XELXcel EnergyQ2 FY2026Earnings Analysis

Infrastructure Recovery and Reduced Depreciation Drive Earnings

Second-quarter diluted GAAP EPS increased to $0.93 from $0.75 in Q2 2025. Key positive drivers included lower electric fuel and purchased power costs impact ($0.30/share), higher AFUDC equity and debt ($0.08/share), and lower depreciation and amortization ($0.08/share), which were partially offset by higher interest charges ($0.12/share decrease) and equity financing dilution ($0.06/share decrease).

Source: 10-Q Item 2 MD&A, p.24-25

Regulatory Settlements and Decisions Across Key Jurisdictions

NSP-Minnesota received an MPUC verbal decision for an estimated $211M rate increase over two years with a 9.60% ROE. PSCo filed settlement agreements in Colorado requesting an electric revenue increase of $225M (9.30% ROE) and gas increase of $123M (9.20% ROE), while SPS reached a settlement in New Mexico for a $90M base rate increase (9.50% ROE).

Source: 10-Q Item 2 MD&A, p.28-29

Non-GAAP Adjustments for Outage Refunds and Wildfire Litigation

Year-to-date ongoing diluted EPS stood at $1.84 compared to GAAP EPS of $1.82. The difference includes a $0.04 per share charge ($38M) for customer refunds ordered by MPUC regarding a 2023-2024 Prairie Island nuclear facility outage, offset by a $0.02 per share credit ($19M) from increased insurance recoveries related to Marshall Wildfire litigation.

Source: 10-Q Item 2 MD&A, p.24-25

Large Load and Data Center Expansion Initiatives

NSP-Minnesota executed an electric service agreement to power a new Google data center requiring 1,900 MW of clean energy resources, estimated to bring $1.1B in benefits to local customers. XEL also proposed mandatory large load tariffs across MN, WI, and CO to serve data centers above 50-100 MW while protecting existing retail customers.

Source: 10-Q Item 2 MD&A, p.28, 30

Current liabilities increased 47.3% YoY to $8.67B, outpacing current assets of $6.08B and resulting in a Current Ratio of 0.70. This reliance on short-term debt and credit facilities creates liquidity pressure in a higher interest rate environment.

Source: 10-Q Balance Sheet (XBRL)

Long-term debt grew 17.9% YoY to $36.95B to finance ongoing system investments. Consequently, interest charges increased by $94M in Q2 FY2026 and $174M year-to-date, putting sustained upward pressure on operating costs.

Source: 10-Q Item 2 MD&A, p.27

Utility profitability depends heavily on regulatory approvals for rate base expansions and cost recoveries. As demonstrated by the $38M Prairie Island nuclear outage refund disallowance, adverse commission rulings can negatively impact revenues and cash flows.

Source: 10-Q Item 2 MD&A, p.24, 28