Xcel Energy executives: 3% retail electricity growth target for 2026 expected to be achieved

Xcel Energy executives said during their second-quarter earnings call Thursday that the company's 2026-2030 base capital investment plan is approximately $60 billion, with the potential to add $10 billion to support new transmission and generation resources for growing data center demand. Company officials said the funds will be used to invest in 11.4 GW of renewable generation, 3.4 GW of natural gas generation, 2.2 GW of energy storage, approximately 1,700 miles of new transmission lines, and $5 billion for wildfire mitigation.

Investments in the 'potential add' category include generation resources to support approximately 3 GW of incremental data center demand, which has been incorporated into Xcel's target plan and is expected to come online gradually in the mid-2030s. According to Xcel's second-quarter 2026 earnings presentation, the company currently has approximately 2 GW of data centers contracted or under construction, expects 4 GW contracted by the end of 2027, and has a potential project pipeline of more than 20 GW.

"We remain confident in our ability to deliver on our data center forecast," CEO Bob Frenzel told analysts. "Our confidence is driven by the strength and depth of our customer pipeline, our proven ability to execute large infrastructure projects, and the differentiated positioning of our service territories, which includes the geographic diversity of our high-probability pipeline."

Xcel has utilities providing electric and natural gas service in Minnesota, Colorado, Wisconsin, Michigan, North Dakota, South Dakota, New Mexico, and Texas.

The base capital plan remains "anchored in the core investments needed to retire legacy coal-fired generation assets within this decade, as well as critical investments in our transmission and distribution systems to support reliability, resilience, and industrial growth," Frenzel said.

On a weather-adjusted basis, Xcel's year-to-date electric sales increased 2.1%, "benefiting from robust activity in the energy sector in Public Service Company of New Mexico's service territory and growth in manufacturing across all operating companies," Chief Financial Officer Brian Van Abel said on the earnings call. "For 2026, we remain on track to achieve full-year weather-adjusted electric sales growth of 3%."

"We have reached productive settlements or outcomes in six active rate cases, while keeping long-term customer bill growth at or below inflation and among the lowest in the nation," Van Abel said.

These settlements include an agreement in Colorado involving a $225 million base rate increase and a 9.3% return on equity. Xcel had proposed a $356 million increase with a 9.8% return on equity in November.

In New Mexico, Xcel has a pending settlement supporting a $90 million base rate increase and a 9.5% return on equity; the utility had proposed a rate increase of approximately $168 million and a 10.5% return on equity.

According to the company's presentation, the Colorado Public Utilities Commission decision is expected in the third quarter. New Mexico regulators are expected to make a decision in the fourth quarter.

The utility reaffirmed its 2026 ongoing earnings guidance of $4.04-$4.16 per share, and Van Abel said the company expects average earnings per share growth of 9% or higher through 2030. Xcel reported second-quarter 2026 earnings per share of 93 cents, compared with 75 cents in the second quarter of 2025.