Xcel Energy Second Quarter 2019 Earnings Report

  • GAAP 2019 second quarter earnings per share were $0.46 compared with $0.52 per share in 2018.
  • Xcel Energy reaffirms 2019 earnings guidance of $2.55 to $2.65 per share.

MINNEAPOLIS–(BUSINESS WIRE)–Xcel Energy Inc. (NASDAQ: XEL) today reported 2019 second quarter GAAP and ongoing earnings of $238 million, or $0.46 per share, compared with $265 million, or $0.52 per share in the same period in 2018.

Earnings reflect higher electric and natural gas margins primarily due to non-fuel riders and regulatory rate outcomes, more than offset by 5 cents per share of unfavorable weather, increased depreciation, interest and operating and maintenance expenses.

Despite the milder than normal weather in the second quarter, Xcel Energy’s year-to-date earnings are on track and we are well-positioned to deliver earnings within our guidance range for the year,” said Ben Fowke, chairman, president and CEO of Xcel Energy.

I am pleased that we have filed our Upper Midwest Resource Plan, which is another significant step forward in our industry leading drive to reduce carbon emissions while ensuring reliability and affordability,” said Fowke. “This plan achieves an 80% reduction in carbon emissions in the region by 2030, through the early retirement of the remaining coal units in the Upper Midwest, by substantially growing the amount of renewables on our system and adding new firm peaking resources to ensure continued reliability. This plan is a key stepping stone toward the company achieving its vision to provide customers 100% carbon-free electricity by 2050.”

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:

 

(720) 543-0302

International Dial-In:

 

(888) 599-8686

Conference ID:

 

8121013

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 Aug. 1 through 12:00 p.m. CDT on Aug. 4.

Replay Numbers

 

 

US Dial-In:

 

(719) 457-0820

International Dial-In:

 

(888) 203-1112

Access Code:

 

8121013

Except for the historical statements contained in this report, the matters discussed herein are forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements, including the 2019 earnings per share (EPS) guidance, long-term EPS and dividend growth rate, as well as assumptions and other statements are intended to be 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, 2018 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; climate change and other weather, natural disaster and resource depletion, including compliance with any accompanying legislative and regulatory changes; ability of subsidiaries to recover costs from customers; reductions in our credit ratings and the cost of maintaining certain contractual relationships; 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; rising energy prices; 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 and third party contractor 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 June 30

 

Six Months Ended June 30

 

 

2019

 

2018

 

2019

 

2018

Operating revenues

 

 

 

 

 

 

 

 

 

 

 

 

Electric

 

$

2,249

 

 

$

2,348

 

 

$

4,574

 

 

$

4,617

 

Natural gas

 

308

 

 

292

 

 

1,102

 

 

954

 

Other

 

20

 

 

18

 

 

42

 

 

38

 

Total operating revenues

 

2,577

 

 

2,658

 

 

5,718

 

 

5,609

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Electric fuel and purchased power

 

813

 

 

935

 

 

1,727

 

 

1,867

 

Cost of natural gas sold and transported

 

112

 

 

104

 

 

591

 

 

479

 

Cost of sales — other

 

10

 

 

8

 

 

19

 

 

17

 

Operating and maintenance expenses

 

586

 

 

578

 

 

1,184

 

 

1,135

 

Conservation and demand side management expenses

 

65

 

 

69

 

 

137

 

 

139

 

Depreciation and amortization

 

439

 

 

377

 

 

872

 

 

760

 

Taxes (other than income taxes)

 

142

 

 

137

 

 

292

 

 

282

 

Total operating expenses

 

2,167

 

 

2,208

 

 

4,822

 

 

4,679

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

410

 

 

450

 

 

896

 

 

930

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

2

 

 

(2

)

 

6

 

 

(1

)

Equity earnings of unconsolidated subsidiaries

 

9

 

 

9

 

 

19

 

 

16

 

Allowance for funds used during construction — equity

 

20

 

 

26

 

 

40

 

 

49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest charges and financing costs

 

 

 

 

 

 

 

 

 

 

 

 

Interest charges — includes other financing costs of $6, $6, $13 and $12, respectively

 

189

 

 

175

 

 

379

 

 

346

 

