Q2 2025 Xcel Energy Inc Earnings Call

George: Hello and welcome to XCEL ENERGY's second quarter 2025 earnings conference call. My name is George, and I'll be your coordinator for today's event. Please note this conference is being recorded. At the duration of the call, your lines will be in the listen-only mode. A question and answer session will follow the prepared remarks, and questions will be taken from institutional investors and analysts. Reporters can contact media relations with inquiries, and individual investors and others can reach out to investor relations. To register for questions, please press star one on your telephone keypad. If you require assistance at any point, please press star zero, and you will be connected to an operator. I'd like to have the call with our host today, Mr. Roopesh Aggarwal, Vice President of Investor Relations, speaking at today's conference. Please go ahead, sir.

Hello and welcome to Xcel Energy. Second quarter 2025 earnings conference call.

My name is George, and I'll be according to today's event. Please note, this conference is being recorded at duration of the call. Your lines will be in the listen. Only mode.

Bob Frenzel: Thank you, George. Good morning and welcome to XCEL ENERGY's second quarter 2025 earnings call. Joining me today are Bob Frenzel, Chairman, President and Chief Executive Officer, and Brian Abel, Executive Vice President and Chief Financial Officer. In addition, we have other members of the management team in the room to answer your questions if needed. This morning, we will review our second quarter 2025 results and highlights, provide updated 2025 assumptions, and share recent business and regulatory updates. Slides that accompany today's call are available on our website. Some comments during today's call may contain forward-looking information. Significant factors that could cause results to differ from those anticipated are described in our earnings release and SEC filings. Today, we will discuss certain metrics that are non-GAAP measures. Information on the comparable GAAP measures and reconciliations are included in our earnings release.

I know you had to call all your hosts today, Mr. Rupesh Agarwal, vice president, speaking to his conference, please go ahead sir. Thank you George, good morning and welcome to Xcel Energy's second quarter, 2025 earnings call.

Joining me today are Bob frenzel chairman president and chief executive officer and Brian vanable, Executive Vice, President and Chief Financial Officer. In addition, we have other members of the management team in the room to answer your questions if needed.

This morning, we will review our second quarter, 2025 results and highlights.

Provide updated 2025 assumptions and share recent business and Regulatory updates.

Slides that accompanies today's call are available on our website.

Some comments.

During today's call may contain forward-looking information.

Significant factors that could cause results to differ from those anticipated are described in our earnings release and SEC filings.

Bob Frenzel: I will now turn the call over to Bob. Thank you, Presh, and good morning, everybody. In the second quarter of 2025, XCEL ENERGY continued to demonstrate our commitment to our customers, investors, and communities to make energy work better. During the quarter, we delivered strong earnings of 75 cents per share. We invested $2.6 billion in resilient and reliable energy infrastructure for our customers, navigated an evolving energy policy landscape to ensure that we can continue to provide safe, clean, reliable, and affordable electric and natural gas service. We continued our wildfire risk reduction efforts to enable safer and more resilient communities. Based on our results through the first half of the year, we remain confident in our ability to deliver on our earnings guidance for the 21st year in a row, one of the best track records in our industry.

Today, we will discuss certain metrics that are non-gaap measures information on the comparable. Gaap measures and reconciliations are included in our earnings release.

I will now turn the call over to Bob.

Thank you for patient. Good morning everybody.

In the second quarter of 2025.

Xcel Energy continued to demonstrate our commitment, to our customers investors and communities to make energy work better during the quarter. We delivered strong earnings of 75 cents per share.

We invested $2.6 billion in resilient and reliable energy infrastructure for our customers.

Now, navigated in an evolving energy policy landscape to ensure that we can continue to provide, safe, clean, reliable, and Affordable Electric and natural gas service.

We continue to our Wildfire risk reduction efforts to enable safer and more resilient communities.

based on our results, through the first half of the year, we remain confident in our ability to deliver, on our earnings guidance, for the 21st year in a row,

1 of the best track records in our industry.

