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Building the CoreBuilding the CoreExecuting the StrategyExecuting the Strategy
Lehman BrothersLehman BrothersCEO Energy/Power ConferenceCEO Energy/Power Conference
September 5 September 5 –– 7, 20067, 2006
This material includes forwardThis material includes forward--looking statements that are subject to certain looking statements that are subject to certain risks, uncertainties and assumptions. Such forwardrisks, uncertainties and assumptions. Such forward--looking statements looking statements include projected earnings, cash flows, capital expenditures aninclude projected earnings, cash flows, capital expenditures and other d other statements and are identified in this document by the words statements and are identified in this document by the words ““anticipate,anticipate,””““estimate,estimate,”” ““expect,expect,”” ““projected,projected,”” ““objective,objective,”” ““outlook,outlook,”” ““possible,possible,””““potentialpotential”” and similar expressions. Actual results may vary materially. and similar expressions. Actual results may vary materially. Factors that could cause actual results to differ materially incFactors that could cause actual results to differ materially include, but are lude, but are not limited to: general economic conditions, including the availnot limited to: general economic conditions, including the availability of ability of credit, actions of rating agencies and their impact on capital ecredit, actions of rating agencies and their impact on capital expenditures; xpenditures; business conditions in the energy industry; competitive factors;business conditions in the energy industry; competitive factors; unusual unusual weather; effects of geopolitical events, including war and acts weather; effects of geopolitical events, including war and acts of terrorism; of terrorism; changes in federal or state legislation; regulation; costs and ochanges in federal or state legislation; regulation; costs and other effects of ther effects of legal administrative proceedings, settlements, investigations anlegal administrative proceedings, settlements, investigations and claims d claims including litigation related to companyincluding litigation related to company--owned life insurance (COLI); actions owned life insurance (COLI); actions of accounting regulatory bodies; the higher degree of risk assocof accounting regulatory bodies; the higher degree of risk associated with iated with Xcel EnergyXcel Energy’’s nonregulated businesses compared with Xcel Energys nonregulated businesses compared with Xcel Energy’’s s regulated business; and other risk factors listed from time to tregulated business; and other risk factors listed from time to time by Xcel ime by Xcel Energy in reports filed with the SEC, including Exhibit 99.01 toEnergy in reports filed with the SEC, including Exhibit 99.01 to Xcel Xcel EnergyEnergy’’s report on Form 10s report on Form 10--K for year 2005.K for year 2005.
Safe HarborSafe Harbor
Building the CoreBuilding the CoreExecuting the StrategyExecuting the Strategy
Ben FowkeBen FowkeVice President and CFOVice President and CFO
September 5, 2006September 5, 2006
Northern States Northern States Power CompanyPower Company--
MinnesotaMinnesota44% Net Income 44% Net Income
Public Service Public Service Company of Company of
ColoradoColorado39% Net Income39% Net Income
Southwestern Southwestern Public ServicePublic Service
12% Net Income12% Net Income
Northern Northern States Power States Power
CompanyCompany--WisconsinWisconsin
5% Net Income5% Net Income
5th Largest Combination Electric and Gas Utility (based on customers)
5th Largest Combination Electric and Gas Utility (based on customers)