Allowance for funds used during construction — debt

 

(10

)

 

(11

)

 

(20

)

 

(22

)

Total interest charges and financing costs

 

179

 

 

164

 

 

359

 

 

324

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

262

 

 

319

 

 

602

 

 

670

 

Income taxes

 

24

 

 

54

 

 

49

 

 

114

 

Net income

 

$

238

 

 

$

265

 

 

$

553

 

 

$

556

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

516

 

 

510

 

 

515

 

 

509

 

Diluted

 

518

 

 

510

 

 

517

 

 

510

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per average common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.46

 

 

$

0.52

 

 

$

1.07

 

 

$

1.09

 

Diluted

 

0.46

0.52

 

1.07

1.09

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 measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are adjusted from measures calculated and presented in accordance with GAAP. Xcel Energy’s management uses non-GAAP measures for financial planning and analysis, for reporting of results to the Board of Directors, in determining performance-based compensation, and communicating its earnings outlook to analysts and investors. Non-GAAP financial measures are intended to supplement investors’ understanding of our 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. 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 are generally recovered through various regulatory recovery mechanisms. 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 Ongoing Diluted EPS)

GAAP diluted EPS reflects the potential dilution that could occur if securities or other agreements to issue common stock (i.e., common stock equivalents) were settled. The weighted average number of potentially dilutive shares outstanding used to calculate Xcel Energy Inc.’s diluted EPS is calculated using the treasury stock method. Ongoing earnings reflect adjustments to GAAP earnings (net income) for certain items. Ongoing diluted EPS is calculated by dividing the net income or loss of each subsidiary, adjusted for certain items, by the weighted average fully diluted Xcel Energy Inc. common shares outstanding for the period. Ongoing diluted EPS for each subsidiary is calculated by dividing the net income or loss of such 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 six months ended June 30, 2019 and 2018, 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 summarizes diluted EPS for Xcel Energy:

 

 

Three Months Ended June 30

 

Six Months Ended June 30

Diluted Earnings (Loss) Per Share

 

2019

 

2018

 

2019

 

2018

Public Service Company of Colorado (PSCo)

 

$

0.20

 

 

$

0.24

 

 

$

0.47

 

 

$

0.50

 

NSP-Minnesota

 

0.19

 

 

0.18

 

 

0.41

 

 

0.40

 

Southwestern Public Service Company (SPS)

 

0.11

 

 

0.11

 

 

0.22

 

 

0.18

 

NSP-Wisconsin

 

0.02

 

 

0.03

 

 

0.06

 

 

0.09

 

Equity earnings of unconsolidated subsidiaries

 

0.01

 

 

0.01

 

 

0.02

 

 

0.02

 

Regulated utility (a)

 

0.53

 

 

0.58

 

 

1.18

 

 

1.19

 

Xcel Energy Inc. and other

 

(0.06

)

 

(0.06

)

 

(0.11

)

 

(0.10

)

Total (a)

 

$

0.46

 

 

$

0.52

 

 

$

1.07

 

 

$

1.09

 

(a) Amounts may not add due to rounding.

PSCo — Earnings decreased $0.04 per share for the second quarter of 2019 and $0.03 per share year-to-date. The decrease in year-to-date earnings was driven by higher O&M and depreciation partially offset by the timing of gas rates in 2018 and higher gas sales.

NSP-Minnesota — Earnings increased $0.01 per share for the second quarter of 2019 and $0.01 per share year-to-date. The increase in year-to-date earnings primarily reflects higher electric margins driven by rate case outcomes, partially offset by increased depreciation and O&M expenses.

SPS — Earnings were flat for the second quarter of 2019 and increased $0.04 per share year-to-date. Year-to-date results reflect higher electric margin attributable to rate case outcomes, sales growth and lower purchased capacity costs, despite unfavorable weather. Higher electric margin and AFUDC associated with the Hale County wind project were partially offset by increased depreciation, O&M and interest expenses.

NSP-Wisconsin — Earnings decreased $0.01 per share for the second quarter of 2019 and $0.03 per share year-to-date, largely due to unfavorable weather, higher depreciation and O&M expenses.

Xcel Energy Inc. and other — Xcel Energy Inc. and other primarily includes financing costs at the holding company.

