xcel energy aga_may_2008

Reducing Carbon,Reducing Carbon,Delivering ResultsDelivering Results

American Gas AssociationAmerican Gas AssociationMay 4 May 4 –– 6, 20086, 2008

This material includes forwardThis material includes forward--looking statements that are subject to looking statements that are subject to certain risks, uncertainties and assumptions. Such forwardcertain risks, uncertainties and assumptions. Such forward--looking looking statements include projected earnings, cash flows, capital statements include projected earnings, cash flows, capital expenditures and other statements and are identified in this docexpenditures and other statements and are identified in this document ument by the words by the words ““anticipate,anticipate,”” ““estimate,estimate,”” ““expect,expect,”” ““projected,projected,””““objective,objective,”” ““outlook,outlook,”” ““possible,possible,”” ““potentialpotential”” and similar and similar expressions. Actual results may vary materially. Factors that expressions. Actual results may vary materially. Factors that could could cause actual results to differ materially include, but are not lcause actual results to differ materially include, but are not limited to: imited to: general economic conditions, including the availability of credigeneral economic conditions, including the availability of credit, t, actions of rating agencies and their impact on capital expendituactions of rating agencies and their impact on capital expenditures; res; business conditions in the energy industry; competitive factors;business conditions in the energy industry; competitive factors;unusual weather; effects of geopolitical events, including war aunusual weather; effects of geopolitical events, including war and acts nd acts of terrorism; changes in federal or state legislation; regulatioof terrorism; changes in federal or state legislation; regulation; actions n; actions of accounting regulatory bodies; and other risk factors listed fof accounting regulatory bodies; and other risk factors listed from rom time to time by Xcel Energy in reports filed with the SEC, inclutime to time by Xcel Energy in reports filed with the SEC, including ding Exhibit 99.01 to Xcel EnergyExhibit 99.01 to Xcel Energy’’s report on Form 10s report on Form 10--K for year 2007.K for year 2007.

Safe HarborSafe Harbor

Attractive Investment OpportunityAttractive Investment Opportunity

Environmental leader with geographic competitive Environmental leader with geographic competitive advantageadvantage

Constructive regulation with enhanced recoveryConstructive regulation with enhanced recoveryof major capital projectsof major capital projects

Conservative financial managementConservative financial management

Strong corporate governanceStrong corporate governance

Track record of successful executionTrack record of successful execution

Environmental LeaderEnvironmental LeaderResource plansResource plans’’ projected COprojected CO22 emission reductionsemission reductions

Minnesota plan: 22% reduction by 2020Minnesota plan: 22% reduction by 2020Colorado plan: 10% reduction by 2017Colorado plan: 10% reduction by 2017

Innovative technologyInnovative technologySolarSolarWind to batteryWind to batteryWind to hydrogenWind to hydrogenDemand Side Management (DSM)Demand Side Management (DSM)

Smart GridSmart GridGeographic advantagesGeographic advantages

WindWindSolarSolarCarbon sequestrationCarbon sequestrationBiomassBiomass

Geographic Competitive AdvantageGeographic Competitive Advantage

Wind ResourceWind Resource

Solar ResourceSolar Resource

Biomass ResourceBiomass Resource

Xcel EnergyXcel EnergyStates ServedStates Served

Wind DensityWind DensityHighHigh

LowLow

Source: National Renewable Energy LaboratorySource: National Renewable Energy Laboratory

Reducing Carbon Dioxide Emissions*Reducing Carbon Dioxide Emissions*

60

65

70

75

80

2003 2004 2005 2006 2007

Millions of tons Millions of tons

* Owned* Owned––generation carbon dioxide emissionsgeneration carbon dioxide emissions

