveners same the Greg, the to in in Mexico ones many of Texas. going be

settle year. we'll time frame Texas have obviously look some case optimistic those cautiously the cases, we'll opportunities So to at potentially in but we're March that this the of

Greg Gordon

Fantastic. Thank you guys.

Operator

Goldman We'll our Sachs. question next you. take Insoo Kim, Thank from

Insoo Kim

the impacted, Thank growth. weather-adjusted you. first side, on question that the My the the on electric you on XXXX for what outlook is the – weather-adjusted load Thank color especially you gave for load.

As and the achieve a that having does leap this the just gone impact? year, give X% confidence year out towards you this through load, still that of you including just look increase could year you in month

Bob Frenzel

Thanks Bob. appreciate and its on the the Insoo, Yes. for question, call. you

XXXX. declines don't use continue in underlying in And is forecast that sales to some our C&I is XXXX discrete don't do from customer. discrete think in customer is our customers adjust and have we we think We I to growth, as I our reasonably expect expected, conservative. strong by did large those But items, slightly that which moderated forecast per guidance. we have expect

Insoo Kim

Got in you timing potential And do Minnesota, the How – changes, second with to Energy or latest RP? ongoing overall discussions it. out if that and see legislation. opportunities there the are and laid you. plan? with my in In shape of see relative transformation fleet you've Thank fit on And original First, the your challenges do discussions you potential the did question. the Clean

Ben Fowke

really a question. good it’s Well

do. what Clean planning think I basically codifies Energy already we're to First

that some out to be it the where second it. I state the And legislation. And – looking come was will Energy First that legislate time there is think opportunities so would be Clean that this of

way For us, sure possible. very we nuclear the this efficient strong it's recognize make in of do importance important we that our We the most energy.

to a reduction rewarded achieve recognize plants to we have well. voluntary And opportunities on be carbon that that basis some our as coal and shut as we the fact investors that XX% close

you We're think of the that's, our that we'll lot year. going that's throughout the we've forward. it rather, And filing discussed continuation So filed see a it, IRP nuclear – and will which and has plan, a pretty it's as where our goes. be renewables, – We're I know, extraordinary plan, of plants. and some move to it's so gas,

So positioned. I well think we're

Insoo Kim

Got it. Thank you very much.

Operator

Thank question you. from Bank We'll our next Julien of take Dumoulin-Smith of America.

Ben Fowke

Julien. Hi,

Julien Dumoulin-Smith

you Hey, can hear me?

Ben Fowke

Good Yes. morning.

Bob Frenzel

you. can We hear

Julien Dumoulin-Smith

time. the Hey Thank good you morning. for

elaborate extenders' you wind guys a just vocal the about the I in at it's know and bit the on Can So opportunity tax early, side. some perhaps do PPA I given a thinking you given the specifically opportunities the little of extension? to how just repowering know little the altogether, always you up And developments buyout follow your but about the latest on on are your on bill strategy large repowering PTC. extension? think the

Ben Fowke

Well, I PTC. with short in and think you the answer. through helpful, The technology XX% PTC XX% allows lock to a it's XXXX extension that's

So to create know, your – certainly have but are going I potentially you we opportunities repowering, point, don't opportunities. as to looking that we more those those We in embedded think our will for some opportunities, be Julien. for forecast,

Julien Dumoulin-Smith

in about that – again, but up conversation? you as any give you potentially in Got as to that do know to going on specifically? case kind setting want just of open out? you the think last But And just any the Minnesota, maybe you some towards question premise it. obviously, case, to Excellent. you you how here, to forward I parameters being think expectations start think about then that, pushed alluded in to rate

Ben Fowke

out we'll to rates in it a out November, way I that We a were be unless to we pushed constructive. we out another with interim effect push year, think go of, – terms file into figure it Well, XXXX. January in year, would and guess, the I can mean, I

So pleased I and We out. with really have work don't the to that. staff stay details than much more were

I they've plan, to got quite think the and a off that allows as us a on too the be burden little resource to able take workload. it's nice focus to staff

So could can't where that, we I than another Julien. That's add stay don't out much are. I But color I know. more year? we Well, guess,

Julien Dumoulin-Smith

you is fair. right, Thank All guys. That excellent.

