Xcel Energy raises its five-year capital plan to $70bn

Xcel Energy will spend $70bn on its grid and power plants from 2027 through 2031, up from the $60bn it had planned for 2026–2030, and it set 2027 earnings guidance of $4.48–$4.62 a share. Third-quarter ongoing earnings, the Minneapolis utility's adjusted measure, rose 23%* to $1.52 a share.

The figures come from the release Xcel furnished on Form 8-K after the market closed on Oct. 28 and its Oct. 29 10-Q. Data-center targets and the faster growth outlook were stated on the Oct. 29 call.

Revenue rose 6.6%* to $4.17bn. Net income was $960m, against $524m a year earlier, when Xcel took a $287m charge to settle claims from the 2021 Marshall wildfire in Colorado. Without that charge, last year's ongoing figure was $1.24 a share.

Higher electric revenue added 32 cents, and the return Xcel books on projects still under construction added 11 cents. Earnings from equity investments added 9 cents, mostly unrealized gains at investment funds that hold stakes in energy-technology companies. Against that, interest charges rose 26%* to $484m and cost 13 cents, new shares cost 10 cents and higher operating costs 8 cents. Weather was worth 7 cents a share against normal.

The Colorado utility's contribution jumped to 57 cents from 8 cents, because last year's figure carried the Marshall charge; on an ongoing basis it gained 13 cents. Weather-adjusted electric sales rose 3.0%.

Xcel narrowed its 2026 range to $4.10–$4.16 from $4.04–$4.16. After $3.37 so far, that leaves 73–79 cents* for the fourth quarter. The 2027 midpoint of $4.55 is 10%* above the new 2026 midpoint.

The release keeps the long-term objective at 6%–8%-plus annual growth in earnings per share. On the call, Brian Van Abel, the finance chief, extended to 2031 Xcel's expectation of average per-share growth of 9% or more, and put 2027–2030 at 10% or more, measured from the 2026 guidance midpoint.

Renewables take $21.4bn of the $70bn, transmission $18.6bn, distribution $13.7bn and other generation $9.2bn. Southwestern Public Service, which serves Texas and New Mexico, gets the largest share, $25.8bn, ahead of the Minnesota utility at $24.8bn. Van Abel said the plan extends rate-base growth of 11% a year into 2031. Rate base is the asset value on which regulators let a utility earn a return.

Xcel expects operating cash, after dividends and pension funding, to supply $35.8bn. New debt provides $26.2bn and equity $8bn, which could include other instruments that rating agencies treat as equity. Van Abel said more than 40% of the $8bn is already contracted.

The plan leaves out infrastructure for new data centers. Xcel says it remains on track to sign service agreements for another gigawatt of data-center load by the end of 2026 and 3 gigawatts more by the end of 2027, and counts that work among more than $10bn of opportunities outside the plan. The 10-Q describes one data-center agreement in detail, for a Google site in Minnesota; a regulatory decision is expected in early 2027.

Operating cash for nine months was $4.87bn, up $994m on higher net income and insurance reimbursements for wildfire settlements. Capital spending was $9.26bn, so operations covered 53%* of it. Total debt rose $6.7bn* this year to $40.6bn, or 62% of capitalization, from 59%. At Sept. 30, Xcel had 79.4m shares under forward sale agreements, with minimum expected proceeds of $5.8bn. Moody's rates the holding company Baa1 with a negative outlook.

On Oct. 9, the Minnesota utility asked state regulators to freeze base rates for 2027 and 2028, using faster recognition of battery-storage tax credits to offset new costs. Colorado regulators granted a $184m electric revenue increase, excluding rider roll-ins, in September at a 9.3% return on equity. In October, Xcel agreed to sell $150m of Michigan electric and gas assets. In Texas, estimated losses from the 2024 Smokehouse Creek fire stand at $475m before insurance, plus $50m of legal costs, and Xcel warns that remaining claims could exceed its $525m of annual cover. Forms 4 since July show only directors' stock-unit grants.

Xcel is pairing a bigger plan with a faster growth promise, and a quarter flattered by fund gains and warm weather gives it room. Because the base plan does not depend on signing new data-center customers, the 4-gigawatt target is upside rather than a prop. The price is $26bn of new debt and $8bn of equity, with the parent's Moody's outlook already negative.

Exceptions to the New Mexico rate stipulation are due Nov. 2, with new rates expected in December. Xcel has asked Minnesota regulators to rule on the rate freeze by January, and a decision on the Google agreement is expected early in 2027. Xcel has not set its fourth-quarter date; last year's release was furnished on the evening of Feb. 4, which points to Feb. 3, 2027*.

*Rackline estimate from Xcel's release and filings.