Xcel Energy Third Quarter 2018 Earnings Report
October 25, 2018
-
Xcel Energy reports 2018 third quarter EPS of $0.96 per share compared
with $0.97 per share in 2017. -
Xcel Energy narrows its 2018 EPS guidance range to $2.45 to $2.49 from
previous EPS guidance of $2.41 to $2.51. - Xcel Energy initiates 2019 EPS guidance of $2.55 to $2.65.
-
Xcel Energy increases its long-term EPS growth objective to 5 to 7
percent.
MINNEAPOLIS–(BUSINESS WIRE)–Xcel Energy Inc. (NASDAQ: XEL) today reported 2018 third quarter GAAP
and ongoing earnings of $491 million, or $0.96 per share, compared with
$492 million, or $0.97 per share in the same period in 2017.
Earnings results for the quarter are a function of higher electric and
natural gas margins due to favorable weather and sales growth, higher
AFUDC and a lower tax rate, which were more than offset by higher
depreciation, operating and maintenance, and interest expenses.
“Third quarter results were in line with our forecast, while our
year-to-date results continue to be favorable,” said Ben Fowke,
chairman, president and CEO of Xcel Energy. “We are on track to achieve
our revised year-end earnings guidance, we are well positioned for the
future, and we are increasing our long-term growth objective to 5 to 7
percent.”
“We reached important milestones in our strategy of expanding our clean
energy portfolio and upgrading the grid, including approval of the
Colorado Energy Plan and our innovative supply agreement with EVRAZ, a
major Colorado employer,” said Fowke. “We also made strides in
delivering new energy options and enhanced services for our customers,
like our Minnesota proposal to advance the electric vehicle transition
through affordable charging options and filing for approval of our
RenewableConnect product in Wisconsin. These initiatives further our
vision of being the preferred and trusted provider of the energy our
customers need.”
At 9:00 a.m. CDT today, Xcel Energy will host a conference call to
review financial results. To participate in the call, please dial-in 5
to 10 minutes prior to the start and follow the operator’s instructions.
| US Dial-In: | (800) 949-2175 | ||
| International Dial-In: | (323) 994-2131 | ||
| Conference ID: | 3269787 | ||
The conference call also will be simultaneously broadcast and archived
on Xcel Energy’s website at www.xcelenergy.com.
To access the presentation, click on Investor Relations. If you are
unable to participate in the live event, the call will be available for
replay from 12:00 p.m. CDT on Oct. 25 through 12:00 p.m. CDT on Oct. 28.
| Replay Numbers | |||
| US Dial-In: | (888) 203-1112 | ||
| International Dial-In: | (719) 457-0820 | ||
| Access Code: | 3269787 | ||
Except for the historical statements contained in this release, the
matters discussed herein, are forward-looking statements that are
subject to certain risks, uncertainties and assumptions. Such
forward-looking statements, including our 2018 earnings per share (EPS)
guidance, the Tax Cut and Jobs Act (TCJA)’s impact to Xcel Energy and
its customers, rate base, valuation of deferred tax assets and
liabilities, cash flow, credit metrics, long-term earnings per share and
dividend growth rate and potential regulatory options, as well as
assumptions and other statements identified in this document by the
words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,”
“may,” “objective,” “outlook,” “plan,” “project,” “possible,”
“potential,” “should,” “will,” “would” and similar expressions. Actual
results may vary materially. Forward-looking statements speak only as of
the date they are made and we expressly disclaim any obligation to
update any forward-looking information. The following factors, in
addition to those discussed in Xcel Energy’s Annual Report on Form 10-K
for the fiscal year ended Dec. 31, 2017 and subsequent securities
filings, could cause actual results to differ materially from management
expectations as suggested by such forward-looking information: changes
in environmental laws and regulations; unusual weather and climate
change, including compliance with any accompanying legislative and
regulatory changes; ability of subsidiaries to recover costs from
customers; actions of credit rating agencies; general economic
conditions, including inflation rates, monetary fluctuations and their
impact on capital expenditures and the ability of Xcel Energy Inc. and
its subsidiaries to obtain financing on favorable terms; availability or
cost of capital; our customers’ and counterparties’ ability to pay their
debts to us; assumptions and costs relating to funding our employee
benefit plans and health care benefits; our subsidiaries’ ability to
make dividend payments; tax laws; operational safety, including our
nuclear generation facilities; successful long-term operational
planning; commodity risks associated with energy markets and production;
costs of potential regulatory penalties; effects of geopolitical events,
including war and acts of terrorism; cyber security threats and data
security breaches; fuel costs; and employee work force factors.
