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xcel energy  D88E9236-6AC6-44B0-A479-46BB6F396B2B_0309_Euro
 

xcel energy D88E9236-6AC6-44B0-A479-46BB6F396B2B_0309_Euro

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    xcel energy  D88E9236-6AC6-44B0-A479-46BB6F396B2B_0309_Euro xcel energy D88E9236-6AC6-44B0-A479-46BB6F396B2B_0309_Euro Presentation Transcript

    • Fundamental Strength & Stability Investor Meetings in Europe March 16 - 20, 2009
    • Safe Harbor This material includes forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements include projected earnings, cash flows, capital expenditures and other statements and are identified in this document by the words “anticipate,” “estimate,” “expect,” “projected,” “objective,” “outlook,” “possible,” “potential” and similar expressions. Actual results may vary materially. Factors that could cause actual results to differ materially include, but are not limited to: general economic conditions, including the availability of credit, actions of rating agencies and their impact on capital expenditures; business conditions in the energy industry; competitive factors; unusual weather; effects of geopolitical events, including war and acts of terrorism; changes in federal or state legislation; regulation; actions of accounting regulatory bodies; and other risk factors listed from time to time by Xcel Energy in reports filed with the SEC, including Exhibit 99.01 to Xcel Energy’s report on Form 10-K for year 2008.
    • Company Profile NSP-Wisconsin Traditional Regulation 6% of earnings * NSP-Minnesota 41% of earnings * Operate in 8 States Combination Utility PSCo Electric 81% of net income 48% of earnings * Gas 19% of net income SPS 5% of earnings * Customers 3.4 million electric 1.9 million gas 2008 Financial Statistics * Percentages based on 2008 Ongoing Earnings NI Ongoing: $641 million 2008 EPS Ongoing: $1.45; GAAP: $1.46 NI GAAP: $646 million Assets: $25 billion 2008 Dividend $0.95 per share annualized Equity ratio: 44%
    • Investment Merits Environmental leader Strong liquidity and balance sheet to finance rate base growth strategy Constructive regulatory environment Rate base growth drives an attractive total return — A long-term annual EPS growth objective of 5% – 7% — A secure and growing dividend, currently yielding 5.6% We are positioned to execute our strategy – despite economic headwinds
    • Growth Drivers Rate base growth — Uprating/improving existing fleet — Wind development — Transmission expansion Achieving authorized returns — Rider recovery — Filing rate cases where necessary
    • Environmental Leader #1 wind energy provider in United States with increased focus on wind ownership — 100 MW wind farm recently completed — 351 MW wind turnkey project under development #5 solar energy provider in United States Resource plans projected CO2 emission reductions — Minnesota plan: 22% reduction by 2020 — Colorado plan: 10% reduction by 2017 Member of the Dow Jones Sustainability Index Well positioned for potential carbon legislation or a national renewable portfolio standard
    • Wind Growth MW 10,000 SPS Projected 8,000 PSCo NSP 6,000 4,000 2,000 0 04 16 00 02 06 08 10 12 14 18 20 20 20 20 20 20 20 20 20 20 20 20
    • Solar Growth 1,000 MW Projected SPS 800 PSCo 600 400 200 0 678901234567890 0 0 20 0 200 200 20 1 201 201 20 1 20 1 201 201 20 1 201 201 20 2 08 06 07 12 15 09 10 16 19 11 13 14 17 18 20 2 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
    • Projected Renewable Resources Energy 2007 2020 Nuclear Nuclear 11% 13% Renewables Natural Renewables 24% Gas 9% Natural 31% Gas 17% Coal Coal 49% 46% Capacity MW Wind Hydro Solar Biomass RDF Landfill Geothermal 2007 2,700 365 17 182 100 15 0 2020 7,400 400 800 250 60 20 20
    • Financial Strengths Strong Balance Sheet Solid Credit Ratings — 44% equity — Xcel Unsec = Baa1/BBB/BBB+ — 1% preferred equity — NSP-M/W Secured = A2/A/A+ — 55% debt — PSCo Secured = A3/A/A — Issued equity in 2008 — SPS Unsec = Baa1/BBB+/BBB+ before market collapse Strong Liquidity Modest 2009 Financing and Funding Needs — $2.2 billion of credit facilities, maturing — $800 million in first December 2011 mortgage bonds — $1.8 billion total liquidity — $70-$130 million in as of 3/4/2009 pension contributions
    • Constructive Regulation Forward test year – MN, WI, ND and pending in CO Interim rates – MN, ND; WI final rates in effect for test year Transmission riders – CO, MN, ND, SD, TX Renewable riders – CO, MN MERP rider – MN Environmental riders – MN, ND, SD Comanche 3 forward CWIP via general rate case – CO Fuel clause recovery – all states except WI Capacity rider – CO Conservation/DSM riders – CO, MN Air quality improvement rider – CO
