Xcel Energy Q3 EPS Rises, 2026 Guidance Narrows as $70 Billion Plan Takes Shape

Xcel Energy reported stronger third-quarter earnings, narrowed its 2026 ongoing earnings guidance by lifting the lower end of the range, and introduced a 2027 outlook supported by rising electric sales and extensive infrastructure investment. The utility also outlined a $70 billion capital plan for 2027 through 2031, which it expects to drive annual rate-base growth of about 11% and EPS growth of more than 9% through 2031.

Third-quarter GAAP and ongoing diluted earnings were both $1.52 per share, compared with GAAP EPS of $0.88 and ongoing EPS of $1.24 a year earlier. For the first nine months of 2026, GAAP EPS rose to $3.34 from $2.47, while ongoing EPS increased to $3.37 from $2.84.

Higher electric revenue and allowance for funds used during construction, or AFUDC, were key contributors to the quarterly increase in ongoing earnings. Electric revenue benefited from non-fuel riders, rate cases, weather, and sales and demand. Those gains were partly offset by electric fuel and purchased-power costs and higher interest-related expenses. Xcel noted that fuel and purchased-power costs are generally recovered through regulatory mechanisms and offset in revenue.

Among the operating companies, Public Service Company of Colorado contributed $0.57 per share in the quarter, up from $0.08 a year earlier. Southwestern Public Service increased its contribution to $0.34 from $0.27, while Northern States Power-Wisconsin rose to $0.08 from $0.07. Northern States Power-Minnesota contributed $0.51, compared with $0.53 in the prior-year period.

Weather-adjusted retail electric sales increased 2.5% year to date, led by 5.1% growth at Southwestern Public Service. Electric customer growth was 0.6% in the third quarter, while natural-gas customer growth was also 0.6%. Weather-adjusted natural-gas sales declined 1.6% during the first nine months.

Guidance and investment outlook

Xcel narrowed its 2026 ongoing EPS guidance to $4.10 to $4.16 from $4.04 to $4.16. The outlook assumes approximately 3% growth in weather-adjusted retail electric sales, flat firm natural-gas sales, normal weather for the remainder of the year, and constructive outcomes in pending regulatory proceedings.

The company expects 2026 operations and maintenance expense to rise about 5%, with net interest expense increasing by $290 million to $300 million. Capital-rider revenue is projected to increase by $370 million to $380 million, while AFUDC-equity is expected to rise by $180 million to $190 million.

For 2027, Xcel initiated ongoing EPS guidance of $4.48 to $4.62. Its assumptions include approximately 5% growth in weather-adjusted retail electric sales, 1% growth in firm natural-gas sales, normal weather, and constructive regulatory outcomes. Capital-rider revenue is expected to increase by $560 million to $570 million, while depreciation and net interest expense are projected to rise by $460 million to $470 million and $320 million to $330 million, respectively.

The ongoing guidance excludes nonrecurring or infrequent items that management does not consider reflective of core operations. Xcel said it cannot reconcile the forward-looking ongoing EPS ranges to GAAP EPS because unplanned or unknown adjustments may occur.

Xcel’s $70 billion base capital plan includes about $21.36 billion for renewable generation, $18.56 billion for electric transmission, and $13.66 billion for distribution. The program calls for approximately 9,200 megawatts of renewable generation, 3,300 MW of natural-gas generation, 2,300 MW of energy storage, and 2,400 miles of new transmission. It also includes about $4 billion for wildfire mitigation and $7 billion to serve contracted data centers.

The company invested $10 billion in generation, transmission, and distribution infrastructure during the first nine months of 2026. Its projected consolidated rate base rises from $68 billion in 2026 to $112 billion in 2031 under the base plan.

Data centers expand the growth pipeline

Xcel forecasts approximately 5% compound annual growth in base retail electric sales from 2026 through 2031. Data centers account for an estimated three percentage points of that growth, while oil and gas customers contribute 1.5 points and other demand adds 0.5 point.

About 2 GW of data-center capacity is contracted or under construction. Xcel expects roughly 1 GW to be signed during 2026 and targets approximately 4 GW under contract by the end of 2027. The broader pipeline exceeds 20 GW, although those prospective projects are not included as contracted demand.

The company said its large-load arrangements generally secure minimum bills covering 75% to 85% of demand, backed by parent guarantees or letters of credit. It estimated that each additional 1 GW of data-center load could require $6 billion to $8 billion of investment, including third-party generation.

Beyond the base plan, Xcel identified more than $10 billion of potential incremental investment, including additional generation and high-voltage transmission. Management estimated that every $1 billion of added capital spending would increase rate-base growth by 15 to 20 basis points.

Regulation, financing and risks

Xcel said it had reached settlements or constructive outcomes in most major rate cases. Colorado regulators approved settlements providing electric and natural-gas base-rate increases of about $184 million and $123 million, respectively, with final rates implemented in October. Decisions on Minnesota and New Mexico proceedings were expected in the fourth quarter of 2026.

The company plans $8 billion of equity and equity-content financing from 2027 through 2031, with about 40% contracted and priced as of the end of the third quarter. The broader financing plan also includes cash from operations and incremental debt and remains subject to capital spending, regulatory outcomes, market conditions, internal cash generation, and tax policy.

Wildfire exposure remains a significant uncertainty. Xcel reported $475 million of estimated losses and about $50 million of legal costs related to the Smokehouse Creek Fire through the third quarter. It had committed $410 million under finalized settlements and paid $405 million, with claims representing an estimated 141 plaintiff groups still outstanding. The company has $525 million of insurance for the annual policy period but said it could not reasonably estimate an upper limit for potential losses because of unresolved factual and legal issues.

Other risks identified by Xcel include the ability to recover costs through regulation, execution of the large capital program, financing availability and cost, supply-chain constraints, large-load customer growth, cybersecurity threats, commodity prices, and extreme weather.