Operator

next Thank Morningstar. of take question our from We'll Travis you. Miller

Ben Fowke

Travis. morning, Good

Travis Miller

Good morning.

of both What as wind are in looking in and solar? you're solar are down? quite and and Where costs PPAs and obviously, just are Just if seeing you characterize outside could cost As XXXX, those. the XXXX terms Are contracts, XXXX, wind you're of comparisons? in still the both going, and industry, wondering going active, negotiating solar, terms? you're both possibly going and you're wind. they XXXX they seeing you changing what regulated

Ben Fowke

But to Well, I is up perhaps in the are about, which have PTCs really and to pleased see going seeing think the as helpful. is that I you ITCs. we And we'll you're that Travis, then – The fall the I'm extension, I think, bump and Without price. be where in we some – extension, you why XXX%. that still technologies might. just up we would we XX% match still have wind, with that PTC told XX% talked locked with down

the is the a natural still that's I of even going environment. word. no-regret a in gas sense with low every But alternatives, head fossil think on technology I to compete strategy in think

that the system this wind and also energy carbon-free technologies, as achieve back IRP to in then need you is think and big that more be to see renewables next grid of key the just all goal technologies to to will but to start to we're our natural source Colorado need Minnesota, ultimately, Of will our in But we're Renewables is anybody mid-XXXXs. going will that by with we're by going connected else, XXXX. year, we And I up address more storage. of going than zero a gas. to than we're that to renewables in we'll percent biggest dispatchable the allow battery carbon that put us our developing need course, that on important

for bit you, little Travis. throw a That's I but plan. that that's long-winded, thought the I'd maybe out So there

is Travis, down to this the to doing, I and the add also industry. our of establish goal. mean up stepping up of if will But add really I to you I'm been have reduction. the the go are carbon industry first significant, what line challenge quite we're really and it utilities proud really, is proud

Bob Frenzel

I'll Yes, real quick. add Travis,

for year-over-year coal, the million. while into to cost $XXX that And just of on prices, we ground our customers, decline are to in home need. transmission And while continued Our program benefit the have coming for the line. roost the you're and steel-for-fuel benefit we fuel customers. that the seeing that which fuel some real for and accrete to capital And about us know was half the rest commodity is it grids, steel our recovery, distribution of lower investing and was headroom of cases provides does investments the in gas the natural we and bill

Travis Miller

energy then on the you. acquisitions? you great. unregulated did doing not would sure but any not acquisitions, a you Thank what I you – there's said. to do I just there renewable PPA-type keep Yes, from make change And possibly hear correctly, you plan

Ben Fowke

goal benefits the opportunities the is our PPA repowering or opportunities customers. flowing for buyout to to So, look with

operations into been and plan. the means always that regulated in putting base. That's rate them So

decided benefits and to course, forward. which were sufficient well we fired go primarily plant weren't gas Of enough offer in a commission loaded that for as Mankato, back-end the

we we I regulated purchase non-reg to play utility coming growth There's more So that we of thought focused into the and Xcel from than XXX% integrated under pure operations. valuable growth it. the more – is and hold more and but challenge agreement. that's to – was selling their our would vertically made find that mean of the it I Energy, has more anybody important than portfolio, long-term nobody keep way anything decision is else But and power and that's a their asset try say anomaly an the would enough would that in you a – to that we we utility enough as

Travis Miller

Thank very much. great. Okay, you

Operator

of you. next from Agha SunTrust question Robinson take We'll Thank Ali our Humphrey.