Bob Frenzel: At XCEL ENERGY, we believe that we're in the early stages of an infrastructure investment cycle in the United States that will define many industries for decades. Not just the often-discussed AI boom, we see potential investment in onshoring and reshoring of manufacturing and other energy-intensive industries. And given our competitive reliability, cost, and sustainability, we believe we will be attractive to those industries. And of course, we see strong investment in oil and gas and other energy infrastructure, particularly in our SPS region, where we power large portions of the Permian and Delaware Basins. And we continue to see strong energy demand from electrification of transportation, manufacturing, and of home heating. XCEL ENERGY is here to meet the moment for our customers.

Of an infrastructure investment cycle in the United States, that will Define many Industries for decades.

Not just the often discussed AI. Boom, we see potential investment in. Onshoring and reshoring of manufacturing and other energy-intensive Industries. And given our competitive reliability, cost and sustainability, We believe We will be attractive to those Industries. And of course we see strong investment in oil and gas and other energy infrastructure, particularly in our SPS region, where we power, large portions of the Permian and Delaware basins, and we continue to see strong energy demand from electrification of Transportation, manufacturing, and of Home Heating.

NextEra Energy is here to meet the moment for our customers.

Bob Frenzel: When we set our capital plan, our five-year capital plan last fall, we outlined a $45 billion infrastructure investment forecast to serve increased energy demand and make needed investments to strengthen our transmission and distribution systems. At that time, we also expected that our customers' needs could exceed that base forecast. Today, we now believe that we're likely to need an additional $15 billion of capital investment to meet our customer needs, largely within our current five-year forecast and some beyond. There are several drivers to that incremental need. In June, we filed a generation plan to support energy needs in our fast-growing Texas and New Mexico region. Our recommended portfolio included nearly 5,200 megawatts of generation and storage to be placed in service by 2030. Over 4,500 megawatts is expected to be company-owned and operated.

When we set our capital plan, our 5-year capital plan last fall, we outlined a $45 billion to $45 billion infrastructure investment forecast to serve increased energy demand.

And make needed Investments to strengthen our transmission and Distribution Systems.

At that time, we also expected that our customers needs could exceed That Base forecast.

Today, we now believe that we're likely, we're likely to need an additional 15 billion dollars of capital investment to meet our customer needs.

Largely within our current 5-year forecast and some Beyond. There are several drivers to that incremental need in June, we filed a generation plan to support energy needs in our fast. Growing Texas, in New Mexico region, our recommended portfolio included nearly 5,200 megawatts of generation and storage to be placed in service by 2030.

Bob Frenzel: This includes 1,300 megawatts of wind, 700 megawatts of solar, 2,100 megawatts of natural gas (CTs), and 500 megawatts of storage. We anticipate filing for regulatory approval of these projects over the remainder of this year with commission decisions in 2026. We also anticipate issuing a second RFP later this year for additional resource needs in that region. In the upper Midwest, we received approval in Minnesota for two firm dispatchable projects totaling 720 megawatts and at least an additional 2,800 megawatts of company-owned wind that will use our new Minnesota Energy Connection transmission line when it's placed in service in 2029. RFPs for additional generation projects that are needed to meet customer demand and grid reliability are ongoing, and we expect commission decisions in 2026.

Over 4,500 megawatts, is expected to be company owned and operated. This includes 1300 megawatts of wind 700 megawatts of solar 2100 megawatts of natural gas, CTS and 500 megawatts of storage.

We anticipate filing for regulatory approval of these projects over the remainder of this year, with commission decisions in 2026.

Bob Frenzel: We expect to invest an incremental $3 to $4 billion in regional transmission projects to support reliability and regional growth, including two 765 kV lines, one from the MISO Tranche 2.1 and the other from the Southwest Power Pools ITP portfolio. In addition to this $15 billion of incremental need, we are actively working through the resource planning process in Colorado that likely requires between 5 and 14 gigawatts of new generation to meet reliability and customer demands through 2031. We are still working through required regulatory approvals for a number of these projects and will provide updates as they materialize. We expect to formally update our five-year forecast through 2030 on our third quarter earnings update. As we move to aggressively build the generation and transmission that the grid requires to support both growth and reliability needs, we're also navigating a rapidly evolving energy policy landscape.

