xcel energy RBC_August_2008

Reducing CarbonReducing CarbonDelivering ResultsDelivering Results

RBC Investor MeetingsRBC Investor MeetingsAugust 13, 2008August 13, 2008

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, capital statements include projected earnings, cash flows, capital expenditures and other statements and are identified in this docexpenditures and other statements and are identified in this document ument by the words by the words ““anticipate,anticipate,”” ““estimate,estimate,”” ““expect,expect,”” ““projected,projected,””““objective,objective,”” ““outlook,outlook,”” ““possible,possible,”” ““potentialpotential”” and similar and similar expressions. Actual results may vary materially. Factors that expressions. Actual results may vary materially. Factors that could could cause actual results to differ materially include, but are not lcause actual results to differ materially include, but are not limited to: imited to: general economic conditions, including the availability of credigeneral economic conditions, including the availability of credit, t, actions of rating agencies and their impact on capital expendituactions of rating agencies and their impact on capital expenditures; res; business conditions in the energy industry; competitive factors;business conditions in the energy industry; competitive factors;unusual weather; effects of geopolitical events, including war aunusual weather; effects of geopolitical events, including war and acts nd acts of terrorism; changes in federal or state legislation; regulatioof terrorism; changes in federal or state legislation; regulation; actions n; actions of accounting regulatory bodies; and other risk factors listed fof accounting regulatory bodies; and other risk factors listed from rom time to time by Xcel Energy in reports filed with the SEC, inclutime to time by Xcel Energy in reports filed with the SEC, including ding Exhibit 99.01 to Xcel EnergyExhibit 99.01 to Xcel Energy’’s report on Form 10s report on Form 10--K for year 2007.K for year 2007.

Safe HarborSafe Harbor

Xcel Energy Corporate StrategyXcel Energy Corporate Strategy

Achieve annual EPS growth of 5 Achieve annual EPS growth of 5 –– 7%7%Increase dividend by 2 Increase dividend by 2 –– 4% annually4% annuallyReduce emissions by 2020Reduce emissions by 2020

Grow our core business andGrow our core business andmeet the environmental challengemeet the environmental challenge

Traditional RegulationTraditional Regulation

Operate in 8 StatesOperate in 8 States

Combination UtilityCombination UtilityElectric 85% of net incomeElectric 85% of net incomeGas 15% of net incomeGas 15% of net income

CustomersCustomers3.3 million electric3.3 million electric1.8 million gas1.8 million gas

2007 Financial Statistics2007 Financial StatisticsNI Ongoing: $612 million NI Ongoing: $612 million NI GAAP: $577 millionNI GAAP: $577 millionAssets: $23 billionAssets: $23 billionEquity ratio: 43%Equity ratio: 43%

Company ProfileCompany Profile

NSPNSP--WisconsinWisconsin6% of earnings *6% of earnings *NSPNSP--MinnesotaMinnesota

40% of earnings *40% of earnings *

SPSSPS5% of earnings *5% of earnings *

PSCoPSCo49% of earnings *49% of earnings *

2007 EPS Ongoing: $1.43, GAAP: $1.352007 EPS Ongoing: $1.43, GAAP: $1.352008 Dividend $0.95 per share annualized2008 Dividend $0.95 per share annualized

* Percentages based on 2007 Ongoing Earnings* Percentages based on 2007 Ongoing Earnings

Attractive Investment OpportunityAttractive Investment Opportunity

Environmental leader with both a willingness and Environmental leader with both a willingness and the ability to address environmental challenges the ability to address environmental challenges

Constructive regulation with enhanced recoveryConstructive regulation with enhanced recoveryof major capital projectsof major capital projects

Rate base growth opportunitiesRate base growth opportunities

Track record of successful executionTrack record of successful execution

Strong corporate governanceStrong corporate governance

Impact of Potential Impact of Potential Climate Change LegislationClimate Change Legislation