    • Minnesota Electric Rate Case Filed November 2008 Seeking rate increase of $156 million or 6.1% — Electric rate base of $4.1 billion — Requested ROE of 11.0% — Equity ratio of 52.5% Filing is based on 2009 forward test year Commission approved interim rates of $132 million effective January 2009, subject to refund Decision expected fall/winter 2009
    • 2009 Colorado Electric Rate Case Filed November 2008 Seeking a rate increase of $175 million or 7.4% — Electric rate base of $4.1 billion — Requested ROE of 11% — Equity ratio of 58% Seeking a 2009 forward test year Decision expected summer 2009 Rate increase effective after commission decision
    • 2010 Colorado Electric Rate Case Expected filing April 2009 Purpose is to recover costs associated with major plan investments, including full-year costs for Comanche and Ft. St. Vrain and other 2010 costs Seeking a 2010 forward test year Decision expected winter 2009 Full-year revenue increase in 2010
    • New Mexico Electric Rate Case Filed December 2008 Seeking rate increase of $24.6 million or 5.1% — Electric rate base of $321 million — Requested ROE of 12.0% — Equity ratio of 50% Historic test year based on year-ending June 2008 Seeking interim rates of $7.6 million for Lea Power capacity contract Rate increase effective after commission decision
    • Capital Forecast Dollars in millions $2,300 $2,350 $2,350 $1,800 2009 2010 2011 2012 Other Nuclear Fuel Gas Electric Distribution Electric Transmission Electric Generation Wind
    • Investment Drives Rate Base Growth Dollars in millions $17.9 $16.8 CAGR = 7.4% $15.6 $14.4 $13.7 2008 2009 2010 2011 2012
    • Financial Execution Delivering on 5% – 7% EPS Growth Objective Guidance Range $1.45–$1.55 2005 – 2009 CAGR = 6.9% ** $1.45 $1.43 $1.30 $1.15 2005 2007 2008 2009 2006 Ongoing * Ongoing * Ongoing * Ongoing * Guidance * Ongoing EPS excludes the impacts of COLI and disc ops. A reconciliation to GAAP earnings is included in the appendix. ** Estimated CAGR is based on middle of 2009 guidance range.
    • Financial Execution Delivering 2% – 4% Dividend Growth Objective Annualized dividend per share 2004 – 2008 CAGR = 3.4% $0.95 $0.92 $0.89 $0.86 $0.83 2004 2005 2006 2007 2008
    • Key Take-Aways Environmental leader Strong liquidity and balance sheet to finance rate base growth strategy Constructive regulatory environment Rate base growth drives an attractive total return — A long-term annual EPS growth objective of 5% – 7% — A secure and growing dividend, currently yielding 5.6% We are positioned to execute our strategy – despite economic headwinds
    • Appendix
    • Reconciliation – Ongoing EPS to GAAP Dollars per share 2005 2006 2007 2008 Ongoing Earnings $1.15 $1.30 $1.43 $1.45 PSRI/COLI 0.05 0.05 (0.08) 0.01 Continuing Operations $1.20 $1.35 $1.35 $1.46 Disc Ops 0.03 0.01 – – GAAP Earnings $1.23 $1.36 $1.35 $1.46 As a result of the termination of the COLI program, Xcel Energy’s management Energy’s believes that ongoing earnings provide a more meaningful comparison of earnings comparison results between different periods in which the COLI program was in place and is more representative of Xcel Energy’s fundamental core earnings power. Energy’s Xcel Energy’s management uses ongoing earnings internally for financial planning Energy’s planning and analysis, for reporting of results to the Board of Directors, in determining Directors, whether performance targets are met for performance-based compensation, performance-based and when communicating its earnings outlook to analysts and investors. investors.
    • 2009 Earnings Guidance 2009 Earnings Per Share $1.45 - $1.55 Key Assumptions — Relatively flat sales growth — Reasonable treatment in rate cases — Increasing revenue from riders — Rising O&M expense — Increasing depreciation expense — Increasing interest expense — Higher share count
    • Geographic Competitive Advantage Wind Resource Source: National Renewable Energy Laboratory Solar Resource Wind Density High Low Xcel Energy States Served
    • Solid Credit Ratings Secured Unsecured Fitch Moody’s S&P Fitch Moody’s S&P * Hold Co. – – – BBB+ Baa1 BBB NSPM A+ A2 A A A3 BBB+ NSPW A+ A2 A A A3 A- A- PSCo A A3 A A– Baa1 BBB+ A– SPS – – – BBB+ Baa1 BBB+ * S&P upgraded the unsecured ratings for NSPM, NSPW and PSCo on November 5, 2008
    • Solid Liquidity Dollars in millions, as of March 4, 2009 Credit Total Lines Available Cash Liquidity Hold Co. $ 772 $ 344 $3 $ 347 NSPM 482 456 1 457 PSCo 675 670 0 670 SPS 248 238 41 279 Other 0 0 5 5 Total $2,177 $1,708 $ 50 $1,758
    • Strong Balance Sheet As of December 31, 2008 Millions Percent Equity $ 6,964 44% Preferred Equity 105 1% Current Portion LT Debt 559 3% Short-term Debt 455 3% Long-term Debt * 7,732 49% Total Capitalization $15,815 100% * Long-term debt includes $400 million of hybrid securities which receives 50% equity treatment from the rating agencies.
