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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Presentation
Executive
Ben Fowke

based on a settlement with a diverse group of parties and balances company ownership with customer benefit. It will provide over $200 million of customer savings, while reducing carbon 60% in Colorado by 2026 from a 2005 base level.

A Commission decision is expected early in September and we will update our capital forecast and financing plans later in the year. We anticipate funding the Colorado Energy Plan, with a combination of internally generated funds, incremental debt and $300 million to $400 million of equity, if the Commission approves our proposal. And we expect most of the external financing to occur in 2020 and beyond given the build own transfer nature of the plan. So as you can see, we continue to make great progress on our steel for fuel strategy.

Based on our approved projects, we're on track to have over 10,000 megawatts of wind on our system by 2021. In addition, approval of the Colorado Energy Plan would increase our overall wind capacity to approximately 11,500 megawatts, solidifying our position as the leading renewable generation utility in the United States while providing significant customer benefit. As a company, we strive to be an industry leader and provide a safe, reliable and affordable energy supply to our customers.

Our people are the greatest resource and they're instrumental in achieving this goal. So I'm very pleased that Xcel Energy was included in the 2018 Forbes' Best Employers in America list, reflecting our continued focus on company culture and our employees. So with that, let me turn the call over to Bob and he'll provide more detail on our financial results and outlook as well as a regulatory update. Bob?

Executive
Robert Frenzel

Thanks, Ben, and good morning. We realized another solid quarter with earnings of $0.52 per share in 2018 compared with $0.45 per share in 2017. Impacts of weather, both hot and cold, increased electric and natural gas sales and increased earnings by $0.03 per share in the quarter. The most significant earnings drivers for the quarter included higher electric and natural gas margins, which increased earnings by $0.10 per share, including the impact of favorable year-over-year weather and rate increases in riders to recover our capital investments, partly offset by wind production tax credits to flow back to our customers and higher AFUDC which increased earnings by $0.02 per share.

Offsetting these positive drivers were higher O&M expenses, which decreased earnings by $0.01 per share. Higher depreciation, interest and other items combined to reduce earnings by a total of $0.04 per share. Turning to sales, on a weather-adjusted basis, our year-to-date electric sales increased 1.1%, reflecting strong sales growth to our commercial and industrial classes and relatively flat residential sales. Year-to-date natural gas sales increased 2% on a weather-adjusted basis, reflecting continued customer growth and increasing customer use. Based on our year-to-date results, we've revised our annual weather-adjusted sales guidance to growth of up to 1% for electric and 1% to 1.5% for natural gas.

Turning to expenses, our second quarter