Climate Change legislation would require:Climate Change legislation would require:Significant emission reductionsSignificant emission reductionsSignificant capital investmentsSignificant capital investmentsLongLong--term technological transformationterm technological transformationA diverse portfolio of resourcesA diverse portfolio of resources

Xcel Energy States at ForefrontXcel Energy States at Forefront

N/AN/A.2%.2%5% by 20155% by 2015TXTX

N/AN/AN/AN/A10% by 201510% by 2015WIWI

10% by 202010% by 2020(over 2000)(over 2000).3%.3%20% by 202020% by 2020NMNM

N/AN/A.6%.6%20% by 202020% by 2020COCO

30% by 202530% by 2025(over 2005)(over 2005)1.5%1.5%30% by 202030% by 2020MNMN

Carbon Carbon ReductionReduction

DemandDemand--Side Side Management Management (annual MWh (annual MWh

savings)savings)

Renewable Renewable Portfolio Portfolio

Standards Standards StateState

Benefits of a Stability/Reduction PlanBenefits of a Stability/Reduction Plan

Reduce riskReduce riskFederal and state carbon regulationFederal and state carbon regulationCommunity and litigation risksCommunity and litigation risksMitigate longMitigate long--term costs to customersterm costs to customers

Demonstrate continued environmental leadershipDemonstrate continued environmental leadershipPotential for investment opportunitiesPotential for investment opportunities

Geographic Competitive AdvantageGeographic Competitive Advantage

Wind ResourceWind Resource

Solar ResourceSolar Resource

Biomass ResourceBiomass Resource

Xcel EnergyXcel EnergyStates ServedStates Served

Wind DensityWind DensityHighHigh

LowLow

Source: National Renewable Energy LaboratorySource: National Renewable Energy Laboratory

Clean Energy ActionsClean Energy Actions

Increase renewable energyIncrease renewable energyUprate and extend lives of nuclear plantsUprate and extend lives of nuclear plantsExpand demand side management, energy Expand demand side management, energy efficiency and conservation effortsefficiency and conservation effortsIncrease investment in transmissionIncrease investment in transmissionUpgrade environmental systems and improve Upgrade environmental systems and improve efficiencies of generation plants efficiencies of generation plants Replace/repower inefficient generationReplace/repower inefficient generationEvaluate carbon capture and storageEvaluate carbon capture and storage

Minnesota Resource PlanMinnesota Resource Plan

Reduces carbon emission by 22% by 2020Reduces carbon emission by 22% by 2020Adds 2,600 megawatts (MW) of wind by 2020Adds 2,600 megawatts (MW) of wind by 2020Seeks to expand output from Prairie Island and Seeks to expand output from Prairie Island and Monticello nuclear plants by 230 MWMonticello nuclear plants by 230 MWRequests environmental upgrades and capacity Requests environmental upgrades and capacity expansion of 80 MW at Shercoexpansion of 80 MW at ShercoSeeks approval of Manitoba Hydro 375 MW PPASeeks approval of Manitoba Hydro 375 MW PPAWould add 2,300 MW of natural gas generationWould add 2,300 MW of natural gas generationExpands DSM effortsExpands DSM effortsPlan requires Commission approvalPlan requires Commission approval

Colorado Resource PlanColorado Resource Plan

Reduces carbon emission by 10% by 2017 and puts Reduces carbon emission by 10% by 2017 and puts PSCo on path to achieve 20% reduction by 2020PSCo on path to achieve 20% reduction by 2020Adds 800 MW of wind by 2015Adds 800 MW of wind by 2015Replaces four coal units with natural gas generationReplaces four coal units with natural gas generationAcquire 25 MW of solar with plans to add up to 200 Acquire 25 MW of solar with plans to add up to 200 MW of solar as technology developsMW of solar as technology developsExpands DSM effortsExpands DSM effortsPlan requires Commission approvalPlan requires Commission approval