Projected Renewable Resources

7,400400600250

602020

7,4007,400400400600600250250

606020202020

Coal 57% Coal 57%

Renewables10%

Renewables10%

Gas & Oil 21%

Gas & Oil 21%

Nuclear 12%

Nuclear 12%

Capacity (MW)Capacity (MW)Capacity (MW) 2007 202020072007 20202020

Coal 46% Coal 46%

Renewables24%

Renewables24%

Gas & Oil 17%

Gas & Oil 17%

Nuclear 13%

Nuclear 13%

Wind 2,700Hydro 365Solar 17Biomass 182RDF 100Landfill 15Geothermal 0

WindWind 2,7002,700HydroHydro 365365SolarSolar 1717BiomassBiomass 182182RDFRDF 100100LandfillLandfill 1515GeothermalGeothermal 00

Smart Grid Drivers for ChangeSmart Grid Drivers for Change

Grid reliabilityGrid reliabilityImproved reliability, increased demandImproved reliability, increased demand

EnvironmentEnvironmentGlobal climate changeGlobal climate changeLegislative mandates for green powerLegislative mandates for green power

Customer choicesCustomer choicesGrowing needs and expectationsGrowing needs and expectationsDesire for greater flexibility and optionsDesire for greater flexibility and options

Smart Grid ScopeSmart Grid Scope and Effortsand Efforts

Smart metersSmart metersReal time, high speed, twoReal time, high speed, two––way communications way communications Intelligent home/smart appliancesIntelligent home/smart appliancesDemand Side Management Demand Side Management Distributed generationDistributed generationRenewable energy sector growthRenewable energy sector growthEnergy storage devicesEnergy storage devices

Smart Grid Pilot ProjectSmart Grid Pilot Project

Alignment with 5 partnersAlignment with 5 partnersTotal project cost ~ $100 millionTotal project cost ~ $100 millionXcel Energy portion ~ 15% of totalXcel Energy portion ~ 15% of total

Selected city: Boulder, COSelected city: Boulder, CO

City City SelectionSelection

Build Out Build Out BeginsBegins

Build Out Build Out CompletedCompleted

Benefit Benefit Assessment Assessment

BeginsBegins

Benefit Benefit Assessment Assessment CompletedCompleted

Q1 Q1 2008 2008 2009 2009 Q2Q2 Q4Q4 Q1Q1 Q4Q4 2010 2010

Constructive RegulationConstructive Regulation

Transmission riders Transmission riders –– CO, MN, ND, SDCO, MN, ND, SDRenewable riders Renewable riders –– CO, MNCO, MNMERP rider MERP rider –– MNMNConservation/DSM riders Conservation/DSM riders –– CO, MNCO, MNEnvironmental riders Environmental riders –– MN, ND, SDMN, ND, SDCapacity rider Capacity rider –– COCOComanche 3 forward CWIP via general rate case Comanche 3 forward CWIP via general rate case –– COCOIGCC rider IGCC rider –– COCOAir quality improvement rider Air quality improvement rider –– COCO

Projected Rider RevenueProjected Rider Revenue

0

40

80

120

160

200

240

2006 2007 2008 2009

CO AQIRMN Renewable Energy StandardCO Trans Cost AdjustmentMN Trans Cost RecoveryMN MERP

Dollars in millionsDollars in millions

$73$73

$107$107

$166$166

$195$195

Regulatory ResultsRegulatory Results

Rate relief granted 2006Rate relief granted 2006--2007: $400 million2007: $400 million

2006 Minnesota electric rate case: $131 million2006 Minnesota electric rate case: $131 million

2006 Colorado electric rate case: $151 million2006 Colorado electric rate case: $151 million

2006 Wisconsin gas and electric rate cases: $47 million2006 Wisconsin gas and electric rate cases: $47 million

2007 Colorado gas rate case: $32 million2007 Colorado gas rate case: $32 million

Other: $39 millionOther: $39 million

2008 Regulatory Status2008 Regulatory Status

New Mexico ElectricNew Mexico Electric December 2007December 2007 PendingPending$17.3 million$17.3 million Summer 2008Summer 200811.0% ROE11.0% ROE