Ben Fowke

Ali. Hey,

Ali Agha

Thank you. morning. Hi, good

slides, OpCo level earned remind you First embedded question, ROE. in level? XXXX in the the what is you Can earned us XXXX at your you the in as just X.XX% noted guidance at ROE OpCo a

Bob Frenzel

Bob. its Ali, Yes.

regulated of lag X.X% XX basis about that. approximately of and Our points we is all leakage weighted average ROE in jurisdictions have our across and still

So high-X%s good a is probably now. right number

Ali Agha

I see.

So, XXXX Bob bit a a you'd expect earning? little or from reduction of ended up what leakage

Bob Frenzel

ROE do mostly still and a gap, that. some electric lower I that working to driven Colorado We're trying close to by over on opportunity do in the ROE case. we term think we have longer

Ben Fowke

– and January, see had takes we middle we're are it's Bob earnings range. we I are I tell think Ali, of positive in far, puts into solidly some the to I the would we've the But too. tell and that ROE our mentioned, as you to we as in you, things end note, there Colorado. that that received guidance But you were be as so important of in we though, – disappointed there, will we the positioned are

Ali Agha

secondly, alluded know current year at opportunities, your around roughly they et billion. Ben, you cetera, And renewables, is Okay. I if five additional do arise. XXXX CapEx to it's looking $XX whether And XXXX through

right $XX it's you much there? or opportunities constraint you balance do were terms a customers if are of in can the if opportunities? I rate cetera, that stretch case, et impact rate there how not mean, Or see any from perspective whether to Just constraints billion sheet,

Ben Fowke

bill, offsets constraints. We're that. the opportunities. And other – And PPA with reduce on than customers cost think term, their more that's capital, fuel we're EVs saving longer those the associated energy steel helps great; of O&M fuel, total that's if I and capital our are we're total are bill don't on there, be saves opportunities, and great. for find that's early beneficial can right that CapEx that return, there to no focused customers' I it's great, opportunities the customers. on in if; And bills money we if for and looking money going for trading where it's it's days buyout, electrification the more their always a if Well, for

So base, can flat And we've opportunities again, our keep and our rate earnings excited our it's I'm invest. we of the customers. we have demonstrated get XXX% our bills capital to think we I from where regulated about for grow

Ali Agha

are us comfortable last And can remind that you CapEx, today? end that just stand this target – remind that higher upper as growth and Again, look a Can you where range? to out, X% X% question. here look are from When opportunities quick today at at reminder. laid you looking you the on you you rate that the the in growth of in we where at half stand rate of you the range, us you

Ben Fowke

I I to be upper part we're range. on I'd.. Yes, think the positioned of the mean

Ali Agha

Upper part?

Ben Fowke

anything don't to Bob, I Yes. you have if add? know

Bob Frenzel

agree I that. with

Ali Agha

we So, higher-end is the way should think it? about

Ben Fowke

Yes.

Ali Agha

Thank see. I, you.

Ben Fowke

Thanks, Ali.

Operator

Thank you.

We will take of our next question Karp KeyBank. from Sophie

Sophie Karp

I to my the I topics of taking wanted guess, have but for you discussed, just question. been Thank morning. good Most Hi,

Paul Johnson

hardly we lot noise, there's Sophie, hear a of background can you.

Sophie Karp

hear now? you me Can

Paul Johnson

Much better.

Sophie Karp

that. about Sorry

and of the directionally? is you most topics quickly have I So guess, Could kind on discuss just Colorado. of I back state in but the been environment wanted the to going regulatory circle decision discussed, where overall, of initiative Boulder, say, fair maybe say, or the it in the would I statement? it be like, getting rate guess, to is fair difficult, more not disappointing a – with it's

Ben Fowke

it I quite So we it basis XX I probably and well to, and there a – do has with think, for for as well. Boulder will think, supportive talking I be legal more to years that's five. don't about wouldn't Boulder, now been – on talking been I least that continue categorize at centric, another way. And Boulder we've about commission decisions

