Executing The Operating Company PlansExecuting The Operating Company Plans
Paul Bonavia President – Utilities GroupPaul Bonavia President – Utilities Group
Regulators/Regulators/LegislatorsLegislators
Value toValue toCustomersCustomers
EnvironmentalEnvironmentalStewardshipStewardship
FinancialFinancialPerformancePerformance
Invest in Regulated Utility BusinessInvest in Regulated Utility Business
This material includes forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements include projected earnings, cash flows, capital expenditures and other statements and are identified in this document by the words “anticipate,”“estimate,” “expect,” “projected,” “objective,” “outlook,” “possible,”“potential” and similar expressions. Actual results may vary materially. Factors that could cause actual results to differ materially include, but are not limited to: general economic conditions, including the availability of credit, actions of rating agencies and their impact on capital expenditures; business conditions in the energy industry; competitive factors; unusual weather; effects of geopolitical events, including war and acts of terrorism; changes in federal or state legislation; regulation; final approval and implementation of the pending settlement of the securities, ERISA and derivative litigation; costs and other effects of legal administrative proceedings, settlements, investigations and claims including litigation related to company-owned life insurance (COLI); actions of accounting regulatory bodies; risks associated with the California power market; the higher degree of risk associated with Xcel Energy’s nonregulated businesses compared with Xcel Energy’s regulated business; and other risk factors listed from time to time by Xcel Energy in reports filed with the SEC, including Exhibit 99.01 to Xcel Energy’s report on Form 10-K for year 2004.
This material includes forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements include projected earnings, cash flows, capital expenditures and other statements and are identified in this document by the words “anticipate,”“estimate,” “expect,” “projected,” “objective,” “outlook,” “possible,”“potential” and similar expressions. Actual results may vary materially. Factors that could cause actual results to differ materially include, but are not limited to: general economic conditions, including the availability of credit, actions of rating agencies and their impact on capital expenditures; business conditions in the energy industry; competitive factors; unusual weather; effects of geopolitical events, including war and acts of terrorism; changes in federal or state legislation; regulation; final approval and implementation of the pending settlement of the securities, ERISA and derivative litigation; costs and other effects of legal administrative proceedings, settlements, investigations and claims including litigation related to company-owned life insurance (COLI); actions of accounting regulatory bodies; risks associated with the California power market; the higher degree of risk associated with Xcel Energy’s nonregulated businesses compared with Xcel Energy’s regulated business; and other risk factors listed from time to time by Xcel Energy in reports filed with the SEC, including Exhibit 99.01 to Xcel Energy’s report on Form 10-K for year 2004.
Safe HarborSafe Harbor
Southwestern Southwestern Public Public
Service Service CompanyCompany
SPSSPS
Northern Northern States Power States Power
WisconsinWisconsinNSP (W)NSP (W)
Northern Northern States Power States Power
MinnesotaMinnesotaNSP (M)NSP (M)
Public Public Service Service
Company of Company of Colorado Colorado
PSCoPSCo
Xcel EnergyXcel EnergyUtilities GroupUtilities Group
Operating CompaniesOperating Companies
Northern States Power Northern States Power –– MinnesotaMinnesota
2004 CustomersElectric 1,352,244Gas 453,982
2004 CustomersElectric 1,352,244Gas 453,982
MinnesotaMinnesotaNorth DakotaNorth Dakota
South DakotaSouth Dakota
Minneapolis/ St. Paul
Unemployment rate –September 2005
US 4.8%NSP (M) 3.5%
Job growth – 2006 ForecastNSP (M) 1.3%
Xcel annual sales growth –2005 – 2009
Electric 1.7%Gas 1.5%
Unemployment rate –September 2005
US 4.8%NSP (M) 3.5%
Job growth – 2006 ForecastNSP (M) 1.3%
Xcel annual sales growth –2005 – 2009
Electric 1.7%Gas 1.5%
Strong Regional Economy
Strong Regional Economy
Northern States Power Northern States Power –– Minnesota Minnesota Future Power Requirements Future Power Requirements
02468
10121416
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Non-Nuclear Owned NuclearLong-Term Purchases Short-Term Purchases
MWs in thousandsMWs in thousands
Load Obligation Load Obligation @ 15% Reserve@ 15% Reserve
Load & ResourcesLoad & Resources
Northern States Power Northern States Power –– Minnesota Minnesota Resource PlanResource Plan
1,805 MW incremental non-renewableresource need by 2015560 MW incremental renewable resourceneed by 2015780 MW previously mandated renewableresources in progressNuclear plant relicensingCapX transmission bill