North Dakota ElectricNorth Dakota Electric December 2007December 2007 PendingPending$20.5 million$20.5 million August 2008August 200811.5% ROE11.5% ROE Interim ratesInterim rates

PSCo WholesalePSCo Wholesale February 2008February 2008 SettlementSettlementBase rates $8.8 millionBase rates $8.8 million $6.5 million$6.5 millionCWIP $3.7 million CWIP $3.7 million Blackbox Blackbox 11.5% ROE11.5% ROE

SPS WholesaleSPS Wholesale March 2008March 2008 PendingPending$14.9 million$14.9 million12.2% ROE12.2% ROE

RequestedRequested StatusStatus

Solid Credit RatingsSolid Credit Ratings

Holding Co. – – – BBB+ Baa1 BBB

NSPM A+ A2 A A A3 BBB

NSPW A+ A2 A A A3 BBB+

PSCo A A3 A A– Baa1 BBB

SPS – – – BBB+ Baa1 BBB+

Holding Co.Holding Co. –– –– –– BBB+BBB+ Baa1Baa1 BBBBBB

NSPMNSPM A+A+ A2A2 A A AA A3A3 BBBBBB

NSPWNSPW A+A+ A2 A2 A A AA A3A3 BBB+ BBB+

PSCoPSCo AA A3A3 A A AA–– Baa1Baa1 BBBBBB

SPSSPS –– –– –– BBB+BBB+ Baa1Baa1 BBB+BBB+

Fitch Moody’s S&P Fitch Moody’s S&PFitch Moody’s S&P Fitch Moody’s S&PSecuredSecured UnsecuredUnsecured

Strong Access to Credit MarketsStrong Access to Credit Markets

Issued $400 million of retail hybrid securities Issued $400 million of retail hybrid securities with a 7.6% coupon in January 2008with a 7.6% coupon in January 2008

Issued $500 million of first mortgage bonds Issued $500 million of first mortgage bonds at NSPat NSP––Minnesota with 5.25% coupon in March 2008Minnesota with 5.25% coupon in March 2008

Potential FMB debt issuances: 2nd half 2008Potential FMB debt issuances: 2nd half 2008

PSCo: $500 to $600 million PSCo: $500 to $600 million

NSPNSP––Wisconsin: Up to $250 millionWisconsin: Up to $250 million

Strong Corporate Governance Strong Corporate Governance

Independent Lead Director appointed June 2007Independent Lead Director appointed June 2007

Annual election of all directorsAnnual election of all directors

12 independent directors on 13 person board 12 independent directors on 13 person board

Management compensation aligned with Management compensation aligned with shareholders shareholders –– stock ownership guidelines:stock ownership guidelines:

CEO ownership 5x annual base salary CEO ownership 5x annual base salary

CFO/Other Officers ownership 3x base salary CFO/Other Officers ownership 3x base salary

Proven Track Record:Proven Track Record:Delivering on 5 Delivering on 5 –– 7% EPS Growth7% EPS Growth

$1.15$1.15$1.30$1.30

$1.43$1.43

2005 2005 OngoingOngoing



Guidance RangeGuidance Range

13%10%

$1.45 $1.45 –– $1.55$1.55

5%*

2008 2008 GuidanceGuidance

Ongoing EPS excludes the impacts of COLI and disc ops.Ongoing EPS excludes the impacts of COLI and disc ops.A reconciliation to GAAP earnings is included in the appendix.A reconciliation to GAAP earnings is included in the appendix.