This information is not given in connection with any
sale,
offer for sale or offer to buy any security.
| XCEL ENERGY INC. AND SUBSIDIARIES | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||||||||||||
|
(amounts in millions, except per share data) |
||||||||||||||||||||
| Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||||||
| Operating revenues | ||||||||||||||||||||
| Electric | $ | 2,802 | $ | 2,784 | $ | 7,419 | $ | 7,421 | ||||||||||||
| Natural gas | 227 | 214 | 1,181 | 1,130 | ||||||||||||||||
| Other | 19 | 19 | 57 | 58 | ||||||||||||||||
| Total operating revenues | 3,048 | 3,017 | 8,657 | 8,609 | ||||||||||||||||
| Operating expenses | ||||||||||||||||||||
| Electric fuel and purchased power | 1,040 | 1,006 | 2,907 | 2,850 | ||||||||||||||||
| Cost of natural gas sold and transported | 58 | 64 | 537 | 543 | ||||||||||||||||
| Cost of sales — other | 9 | 8 | 26 | 25 | ||||||||||||||||
| Operating and maintenance expenses | 593 | 536 | 1,729 | 1,688 | ||||||||||||||||
| Conservation and demand side management expenses | 77 | 74 | 216 | 206 | ||||||||||||||||
| Depreciation and amortization | 440 | 371 | 1,199 | 1,102 | ||||||||||||||||
| Taxes (other than income taxes) | 135 | 134 | 417 | 411 | ||||||||||||||||
| Total operating expenses | 2,352 | 2,193 | 7,031 | 6,825 | ||||||||||||||||
| Operating income | 696 | 824 | 1,626 | 1,784 | ||||||||||||||||
| Other expense (net) | (7 | ) | (1 | ) | (8 | ) | (4 | ) | ||||||||||||
| Equity earnings of unconsolidated subsidiaries | 9 | 7 | 25 | 22 | ||||||||||||||||
| Allowance for funds used during construction — equity | 30 | 24 | 79 | 54 | ||||||||||||||||
| Interest charges and financing costs | ||||||||||||||||||||
|
Interest charges — includes other financing costs of $6, $6, $18, |
177 | 168 | 523 | 498 | ||||||||||||||||
| Allowance for funds used during construction — debt | (13 | ) | (11 | ) | (35 | ) | (25 | ) | ||||||||||||
| Total interest charges and financing costs | 164 | 157 | 488 | 473 | ||||||||||||||||
| Income before income taxes | 564 | 697 | 1,234 | 1,383 | ||||||||||||||||
| Income taxes | 73 | 205 | 187 | 424 | ||||||||||||||||
| Net income | $ | 491 | $ | 492 | $ | 1,047 | $ | 959 | ||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||
| Basic | 510 | 509 | 510 | 508 | ||||||||||||||||
| Diluted | 511 | 509 | 510 | 509 | ||||||||||||||||
| Earnings per average common share: | ||||||||||||||||||||
| Basic | $ | 0.96 | $ | 0.97 | $ | 2.05 | $ | 1.89 | ||||||||||||
| Diluted | 0.96 | 0.97 | 2.05 | 1.88 | ||||||||||||||||
| Cash dividends declared per common share | $ | 0.38 | $ | 0.36 | $ | 1.14 | $ | 1.08 | ||||||||||||
XCEL ENERGY INC. AND SUBSIDIARIES
Notes to Investor
Relations Earnings Release (Unaudited)
Due to the seasonality of Xcel Energy’s operating results, quarterly
financial results are not an appropriate base from which to project
annual results.
Non-GAAP Financial Measures
The following discussion includes financial information prepared in
accordance with generally accepted accounting principles (GAAP), as well
as certain non-GAAP financial measures such as electric margin, natural
gas margin, ongoing earnings and ongoing diluted EPS. Generally, a
non-GAAP financial measure is a numerical measure of a company’s
financial performance, financial position or cash flows that excludes
(or includes) amounts that are adjusted from the most directly
comparable measure calculated and presented in accordance with GAAP.