Reducing Carbon Dioxide Emissions*Reducing Carbon Dioxide Emissions*

60

65

70

75

80

2003 2004 2005 2006 2007

Millions of tons Millions of tons

* Owned* Owned––generation carbon dioxide emissionsgeneration carbon dioxide emissions

Projected Renewable Resources

Coal 49% Coal 49%

Renewables9%

Renewables9%

Gas & Oil 31%

Gas & Oil 31%

Nuclear 11%

Nuclear 11%

Coal 46% Coal 46%

Renewables24%

Renewables24%

Gas & Oil 17%

Gas & Oil 17%

Nuclear 13%

Nuclear 13%

200720072007 202020202020

Wind Hydro Solar Biomass RDF Landfill GeothermalWindWind HydroHydro SolarSolar BiomassBiomass RDFRDF LandfillLandfill GeothermalGeothermalMWMWMW2007 2,700 365 17 182 100 15 02020 7,400 400 600 250 60 20 2020072007 2,7002,700 365365 1717 182182 100100 1515 0020202020 7,4007,400 400400 600600 250250 6060 2020 2020

CapacityCapacityCapacity

EnergyEnergyEnergy

Constructive RegulationConstructive Regulation

Transmission riders Transmission riders –– CO, MN, ND, SDCO, MN, ND, SDRenewable riders Renewable riders –– CO, MNCO, MNMERP rider MERP rider –– MNMNConservation/DSM riders Conservation/DSM riders –– CO, MNCO, MNEnvironmental riders Environmental riders –– MN, ND, SDMN, ND, SDCapacity rider Capacity rider –– COCOComanche 3 forward CWIP via general rate case Comanche 3 forward CWIP via general rate case –– COCOIGCC rider IGCC rider –– COCOAir quality improvement rider Air quality improvement rider –– COCO

Projected Rider RevenueProjected Rider Revenue

0

40

80

120

160

200

240

2006 2007 2008 2009

CO AQIRMN Renewable Energy StandardCO Trans Cost AdjustmentMN Trans Cost RecoveryMN MERP

Dollars in millionsDollars in millions

$73$73

$107$107

$166$166

$195$195

Regulatory ResultsRegulatory Results

Rate relief granted 2006Rate relief granted 2006--2007: $400 million2007: $400 million

2006 Minnesota electric rate case: $131 million2006 Minnesota electric rate case: $131 million

2006 Colorado electric rate case: $151 million2006 Colorado electric rate case: $151 million

2006 Wisconsin gas and electric rate cases: $47 million2006 Wisconsin gas and electric rate cases: $47 million

2007 Colorado gas rate case: $32 million2007 Colorado gas rate case: $32 million

Other: $39 millionOther: $39 million

Recovery on Capital Investment*Recovery on Capital Investment*

* Capital forecast based on middle of range* Capital forecast based on middle of rangeDepreciation

0

400

800

1,200

1,600

2,000

2,400

2,800

2008 2009 2010 2011

Traditional Recovery Enhanced Recovery


$2,150$2,150$1,900$1,900 $2,000$2,000

$2,350$2,350

2006 2007 2008 2009 2010 2011

Delivering on Rate Base Growth*Delivering on Rate Base Growth*

CAGR = 7.5%CAGR = 7.5%

Dollars in billionsDollars in billions

* Growth based on middle of capital forecast range* Growth based on middle of capital forecast range

$11.7$11.7$12.8$12.8

$14.0$14.0 $14.9$14.9 $15.7$15.7$16.9$16.9

Proven Track RecordProven Track RecordDelivering on 5 Delivering on 5 –– 7% EPS Growth7% EPS Growth

$1.15$1.15$1.30$1.30

$1.43$1.43

2005 2005 Ongoing*Ongoing*



Guidance RangeGuidance Range

13%10%

$1.45 $1.45 –– $1.55$1.55

5%**

2008 2008 GuidanceGuidance

* Ongoing EPS excludes the impacts of COLI and disc ops.* Ongoing EPS excludes the impacts of COLI and disc ops.A reconciliation to GAAP earnings is included in the appendixA reconciliation to GAAP earnings is included in the appendix..