~~

* Estimated growth rate based on middle of guidance range* Estimated growth rate based on middle of guidance range

Proven Track Record:Proven Track Record:Delivering 2 Delivering 2 –– 4% Dividend Growth4% Dividend Growth

2003 2004 2005 2006 2007

$0.75$0.75

2004 2004 –– 2007 CAGR = 3.5%2007 CAGR = 3.5%

Annualized dividend per shareAnnualized dividend per share

$0.83$0.83 $0.86$0.86 $0.89$0.89 $0.92$0.92

Value PropositionValue Proposition

Low risk, fully regulated and integrated utilityLow risk, fully regulated and integrated utilityConstructive regulation with enhanced recovery Constructive regulation with enhanced recovery of major capital projectsof major capital projectsPipeline of investment opportunitiesPipeline of investment opportunitiesEnvironmental leader, wellEnvironmental leader, well––positionedpositionedfor changing rulesfor changing rules

Attractive Total ReturnAttractive Total ReturnSustainable annual EPS growth of 5% Sustainable annual EPS growth of 5% –– 7%7%with upside potentialwith upside potentialStrong dividend yield of Strong dividend yield of ~~ 4.4%4.4%Sustainable annual dividend growth of 2% Sustainable annual dividend growth of 2% –– 4%4%

AppendixAppendix

Ongoing Earnings $1.15 $1.30 $1.43PSRI/COLI 0.05 0.05 (0.08)Continuing Operations $1.20 $1.35 $1.35Disc Ops 0.03 0.01 –GAAP Earnings $1.23 $1.36 $1.35

Ongoing Earnings Ongoing Earnings $1.15 $1.15 $1.30$1.30 $1.43$1.43PSRI/COLIPSRI/COLI 0.050.05 0.050.05 (0.08)(0.08)Continuing OperationsContinuing Operations $1.20$1.20 $1.35$1.35 $1.35$1.35Disc Ops Disc Ops 0.030.03 0.01 0.01 ––GAAP Earnings $1.23 GAAP Earnings $1.23 $1.36$1.36 $1.35$1.35

Reconciliation Reconciliation ––Ongoing EPS to GAAPOngoing EPS to GAAP

200720072007Dollars per shareDollars per share

200620062006200520052005

As a result of the termination of the COLI program, Xcel Energy’s management believes that ongoing earnings provide a more meaningful comparison of earnings results between different periods in which the COLI program was in place and is more representative of Xcel Energy’s fundamental core earnings power. Xcel Energy’s management uses ongoing earnings internally for financial planning and analysis, for reporting of results to the Board of Directors, in determining whether performance targets are met for performance-based compensation,and when communicating its earnings outlook to analysts and investors.

As a result of the termination of the COLI program, Xcel EnergyAs a result of the termination of the COLI program, Xcel Energy’’s management s management believes that ongoing earnings provide a more meaningful comparibelieves that ongoing earnings provide a more meaningful comparison of earnings son of earnings results between different periods in which the COLI program was results between different periods in which the COLI program was in place and is in place and is more representative of Xcel Energymore representative of Xcel Energy’’s fundamental core earnings power. s fundamental core earnings power. Xcel EnergyXcel Energy’’s management uses ongoing earnings internally for financial plans management uses ongoing earnings internally for financial planning ning and analysis, for reporting of results to the Board of Directorsand analysis, for reporting of results to the Board of Directors, in determining , in determining whether performance targets are met for performancewhether performance targets are met for performance--based compensation,based compensation,and when communicating its earnings outlook to analysts and inveand when communicating its earnings outlook to analysts and investors.stors.

Regulated Utility $1.55 $1.61 – $1.71 Holding Company (0.12) (0.16) Ongoing Earnings $1.43 $1.45 – $1.55

PSRI/COLI $(0.08) –Continuing Operations 1.35 1.45 – 1.55Disc Ops – –GAAP Earnings $1.35 $1.45 – $1.55

Regulated UtilityRegulated Utility $1.55 $1.55 $1.61 $1.61 –– $1.71 $1.71 Holding CompanyHolding Company (0.12)(0.12) (0.16) (0.16) Ongoing Earnings Ongoing Earnings $1.43$1.43 $1.45 $1.45 –– $1.55$1.55

PSRI/COLIPSRI/COLI $(0.08)$(0.08) ––Continuing OperationsContinuing Operations 1.351.35 1.45 1.45 –– 1.551.55Disc Ops Disc Ops –– ––GAAP EarningsGAAP Earnings $1.35$1.35 $1.45 $1.45 –– $1.55$1.55

