ExecutingPlan
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Transcript of ExecutingPlan
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New York Investor MeetingNew York Investor MeetingNovember 29, 2005November 29, 2005
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New York Investor MeetingNew York Investor MeetingNovember 29, 2005November 29, 2005
Northern States Power Northern States Power Company Company -- WisconsinWisconsin
Northern States Power Northern States Power Company Company -- MinnesotaMinnesota
Public Service Public Service Company of ColoradoCompany of Colorado
Southwestern Public ServiceSouthwestern Public Service
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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
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Achievingthe PotentialAchievingthe Potential
Executing the PlanExecuting the Plan
Dick KellyPresident and Chief Executive Officer
Dick KellyPresident and Chief Executive Officer
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Invest in utility assets AND
Earn our allowed return on equity
Invest in utility assets AND
Earn our allowed return on equity
Strategy Strategy —— Building the CoreBuilding the Core
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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 increasesAnnual dividend increases—— Consistent with dividend growthConsistent with dividend growth
objective of 2 objective of 2 –– 4% per year4% per year
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
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Value toValue toCustomersCustomers
EnvironmentalEnvironmentalStewardshipStewardship
Regulators/Regulators/LegislatorsLegislators
FinancialFinancialPerformancePerformance
Invest in Regulated Utility BusinessInvest in Regulated Utility Business
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Distribution, Customer and A & G CostsDistribution, Customer and A & G Costs
0
100
200
300
400
500
XEL ED W
RPGN
PNWW
ECCIN SO
DTE
Dollars per customerDollars per customer
Source: 2004 FERC Form 1Source: 2004 FERC Form 1
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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
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Construction ProgramConstruction ProgramOnOn--time and Within Budgettime and Within Budget
Fort St. VrainFort St. VrainBlack DogBlack DogPrairie IslandPrairie IslandSteam GeneratorSteam GeneratorAngus AnsonAngus AnsonBlue LakeBlue Lake
CompletedCompleted
KingKingHigh BridgeHigh BridgeRiversideRiversideComanche 3Comanche 3
InIn--ProcessProcess
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Environmental StewardshipEnvironmental Stewardship
7% of energy from renewables – 2004Wind generation:— Current 953 MW— In-service by 2008 730 — Negotiating 850
Total 2,533 MWPartner with EPRI on high-altitude,Powder River Basin coal IGCC demonstrationPartner with the National Renewable Energy Laboratory on wind-hydrogen demonstration8 MW solar farm to be built in Colorado
7% of energy from renewables – 2004Wind generation:— Current 953 MW— In-service by 2008 730 — Negotiating 850
Total 2,533 MWPartner with EPRI on high-altitude,Powder River Basin coal IGCC demonstrationPartner with the National Renewable Energy Laboratory on wind-hydrogen demonstration8 MW solar farm to be built in Colorado
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Supportive Regulatory TreatmentSupportive Regulatory Treatment
MERPMERP
Transmission riders in Minnesota and TexasTransmission riders in Minnesota and Texas
Capacity cost rider in ColoradoCapacity cost rider in Colorado
Comanche 3 CWIP in rate baseComanche 3 CWIP in rate base
Public Service of Colorado equity ratio up to 60%Public Service of Colorado equity ratio up to 60%
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Financial StrengthFinancial Strength
Regulatory support for major investmentsRegulatory support for major investments
File rate casesFile rate cases
Manage to allowed costManage to allowed cost
Invest in jurisdictions which provide a fair returnInvest in jurisdictions which provide a fair return
Maintain solid balance sheet to support growth Maintain solid balance sheet to support growth and achieve credit rating objectivesand achieve credit rating objectives
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Results in local decision makers with 360 degree perspective, responsibility and accountability
Results in local decision makers with 360 degree perspective, responsibility and accountability
Operational FocusOperational Focus
Resourceportfolio
Resourceportfolio
LegislativeLegislative
Customer expectations
Customer expectations
Financialissues
Financialissues
Resourceneeds
Resourceneeds
OperationalFocus
OperationalFocus
RegulatoryRegulatory
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Organization Structure Organization Structure
CEOCEO
GeneralGeneralCounsel Counsel
ChiefChiefFinancialFinancialOfficerOfficer
CustomerCustomerandand
EnterpriseEnterpriseSolutionsSolutions
EnergyEnergySupplySupply
PSCoPSCo
UtilitiesUtilitiesGroupGroup
NSP (M)NSP (M)
SPSSPS
NSP (W)NSP (W)
Optimize efficiency Optimize efficiency whilewhile
maximizing maximizing accountabilityaccountability
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Paul BonaviaPaul BonaviaPresidentPresidentUtilities GroupUtilities Group
Dave SparbyDave SparbyVice PresidentVice PresidentGovernment Government and Regulatoryand RegulatoryAffairsAffairs
David WilksDavid WilksPresidentPresident
Energy SupplyEnergy Supply
Ben FowkeBen FowkeVice PresidentVice President
and CFOand CFO