Xcel Energy(XEL) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Xcel Energy reported ongoing earnings of $3.50 per share for 2024, an increase from$ 3.35 per share in 2023, marking a growth of approximately 4.5% [28] - GAAP earnings for 2024 were $3.44 per share, with a non-recurring charge of$ 0.06 per share excluded from ongoing earnings [6][10] - The company navigated significant headwinds but met its guidance for the 20th consecutive year, showcasing a strong operational and financial track record [10][39] Business Line Data and Key Metrics Changes - Weather-adjusted electric sales increased by 3% in Q4 and 1% for the full year, driven by increased commercial and industrial load in SPS and residential sales in PSCo [29] - O&M expenses rose by $96 million in 2024 due to investments in wildfire mitigation and increased costs from generation maintenance and storm response [29] Market Data and Key Metrics Changes - The company anticipates a 3% increase in weather-adjusted electric sales for 2025, reflecting continued customer growth [29] - Xcel Energy's average residential electric and natural gas bills are 28% and 12% below the national average, respectively [22] Company Strategy and Development Direction - Xcel Energy plans to invest significantly in infrastructure over the next decade, with a five-year capital plan aimed at delivering rate base growth in excess of 9% [13] - The company is focused on clean energy leadership and aims to achieve an 80% carbon reduction by 2030, leveraging its geographic advantage for renewable resources [23][84] - The company is actively working on expanding its electrical grid to meet customer needs and has been a leading provider of new transmission line miles in the country for the past 15 years [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the 2025 earnings guidance of$ 3.75 to $3.85 per share, reflecting a 7% growth from the midpoint of the 2024 range [12][40] - The management acknowledged the challenges faced in 2024, including warmer-than-normal December weather, but emphasized the importance of operational improvements and investments made during the year [11][12] Other Important Information - The company has made significant progress in wildfire mitigation efforts, filing updated plans in multiple states and investing in risk reduction measures [20][22] - Xcel Energy has committed$ 73 million in settlement agreements related to wildfire claims, with $35 million already paid [37] Q&A Session Summary Question: Thoughts on renewable permitting and project impacts - Management indicated that they do not expect federal or private permitting halts to impact their projects, emphasizing the need for infrastructure to meet customer demand [45][50] Question: Wildfire policy changes and outlook - Management acknowledged the tragedy of recent wildfires and the need for federal and state-level solutions, expressing hope for constructive dialogues [68][71] Question: Data center growth and sales forecast - Management confirmed that they expect to sign contracts for the remaining data center capacity in their five-year sales forecast by fall 2025, with ongoing discussions with multiple counterparties [34][98] Question: Labor availability and industry constraints - Management highlighted ongoing efforts to secure critical talent for capital projects, noting competition for skilled labor across the industry [151]