XEL_0806

Building the CoreExecuting the Strategy

Midwest Investor MeetingsAugust 9 – 10, 2006 Xcel Energy Inc.

414 Nicollet MallMinneapolis, Minnesota 55401www.xcelenergy.com

®

This material includes forwardThis material includes forward--looking statements that are subject to looking statements that are subject to certain risks, uncertainties and assumptions. Such forwardcertain risks, uncertainties and assumptions. Such forward--looking looking statements include projected earnings, cash flows, statements include projected earnings, cash flows, capital expenditures capital expenditures and other statements and are identified in this document by the and other statements and are identified in this document by the words words ““anticipate,anticipate,”” ““estimate,estimate,”” ““expect,expect,”” ““projected,projected,”” ““objective,objective,”” ““outlook,outlook,””““possible,possible,”” ““potentialpotential”” and similar expressions. Actual results may vary and similar expressions. Actual results may vary materially. Factors that could cause actual results to differ mmaterially. Factors that could cause actual results to differ materially aterially include, but are not limited to: general economic conditions, ininclude, but are not limited to: general economic conditions, including the cluding the availability of credit, actions of rating agencies and their impavailability of credit, actions of rating agencies and their impact on capital act on capital expenditures; business conditions in the energy industry; competexpenditures; business conditions in the energy industry; competitive itive factors; unusual weather; effects of geopolitical events, includfactors; unusual weather; effects of geopolitical events, including war and ing war and acts of terrorism; changes in federal or state legislation; reguacts of terrorism; changes in federal or state legislation; regulation; costs lation; costs and other effects of legal administrative proceedings, settlemenand other effects of legal administrative proceedings, settlements, ts, investigations and claims including litigation related to companinvestigations and claims including litigation related to companyy--owned owned life insurance (COLI); actions of accounting regulatory bodies; life insurance (COLI); actions of accounting regulatory bodies; the higher the higher degree of risk associated with Xcel Energydegree of risk associated with Xcel Energy’’ss nonregulatednonregulated businesses businesses compared with Xcel Energycompared with Xcel Energy’’s regulated business; and other risk factors s regulated business; and other risk factors listed from time to time by Xcel Energy in reports filed with thlisted from time to time by Xcel Energy in reports filed with the SEC, e SEC, including Exhibit 99.01 to Xcel Energyincluding Exhibit 99.01 to Xcel Energy’’s report on Form 10s report on Form 10--K for year 2005.K for year 2005.

Safe HarborSafe Harbor

5th Largest Combination Electric and Gas Utility (based on customers)

5th Largest Combination Electric and Gas Utility (based on customers)

Gas Customers 1.8 millionElectric Customers 3.3 millionGas Customers 1.8 millionElectric Customers 3.3 million

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

2005 Earnings Available: $509 Million2005 Earnings Available: $509 Million

Regulatory and Legislative PolicyRegulatory and Legislative Policy

Invest in fully regulated utility assets AND

Increase our earned return on equity

Invest in fully regulated utility assets AND

Increase our earned return on equity

Strategy: Building the CoreStrategy: Building the Core

Financial ResultsFinancial Results

Regulatory RecoveryRegulatory Recovery

Investing in the CoreInvesting in the Core

Attractive Total Return withAttractive Total Return withLowLow--Risk StrategyRisk Strategy

EPS growth rate objective 5 – 7% per year*2005 – 2009

Annual dividend growth objective 2 – 4% per year

Dividend yield 4.5%

EPS growth rate objective 5 – 7% per year*2005 – 2009

Annual dividend growth objective 2 – 4% per year

Dividend yield 4.5%

* Excluding any impact from Corporate Owned Life Insurance* Excluding any impact from Corporate Owned Life Insurance

Getting the Rules RightGetting the Rules Right

Minnesota transmission legislation for renewables 2001

MERP legislation 2001

Comanche 3 regulatory framework 2004

Transmission investment recovery legislation— Minnesota 2005— Texas 2005— South Dakota 2006

Rider recovery of environmental investments including Minnesota 90% mercury reduction target

Minnesota transmission legislation for renewables Minnesota transmission legislation for renewables 20012001

