Xcel Energy(US:XEL)2019-02-22 18:40Customer Base and Operations - Xcel Energy serves approximately 3.6 million electric customers and 2.0 million natural gas customers across eight states[16]. - The company operates through four subsidiaries: NSP-Minnesota, NSP-Wisconsin, PSCo, and SPS[16]. - NSP-Wisconsin has 0.3 million electric customers and 0.1 million natural gas customers, contributing 5% to 10% to consolidated earnings[25]. - PSCo serves 1.5 million electric customers and 1.4 million natural gas customers, with a consolidated earnings contribution of 35% to 45%[28]. - SPS has 0.4 million electric customers and contributes 15% to 20% to consolidated earnings[30]. Financial Performance and Investments - NSP-Minnesota contributes 35% to 45% of consolidated earnings with total assets of $18.5 billion[23]. - Total assets for NSP-Wisconsin amount to $2.7 billion, while PSCo's total assets are $17.3 billion, and SPS's total assets are $6.7 billion[25][28][30]. - PSCo's total natural gas revenues for 2018 reached $1.739 billion, an increase from $1.650 billion in 2017[109]. - The number of residential customers at PSCo increased to 1,878,576 in 2018, up from 1,856,221 in 2017[109]. - Xcel Energy relies on cash flows from subsidiaries to make dividend payments, which are subject to statutory and contractual restrictions[175]. Renewable Energy and Environmental Goals - Xcel Energy aims for 100% zero-carbon emissions by 2050 and is implementing the largest multi-state wind plan in the U.S.[17]. - The company is committed to environmental leadership and has announced significant investments in renewable energy[17]. - NSP-Minnesota's renewable energy percentage is 27.0% for 2018, down from 28.8% in 2017[38]. - PSCo's renewable energy percentage is 27.4% for 2018, slightly down from 27.6% in 2017[39]. - SPS's renewable energy percentage is 21.1% for 2018, down from 24.0% in 2017[40]. Operational Capacity and Infrastructure - The company has an electric generating capacity of 7,530 MW and gas storage capacity of 14.7 Bcf[23]. - PSCo has an electric generating capacity of 5,685 MW, while NSP-Wisconsin has 563 MW and SPS has 4,406 MW[25][28][30]. - NSP-Minnesota's peak demand increased from 8,546 MW in 2017 to 8,927 MW in 2018, partly due to warmer weather[52]. - NSP-Wisconsin completed construction of the Badger Coulee 345 KV transmission line in December 2018[84]. - The company is actively pursuing new generation facilities and power purchases to meet system capacity requirements[89]. Regulatory and Compliance Issues - The company is subject to various environmental regulations that may require future capital expenditures for compliance, particularly regarding GHG emissions and legacy site remediation[132]. - Adverse regulatory rulings could materially affect the company's financial obligations, including debt payments and dividends[162]. - Regulatory compliance costs, particularly related to the Pipeline Safety Act, could be significant and may increase operational costs[149]. - Legislative and regulatory responses to climate change could impose substantial costs and affect compliance with environmental laws[193]. - Increased regulatory penalties for violations could have a material effect on the company's financial condition and results of operations[197]. Risk Factors - Cybersecurity incidents pose a material risk, potentially disrupting operations and exposing the company to liability due to breaches of sensitive information[185]. - Credit risks include the potential for customers to default on payments, which could increase bad debt expenses and reduce liquidity[169]. - The company faces risks if its utility subsidiaries cease dividend payments, which could adversely affect its ability to meet financial obligations[176]. - Economic conditions, including insufficient financial sector liquidity, could lead to increased unemployment and affect customers' ability to pay, resulting in higher bad debt expenses[178]. - The electric utility sector is experiencing significant changes, including shifts towards renewable energy and energy efficiency, which could lead to excess resources and stranded costs if not managed properly[152]. Customer Experience and Pricing - The company is focused on enhancing customer experience and keeping energy bills low[20]. - Xcel Energy's strategic priorities include leading the clean energy transition and providing reliable energy services at competitive prices[17]. - NSP-Minnesota's retail electric rates include a Fuel Cost Adjustment (FCA) for recovering changes in fuel-related costs[57]. - NSP-Wisconsin's natural gas rates incorporate a cost-recovery factor based on 12-month projections, adjusted annually to actual amounts[120]. - PSCo's fuel cost adjustment clause allows for the recovery of fuel and purchased energy costs from wholesale customers, ensuring cost stability[88]. Workforce and Employment - Xcel Energy's total employees as of December 31, 2018, were 11,043 full-time and 49 part-time, with 5,129 covered under collective bargaining agreements[135]. - Increasing costs associated with defined benefit retirement plans and health care could adversely impact financial results[173][174].