Earnings Guidance Range Earnings Guidance Range

2007A2007A2007A 200820082008Dollars per shareDollars per share

Capital Expenditure ForecastCapital Expenditure ForecastDollars in millionsDollars in millionsDollars in millions Denotes enhanced recovery mechanismDenotes enhanced recovery mechanismDenotes enhanced recovery mechanism

20082008 20092009 20102010 20112011Base & Other Base & Other $1,245$1,245 $1,285$1,285 $1,310$1,310 $1,300$1,300MERPMERP 170170 2525 1010 00Comanche 3Comanche 3 330330 6060 1010 00MN Wind Tran/CapX 2020MN Wind Tran/CapX 2020 4040 6565 115115 270270Sherco UpgradeSherco Upgrade 55 2020 7575 230230MN Wind GenerationMN Wind Generation 135135 00 00 00Nuclear Capacity/Life ExtNuclear Capacity/Life Ext 7575 120120 180180 200200Fort St. Vrain CTFort St. Vrain CT 100100 2525 00 00Total CommittedTotal Committed $2,100$2,100 $1,600$1,600 $1,700$1,700 $2,000$2,000

Potential ProjectsPotential Projects 00--100100 200200--400400 200200--400 400 200200--500500RangeRange $2,100$2,100-- $1,800$1,800-- $1,900$1,900-- $2,200$2,200--

$2,200 $2,200 $2,000$2,000 $2,100$2,100 $2,500$2,500

Capital ExpendituresCapital Expendituresby Operating Company*by Operating Company*

NSPMNSPM $935$935 $955$955 $1,060$1,060 $1,380$1,380

PSCoPSCo 945945 650650 680680 750750SPSSPS 170170 205 205 180 180 140140NSPWNSPW 100100 90 90 8080 80 80 TotalTotal $2,150$2,150 $1,900$1,900 $2,000$2,000 $2,350$2,350


* Capital forecast based on middle of range* Capital forecast based on middle of range

20082008 20092009 20102010 20112011

Capital Expenditures by Function*Capital Expenditures by Function*

20082008 20092009 20102010 20112011

Elec GenerationElec Generation $935$935 $480$480 $525$525 $745$745Elec TransmissionElec Transmission 300300 325325 390 390 500500Elec DistributionElec Distribution 355355 345 345 355 355 360360GasGas 140140 155 155 160160 155 155 Nuclear FuelNuclear Fuel 145145 150150 140140 105105Common/OtherCommon/Other 225225 145145 130130 135135Potential ProjectsPotential Projects 5050 300300 300300 350350TotalTotal $2,150$2,150 $1,900$1,900 $2,000$2,000 $2,350$2,350

* Capital forecast based on middle of range* Capital forecast based on middle of range


Recovery on Capital Investment*Recovery on Capital Investment*

* Capital forecast based on middle of range* Capital forecast based on middle of rangeDepreciation

0

400

800

1,200

1,600

2,000

2,400

2,800

2008 2009 2010 2011

Traditional Recovery Enhanced Recovery


$2,150$2,150$1,900$1,900 $2,000$2,000

$2,350$2,350

2006 2007 2008 2009 2010 2011

Delivering on Rate Base Growth*Delivering on Rate Base Growth*

CAGR = 7.5%CAGR = 7.5%

Dollars in billionsDollars in billions

* Growth based on middle of capital forecast range* Growth based on middle of capital forecast range

$11.7$11.7$12.8$12.8

$14.0$14.0 $14.9$14.9 $15.7$15.7$16.9$16.9

Debt MaturitiesDebt Maturities

$0

$200

$400

$600

$800

$1,000

$1,200

2008 2009 2010 2011 2012 2013 2014 2015

SPSPSCoNSPWNSPMXcel Energy

Dollars in millionsDollars in millionsDollars in millions

xcel energy aga_may_2008

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