Xcel Energy Inc.

Overview Key strengths Key risks Rate-regulated, vertically integrated electric and natural gas utility operations. Financial measures below the midpoint of the benchmark range for the financial risk profile category. Regulatory and geographic diversity. High capital spending. Large customer base across eight states. Negative discretionary cash flow, indicating external funding needs. Low-cost, diversified generation portfolio. Operating cash flow with support from steady, ongoing cost recovery. In the eight jurisdictions in which Xcel Energy Inc. operates, most provide for forward test years, fuel-recovery mechanisms, and interim rates. Jurisdictions that allow for multiyear rate plans and credit-supportive cost recovery account for 80% of Xcel's EBITDA. Xcel serves about 5.5 million customers (3.5 million electric and 2 million gas) in eight states. The majority

...Regulatory diversity allows for timely recovery of operating costs. In the eight jurisdictions in which Xcel Energy Inc. operates, most provide for forward test years, fuel-recovery mechanisms, and interim rates. Jurisdictions that allow for multiyear rate plans and credit-supportive cost recovery account for 80% of Xcel's EBITDA. Xcel's large customer base helps mitigate economic fluctuations on cash flow. Xcel serves about 5.5 million customers (3.5 million electric and 2 million gas) in eight states. The majority of customers are residential and commercial, contributing to stable cash flows. A February 2021 winter storm affected Xcel and its subsidiaries' service territories, modestly weakening financial measures. During the storm, Xcel's subsidiaries incurred about $965 million in extra fuel costs from the extraordinary increases in natural gas and purchased power costs. Xcel has deferred these costs and proposes to recover the incremental costs over a period of two years to mitigate...

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