Xcel Energy’s management uses non-GAAP measures 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. Non-GAAP financial measures are
intended to supplement investors’ understanding of our operating
performance and should not be considered alternatives for financial
measures presented in accordance with GAAP. These measures are discussed
in more detail below and may not be comparable to other companies’
similarly titled non-GAAP financial measures.
Electric and Natural Gas Margins
Electric
margin is presented as electric revenues less electric fuel and
purchased power expenses and natural gas margin is presented as natural
gas revenues less the cost of natural gas sold and transported. Expenses
incurred for electric fuel and purchased power and the cost of natural
gas sold and transported are generally recovered through various
regulatory recovery mechanisms, and as a result, changes in these
expenses are generally offset in operating revenues. Management believes
electric and natural gas margins provide the most meaningful basis for
evaluating our operations because they exclude the revenue impact of
fluctuations in these expenses. These margins can be reconciled to
operating income, a GAAP measure, by including other operating revenues,
cost of sales – other, operating and maintenance (O&M) expenses,
conservation and demand side management (DSM) expenses, depreciation and
amortization and taxes (other than income taxes).
Earnings Adjusted for Certain Items (Ongoing
Earnings and Diluted EPS)
Ongoing earnings reflect
adjustments to GAAP earnings (net income) for certain items. Ongoing
diluted EPS is calculated by dividing the net income or loss
attributable to the controlling interest of each subsidiary, adjusted
for certain items, by the weighted average fully diluted Xcel Energy
Inc. common shares outstanding for the period. We use these non-GAAP
financial measures to evaluate and provide details of Xcel Energy’s core
earnings and underlying performance. We believe these measurements are
useful to investors to evaluate the actual and projected financial
performance and contribution of our subsidiaries. For the three and nine
months ended Sept. 30, 2018 and 2017, there were no such adjustments to
GAAP earnings and therefore GAAP earnings equal ongoing earnings for
these periods.
Note 1. Earnings Per Share Summary
The following table summarizes GAAP and ongoing diluted EPS for Xcel
Energy:
| Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||||||||
| Diluted Earnings (Loss) Per Share | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
| Public Service Company of Colorado (PSCo) | $ | 0.41 | $ | 0.37 | $ | 0.91 | $ | 0.78 | ||||||||||||
| NSP-Minnesota | 0.39 | 0.45 | 0.79 | 0.81 | ||||||||||||||||
| Southwestern Public Service Company (SPS) | 0.16 | 0.13 | 0.34 | 0.25 | ||||||||||||||||
| NSP-Wisconsin | 0.06 | 0.04 | 0.15 | 0.12 | ||||||||||||||||
| Equity earnings of unconsolidated subsidiaries | 0.01 | 0.01 | 0.03 | 0.03 | ||||||||||||||||
| Regulated utility (a) | 1.03 | 1.00 | 2.22 | 1.98 | ||||||||||||||||
| Xcel Energy Inc. and other | (0.07 | ) | (0.03 | ) | (0.17 | ) | (0.10 | ) | ||||||||||||
| Total | $ | 0.96 | $ | 0.97 | $ | 2.05 | $ | 1.88 | ||||||||||||
(a) Amounts may not add due to rounding.
Explanations for operating company results below exclude the offsetting
impacts on sales, depreciation and amortization expense and income tax
expense of the TCJA.
PSCo — Earnings increased $0.04 per share for the third
quarter of 2018 and increased $0.13 per share year-to-date. The
year-to-date increase in earnings was driven by higher natural gas
margins largely due to the impact of a natural gas rate increase, higher
electric margins reflecting favorable weather and sales growth, and
increased allowance for funds used during construction (AFUDC) primarily
related to the Rush Creek wind project. These items were partially
offset by higher operating and maintenance (O&M) expenses, interest
charges, depreciation expense and property taxes.
NSP-Minnesota — Earnings decreased $0.06 per share for the
third quarter of 2018 and decreased $0.02 per share year-to-date. The
year-to-date decrease reflects higher depreciation expense due to
increased invested capital and O&M expenses, partially offset by higher
electric and natural gas margins due to favorable weather.