1,805 MW incremental non-renewableresource need by 2015560 MW incremental renewable resourceneed by 2015780 MW previously mandated renewableresources in progressNuclear plant relicensingCapX transmission bill
Northern States Power Northern States Power –– Minnesota Minnesota Customer RelationsCustomer Relations
Top quartile reliabilityTop quartile customer satisfactionPublic support for environmental initiativesFuel cost mitigation plan
Top quartile reliabilityTop quartile customer satisfactionPublic support for environmental initiativesFuel cost mitigation plan
Northern States Power Northern States Power –– Minnesota Minnesota Regulatory ClimateRegulatory Climate
Multiple electric rate casesMinnesota and North Dakota gas rate cases in 2005Multiple cost recovery ridersConservation incentive plan and MERP allow premium returns
Multiple electric rate casesMinnesota and North Dakota gas rate cases in 2005Multiple cost recovery ridersConservation incentive plan and MERP allow premium returns
Northern States Power Northern States Power –– Minnesota Minnesota PrioritiesPriorities
Sustain strong operating performanceExecute rate casesAdvocate environmental and cost recovery policy initiativesIncrease capital and O&M flexibility
Sustain strong operating performanceExecute rate casesAdvocate environmental and cost recovery policy initiativesIncrease capital and O&M flexibility
WisconsinWisconsin
Upper MichiganUpper Michigan
Northern States Power Northern States Power –– WisconsinWisconsin
Unemployment rate –September 2005
US 4.8%NSP (W) 3.5%
Job growth – 2006 ForecastNSP (W) 1.3%
Xcel annual sales growth –2005 – 2009
Electric 1.6%Gas 1.2%
Unemployment rate –September 2005
US 4.8%NSP (W) 3.5%
Job growth – 2006 ForecastNSP (W) 1.3%
Xcel annual sales growth –2005 – 2009
Electric 1.6%Gas 1.2%
2004 CustomersElectric 240,035Gas 97,463
2004 CustomersElectric 240,035Gas 97,463
Strong Regional Economy
Strong Regional Economy
Northern States Power Northern States Power –– Wisconsin Wisconsin ProfileProfile
Resource planning and energy supply coordinated with Northern States Power Minnesota through Interchange AgreementLowest retail rates in WisconsinRate case every two yearsBest Xcel Energy delivery system performanceBest Xcel Energy financial performance
Resource planning and energy supply coordinated with Northern States Power Minnesota through Interchange AgreementLowest retail rates in WisconsinRate case every two yearsBest Xcel Energy delivery system performanceBest Xcel Energy financial performance
Northern States Power Northern States Power –– Wisconsin Wisconsin PrioritiesPriorities
Keep it up Execute rate casesAdvance environmental initiatives
Keep it up Execute rate casesAdvance environmental initiatives
ColoradoColorado
Public Service Company of ColoradoPublic Service Company of Colorado
2004 CustomersElectric 1,294,849Gas 1,209,297
2004 CustomersElectric 1,294,849Gas 1,209,297
Unemployment rate –September 2005
US 4.8%PSCo 4.8%
Job growth – 2006 ForecastPSCo 2.0%
Xcel annual sales growth –2005 – 2009
Electric 1.9%Gas 1.5%
Unemployment rate –September 2005
US 4.8%PSCo 4.8%
Job growth – 2006 ForecastPSCo 2.0%
Xcel annual sales growth –2005 – 2009
Electric 1.9%Gas 1.5%
Solid Regional Economy
Solid Regional Economy
0123456789
2006 2007 2008 2009 2010 2011 2012 2013
Owned Purchases Reserve Sharing Comanche 3
MWs in thousandsMWs in thousandsLoad Obligation @ 16% ReserveLoad Obligation @ 16% Reserve
Load & ResourcesLoad & Resources
Public Service Company of Colorado Public Service Company of Colorado Future Power RequirementsFuture Power Requirements
2,600 MW by 2013Comanche coal plant project320 MW demand side management by 2013Renewable portfolio standard2007 solar mandateIGCC legislation
2,600 MW by 2013Comanche coal plant project320 MW demand side management by 2013Renewable portfolio standard2007 solar mandateIGCC legislation
Public Service Company of Colorado Public Service Company of Colorado Resource PlanResource Plan
High exposure to natural gas volatilityQuality of Service Plan reformCustomer satisfaction trails other operating companiesMajor franchise renewalsFuel cost mitigation plan
High exposure to natural gas volatilityQuality of Service Plan reformCustomer satisfaction trails other operating companiesMajor franchise renewalsFuel cost mitigation plan
Public Service Company of Colorado Public Service Company of Colorado Customer RelationsCustomer Relations
2005 gas rate case2006 electric rate caseMultiple cost recovery clauses expire 12-31-06
2005 gas rate case2006 electric rate caseMultiple cost recovery clauses expire 12-31-06
Public Service Company of Colorado Public Service Company of Colorado RatesRates
Improve customer satisfactionContinue reliability initiativesPrepare 2006 electric rate caseConclude least-cost resource planIncrease capital and O&M flexibility
Improve customer satisfactionContinue reliability initiativesPrepare 2006 electric rate caseConclude least-cost resource planIncrease capital and O&M flexibility
Public Service Company of Colorado Public Service Company of Colorado PrioritiesPriorities