I We a of in that. X.X% one and frankly, in did, in Bob reflect mentioned, ROE, environment that as of doesn't ROE. best-performing disappointed utilities and far yes, I Colorado, the we're nation, As regulatory the the we're quite one both think

for So likely reconsideration look on that.

that we're codified was when the see Colorado. in with believe term, And we're stakeholders – want session, last law, longer doing what customers to doing legislative and stakeholders we're what in with think Sophie, bodes success. doing, aligned But I how and our and basis our highly success, for is how about future I exactly that and execute is Xcel that's you think I then a long-term what well on you align that it, and crisp what achieve do

Sophie Karp

Terrific, thank you.

Operator

take our question Andrew of from Levi next We'll ExodusPoint. you. Thank

Ben Fowke

Hey, are How Andy. you doing?

Andrew Levi

Was growth your obviously, just going to of to gas. guess to relative of kind been big – part ask a about wanted up as But investing. – a ESG big whether on mentioned guess natural a how to another you people rate taking far really kind ESG you've thoughts is as that's get growing I are I about industry I the and talked how Ben, it's but it's plant people's And commodity fuel. whether even whether wanted or LDC, context fracking, or just gas clean as it's ESG, of thoughts just fuel. dirty as in I Ben, you using the natural in it's of your power think get midstream, it's – agree in if the your then with kind whether view it it's to you on whether some dirty and and as a that it's

Ben Fowke

addressing It's need pretty reduction the to I we're risk going Well, is action Yes. I mentioned. because natural carbon important darn to good early question. achieve in that question that that challenging climate very Andy, change. a is gas think a of XX% And

you of I pushed But gas. shouldn't think is get enemy perfection be great So on we're key to make understand, going plan. people to sure back that the make the natural a

up. plan. is vortex. this we to Midwest. need a polar away That's We critical. were on coal here from a it moving we're in back Reliability to the had going year, the time completely We're And gas last Upper –

pragmatic So plan. I think we've really got a

battery away. is an Our that going different as challenge Andy, going renewables a need saturated, depending connected way We're that as industry, and much between XX% the put but the get to innovation. all of in making we're sure that on to types XX%. where tell experts We'll that are to people big storage be us grid, does grid XXXX the see is on you and long country,

ultimately, we're But technologies. but that, need the That's big back – amazing. new to things it we're That's to and going after that's grid. where up

out of EEI, get to a part message as want that's So leadership of I there. the

more demanding of I as needs goes think as upstream industry far as emissions. Now natural methane our the and using as be gas, far to LDC

really down or the then and look to resource we that potentially that. on side. that's energy gas energy start I made on think We do other need things at important, using need double blending carbon-free we mix. out gas ultimately, I and think and in efficiency hydrogen the And something renewable can of to

Upper I tell that least in the work, at you tough will make are that here things technology. and also with pretty pumps Midwest, today's to heat like

So warm. and customers we've keep got – of

So with I the great think and a I think messaging persevere got but demonstrating there. issue, it's plan, right can we challenging a we've

Andrew Levi

a great actually you, That Thank you. Thank answer. was Ben.

Ben Fowke

Thank you.

Operator

take from Thank you. of Associates. Glenrock We'll next question Patterson Paul our

Paul Patterson

you doing? good Hey, are morning. How

Ben Fowke

Paul. Hey,

Bob Frenzel

Hey, Paul.