Components significantly contributing to changes in 2019 EPS compared with the same period in 2018:

Three Months

Six Months

Diluted Earnings (Loss) Per Share

 

Ended June 30

 

Ended June 30

GAAP and ongoing diluted EPS — 2018

 

$

0.52

 

 

$

1.09

 

 

 

 

 

 

Components of change — 2019 vs. 2018

 

 

 

 

Higher electric margins

 

0.03

 

 

0.14

 

Lower ETR (a)

 

0.03

 

 

0.10

 

Higher natural gas margins

 

0.01

 

 

0.05

 

Higher depreciation and amortization

 

(0.09

)

 

(0.16

)

Higher O&M

 

(0.01

)

 

(0.07

)

Higher interest charges

 

(0.02

)

 

(0.05

)

Higher taxes (other than income taxes)

 

(0.01

)

 

(0.01

)

Other (net)

 

 

 

(0.02

)

GAAP and ongoing diluted EPS — 2019

 

$

0.46

 

 

$

1.07

 

(a) Includes flow back of production tax credits (PTCs) and timing of tax reform regulatory decisions, which are primarily offset in revenue.

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.

Percentage increase (decrease) in normal and actual HDD, CDD and THI:

 

 

Three Months Ended June 30

 

Six Months Ended June 30

 

 

2019 vs.

Normal

 

2018 vs.

Normal

 

2019 vs.

2018

 

2019 vs.

Normal

 

2018 vs.

Normal

 

2019 vs.

2018

HDD

 

16.9

%

 

0.1

%

 

15.0

%

 

12.8

%

 

0.3

%

 

11.0

%

CDD

 

(45.2

)

 

59.1

 

 

(71.4

)

 

(45.5

)

 

59.7

 

 

(65.1

)

THI

 

(26.7

)

 

108.1

 

 

(64.6

)

 

(26.9

)

 

107.4

 

 

(64.5

)

Weather — Estimated impact of temperature variations on EPS compared with normal weather conditions:

 

 

Three Months Ended June 30

 

Six Months Ended June 30

 

 

2019 vs.

Normal

 

2018 vs.

Normal

 

2019 vs.

2018

 

2019 vs.

Normal

 

2018 vs.

Normal

 

2019 vs.

2018

Retail electric

 

$

(0.024

)

 

$

0.065

 

 

$

(0.089

)

 

$

(0.005

)

 

$

0.067

 

 

$

(0.072

)

Firm natural gas

 

0.004

 

 

0.002

 

 

0.002

 

 

0.022

 

 

0.003

 

 

0.019

 

Total (excluding decoupling)

 

$

(0.020

)

 

$

0.067

 

 

$

(0.087

)

 

$

0.017

 

 

$

0.070

 

 

$

(0.053

)

Decoupling Minnesota

 

0.006

 

 

(0.030

)

 

0.036

 

 

0.001

 

 

(0.032

)

 

0.033

 

Total (adjusted for decoupling)

 

$

(0.014

)

 

$

0.037

 

 

$

(0.051

)

 

$

0.018

 

 

$

0.038

 

 

$

(0.020

)

Sales Growth (Decline) — Sales growth (decline) for actual and weather-normalized sales in 2019 compared to the same period in 2018:

 

 

Three Months Ended June 30

 

 

PSCo

 

NSP-Minnesota

 

SPS

 

NSP-Wisconsin

 

Xcel Energy

Actual

 

 

 

 

 

 

 

 

 

 

Electric residential

 

(6.5

)%

 

(10.7

)%

 

(13.2

)%

 

(9.0

)%

 

(9.4

)%

Electric commercial and industrial

 

(1.4

)

 

(6.2

)

 

2.6

 

 

(2.5

)

 

(2.3

)

Total retail electric sales

 

(2.9

)

 

(7.5

)

 

(0.5

)

 

(4.2

)

 

(4.2

)

Firm natural gas sales

 

19.6

 

 

(1.2

)

 

N/A

 

(10.7

)

 

10.5

 

 

 

Three Months Ended June 30

 

 

PSCo

 

NSP-Minnesota

 

SPS

 

NSP-Wisconsin

 