Unemployment rate –September 2005
US 4.8%SPS 4.2%
Job growth – 2006 ForecastSPS 1.4%
Xcel annual sales growth –2005 – 2009
Electric 2.1%
Unemployment rate –September 2005
US 4.8%SPS 4.2%
Job growth – 2006 ForecastSPS 1.4%
Xcel annual sales growth –2005 – 2009
Electric 2.1%
Southwestern Public ServiceSouthwestern Public Service
TexasTexas
New MexicoNew Mexico
2004 CustomersElectric 394,8792004 Customers
Electric 394,879
Strong Regional Economy
Strong Regional Economy
Note: Sale pending on Kansasand Oklahoma properties
Note: Sale pending on Kansasand Oklahoma properties
012345678
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Owned Long-Term Purchases Short-Term Purchases
MWs in thousandsMWs in thousands
Load Obligation Load Obligation @ 12% Reserve@ 12% Reserve
Load & ResourcesLoad & Resources
Southwestern Public ServiceSouthwestern Public ServiceFuture Power RequirementsFuture Power Requirements
Southwestern Public ServiceSouthwestern Public ServiceResource PlanResource Plan
Long system is now shortTwo low-cost coal plants plus gas-fired steam plantsNew environmental mandatesTransmission and renewable energy investment opportunities
Long system is now shortTwo low-cost coal plants plus gas-fired steam plantsNew environmental mandatesTransmission and renewable energy investment opportunities
Gain support for resource plan and cost recoveryPrepare 2006 rate caseImprove large customer relations
Gain support for resource plan and cost recoveryPrepare 2006 rate caseImprove large customer relations
Southwestern Public ServiceSouthwestern Public ServicePrioritiesPriorities
Three Core ProcessesThree Core Processes
Executing the Operating Company PlanExecuting the Operating Company Plan
PeoplePeople
OperationsOperationsStrategyStrategy
CustomersCustomers
RegulationRegulationPortfolioPortfolio
StrategyStrategy
NSP (M)NSP (M)
Operating plans translate strategy into specific Operating plans translate strategy into specific goals, actions, milestones and accountabilitiesgoals, actions, milestones and accountabilities
OperationsOperations
NSP (W)NSP (W) PSCoPSCo SPSSPS
Xcel EnergyXcel Energy
ExecutingExecutingThe Operating Company PlansThe Operating Company Plans
Make building generation, purchasing power and conservation financially equivalent
Enables better decisions by considering all costs and benefitsCompensates utility shareholders for lost margins and imputed debt
Resource plan decisions, rate proposalsand legislation
Comanche 3 settlementMinnesota rate case financial equivalency proposalTransmission ridersManage to authorized returns
Make building generation, purchasing power and conservation financially equivalent
Enables better decisions by considering all costs and benefitsCompensates utility shareholders for lost margins and imputed debt
Resource plan decisions, rate proposalsand legislation
Comanche 3 settlementMinnesota rate case financial equivalency proposalTransmission ridersManage to authorized returns
StrategyStrategy
ExecutionExecution
Strategy: Optimize Reliability / Cost Strategy: Optimize Reliability / Cost BalanceBalance
Top Quartile Satisfaction* is Financially Prudent Top Quartile Satisfaction* is Financially Prudent
141139138136
116116115115124124124123
020406080
100120140160
2000 2001 2002 2003First Decile Satisfaction First Quartile SatisfactionBelow Average Satisfaction
* JD Power Survey** Distribution O&M per retail customer plus customer care (FERC 901-916) less
customer assistance (908) per retail customer
GoodCost per Customer** (Dollars) by Customer SatisfactionCost per Customer** (Dollars) by Customer Satisfaction
Capital Investment per New CustomerCapital Investment per New Customer
2003 2004 Oct YTD '05
GasGasElectricElectric
1,5911,591GoodDollarsDollars
1,5711,5711,4271,427
1,1961,1961,2141,214 1,1731,173
Improving Large Customer* SatisfactionImproving Large Customer* Satisfaction
2003 2004 2005
5555
73738282
Percentile rank Percentile rank –– TQS survey results TQS survey results
Good
* 6,100 customers surveyed served by 60 utilities* 6,100 customers surveyed served by 60 utilities
Xcel Energy Utilities GroupXcel Energy Utilities Group
NSP (M)NSP (M) NSP (W)NSP (W) PSCoPSCo SPSSPS
TransmissionTransmissionExternal External AffairsAffairs
Resource Resource PortfolioPortfolio
Asset Asset ManagementManagement MarketingMarketing
People People –– Right People in Right Jobs Right People in Right Jobs
NSP (W)NSP (W)President & CEOPresident & CEO
Mike SwensonMike Swenson
PSCoPSCoPresident & CEOPresident & CEO
Pat VincentPat Vincent
SPSSPSPresident & CEOPresident & CEO
Gary GibsonGary Gibson
Paul BonaviaPaul BonaviaPresident President –– Utilities GroupUtilities Group
NSP (M)NSP (M)President & CEOPresident & CEO
Cyndi LesherCyndi Lesher
Executing The Operating Company PlansExecuting The Operating Company Plans
Regulators/Regulators/LegislatorsLegislators
Value toValue toCustomersCustomers
EnvironmentalEnvironmentalStewardshipStewardship
FinancialFinancialPerformancePerformance
Invest in Regulated Utility BusinessInvest in Regulated Utility Business