SPS — Earnings increased by $0.03 per share for the third
quarter of 2018 and increased $0.09 per share year-to-date. The
year-to-date increase was primarily due to higher electric margins
reflecting favorable weather and sales growth, AFUDC related to the Hale
County wind project, timing of O&M expenses, and lower interest expense,
partially offset by higher depreciation expense.
NSP-Wisconsin — Earnings increased by $0.02 per share for
the third quarter of 2018 and increased $0.03 per share year-to-date.
The year-to-date increase was largely due to higher electric and natural
gas rates and the impact of favorable weather and sales growth,
partially offset by additional depreciation expense related to higher
invested capital.
Xcel Energy Inc. and other — Xcel Energy Inc. and other,
which primarily includes financing costs at the holding company and
other smaller items, decreased by $0.04 per share for the third quarter
of 2018 and decreased by $0.07 per share year-to-date. The decrease in
earnings was primarily related to the impact of the TCJA as well as
higher debt levels.
The following table summarizes significant components contributing to
the changes in 2018 EPS compared with the same period in 2017:
| Three Months | Nine Months | |||||||||
| Diluted Earnings (Loss) Per Share |
Ended Sept. 30 |
Ended Sept. 30 |
||||||||
| GAAP and ongoing diluted EPS — 2017 | $ | 0.97 | $ | 1.88 | ||||||
| Components of change — 2018 vs. 2017 | ||||||||||
| Higher electric margins (excluding TCJA impacts) (a) | 0.10 | 0.21 | ||||||||
| Higher natural gas margins (excluding TCJA impacts) (a) | 0.03 | 0.10 | ||||||||
| Higher AFUDC — equity | 0.01 | 0.05 | ||||||||
| Higher depreciation and amortization (excluding TCJA impacts) (a) | (0.03 | ) | (0.06 | ) | ||||||
| Higher O&M expenses | (0.07 | ) | (0.05 | ) | ||||||
| Higher ETR (excluding TCJA impacts) (a) | (0.03 | ) | (0.04 | ) | ||||||
| Higher interest charges | (0.01 | ) | (0.03 | ) | ||||||
| Other (net) | (0.01 | ) | (0.01 | ) | ||||||
| GAAP and ongoing diluted EPS — 2018 | $ | 0.96 | $ | 2.05 | ||||||
|
(a) Estimated net impact of the TCJA, which includes |
||||||||||
| Income tax — rate change and ARAM (net of deferral) | $ | 0.25 | $ | 0.46 | ||||||
| Electric margin reductions (net) | (0.15 | ) | (0.31 | ) | ||||||
| Natural gas margin reductions (net) | (0.01 | ) | (0.03 | ) | ||||||
| Depreciation and amortization reductions (Colorado prepaid pension) | (0.07 | ) | (0.07 | ) | ||||||
| Holding company — interest expense | (0.01 | ) | (0.04 | ) | ||||||
| Total | $ | 0.01 | $ | 0.01 | ||||||
Note 2. Regulated Utility Results
Estimated Impact of Temperature Changes on Regulated Earnings —
Unusually hot summers or cold winters increase electric and natural gas
sales, while mild weather reduces electric and natural gas sales. The
estimated impact of weather on earnings is based on the number of
customers, temperature variances and the amount of natural gas or
electricity historically used per degree of temperature. Weather
deviations from normal levels can affect Xcel Energy’s financial
performance.
Degree-day or Temperature-Humidity Index (THI) data is used to estimate
amounts of energy required to maintain comfortable indoor temperature
levels based on each day’s average temperature and humidity. Heating
degree-days (HDD) is the measure of the variation in the weather based
on the extent to which the average daily temperature falls below 65°
Fahrenheit. Cooling degree-days (CDD) is the measure of the variation in
the weather based on the extent to which the average daily temperature
rises above 65° Fahrenheit. Each degree of temperature above 65°
Fahrenheit is counted as one CDD, and each degree of temperature below
65° Fahrenheit is counted as one HDD. In Xcel Energy’s more humid
service territories, a THI is used in place of CDD, which adds a
humidity factor to CDD. HDD, CDD and THI are most likely to impact the
usage of Xcel Energy’s residential and commercial customers. Industrial
customers are less sensitive to weather.