Traditional RegulationTraditional Regulation
2005 EPS $1.20 continuing operations2006 Dividend $0.89 annualized2005 EPS $1.20 continuing operations2006 Dividend $0.89 annualized
Attractive Total ReturnAttractive Total Return
EPS growth rate objective 5 – 7% per year *
Annual dividend growth objective 2 – 4% per year
Dividend yield ~ 4.3%
EPS growth rate objective 5 – 7% per year *
Annual dividend growth objective 2 – 4% per year
Dividend yield ~ ~ 4.3%
* Excluding any impact from corporate-owned life insurance (COLI)* Excluding any impact from corporate-owned life insurance (COLI)
0
7,000
14,000
21,000
28,000
2007 2009 2011 2013 2015
MWMW
Xcel Service Area Growth ContinuesXcel Service Area Growth Continues
Owned GenerationOwned Generation
SupplySupplyRequirementRequirementContracted PurchasesContracted Purchases
Xcel Energy and Wind PotentialXcel Energy and Wind Potential
Wind DensityWind DensityHighHigh
LowLowXcel EnergyXcel EnergyStates ServedStates Served
Source: National Renewable Energy LaboratorySource: National Renewable Energy Laboratory
Diverse, reliable supplyEnvironmentally responsibleFairly priced energy
Diverse, reliable supplyEnvironmentally responsibleFairly priced energy
Strategy: Building the CoreStrategy: Building the Core
Targeted investment to meet increasing customer needs:Targeted investment to meet increasing Targeted investment to meet increasing customer needs:customer needs:
Rate Base $10.8 B $13 B 4.5%Regulatory EquityCapitalization 52% 52 – 54% 0 to 1%Return on Equity 9.6% 10.5 to 11% 2.3 to 3.5%
Rate BaseRate Base $10.8 B$10.8 B $13 B$13 B 4.5%4.5%Regulatory EquityRegulatory EquityCapitalizationCapitalization 52%52% 52 52 –– 54%54% 0 to 1%0 to 1%Return on Equity Return on Equity 9.6%9.6% 10.5 to 11%10.5 to 11% 2.3 to 3.5%2.3 to 3.5%
Earnings Growth DriversEarnings Growth Drivers
AnnualAnnual20092009 GrowthGrowth
20052005 PotentialPotential RateRate
Investment Opportunities 2006 Investment Opportunities 2006 -- 20202020
MERPMERPComanche 3Comanche 3
CapX 2020 Group 1CapX 2020 Group 1Colorado IGCCColorado IGCC
MercuryMercuryCAIRCAIR
License Extension & Uprate:License Extension & Uprate:
Plant Repowering & Uprate Plant Repowering & Uprate New Generation/Gas StorageNew Generation/Gas StorageEnvironmental ImprovementsEnvironmental Improvements
CapX 2020 Group 2CapX 2020 Group 2CapX 2020 Group 3CapX 2020 Group 3
0606 0707 0808 0909 1010 1111 1212 1313 1414 1515 1616 1717 1818 1919 2020
$700$900
$60
$300$700
$100
$700
$30$4
MonticelloMonticelloPrairie IslandPrairie Island
CommittedEstimated CostPotential Investment
Incremental Investment DrivenIncremental Investment Drivenby Economic Signalsby Economic Signals
Customer needManaging costSupportive regulatory treatmentRisk-adjusted return
Customer needManaging costSupportive regulatory treatmentRisk-adjusted return
Increased customer and shareholder valueIncreased customer and shareholder value
Allocation of capital based on:Allocation of capital based on:
Engineering ~ 100% 60% 3%Equipment Purchase ~ 100% 70%Project Cost ~ 90% 76% 20%Construction 60% 25%Completion May May May
2007 2008 2009
EngineeringEngineering ~ 100%~ 100% 60%60% 3%3%Equipment PurchaseEquipment Purchase ~ 100%~ 100% 70%70%Project CostProject Cost ~ 90%~ 90% 76%76% 20%20%ConstructionConstruction 60%60% 25%25%CompletionCompletion MayMay MayMay MayMay
20072007 20082008 20092009
Metro Emissions Reduction Program StatusMetro Emissions Reduction Program Status
HighKing Bridge Riverside
HighHighKingKing BridgeBridge RiversideRiverside
Comanche 3 – 500 MW share of 750 MWsuper-critical pulverized coal plant
Comanche 1 & 2 – Upgrades to environmental systems
Comanche 3 Comanche 3 –– 500 MW share of 750 MW500 MW share of 750 MWsupersuper--critical pulverized coal plantcritical pulverized coal plant