~~

** ** Estimated growth rate based on middle of guidance rangeEstimated growth rate based on middle of guidance range

Proven Track Record:Proven Track Record:Delivering 2 Delivering 2 –– 4% Dividend Growth*4% Dividend Growth*

2003 2004 2005 2006 2007 2008

$0.75$0.75

2004 2004 –– 2008 CAGR = 3.4%2008 CAGR = 3.4%

Annualized dividend per shareAnnualized dividend per share

$0.83$0.83 $0.86$0.86 $0.89$0.89 $0.92$0.92 $0.95$0.95

* Xcel Energy increased the dividend by 3* Xcel Energy increased the dividend by 3¢¢ on May 21, 2008on May 21, 2008

Strong Corporate Governance Strong Corporate Governance

Independent Lead DirectorIndependent Lead Director

Annual election of all directorsAnnual election of all directors

12 independent directors on 13 person board 12 independent directors on 13 person board

Management compensation aligned with Management compensation aligned with shareholders shareholders –– stock ownership guidelines:stock ownership guidelines:

CEO ownership 5x annual base salary CEO ownership 5x annual base salary

CFO/Other Officers ownership 3x base salary CFO/Other Officers ownership 3x base salary

Value PropositionValue Proposition

Low risk, fully regulated and integrated utilityLow risk, fully regulated and integrated utilityConstructive regulation with enhanced recovery Constructive regulation with enhanced recovery of major capital projectsof major capital projectsPipeline of investment opportunitiesPipeline of investment opportunitiesEnvironmental leader, wellEnvironmental leader, well––positionedpositionedfor changing rulesfor changing rules

Attractive Total ReturnAttractive Total ReturnSustainable annual EPS growth of 5% Sustainable annual EPS growth of 5% –– 7%7%with upside potentialwith upside potentialStrong dividend yield of 4.7% (as of 7/31/08)Strong dividend yield of 4.7% (as of 7/31/08)Sustainable annual dividend growth of 2% Sustainable annual dividend growth of 2% –– 4%4%

AppendixAppendix

Ongoing Earnings $1.15 $1.30 $1.43PSRI/COLI 0.05 0.05 (0.08)Continuing Operations $1.20 $1.35 $1.35Disc Ops 0.03 0.01 –GAAP Earnings $1.23 $1.36 $1.35

Ongoing Earnings Ongoing Earnings $1.15 $1.15 $1.30$1.30 $1.43$1.43PSRI/COLIPSRI/COLI 0.050.05 0.050.05 (0.08)(0.08)Continuing OperationsContinuing Operations $1.20$1.20 $1.35$1.35 $1.35$1.35Disc Ops Disc Ops 0.030.03 0.01 0.01 ––GAAP Earnings $1.23 GAAP Earnings $1.23 $1.36$1.36 $1.35$1.35

Reconciliation Reconciliation ––Ongoing EPS to GAAPOngoing EPS to GAAP

200720072007Dollars per shareDollars per share

200620062006200520052005

As a result of the termination of the COLI program, Xcel Energy’s management believes that ongoing earnings provide a more meaningful comparison of earnings results between different periods in which the COLI program was in place and is more representative of Xcel Energy’s fundamental core earnings power. Xcel Energy’s management uses ongoing earnings internally for financial planning and analysis, for reporting of results to the Board of Directors, in determining whether performance targets are met for performance-based compensation,and when communicating its earnings outlook to analysts and investors.

