Xcel Energy increases capital plan to meet robust power demand
Xcel Energy, a U.S. utility, has increased its capital investment plan by $60 billion over the next five-year period to meet increasing power demand. It also made necessary investments to improve its transmission and distribution system.
Utilities are adding billions to their capital budgets to meet the demands of data centers for more power to support AI-related tasks.
The operating revenue for its electric division rose 7.2%, to $3.64 Billion. For its natural gas division, it grew to $264 MILLION from $239 MILLION a year earlier.
Xcel announced in September that it had reached settlements to resolve all claims relating to the 2021 Marshall Fire, Colorado. It reiterated, however, that it did not admit to any fault, wrongdoing, or negligence.
Minneapolis-based company, Smokehouse Creek Fire Claims, said it would invest $5 billion in improving resiliency, reducing future wildfire risk, and enhancing the capacity of communities to withstand fires.
Xcel offers electric service to 3.9 million customers in eight Western and Midwestern States and natural gas to 2.2 millions customers.
Total interest charges for the utility rose 17.8% in the three-month period ending September 30 to $384 millions, while operating and maintenance costs rose 5.6% to $ 692 million.
Analysts at J.P. Morgan said that the capital plan update meets investor expectations but does not surpass them.
Analysts added that investors would still be able to appreciate the positive growth rate of 6% to 8% in earnings per share presented by Xcel. This could ultimately "carry" the day.
In afternoon trading, shares of the company increased by 2.4%.
LSEG data shows that Xcel has also set its 2026 adjusted earnings at $4.04 to $4.16% per share. The midpoint is below the average analyst estimate of $4.12 per share.
The company's adjusted third-quarter profits came in at just $1.24 per share, falling short of the $1.32 expected. Reporting by Pooja in Bengaluru, editing by Shreya biswas
(source: Reuters)