Comanche 1 & 2 Comanche 1 & 2 –– Upgrades to environmental Upgrades to environmental systemssystems
Comanche ProjectComanche Project
Estimated Comanche 3 completion: 2009Estimated Comanche 3 completion: 2009
Engineering 30%Equipment Purchase 90%Project Cost 80%Construction 5%
Engineering 30%Equipment Purchase 90%Project Cost 80%Construction 5%
Percent Complete/Under ContractPercent Complete/Under Contract
Building the Core Building the Core —— TransmissionTransmissionCapX 2020: Collaborative EffortCapX 2020: Collaborative Effort
Three project groups to:Three project groups to:Maintain/improve reliabilitySupport new generationReduce constraints
Maintain/improve reliabilitySupport new generationReduce constraints
Group IIGroup IIGroup IIIGroup III South DakotaSouth Dakota
IowaIowa
MinnesotaMinnesota
WisconsinWisconsin
North DakotaNorth Dakota
Group IGroup I
CapX 2020 CapX 2020 —— 3 Project Groups3 Project Groups
Group I — In-service 2011 – 2012 Total CostSE Twin Cities-Rochester-LaCrosse WI / 345kV $1.3 BillionBemidji - Grand Rapids / 230 kVFargo - St. Cloud/Monticello area / 345 kV Xcel ShareBrookings - SE Twin Cities / 345 kV $700 Million
Group II — In-service 2012 – 2020 To be determinedNew 345 kV transmission loop around the Twin Cities
Group III — In-service 2014 – 2020 To be determinedAs needed and generation projects developed
Preliminary estimated total > $3 Billion
Group I — In-service 2011 – 2012 Total CostSE Twin Cities-Rochester-LaCrosse WI / 345kV $1.3 BillionBemidji - Grand Rapids / 230 kVFargo - St. Cloud/Monticello area / 345 kV Xcel ShareBrookings - SE Twin Cities / 345 kV $700 Million
Group II — In-service 2012 – 2020 To be determinedNew 345 kV transmission loop around the Twin Cities
Group III — In-service 2014 – 2020 To be determinedAs needed and generation projects developed
Preliminary estimated total > $3 Billion
Increasing Our Earned Return on EquityIncreasing Our Earned Return on Equity
Rate Cases with 2006 ImpactsRate Cases with 2006 ImpactsDollars in millionsDollars in millions
Colorado Gas $34.5 $22.0 11.0% 10.5%
Wisconsin Electric 53.1 43.4 11.9 11.0
Wisconsin Gas 7.8 3.9 11.9 11.0
Minnesota Electric * 154 131/115 ** 11.0 10.54
Colorado Gas $34.5 $22.0 11.0% 10.5%
Wisconsin Electric 53.1 43.4 11.9 11.0
Wisconsin Gas 7.8 3.9 11.9 11.0
Minnesota Electric * 154 131/115 ** 11.0 10.54
Dollar IncreaseDollar Increase Return on EquityReturn on EquityRequested GrantedRequested Granted Requested GrantedRequested Granted
* Pending final Commission order* Pending final Commission order** $131 for 2006 reduced to $115 in 2007** $131 for 2006 reduced to $115 in 2007
Colorado Electric Rate Case HighlightsColorado Electric Rate Case Highlights
Requested $210 million increase
Electric rate base = $3.4 billion
11% return on common equity
Equity ratio = 60%
Historical test year with adjustments for known and measurable
Final decision expected late 2006
Rates expected to be in effect early 2007
Requested $210 million increase
Electric rate base = $3.4 billion
11% return on common equity
Equity ratio = 60%
Historical test year with adjustments for known and measurable
Final decision expected late 2006
Rates expected to be in effect early 2007
Under earning: 8.5% ROE vs 10.75% Under earning: 8.5% ROE vs 10.75% $ 64$ 64Increase ROE to 11% and higherIncrease ROE to 11% and higher
equity ratio equity ratio 1717Comanche 3Comanche 3 2424DepreciationDepreciation 3333Wholesale contract expirationWholesale contract expiration 1414Employee related costsEmployee related costs 66OtherOther 2020
$178$178PCCA Impact & Amendment 37 RiderPCCA Impact & Amendment 37 Rider 3232Total requestedTotal requested $210$210
Dollars in millionsDollars in millions