As a result of the termination of the COLI program, Xcel EnergyAs a result of the termination of the COLI program, Xcel Energy’’s management s management believes that ongoing earnings provide a more meaningful comparibelieves that ongoing earnings provide a more meaningful comparison of earnings son of earnings results between different periods in which the COLI program was results between different periods in which the COLI program was in place and is in place and is more representative of Xcel Energymore representative of Xcel Energy’’s fundamental core earnings power. s fundamental core earnings power. Xcel EnergyXcel Energy’’s management uses ongoing earnings internally for financial plans management uses ongoing earnings internally for financial planning ning and analysis, for reporting of results to the Board of Directorsand analysis, for reporting of results to the Board of Directors, in determining , in determining whether performance targets are met for performancewhether performance targets are met for performance--based compensation,based compensation,and when communicating its earnings outlook to analysts and inveand when communicating its earnings outlook to analysts and investors.stors.

Regulated Utility $1.55 $1.61 – $1.71 Holding Company (0.12) (0.16) Ongoing Earnings $1.43 $1.45 – $1.55

PSRI/COLI $(0.08) –Continuing Operations 1.35 1.45 – 1.55Disc Ops – –GAAP Earnings $1.35 $1.45 – $1.55

Regulated UtilityRegulated Utility $1.55 $1.55 $1.61 $1.61 –– $1.71 $1.71 Holding CompanyHolding Company (0.12)(0.12) (0.16) (0.16) Ongoing Earnings Ongoing Earnings $1.43$1.43 $1.45 $1.45 –– $1.55$1.55

PSRI/COLIPSRI/COLI $(0.08)$(0.08) ––Continuing OperationsContinuing Operations 1.351.35 1.45 1.45 –– 1.551.55Disc Ops Disc Ops –– ––GAAP EarningsGAAP Earnings $1.35$1.35 $1.45 $1.45 –– $1.55$1.55

Earnings Guidance Range Earnings Guidance Range

2007A2007A2007A 200820082008Dollars per shareDollars per share

-20%

-15%

-10%

-5%

0%

5%

12/31

/2007

1/31/2

008

2/29/2

008

3/31/2

008

4/30/2

008

5/31/2

008

6/30/2

008

Peer Avg XEL

Stock Price ChangeStock Price Change7/1

3/200

8

7/13/2

008

2008 Regulatory Status2008 Regulatory Status

New Mexico ElectricNew Mexico Electric December 2007December 2007 PendingPending$17.3 million$17.3 million Summer 2008Summer 200811.0% ROE11.0% ROE

North Dakota ElectricNorth Dakota Electric December 2007December 2007 PendingPending$20.5 million$20.5 million August 2008August 200811.5% ROE11.5% ROE Interim ratesInterim rates

PSCo WholesalePSCo Wholesale February 2008February 2008 SettlementSettlementBase rates $8.8 millionBase rates $8.8 million $6.5 million$6.5 millionCWIP $3.7 million CWIP $3.7 million Blackbox Blackbox 11.5% ROE11.5% ROE

SPS WholesaleSPS Wholesale March 2008March 2008 PendingPending$14.9 million$14.9 million12.2% ROE12.2% ROE

Texas ElectricTexas Electric June 2008June 2008 Pending Pending $61.3 million overall $61.3 million overall 11.25% ROE11.25% ROE

RequestedRequested StatusStatus

Capital Expenditure ForecastCapital Expenditure ForecastDollars in millionsDollars in millionsDollars in millions Denotes enhanced recovery mechanismDenotes enhanced recovery mechanismDenotes enhanced recovery mechanism

20082008 20092009 20102010 20112011Base & Other Base & Other $1,245$1,245 $1,285$1,285 $1,310$1,310 $1,300$1,300MERPMERP 170170 2525 1010 00Comanche 3Comanche 3 330330 6060 1010 00MN Wind Tran/CapX 2020MN Wind Tran/CapX 2020 4040 6565 115115 270270Sherco UpgradeSherco Upgrade 55 2020 7575 230230MN Wind GenerationMN Wind Generation 135135 00 00 00Nuclear Capacity/Life ExtNuclear Capacity/Life Ext 7575 120120 180180 200200Fort St. Vrain CTFort St. Vrain CT 100100 2525 00 00Total CommittedTotal Committed $2,100$2,100 $1,600$1,600 $1,700$1,700 $2,000$2,000