Normal weather conditions are defined as either the 20-year or 30-year
average of actual historical weather conditions. The historical period
of time used in the calculation of normal weather differs by
jurisdiction, based on regulatory practice. To calculate the impact of
weather on demand, a demand factor is applied to the weather impact on
sales. Extreme weather variations, windchill and cloud cover may not be
reflected in weather-normalized estimates.
The percentage increase (decrease) in normal and actual HDD, CDD and THI
is provided in the following table:
| Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||||||||||||
| 2018 vs. | 2017 vs. | 2018 vs. | 2018 vs. | 2017 vs. | 2018 vs. | |||||||||||||||||||
| Normal | Normal | 2017 | Normal | Normal | 2017 | |||||||||||||||||||
| HDD | (18.2 | )% | (16.5 | )% | (5.6 | )% | (0.3 | )% | (13.6 | )% | 14.2 | % | ||||||||||||
| CDD | 14.8 | 5.3 | 2.4 | 27.1 | 5.9 | 21.4 | ||||||||||||||||||
| THI | 18.2 | (11.6 | ) | 35.7 | 38.4 | (10.6 | ) | 57.0 | ||||||||||||||||
Weather — The following table summarizes the estimated
impact of temperature variations on EPS compared with normal weather
conditions:
| Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||||||||||||||||||
| 2018 vs. | 2017 vs. | 2018 vs. | 2018 vs. | 2017 vs. | 2018 vs. | |||||||||||||||||||||||||
| Normal | Normal | 2017 | Normal | Normal | 2017 | |||||||||||||||||||||||||
| Retail electric | $ | 0.043 | $ | (0.011 | ) | $ | 0.054 | $ | 0.110 | $ | (0.032 | ) | $ | 0.142 | ||||||||||||||||
| Firm natural gas | — | — | — | 0.003 | (0.020 | ) | 0.023 | |||||||||||||||||||||||
| Total (before adjustments for decoupling) | $ | 0.043 | $ | (0.011 | ) | $ | 0.054 | $ | 0.113 | $ | (0.052 | ) | $ | 0.165 | ||||||||||||||||
| Decoupling – Minnesota | (0.018 | ) | 0.015 | (0.033 | ) | (0.050 | ) | 0.023 | (0.073 | ) | ||||||||||||||||||||
| Total (adjusted for decoupling) | $ | 0.025 | $ | 0.004 | $ | 0.021 | $ | 0.063 | $ | (0.029 | ) | $ | 0.092 | |||||||||||||||||
Sales Growth (Decline) — The following tables summarize
Xcel Energy and its subsidiaries’ sales growth (decline) for actual and
weather-normalized sales in 2018 compared to the same period in 2017:
| Three Months Ended Sept. 30 | ||||||||||||||||||||
| PSCo | NSP-Minnesota | SPS | NSP-Wisconsin | Xcel Energy | ||||||||||||||||
| Actual | ||||||||||||||||||||
| Electric residential | 3.8 | % | 8.2 | % | 5.4 | % | 8.4 | % | 6.1 | % | ||||||||||
| Electric commercial and industrial | 1.6 | 2.0 | 6.2 | 4.9 | 3.1 | |||||||||||||||
| Total retail electric sales | 2.3 | 3.8 | 6.0 | 5.8 | 3.9 | |||||||||||||||
| Firm natural gas sales | (1.5 | ) | 0.6 | N/A | (0.3 | ) | (0.8 | ) | ||||||||||||
| Three Months Ended Sept. 30 | ||||||||||||||||||||
| PSCo | NSP-Minnesota | SPS | NSP-Wisconsin | Xcel Energy | ||||||||||||||||
| Weather-normalized | ||||||||||||||||||||
| Electric residential | 3.9 | % | (0.2 | )% | (0.2 | )% | 2.0 | % | 1.5 | % | ||||||||||
| Electric commercial and industrial | 1.4 | (0.3 | ) | 4.8 | 3.4 | 1.7 | ||||||||||||||
| Total retail electric sales | 2.2 | (0.3 | ) | 3.8 | 3.0 | 1.6 | ||||||||||||||
| Firm natural gas sales | 1.3 | (1.3 | ) | N/A | (1.8 | ) | 0.3 | |||||||||||||
| Nine Months Ended Sept. 30 | ||||||||||||||||||||
| PSCo | NSP-Minnesota | SPS | NSP-Wisconsin | Xcel Energy | ||||||||||||||||
| Actual | ||||||||||||||||||||
| Electric residential | 3.1 | % | 7.8 | % | 8.2 | % | 7.5 | % | 6.0 | % | ||||||||||
| Electric commercial and industrial | 1.3 | 1.9 | 5.6 | 4.2 | 2.8 | |||||||||||||||