Colorado Electric Rate Case DetailsColorado Electric Rate Case Details
PCCA &PCCA &BaseBase AmendAmend--RatesRates ment 37ment 37 TotalTotal
Increase requestedIncrease requested $ 178$ 178 $ 32$ 32 $210$210ROE 9.5% vs. 11%ROE 9.5% vs. 11% -- 4848Average Comanche rate baseAverage Comanche rate base -- 1313Wholesale contractsWholesale contracts -- 88Incentive compensationIncentive compensation -- 55WeatherWeather--normalizationnormalization -- 44OtherOther -- 99
TotalTotal $ 91$ 91 $ 32$ 32 $123$123
Earnings neutralEarnings neutralDepreciationDepreciation -- 2020 -- 2020
TotalTotal $ 71$ 71 $103 $103
Dollars in millionsDollars in millions
Colorado Electric Rate CaseColorado Electric Rate CaseStaff RecommendationStaff Recommendation
Colorado Electric Rate Case ScheduleColorado Electric Rate Case Schedule
Rebuttal testimony — September 29
Hearings — October 23 through November 9
Statement of positions — November 20
Deliberations — December 1
Initial decision — December 18
Rebuttal testimony — September 29
Hearings — October 23 through November 9
Statement of positions — November 20
Deliberations — December 1
Initial decision — December 18
Texas Electric Rate Case HighlightsTexas Electric Rate Case Highlights
Requested $48 million increase
Electric rate base = $943 million
11.6% return on common equity
Equity ratio = 51%
Historical test year with adjustments for known and measurable
Rates expected to be in effect 1st Quarter 2007
Requested $48 million increase
Electric rate base = $943 million
11.6% return on common equity
Equity ratio = 51%
Historical test year with adjustments for known and measurable
Rates expected to be in effect 1st Quarter 2007
Texas Electric Rate Case ScheduleTexas Electric Rate Case Schedule
Intervenor testimony — October 24 & 31
PUCT staff testimony — November 7
Hearings — November 28 through December 31
Decision date — March 2, 2007
Intervenor testimony — October 24 & 31
PUCT staff testimony — November 7
Hearings — November 28 through December 31
Decision date — March 2, 2007
Potential Additional Rate CasesPotential Additional Rate Caseswith 2007 Impactwith 2007 Impact
Colorado Gas Planned for 2006
Minnesota Gas Planned for 2006
North Dakota Electric Potential
New Mexico Electric Potential
South Dakota Electric Potential
Colorado Gas Planned for 2006
Minnesota Gas Planned for 2006
North Dakota Electric Potential
New Mexico Electric Potential
South Dakota Electric Potential
Des Moines
Des Moines
Des Moines
2005 Average Retail2005 Average RetailElectric Rate ComparisonElectric Rate Comparison
0
4
8
12
16
20
0
4
8
12
16
20Cents per kWhCents per kWhCents per kWh
Amarillo
Amarillo
Amarillo
Kansas City
Kansas City
Kansas CityDenver
Denver
Denver
Mpls/St. Paul
Mpls/St. Paul
Mpls/St. Paul
BostonBostonBoston
Chicago
Chicago
Chicago
Milwaukee
Milwaukee
Milwaukee
Phoenix
Phoenix
Phoenix
Salt Lake City
Salt Lake City
Salt Lake City
6.806.806.80
St. Louis
St. Louis
St. Louis
MiamiMiamiMiami
New York
New York
New York
Washington DC
Washington DC
Washington DC
5.975.975.977.347.347.34
Earnings Guidance RangeEarnings Guidance Range
Regulated utility $1.25 – $1.35Holding company
and other (0.10)COLI – tax benefit 0.10
Continuing operations $1.25 – $1.35
Regulated utility $1.25 – $1.35Holding company
and other (0.10)COLI – tax benefit 0.10
Continuing operations $1.25 – $1.35
20062006
Dollars per shareDollars per share
Financial Performance ObjectivesFinancial Performance Objectives
EPS growth rate target 5 EPS growth rate target 5 –– 7% per year 7% per year **
Annual dividend increases of 2 Annual dividend increases of 2 –– 4% per year4% per year
Deliver an attractive total returnDeliver an attractive total return
Credit ratingCredit rating—— Senior unsecured debt BBB+ to A rangeSenior unsecured debt BBB+ to A range