MERP legislation 2001MERP legislation 2001

Comanche 3 regulatory framework 2004Comanche 3 regulatory framework 2004

Transmission investment recovery legislationTransmission investment recovery legislation—— Minnesota 2005Minnesota 2005—— Texas 2005Texas 2005—— South Dakota 2006South Dakota 2006

Rider recovery of environmental investments Rider recovery of environmental investments including Minnesota 90% mercury reduction targetincluding Minnesota 90% mercury reduction target

AchievedAchieved

Getting the Rules RightGetting the Rules Right

Rider recovery of Colorado capacity costs – proposedFlow through recovery of SPS Texas capacitycosts – rule making proceedingReduce exposure to trading and marketing margin volatility – Minnesota electric case

Rider recovery of Colorado capacity costs – proposedFlow through recovery of SPS Texas capacitycosts – rule making proceedingReduce exposure to trading and marketing margin volatility – Minnesota electric case

In ProcessIn ProcessIn ProcessIn Process

Future InitiativesFuture Initiatives

Forward test year in all jurisdictionsForward test year in all jurisdictions

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

Defined with Further Study, Defined with Further Study, Dependent on Future Need:Dependent on Future Need: 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 CostS.E. Twin Cities-Rochester-LaCrosse WI / 345kV $1.3 BillionBemidji-Grand Rapids / 230 kVFargo-St. Cloud/Monticello area / 345 kV Xcel ShareBrookings, S.D. - SE Twin Cities / 345 kV $700 Million

Group II — In-service 2014 – 2020New 345 kV transmission loop around the Twin Cities

Group III — In-service 2012 – 2020As needed and generation projects developed

Preliminary Estimated Total > $3 Billion

Group I — In-service 2011 – 2012 Total CostS.E. Twin Cities-Rochester-LaCrosse WI / 345kV $1.3 BillionBemidji-Grand Rapids / 230 kVFargo-St. Cloud/Monticello area / 345 kV Xcel ShareBrookings, S.D. - SE Twin Cities / 345 kV $700 Million

Group II — In-service 2014 – 2020New 345 kV transmission loop around the Twin Cities

Group III — In-service 2012 – 2020As needed and generation projects developed

Preliminary Estimated Total > $3 Billion

Xcel Energy Investment PipelineXcel Energy Investment Pipeline

Core CapExCore CapEx

MERPMERP

Comanche 3Comanche 3

Group 1Group 1

Group 2Group 2

Group 3Group 3

20062006 20072007 20082008 20092009 20102010 20112011 20122012 20202020

Approx. $1 Billion per YearApprox. $1 Billion per Year

$1 Billion Total$1 Billion Total

$1 Billion Total$1 Billion Total

$700 Million Total$700 Million TotalCapX 2020:CapX 2020:

Evaluation of InvestmentsEvaluation of Investments

Significant investment opportunities beyond forecast

Allocation of capital based on:— Customer need— Supportive regulatory treatment— Risk-adjusted return

Incremental investment driven by economic signals

Significant investment opportunities beyond forecast

Allocation of capital based on:— Customer need— Supportive regulatory treatment— Risk-adjusted return

Incremental investment driven by economic signals

Increased customer and shareholder valueIncreased customer and shareholder value

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

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

Dollar IncreaseDollar Increase Return on EquityReturn on EquityRequested GrantedRequested Granted Requested GrantedRequested Granted

Minnesota Electric Rate Case HighlightsMinnesota Electric Rate Case Highlights

Requested $156 million increase

Interim rates effective January 2006,subject to refund

Electric rate base = $3.2 billion

11% return on common equity

Equity ratio = 52%

Forecast test year


Interim rates effective January 2006,subject to refund



Equity ratio = 52%

Forecast test year

Minnesota Electric Rate CaseMinnesota Electric Rate CaseALJ RecommendationALJ Recommendation

$135 million increase 2006 –reduced to $119 million increase 2007

10.65% return on common equity

Commission deliberation August 2006

Written order September 2006

$135 million increase 2006 –reduced to $119 million increase 2007


Commission deliberation August 2006

Written order September 2006

Colorado Electric Rate Case HighlightsColorado Electric Rate Case Highlights




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




Equity ratio = 60%


Final decision expected late 2006

Rates expected to be in effect early 2007

Colorado Electric Rate ScheduleColorado Electric Rate Schedule

Intervenor testimony — August 18

Rebuttle testimony — September 29

Hearings — October 23 through November 9

Statement of positions — November 20

Deliberations — December 1

Initial decision — December 18

Intervenor testimony — August 18

Rebuttle 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


Electric rate base = $943 million


Equity ratio = 51%


Rates expected to be in effect 1st Quarter 2007


Electric rate base = $943 million


Equity ratio = 51%


Rates expected to be in effect 1st Quarter 2007

Potential Additional Rate CasesPotential Additional Rate Caseswith 2007 Impactwith 2007 Impact