Potential ProjectsPotential Projects 00--100100 200200--400400 200200--400 400 200200--500500RangeRange $2,100$2,100-- $1,800$1,800-- $1,900$1,900-- $2,200$2,200--

$2,200 $2,200 $2,000$2,000 $2,100$2,100 $2,500$2,500

Capital ExpendituresCapital Expendituresby Operating Company*by Operating Company*

NSPMNSPM $935$935 $955$955 $1,060$1,060 $1,380$1,380

PSCoPSCo 945945 650650 680680 750750SPSSPS 170170 205 205 180 180 140140NSPWNSPW 100100 90 90 8080 80 80 TotalTotal $2,150$2,150 $1,900$1,900 $2,000$2,000 $2,350$2,350


* Capital forecast based on middle of range* Capital forecast based on middle of range

20082008 20092009 20102010 20112011

Capital Expenditures by Function*Capital Expenditures by Function*

20082008 20092009 20102010 20112011

Elec GenerationElec Generation $935$935 $480$480 $525$525 $745$745Elec TransmissionElec Transmission 300300 325325 390 390 500500Elec DistributionElec Distribution 355355 345 345 355 355 360360GasGas 140140 155 155 160160 155 155 Nuclear FuelNuclear Fuel 145145 150150 140140 105105Common/OtherCommon/Other 225225 145145 130130 135135Potential ProjectsPotential Projects 5050 300300 300300 350350TotalTotal $2,150$2,150 $1,900$1,900 $2,000$2,000 $2,350$2,350

* Capital forecast based on middle of range* Capital forecast based on middle of range


Credit RatingsCredit Ratings

Holding Co. – – – BBB+ Baa1 BBB

NSPM A+ A2 A A A3 BBB

NSPW A+ A2 A A A3 BBB+

PSCo A A3 A A– Baa1 BBB

SPS – – – BBB+ Baa1 BBB+

Holding Co.Holding Co. –– –– –– BBB+BBB+ Baa1Baa1 BBBBBB

NSPMNSPM A+A+ A2A2 A A AA A3A3 BBBBBB

NSPWNSPW A+A+ A2 A2 A A AA A3A3 BBB+ BBB+

PSCoPSCo AA A3A3 A A AA–– Baa1Baa1 BBBBBB

SPSSPS –– –– –– BBB+BBB+ Baa1Baa1 BBB+BBB+

Fitch Moody’s S&P Fitch Moody’s S&PFitch Moody’s S&P Fitch Moody’s S&PSecuredSecured UnsecuredUnsecured

Debt MaturitiesDebt Maturities

$0

$200

$400

$600

$800

$1,000

$1,200

2008 2009 2010 2011 2012 2013 2014 2015

SPSPSCoNSPWNSPMXcel Energy

Dollars in millionsDollars in millionsDollars in millions

Strong Access to Credit MarketsStrong Access to Credit Markets

Issued $400 million of retail hybrid securities Issued $400 million of retail hybrid securities with a 7.6% coupon in January 2008with a 7.6% coupon in January 2008

Issued $500 million of first mortgage bonds Issued $500 million of first mortgage bonds at NSPat NSP––Minnesota with 5.25% coupon in March 2008Minnesota with 5.25% coupon in March 2008

Potential FMB debt issuances: 2nd half 2008Potential FMB debt issuances: 2nd half 2008

PSCo: $500 to $600 million PSCo: $500 to $600 million

NSPNSP––Wisconsin: Up to $250 millionWisconsin: Up to $250 million

xcel energy RBC_August_2008

Economy & Finance

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