Xcel Energy

Weather-normalized

 

 

 

 

 

 

 

 

 

 

Electric residential

 

0.3

%

 

0.8

%

 

1.9

%

 

1.7

%

 

0.8

%

Electric commercial and industrial

 

0.7

 

 

(3.6

)

 

4.5

 

 

(0.6

)

 

 

Total retail electric sales

 

0.6

 

 

(2.4

)

 

3.9

 

 

 

 

0.2

 

Firm natural gas sales

 

5.3

 

 

4.8

 

 

N/A

 

(7.9

)

 

4.4

 

 

 

Six Months Ended June 30

 

 

PSCo

 

NSP-Minnesota

 

SPS

 

NSP-Wisconsin

 

Xcel Energy

Actual

 

 

 

 

 

 

 

 

 

 

Electric residential

 

(1.7

)%

 

(4.0

)%

 

(4.2

)%

 

(2.8

)%

 

(3.1

)%

Electric commercial and industrial

 

(0.4

)

 

(3.7

)

 

3.4

 

 

(2.4

)

 

(0.8

)

Total retail electric sales

 

(0.8

)

 

(3.8

)

 

1.9

 

 

(2.5

)

 

(1.5

)

Firm natural gas sales

 

17.1

 

 

5.7

 

 

N/A

 

(0.8

)

 

11.9

 

 

 

Six Months Ended June 30

 

 

PSCo

 

NSP-Minnesota

 

SPS

 

NSP-Wisconsin

 

Xcel Energy

Weather-normalized

 

 

 

 

 

 

 

 

 

 

Electric residential

 

0.3

%

 

0.5

%

 

2.8

%

 

0.9

%

 

0.8

%

Electric commercial and industrial

 

0.4

 

 

(2.5

)

 

4.6

 

 

(1.6

)

 

0.2

 

Total retail electric sales

 

0.4

 

 

(1.6

)

 

4.1

 

 

(0.9

)

 

0.4

 

Firm natural gas sales

 

4.7

 

 

1.1

 

 

N/A

 

(3.7

)

 

3.0

 

Weather-normalized Electric Sales Growth (Decline)

  • PSCo — Higher residential sales growth reflects customer additions, partially offset by lower use per customer. Commercial and industrial (C&I) growth was due to an increase in customers and higher use per customer, predominately from the fabricated metal and metal mining industries.
  • NSP-Minnesota — Higher residential sales growth reflects customer additions, partially offset by lower use per customer. Decline in C&I sales was due to lower use per customer (self-generation), which was partially offset by an increase in customers. Decreased sales to C&I customers were driven by the energy and manufacturing sectors.
  • SPS — Residential sales grew largely due to higher use per customer and customer additions. Higher C&I sales was primarily due to increased use per customer, driven by the oil and natural gas industry in the Permian Basin.
  • NSP-Wisconsin — Residential sales growth was primarily attributable to customer additions and higher use per customer. The decline in C&I sales was due to lower use per customer and decreased sales to the mining, manufacturing and food services sectors, partially offset by customer additions.

Weather-normalized Natural Gas Sales Growth

  • Natural gas sales reflect an increase in the number of customers combined with higher 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 generated in a particular period.

Electric revenues and margin:

 

 

Three Months Ended June 30

 

Six Months Ended June 30

(Millions of Dollars)

 

2019

 

2018

 

2019

 

2018

Electric revenues

 

$

2,249

 

 

$

2,348

 

 

$

4,574

 

 

$

4,617

 

Electric fuel and purchased power

 

(813

)

 

(935

)

 

(1,727

)

 

(1,867

)

Electric margin

 

$

1,436

 

 

$

1,413

 

 

$

2,847

 

 

$

2,750

 

Changes in electric margin:

Three Months

Six Months

Ended June 30,

Ended June 30,

(Millions of Dollars)

 

2019 vs. 2018

 

2019 vs. 2018

Non-fuel riders (a)

 

$

21

 

 

$

57

 

Regulatory rate outcomes (Minnesota, New Mexico, North and South Dakota)

 

19

 

 

47

 

Lower purchased capacity costs

 

9

 

 

15

 

Demand revenue

 

11

 

 

13

 

Implementation of lease accounting standard (offset in interest expense and amortization)

 

5

 

 

11

 

Wholesale transmission revenue (net)

 

3

 

 

11

 

Estimated impact of weather (net of Minnesota decoupling)

 

(40

)

 

(32

)

Timing of tax reform regulatory decisions (offset in income tax)

 

(6

)

 

(19

)

Other (net)

 

1

 

 

(6

)

Total increase in electric margin

 

$

23

 

 

$

97

 

(a) Includes approximately $20 million and $32 million, respectively, of additional PTC benefit (grossed-up for tax) as compared to the same periods in 2018, which are flowed back to customers.