Colorado Gas File 2006

Minnesota Gas File 2006

North Dakota Electric Potential

New Mexico Electric Potential

South Dakota Electric Potential

Colorado Gas File 2006

Minnesota Gas File 2006

North Dakota Electric Potential

New Mexico Electric Potential

South Dakota Electric Potential

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 2005 EPS growth rate 2005 –– 20092009—— Target 5 Target 5 –– 7% per year7% per year**

Annual dividend increases of 2 Annual dividend increases of 2 –– 4% per year4% per year

Deliver an attractive total return with low riskDeliver an attractive total return with low risk

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

Des Moines

Des Moines

Des Moines

2005 Average RetailElectric Rate Comparison2005 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

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

Minnesota PUC, legislative and NRC approvals expected 2006 – 2007Life Cycle modifications to be installed 2008 – 2012, projected capital cost of $150 – 200 million

Minnesota PUC, legislative and NRC approvals expected 2006 – 2007Life Cycle modifications to be installed 2008 – 2012, projected capital cost of $150 – 200 million

Begin license application to the NRC and Minnesota Legislature in 2008Life Cycle modifications under evaluationApprovals expected 2010 – 2011

Begin license application to the NRC and Minnesota Legislature in 2008Life Cycle modifications under evaluationApprovals expected 2010 – 2011

MonticelloMonticello

Prairie IslandPrairie Island

Owned Generation (GWh)Owned Generation (GWh)Owned Generation (GWh)Pounds per MWhPounds per MWhPounds per MWh

1997 1999 2001 2003 2005 2007 20090

1

2

3

4

5

6

00

60,00060,000

80,00080,000

100,000100,000

Nitrogen Oxide emissionsNitrogen Oxide emissionsNitrogen Oxide emissionsSulfur Dioxide emissionsSulfur Dioxide emissionsSulfur Dioxide emissions

Owned generation (GWh)Owned generation (GWh)Owned generation (GWh)

Xcel Energy Xcel Energy –– An Environmental LeaderAn Environmental Leader

Capital Expenditures 2006 Capital Expenditures 2006 —— 20092009

Electric Distribution24%

Electric Distribution24%

Generation40%

Generation40%

Gas9%Gas9%

Common9%

Common9%

Nuclear Fuel4%

Nuclear Fuel4%

Electric Transmission14%

Electric Transmission14%

Convert two in-city coal plants to natural gas & refurbish a third in-city coal plant

Improves environment

Cash return on investmentbegan January 2006

Target ROE 10.86% withincentive sliding scale9.97 to 11.46%

Equity ratio 48.5%

Convert two in-city coal plants to natural gas & refurbish a third in-city coal plant

Improves environment

Cash return on investmentbegan January 2006

Target ROE 10.86% withincentive sliding scale9.97 to 11.46%

Equity ratio 48.5%

Minnesota Metro EmissionsMinnesota Metro EmissionsReduction Program (MERP) $1 BillionReduction Program (MERP) $1 Billion

SOSO22 NOxNOx MercuryMercury ParticulateParticulate COCO22

93%93% 91%91% 78%78% 55%55% 21%21%

18 Months 18 Months –– application to application to constructionconstruction

Major contracts signed for Major contracts signed for turbine generator, boiler andturbine generator, boiler andair quality control system air quality control system ––within budget within budget

Began construction inBegan construction inOctober 2005. Major October 2005. Major contractors start May 2006contractors start May 2006

Construction completed fall Construction completed fall 2009 2009

New unitNew unit $1.1 B$1.1 BTransmissionTransmission $150 M$150 MRetrofit 1 & 2Retrofit 1 & 2 $127 M$127 M