| Total retail electric sales | 1.9 | 3.6 | 6.1 | 5.1 | 3.7 | |||||||||||||||
| Firm natural gas sales | 7.2 | 17.3 | N/A | 17.0 | 11.0 | |||||||||||||||
| Nine Months Ended Sept. 30 | ||||||||||||||||||||
| PSCo | NSP-Minnesota | SPS | NSP-Wisconsin | Xcel Energy | ||||||||||||||||
| Weather-normalized | ||||||||||||||||||||
| Electric residential | 1.5 | % | (0.4 | )% | 0.8 | % | (0.1 | )% | 0.5 | % | ||||||||||
| Electric commercial and industrial | 1.0 | (0.1 | ) | 4.6 | 3.0 | 1.6 | ||||||||||||||
| Total retail electric sales | 1.1 | (0.2 | ) | 3.9 | 2.1 | 1.3 | ||||||||||||||
| Firm natural gas sales | 2.2 | 1.0 | N/A | 2.7 | 1.9 | |||||||||||||||
Weather-normalized Electric Sales Growth (Decline)
— Year-To-Date
-
PSCo’s higher residential sales growth reflects strong customer
additions. Commercial and industrial (C&I) growth was due to both an
increase in customers and higher average use per customer for small
and large C&I customers predominately from the fabricated metal, food
products and metal mining industries. -
NSP-Minnesota’s residential sales decrease was a result of lower use
per customer, partially offset by customer growth. The slight decline
in C&I sales was a result of an increase in customers offset by lower
use per customer. -
SPS’ residential sales grew largely due to higher use per customer and
customer additions. The increase in C&I sales was driven by the oil
and natural gas industry in the Permian Basin. -
NSP-Wisconsin’s slight residential sales decline was primarily
attributable to lower use per customer partially offset by customer
additions. C&I growth was largely due to higher use per large
customer, customer additions and increased sales to small and large
sand mining customers and large customers in the energy industries.
Weather-normalized Natural Gas Sales Growth —
Year-To-Date
-
Higher natural gas sales reflect an increase in the number of
customers combined with increasing customer use.
Electric Margin — Electric revenues and fuel and purchased
power expenses are impacted by fluctuations in the price of natural gas,
coal and uranium used in the generation of electricity. However, these
price fluctuations have minimal impact on electric margin due to fuel
recovery mechanisms that recover fuel expenses. In addition, electric
customers receive a credit for PTCs that are generated in a particular
period. The following table details the electric revenues and margin:
| Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||||||||
| (Millions of Dollars) | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
| Electric revenues before impact of the TCJA | $ | 2,909 | $ | 2,784 | $ | 7,665 | $ | 7,421 | ||||||||||||
| Electric fuel and purchased power before impact of the TCJA | (1,044 | ) | (1,006 | ) | (2,917 | ) | (2,850 | ) | ||||||||||||
| Electric margin before impact of the TCJA | $ | 1,865 | $ | 1,778 | $ | 4,748 | $ | 4,571 | ||||||||||||
| Impact of the TCJA (offset as a reduction in income tax expense) | (103 | ) | — | (236 | ) | — | ||||||||||||||
| Electric margin | $ | 1,762 | $ | 1,778 | $ | 4,512 | 4,571 | |||||||||||||
The following table summarizes the components of the changes in electric
margin:
| Three Months | Nine Months | |||||||||
|
Ended Sept. 30, |
Ended Sept. 30, |
|||||||||
| (Millions of Dollars) | 2018 vs. 2017 | 2018 vs. 2017 | ||||||||
| Estimated impact of weather (net of Minnesota decoupling) | $ | 18 | $ | 57 | ||||||
|
Retail sales growth (including Minnesota decoupling and sales true-up) |