* Excluding any impact from COLI* Excluding any impact from COLI
AppendixAppendix
Senior Debt RatingsSenior Debt Ratings
Holding Co. BBB+ Baa1 BBB-NSPM A+ A2 A- A A3 BBB-NSPW A+ A2 A- A A3 BBB PSCo A- A3 A- BBB+ Baa1 BBB-SPS A- Baa1 BBB
Holding Co. BBB+ Baa1 BBB-NSPM A+ A2 A- A A3 BBB-NSPW A+ A2 A- A A3 BBB PSCo A- A3 A- BBB+ Baa1 BBB-SPS A- Baa1 BBB
Fitch Moody’s S&P Fitch Moody’s S&PFitch Moody’s S&P Fitch Moody’s S&PSecuredSecured UnsecuredUnsecured
CoalCoal 3636 8,1388,138Natural GasNatural Gas 6161 4,9184,918NuclearNuclear 33 1,6171,617HydroHydro 8383 508508OilOil 2424 492492RDFRDF 66 9696WindWind -- 2525TotalTotal 15,79415,794
2005 OwnedGenerating Facilities
2005 OwnedGenerating Facilities
Unit TypeUnit Type NumberNumber MWMW
* Xcel Energy supplies in * Xcel Energy supplies in excess of 1100 MWs of excess of 1100 MWs of wind powerwind power
**
Xcel Energy Supply SourcesXcel Energy Supply Sources
Nuclear10%
Nuclear10%
Coal **45%
Coal **45%
Gas & Oil38%
Gas & Oil38%
* Includes purchases** Low-sulfur western coal* Includes purchases** Low-sulfur western coal
Renewables7%
Renewables7%
2005Energy Supply Mix*
2005Energy Supply Mix*
Nuclear Relicensing StatusNuclear Relicensing Status
License renewal approvals expected 2006Life Cycle and power uprate modificationsto be installed 2008 – 2012
License renewal approvals expected 2006Life Cycle and power uprate modificationsto be installed 2008 – 2012
License renewal application— Submit to NRC and Minnesota PUC in 2008— Approvals expected mid 2010Unit 2 steam generator replacement expected 2013
License renewal application— Submit to NRC and Minnesota PUC in 2008— Approvals expected mid 2010Unit 2 steam generator replacement expected 2013
MonticelloMonticello
Prairie IslandPrairie Island
Minnesota Cost Recovery MechanismsMinnesota Cost Recovery MechanismsProjected electric fuel and purchased energy costs billed for the current month with subsequent true-up; MISO costs recovered through FCA on interim basis, with final recovery mechanismbeing developed by stakeholders
Projected purchased gas cost billed for the current month with subsequent true-up
Conservation Improvement Program rider which providesrecovery of program costs plus incentives
Metro Emission Reduction Program, Renewable Development Fund and State Energy Policy rider in place
General Transmission rider authorized by law
Mercury Reduction and Environmental Improvement rider authorized by law
Projected electric fuel and purchased energy costs billed for thProjected electric fuel and purchased energy costs billed for the e current month with subsequent truecurrent month with subsequent true--up; MISO costs recovered up; MISO costs recovered through FCA on interim basis, with final recovery mechanismthrough FCA on interim basis, with final recovery mechanismbeing developed by stakeholdersbeing developed by stakeholders
Projected purchased gas cost billed for the current month with Projected purchased gas cost billed for the current month with subsequent truesubsequent true--upup
Conservation Improvement Program rider which providesConservation Improvement Program rider which providesrecovery of program costs plus incentivesrecovery of program costs plus incentives
Metro Emission Reduction Program, Renewable Development Metro Emission Reduction Program, Renewable Development Fund and State Energy Policy rider in place Fund and State Energy Policy rider in place
General Transmission rider authorized by lawGeneral Transmission rider authorized by law
Mercury Reduction and Environmental Improvement rider Mercury Reduction and Environmental Improvement rider authorized by lawauthorized by law
