Xcel Energy Inc. (

XEL

)

Q2 2011 Earnings Call

July 28, 2011 10:00 AM ET

Executives

Paul Johnson – MD, IR and Assistant Treasurer

Benjamin Fowke – President, CEO and COO

David Sparby – VP and CFO

Scott Wilensky – VP, Regulatory and Resource Planning

Analysts

Justin McCann – Standard & Poors Investment Advisory, Inc.

Ali Agha – SunTrust Robinson Humphrey

Greg Reiss – Catapult Capital Management

Travis Miller – Morningstar Research

Mike Bates – D. A. Davidson & Co.

Jim Bellessa – D. A. Davidson & Co.

Presentation

Operator

Compare to:
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» Xcel Energy Management Discusses Q1 2011 Results - Earnings Call Transcript
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» Xcel Energy Management Discusses Q3 2010 Results - Earnings Call Transcript
» Xcel Energy Inc. Q2 2010 Earnings Call Transcript

Ladies and gentlemen, thank you for standing by and welcome to the Second Quarter 2011 Earnings Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions) This conference is being recorded today, Thursday, July 28, 2011.

I would now like to turn the conference over to Paul Johnson, Managing Director of Investor Relations and Assistant Treasurer. Please go ahead, sir.

Paul Johnson

Thank you and welcome to Xcel Energy’s second quarter 2011 earnings release conference call. With me today are Ben Fowke, President and Chief Operating Officer; Dave Sparby, Vice President and Chief Financial Officer; Teresa Madden, Vice President and Controller; Scott Wilensky, Vice President, Regulatory and Resource Planning; and George Tyson, Vice President and Treasurer.

Today, we plan to cover our second quarter results and accomplishments. In addition, we are reaffirming our 2011 ongoing earnings guidance of $1.65 to $1.75 per share.

Please note that there are slides that accompany the conference call, which are available on our web page. I want to remind everyone that some of the comments we make may contain forward-looking information. Significant factors that could cause results to differ from those anticipated are described in our earnings release and in our filings with the SEC.

You will notice that today’s press release refers to both GAAP and ongoing earnings. Second quarter 2011 ongoing earnings were $0.33 per share compared with $0.29 per share in 2010. The second quarter 2011 GAAP earnings were also $0.33 per share compared with $0.30 per share in 2010.

While there are no differences between GAAP and ongoing earnings during the second quarter of 2011, the second quarter of 2010 included a $0.01 per share benefit due to recognition of a tax benefit related to a previously-held investment. Management believes ongoing earnings provide a more meaningful comparison of results, and is representative of Xcel Energy’s fundamental core earnings power. As a result, we will only discuss ongoing earnings during this call. Please see our earnings release for a reconciliation of GAAP to ongoing earnings.

I will now turn the call over to Ben Fowke.

Benjamin Fowke

Thank you, Paul, and welcome to everyone on today’s call. This morning, we reported second-quarter ongoing earnings of $0.33 per share compared with $0.29 per share in 2010. As a result, we remain well-positioned to deliver ongoing earnings within our 2011 earnings guidance range of $1.65 to $1.75 per share. Dave will discuss second-quarter results in more detail in a few moments.

Let me now bring you up-to-date on some recent developments, all of which are favorable to our customers and supportive of our goals. We continue to make excellent progress on our transmission construction plans, as witnessed most recently with the completion of the Midway project in Colorado, a project consisting of 82 miles of 345 kV transmission line.

In June, we passed an important milestone regarding one of the CapX2020 transmission lines. The MISO Board of Directors granted approval for the Brookings transmission line on the condition that this project is included in the full portfolio of multi-value projects being approved in December 2011. Our CapX2020 transmission project remains on schedule. These transmission projects will facilitate access to renewable energy and improve reliability for our customers.

There are also positive developments regarding our nuclear operations. We are pleased that the NRC renewed the operating licenses for our Prairie Island nuclear generating units for 20 years. The renewal will allow units one and two to continue to provide emission-free power to our customers through 2033 and 2034, respectively. These units have operated in a safe, reliable, economic, and environmentally sound manner for nearly 40 years and our significant investments to support life extension will enable continued solid performance for the next 20 years.

Another positive event for our customers was the settlement we reached with the federal government regarding costs incurred by NSP and its customers related to the DOE’s failure to provide long-term spent fuel storage facility by the required deadline.

Under the terms of the settlement, the federal government will pay NSP approximately $100 million for spent fuel storage costs at our nuclear plants incurred through 2008. The federal government will also pay for spent fuel storage costs incurred from 2009 through 2013. We project those costs to be an incremental $100 million. Finally, the settlement does not address costs for used fuel storage after 2013, which could be the subject of future litigation. Settlement funds will be refunded to our customers in our NSP service territory.

As you know, we are striving to improve regulatory recovery and reduce regulatory lag in each of our jurisdictions. In that regard, another significant development occurred in Minnesota this spring, when a law was passed which allows utilities to file multi-year rate plans. As a result, we plan to seek to implement a multi-year plan that would establish rates for a three-year period, adjusting rates annually based on our investments and costs.

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