Paul Patterson

– I is Just to increases, just really Ali on when quickly expect to indicating Agha's make objectives just general objectives? in factored fuel regulatory everything else, – questions, to it you a don't you guys respect sure Are any of rate wanted and you with I your that follow-up. your that into understand CapEx everything

Ben Fowke

keep CPI to is at if done some mean the years. in impression. the and back I look customers I hope No, And goal give can investor that – our deck, our our I that see of you last you bills on we've our five over look to total index. below that or didn't Paul.

you will a the remember, bill. only – the increases – in one other component what KWH well as but rate that's total see of Now

or we this time frame. bills, So we're less as go really again, through focused CPI on keeping

really can be. than it can supportive analysis And our we technology But make of where with it you needs expensive more and the we and because also right says to important policy. That's are. much public – deployment That's

Paul Patterson

maybe rate of x a maybe the objective of or not all maybe. have of there PBR, rate these is sort something if sort cases CPI any thought sort of that minus like about And And proceedings? to going sort and that's Okay.

Ben Fowke

You mean that? like change around the regulatory compact for something

Paul Patterson

set some it rate than It's guys not to In they're they do, in are I rate going the can regulatory something if internationally, are just places increases inflation seem you compact any and about mean I know. and do taken where some is like about that wondering it's sort making rate where there's where thing, much – follow of the rates time thought you rates in be jurisdictions of it's into just like or... – – basically don't was CPI account – you. have of sort know something you you kind for all was if where have what – in regulatory a cases, periodically. more kind your your the of terms x, performance-based a I around so tactical – minus or me, I of

Ben Fowke

record be those a have And this, on of on good you a and mean, lot again, we gets to need of of track new to ideas, open that a track but it, of Paul. things, we've start aligning think basis, great I to addressing spent you we're cautious we where long-term got about number policymakers, cases when of pretty think, sorts but do file you record I calls a always Well, that. got, very managing a with – time which, And you I talking be. like we've

companies good experience, they have but in of They that for can my be, can those also some mechanisms in that So well. have necessarily those the – as aren't be place. harmful them

Paul Patterson

Sure. wondering I any thought if don't about all. I I ask just that. – thought I all. I'd Sure. just That's just That's that. there's hearing it, – was

Ben Fowke

is symmetrical, not I ratemaking guess. but sometimes Performance-based great, it's

about so we're pretty – So that's pragmatic that.

Paul Patterson

that about, in but or or be retirement? changes in worked time, also And coal might for might Or should of additional on in looking is than that? if that been plant the guys you there dispatch there some is anything sort we things what of terms – terms Absolutely. of you doing in guys other now, think wondering activity additional I about you – enhanced guys be at forward, savings are customers know, of for of guys that going Any know at all flexibility sort that? are in dispatch retirements as in horizon? drive coal additional coal potential see by terms any that your – you into, questions How terms just the you any – and for time of and I looking have savings mean, it I'm plant might Minnesota. you been made anything there's December in then coal filing some you.

Ben Fowke

I the example thank of working great thought mean, here. we with coal of think plants I in economic for Well, don't day moving very do here, to have our dispatch, a I think Midwest. that commission up you the was with first could that as a in run for interested positive any recognizing And I start must partnership. The first coal to when understanding dispatch from mean pause that ready we a the coal how was what we work upper all, I commission in is step.

this So how I pragmatic the about – it's of think we Midwestern to going be approach forward. kind way

how things our to fuel point look particularly I think dispatch at for across when like you to renewable variable coal our opportunities Paul, at there energy. system are and And your plants steel costs the we look of

looking could So at got we're SPS some the need dispatch. issues and definitely some We've that with be to address, seasonal down water in region. that we that solved

doing – economics for we're opportunities So, look more the to us – upper Midwest. yeah, so look for here mind, again, with in it like does in

Paul Patterson

Thanks lot. a great. Okay,

Ben Fowke

All right. Thank you.

Operator

you. Thank

I'll We to Frenzel Bob back further for in remarks. closing have queue. turn no it questions

Bob Frenzel

participating to the We Investor Thank Relations out in call our this teams road you with for quarter. everyone questions. forward thanks look seeing morning. our this you. contact on any Please follow-up Well,

Operator

call. your today's Thank for concludes This participation. you

disconnect. now may You

Xcel Energy (XEL) 30 Jan 202019 Q4 Earnings call transcript