Colorado Cost Recovery MechanismsColorado Cost Recovery MechanismsEnergy Cost Adjustment recovers electric fuel and purchased Energy Cost Adjustment recovers electric fuel and purchased energy costs (through 2006) energy costs (through 2006) –– Filed for new planFiled for new plan
Monthly Gas Cost Adjustment recovers natural gas commodity, Monthly Gas Cost Adjustment recovers natural gas commodity, interstate pipeline and storage costsinterstate pipeline and storage costs
Purchased Capacity Adjustment recovers the demand component Purchased Capacity Adjustment recovers the demand component of purchased power contracts (through 2006) of purchased power contracts (through 2006) –– Filed for new plan Filed for new plan
Fuel Cost Adjustment recovers electric fuel and purchased energyFuel Cost Adjustment recovers electric fuel and purchased energycosts from wholesale customerscosts from wholesale customers
DemandDemand--side Management Cost Adjustment rider (gas and side Management Cost Adjustment rider (gas and electric) and Air Quality Improvement rider (to recover cost of electric) and Air Quality Improvement rider (to recover cost of emissions controls on several Denver metro generation facilitiesemissions controls on several Denver metro generation facilities))
Recovery of Comanche 3 construction workRecovery of Comanche 3 construction work--inin--progress progress
Recovery of expenditures for renewable mandateRecovery of expenditures for renewable mandate
Rider recovery of IGCC investmentRider recovery of IGCC investment
2005 Rate Base and Returns2005 Rate Base and Returns
Colorado Electric $3,120 8.5%Colorado Gas 1,084 7.00Minnesota Electric 3,230 10.61 9.98%Minnesota Gas 422 6.30 7.42North Dakota Electric 175 12.46 12.65North Dakota Gas 42 5.71 6.81South Dakota Electric 191SPS Electric 1,422Wisconsin Electric 613Wisconsin Gas 83
Colorado Electric $3,120 8.5%Colorado Gas 1,084 7.00Minnesota Electric 3,230 10.61 9.98%Minnesota Gas 422 6.30 7.42North Dakota Electric 175 12.46 12.65North Dakota Gas 42 5.71 6.81South Dakota Electric 191SPS Electric 1,422Wisconsin Electric 613Wisconsin Gas 83
Rate Weather-Base Actual NormalizedRateRate WeatherWeather--BaseBase ActualActual NormalizedNormalized
** Reflects regulatory reporting requirementsReflects regulatory reporting requirements**** Electric and GasElectric and Gas
Return on Equity *Return on Equity *Return on Equity *
6.26 **6.26 **
Dollars in millionsDollars in millions
CorporateCorporate--Owned Life InsuranceOwned Life InsuranceLitigation (COLI)Litigation (COLI)
Positive pre-deduction cash flowsMortality gainsThe buildup of cash values
Positive prePositive pre--deduction cash flowsdeduction cash flowsMortality gainsMortality gainsThe buildup of cash valuesThe buildup of cash values
The courtThe court’’s opinion in the Dow case outlined three indicators s opinion in the Dow case outlined three indicators of potential economic benefits to be examined in a COLI case. of potential economic benefits to be examined in a COLI case.
In Xcel EnergyIn Xcel Energy’’s COLI case, the plans:s COLI case, the plans:Were projected to have sizeable preWere projected to have sizeable pre--deduction cash flows, deduction cash flows, based upon the relevant assumptions when purchasedbased upon the relevant assumptions when purchasedPresented the opportunity for mortality gains that were not Presented the opportunity for mortality gains that were not eliminated either retroactively or prospectivelyeliminated either retroactively or prospectivelyHad large cash value increases that were not encumbered Had large cash value increases that were not encumbered by loans during the first seven years of the policiesby loans during the first seven years of the policies
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