Xcel Energy Inc (NASDAQ:XEL) Q2 2018 Earnings Conference Call - Final Transcript

Jul 26, 2018 • 10:00 am ET

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Xcel Energy Inc (NASDAQ:XEL) Q2 2018 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] Our first question comes from Stephen Byrd with Morgan Stanley.

Executive
Ben Fowke

Good morning, Stephen.

Analyst
Stephen Byrd

Hi, good morning. Congratulations on the good results today.

Executive
Robert Frenzel

Thank you.

Analyst
Stephen Byrd

I wanted to just check in in terms of the mix of owned renewables versus renewables under PPA, just sort of broadly where we are in terms of that mix, where you see that over time. There's just been a lot of moving parts, I just thought I'd level set again on that.

Executive
Ben Fowke

Talking about most recently or just overall, Stephen.

Analyst
Stephen Byrd

I'd say overall just to make sure we understand kind of the overall mix.

Executive
Ben Fowke

Okay. I see Bob flipping through some of our materials. So I will stall a little bit here. As you know, we started out not owning any renewables as we've been on this journey for quite a while now, but in recent years, last four years, we've owned more than we've acquired through PPA. Overall, we'd like to own, going forward, at least 50% of the renewables that come online. And that's what we've been -- so we've been catching up over the last four years. Bob, were you able to find the exact number?

Executive
Robert Frenzel

So Stephen, right now, we currently own about 850 megawatts out of 6,700 megawatts. Of the new amount that we've proposed, we would own about 74%.

Analyst
Stephen Byrd

So it's fair to say you've -- okay. And you have a long trajectory you had then in terms of being able to continue to look at the ownership option in terms of as you think about your overall mix?

Executive
Ben Fowke

Absolutely.

Analyst
Stephen Byrd

Is that fair to say? Yeah. Just thought I'd check in on that. Great. And then, just on demand growth, understand kind of the near-term changes. Would you mind just talking at a high level in terms of the long-term trends you see in terms of the demand growth outlook in your service territories?

Executive
Ben Fowke

Yeah. I mean I'll let Bob add as well. I mean I think the trend we're seeing generally is we're seeing good customer growth, so new stores, if you will, but within those -- that the customer usage, it's actually declining. I think primarily driven by energy efficiencies, some of which were leading to our own programs and I think that's a trend that will continue.

Now, clearly, we're optimistic and want to help lead the clean energy transition, particularly as it relates electric vehicles, which will be great load for the utility industry. But I think the long-term trend is relatively flat sales going forward and that's what we're planning for.

Executive
Robert Frenzel

Yeah. Stephen, I'd just add that we've had good consumer industrial class sales, particularly in our Wisconsin and our Southwestern business over the past year. We are focused on economic developments. And what usually lags the large C&I sales is often residential sales. And I think you're seeing a pickup in residential in the Southwestern business as well, as the jobs and the opportunities continue to move into the Southwest. So we're