Natural Gas Margin — 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 cost recovery mechanisms.

Natural gas revenues and margin:

 

 

Three Months Ended June 30

 

Six Months Ended June 30

(Millions of Dollars)

 

2019

 

2018

 

2019

 

2018

Natural gas revenues

 

$

308

 

 

$

292

 

 

$

1,102

 

 

$

954

 

Cost of natural gas sold and transported

 

(112

)

 

(104

)

 

(591

)

 

(479

)

Natural gas margin

 

$

196

 

 

$

188

 

 

$

511

 

 

$

475

 

Changes in natural gas margin:

Three Months

Six Months

Ended June 30,

Ended June 30,

(Millions of Dollars)

 

2019 vs. 2018

 

2019 vs. 2018

Retail rate increase (Colorado)

 

$

 

 

$

12

 

Estimated impact of weather

 

1

 

 

12

 

Infrastructure and integrity riders

 

2

 

 

7

 

Retail sales growth

 

2

 

 

4

 

Transport sales

 

1

 

 

3

 

Conservation revenue (offset by expenses)

 

(1

)

 

(3

)

Other (net)

 

3

 

 

1

 

Total increase in natural gas margin

 

$

8

 

 

$

36

 

O&M Expenses — O&M expenses increased $8 million, or 1.4%, for the second quarter of 2019 and $49 million, or 4.3%, year-to-date. Significant changes are summarized below:

Three Months

Six Months

Ended June 30,

Ended June 30,

(Millions of Dollars)

 

2019 vs. 2018

 

2019 vs. 2018

Distribution

 

$

4

 

 

$

23

 

Business systems

 

7

 

 

11

 

Gas operations

 

3

 

 

4

 

Plant generation

 

(4

)

 

3

 

Other (net)

 

(2

)

 

8

 

Total increase in O&M expenses

 

$

8

 

 

$

49

 

  • Distribution expenses were higher due to storms, labor and overtime;
  • Business systems costs were higher due to increased customer experience transformation program expenses; and
  • Natural gas operation expenses increased due to pipeline maintenance.

Depreciation and Amortization — Depreciation and amortization increased $62 million, or 16.4%, for the second quarter of 2019 and $112 million, or 14.7%, year-to-date. Increase was primarily driven by the Rush Creek wind project being placed in-service (recovered in riders), additional amortization of a prepaid pension asset in Colorado related to tax reform settlements (offset in income taxes) and other capital investments.

Taxes (Other than Income Taxes) — Taxes (other than income taxes) increased $5 million, or 3.6%, for the second quarter of 2019 and $10 million, or 3.5%, year-to-date. Increase was primarily due to higher property taxes in Colorado and Minnesota (net of deferred amounts).

AFUDC, Equity and Debt — AFUDC decreased $7 million for the second quarter of 2019 and $11 million year-to-date. Decrease was primarily due to the Rush Creek wind project being placed in-service in 2018, partially offset by the Hale wind project, which went into service in June 2019, and other capital investments.

Interest Charges — Interest charges increased $14 million, or 8.0%, for the second quarter of 2019 and $33 million, or 9.5%, year-to-date. Increase was primarily due to higher debt levels to fund capital investments, changes in short-term interest rates and implementation of lease accounting standard (offset in electric margin).

Contacts

Paul Johnson, (612) 215-4535

Vice President, Investor Relations

For news media inquiries only:

Xcel Energy Media Relations, (612) 215-5300

Xcel Energy internet address: www.xcelenergy.com

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Laurel McBride real estate agent with Century 21 N and N Realtors with homes for sale in Logan Utah