US utility Xcel says tariff exposure is 2%-3% of capex plan

NEW YORK, April 24 (Reuters) - About 2% to 3% of U.S. electric utility Xcel Energy's XEL.O $45 billion capital expenditure plan is exposed to risks from a global tariff war that is expected to hit renewable energy and storage supply chains, executives with the company said on Thursday.

As the expansion of AI data centers and the electrification of industries like transportation drive U.S. electricity use to record highs, power companies this year have boosted capital expenditure plans to build infrastructure to meet the demand.

Tariffs imposed by U.S. President Donald Trump, and reciprocal tariffs by countries like China, have threatened to inflate those building costs, particularly for renewable energy projects.

Batteries, which are needed to store electricity generated from solar and wind, will be a particular challenge for U.S. power companies sourcing the storage systems from China, Xcel CEO Bob Frenzel said on a call with investors.

Xcel only has one significant battery storage project underway, but it expects more need for batteries in its long-term plan, Frenzel said.

The new tariffs may shift where and how batteries are made as power companies work around rising costs. Utilities, including NextEra NEE.N, this week said they have made arrangements to source battery storage from suppliers in the United States.

"Based on these recent tariff actions, we expect a relatively rapid evolution of the battery supply chain," Frenzel said.