Comanche 3 Comanche 3 —— 750 MW Coal Station750 MW Coal Station

Artist RenderingArtist Rendering

Minnesota Cost Recovery MechanismsMinnesota Cost Recovery Mechanisms

Projected 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

Emission Reduction Program, Renewable Development Fund,and State Energy Policy rider in place,

Renewable Transmission rider in place; General Transmissionrider authorized by law

Mercury Reduction and Environmental Improvement rider authorized by law

Projected 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

Emission Reduction Program, Renewable Development Fund,and State Energy Policy rider in place,

Renewable Transmission rider in place; General Transmissionrider authorized by law

Mercury Reduction and Environmental Improvement rider authorized by law

Minnesota Electric Case Minnesota Electric Case ——Partial Settlement of Trading MarginPartial Settlement of Trading Margin

No credit to base rates for wholesale electric margins

Margins to be flowed through fuel clause include:— 100% wholesale electric margins from excess

generation capacity— 80% of wholesale margins from ancillary

services sales— 25% of margins not arising from use of

NSP-Minnesota generating assets

No credit to base rates for wholesale electric No credit to base rates for wholesale electric marginsmargins

Margins to be flowed through fuel clause include:Margins to be flowed through fuel clause include:—— 100% wholesale electric margins from excess 100% wholesale electric margins from excess

generation capacitygeneration capacity—— 80% of wholesale margins from ancillary 80% of wholesale margins from ancillary

services salesservices sales—— 25% of margins not arising from use of25% of margins not arising from use of

NSPNSP--Minnesota generating assetsMinnesota generating assets

Colorado Cost Recovery MechanismsColorado Cost Recovery Mechanisms

Energy Cost Adjustment recovers electric fuel and purchased Energy Cost Adjustment recovers electric fuel and purchased energy costs for retail load with a maximum gain or loss of energy costs for retail load with a maximum gain or loss of $11.25 million$11.25 millionMonthly Gas Cost Adjustment recovers the cost of the natural Monthly Gas Cost Adjustment recovers the cost of the natural gas commodity, interstate pipeline and storage costs on a dollargas commodity, interstate pipeline and storage costs on a dollar--forfor--dollar basisdollar basisPurchased Capacity Adjustment recovers the demand Purchased Capacity Adjustment recovers the demand component of purchased power contracts (through 2006)component of purchased power contracts (through 2006)Fuel Cost Adjustment recovers 100% of electric fuel and Fuel Cost Adjustment recovers 100% of electric fuel and purchased energy costs for wholesale customerspurchased energy costs for wholesale customersDemandDemand--side Management Cost Adjustment rider (gas and side Management Cost Adjustment rider (gas and electric) Air Quality Improvement rider (to recover cost of electric) Air Quality Improvement rider (to recover cost of emissions controls on several Denver metro generation facilitiesemissions controls on several Denver metro generation facilities))

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

2005 Jurisdictional Returns2005 Jurisdictional 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 176 12.46 12.65North Dakota Gas 42 5.71 6.81Wisconsin 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 176 12.46 12.65North Dakota Gas 42 5.71 6.81Wisconsin Electric 613Wisconsin Gas 83

Rate Weather-Base* Actual NormalizedRateRate WeatherWeather--

Base*Base* ActualActual NormalizedNormalized

** Dollars in millionsDollars in millions**** 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***

Rate Base $10.9 B $13 B 4.5%Regulatory EquityCapitalization 52% 52 – 54% 0 to 1%Earned Return onUtility Rate Base Equity 9.5% 10.5 to 11% 2.5 to 3.5%

Rate BaseRate Base $10.9 B$10.9 B $13 B$13 B 4.5%4.5%Regulatory EquityRegulatory EquityCapitalizationCapitalization 52%52% 52 52 –– 54%54% 0 to 1%0 to 1%Earned Return onEarned Return onUtility Rate Base EquityUtility Rate Base Equity 9.5%9.5% 10.5 to 11%10.5 to 11% 2.5 to 3.5%2.5 to 3.5%

Earnings Growth DriversEarnings Growth Drivers

Annual2009 Growth

2005* Potential Rate

AnnualAnnual20092009 GrowthGrowth

2005*2005* PotentialPotential RateRate

** Estimated regulatory resultsEstimated regulatory results

Corporate Owned Life InsuranceCorporate Owned 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

Economy & Finance

XEL_0806