    • Debt Maturities Dollars in millions $1,200 SPS $1,000 PSCo NSPW $800 NSPM $600 Xcel Energy $400 $200 $0 2009 2010 2011 2012 2013 2014 2015
    • Pension Funding As of December 31, Dollars in millions 2008 2007 Fair value of pension assets $2,185 $3,186 Projected benefit obligation 2,598 2,662 Funded status $(413) $524 Funded status % 84% 120% Pension Assumptions 2009 2008 Discount rate 6.75% 6.25% Expected long-term rate of return 8.50 8.75 Expected Contributions 2009: $70 million to $130 million 2010: $150 million to $250 million
    • Potential Cash from Operations 2,400 Dollars in millions 2,000 1,600 1,200 800 400 0 2009 2010 2011 2012 Net Income * Depreciation NOL * Assumes Net Income growth based on middle of range
    • Capital Expenditure Forecast Denotes enhanced recovery mechanism Dollars in millions 2009 2010 2011 2012 Base & Other $1,305 $1,500 $1,520 $1,665 Nuclear Capacity/Life Ext 130 170 185 150 Comanche 3 130 15 0 0 MN Wind Generation 110 420 370 0 MN Wind Tran/CapX 2020 60 165 240 485 MERP 30 10 0 0 Fort St. Vrain CT 25 0 0 0 Sherco Upgrade 10 20 35 50 Total $1,800 $2,300 $2,350 $2,350
    • Capital Expenditures by Operating Company Dollars in millions 2009 2010 2011 2012 NSPM $ 880 $1,340 $1,410 $1,350 PSCo 610 600 600 710 SPS 210 245 205 195 NSPW 100 115 135 95 Total $1,800 $2,300 $2,350 $2,350
    • 2007 Rate Base and ROE Weather Normalized Dollars in millions Rate Base Earned ROE Minnesota Electric $4,054 11.02% Minnesota Gas 456 7.74 North Dakota Electric 202 2.96 North Dakota Gas 44 7.66 South Dakota Electric 251 9.28 Colorado Electric 3,569 10.09 Colorado Gas 1,096 10.45 Wisconsin Electric 554 8.33 Wisconsin Gas 77 8.59 Texas Electric ** 940 4.61* New Mexico Electric** 276 2.24* Wholesale 982 Not Reported Total Rate Base $12,501 * Texas and New Mexico ROEs are actual earned, not weather normalized ** Results impacted by fuel disallowance
    • Recent Rate Case Outcomes Dollars in millions Dollar Increase Return on Equity Requested Granted Requested Granted Texas Electric * $94.4 $57.4 11.25% N/A Wisconsin Electric $10.0 $5.6 11.0% 10.75% North Dakota $17.9 $12.8 11.5% 10.75% * Settlement pending commission approval
    • Minnesota Recovery Mechanisms Forward test year with interim rates MERP rider Transmission rider Mercury reduction & environmental improvement rider RDF rider State energy policy rider Conservation improvement program rider Fuel clause adjustment Purchased gas adjustment
    • Colorado Recovery Mechanisms Ability to file either historic or forecast test years Purchased capacity cost adjustment Comanche 3 - forward CWIP via general rate case Transmission rider Renewable energy rider Demand-side management cost adjustment rider Air quality improvement rider Energy cost adjustment Natural gas cost adjustment Partial decoupling on retail natural gas
    • Wisconsin Recovery Mechanisms Forward test year Ability to file for prospective fuel & purchase energy adjustments (Wisconsin) Fuel clause adjustment – wholesale Purchased gas adjustment Fuel clause factor (Michigan retail)
    • SPS Recovery Mechanisms Historic test year (Texas & New Mexico) Texas fixed fuel factor recovery New Mexico fuel clause adjustment Authorized transmission rider Ability to establish interim rates through rate case to recover capacity costs associated the Lea Power contract (Texas)
    • Dakota’s Recovery Mechanisms Forward test year with interim rates (ND) Historic test year (SD) Environmental rider (ND & SD) Transmission rider (ND & SD) Fuel clause adjustment (ND & SD) Full decoupling on retail natural gas (ND)