21 | 35 | ||||||||
| Purchased capacity costs | 11 | 34 | ||||||||
| Wholesale transmission revenue (net) | 13 | 19 | ||||||||
| Retail rate increase (Wisconsin, Texas and Michigan) | 8 | 17 | ||||||||
| Non-fuel riders | 3 | 13 | ||||||||
| Wisconsin fuel recovery | 6 | 1 | ||||||||
| Other (net) | 7 | 1 | ||||||||
| Total increase in electric margin before impact of the TCJA | $ | 87 | $ | 177 | ||||||
| Impact of the TCJA (offset as a reduction in income tax expense) | (103 | ) | (236 | ) | ||||||
| Total decrease in electric margin | $ | (16 | ) | $ | (59 | ) | ||||
Natural Gas Margin — Total natural gas expense varies with
changing sales and the cost of natural gas. However, fluctuations in the
cost of natural gas has minimal impact on natural gas margin due to
natural gas cost recovery mechanisms. The following table details
natural gas revenues and margin:
| Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||||||||
| (Millions of Dollars) | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
| Natural gas revenues before impact of the TCJA | $ | 233 | $ | 214 | $ | 1,207 | $ | 1,130 | ||||||||||||
| Cost of natural gas sold and transported | (58 | ) | (64 | ) | (537 | ) | (543 | ) | ||||||||||||
| Natural gas margin before impact of the TCJA | $ | 175 | $ | 150 | $ | 670 | $ | 587 | ||||||||||||
| Impact of the TCJA (offset as a reduction in income tax expense) | (6 | ) | — | (26 | ) | — | ||||||||||||||
| Natural gas margin | $ | 169 | $ | 150 | $ | 644 | $ | 587 | ||||||||||||
The following table summarizes the components of the changes in natural
gas margin:
| Three Months | Nine Months | |||||||||
|
Ended Sept. 30, |
Ended Sept. 30, |
|||||||||
| (Millions of Dollars) | 2018 vs. 2017 | 2018 vs. 2017 | ||||||||
| Retail rate increase (Colorado, Wisconsin and Michigan) | $ | 17 | $ | 41 | ||||||
| Estimated impact of weather | — | 18 | ||||||||
| Infrastructure and integrity riders | 6 | 14 | ||||||||
| Sales growth | — | 3 | ||||||||
| Conservation revenue (offset by expenses) | — | 3 | ||||||||
| Other (net) | 2 | 4 | ||||||||
| Total increase in natural gas margin before impact of the TCJA | $ | 25 | $ | 83 | ||||||
| Impact of the TCJA (offset as a reduction in income tax expense) | (6 | ) | (26 | ) | ||||||
| Total increase in natural gas margin | $ | 19 | $ | 57 | ||||||
O&M Expenses — O&M expenses increased $57 million, or
10.6 percent, for the third quarter of 2018 and increased $41 million,
or 2.4 percent, year-to-date. The significant changes are summarized in
the table below:
| Three Months | Nine Months | ||||||||
|
Ended Sept. 30, |
Ended Sept. 30, |
||||||||
| (Millions of Dollars) | 2018 vs. 2017 | 2018 vs. 2017 | |||||||
| Business systems and contract labor | $ | 18 | $ | 33 | |||||
| Distribution costs | 13 | 13 | |||||||
| Natural gas systems damage prevention and other remediation | 12 | 8 | |||||||
| Plant generation costs | 4 | 2 | |||||||
| Nuclear plant operations and amortization | — | (16 | ) | ||||||
| Other (net) | 10 | 1 | |||||||
| Total increase in O&M expenses | $ | 57 | $ | 41 | |||||
-
Business systems and contract labor costs increased due to growing
network and storage needs, cybersecurity initiatives, to support our
customer strategy, and
Contacts
Xcel Energy Inc.
Paul Johnson, 612-215-4535
Vice President,
Investor Relations
or
Olga Guteneva, 612-215-4559
Director
of Investor Relations
or
For news media inquiries only:
Xcel
Energy Media Relations, 612-215-5300
Xcel Energy internet address: www.xcelenergy.com