We also anticipate issuing a second RFP later. This year for additional resource needs in that region in the Upper Midwest. We received approval in Minnesota, for 2, firm, dispatchable, projects, totaling 720, megawatts. And at least an additional 2800 megawatts of company-owned wind that will use our new Minnesota, Energy connection transmission, line. When it's placed in service in 2029 rfps for additional generation projects, that are needed to meet customer demand and grid. Reliability are ongoing and we expect commission decisions in 2026.

We expect to invest in incremental 3 to 4 billion dollars in Regional transmission projects to support reliability and regional growth.

Including 2, 765 KV lines, 1 from the msot tranche 2.1 and the other from the southwest power pools. ITP portfolio.

In addition to this 15 billion dollars of incremental need, we are actively working through the resource planning process in Colorado, that likely requires between 5 and 14. Gigawatts of new generation to meet reliability and customer demands through 2031.

We are still working through required regulatory approvals for a number of these projects and will provide updates as they materialize.

And we expect to formally update our 5-year forecast through 2030. On our third quarter, earnings update as we move to aggressively build the generation and transmission that the grid requires to support both growth and reliability needs.

Bob Frenzel: While we predominantly navigate resource plans and transition initiatives at a state level, we're also very focused on federal legislation as it pertains to how tax credits and permitting can impact customer outcomes. On July 4th, the budget reconciliation bill was signed into law. While we saw some challenges to wind and solar tax credits, there are also positive outcomes for customers in the bill. Lower corporate tax rates result in lower energy bills, all else being equal. Accelerated depreciation of capital is beneficial to customers, as is the efficiency of transferability of eligible credits, both of which were continued in the One Big Beautiful Bill. As with the incentives for qualifying energy storage and for carbon-free dispatchable resources like advanced geothermal, nuclear generation, and carbon sequestration, all beneficial for customers and the country's energy future.

We're also navigating a rapidly evolving energy policy landscape.

While we predominantly navigate resource plans and transition initiatives at a state level. We're also very focused on federal legislation is that pertains to how tax credits and permitting can impact customer outcomes on July 4th. The budget reconciliation bill was signed into law.

While we saw some challenges to win in solar tax credits, there are also positive outcomes for customers in the bill.

Lower corporate tax rates result in lower energy bills, all else being equal.

Accelerated depreciation of capital is beneficial to customers as is the efficiency of transferability of eligible credits. Both of which were continued in the 1. Big beautiful bill.

Bob Frenzel: Not surprisingly, renewable tax credits were front and center in the debate around this legislation. Accordingly, we expected limitations to credits as Congress tried to narrow a significant budget gap. For several years now, we've been working with our state commissions and other stakeholders on the substantial generation required in our operating regions to meet the reliability and growth needs of our customers. In total, we estimate that we need between 15 and 29 gigawatts of new generation before 2031, of which a significant amount could be sourced from wind and solar. Accordingly, we've already invested substantial capital and/or physically commenced construction of the clean energy resources included in our base capital plan, as well as enough to execute on our incremental investment pipeline, which we believe are necessary to meet the data center and electrification needs of our customers.

Not surprisingly renewable. Tax credits were front and center in the debate around this legislation.

Accordingly. We expected limitations to credits as Congress tried to narrow a significant budget gap for several years. Now, we've been working with our state commissions and other stakeholders on the substantial generation required in our operating regions to meet the reliability and growth needs of our customers.

Total, we estimate that we need between 15 and 29 gigawatts of new generation before 2031, which a significant amount could be sourced from wind and solar.

Bob Frenzel: We'll continue to monitor and manage through the recent executive orders, agency rulemakings, and trade and tariff actions, and make adjustments as needed as we continue to develop the energy assets that we need in our regions. In addition, we've procured 19 gas turbine reservations to meet the reliability needs of our customers. We serve customers in the most resource-rich regions of the country, and pairing wind and solar and energy storage and gas backup means that we can deliver clean, reliable, and affordable energy for our customers at the speed that they require. XCEL ENERGY also continues to make progress to mitigate risk from wildfires and extreme weather. This includes investments in advanced camera and weather station technologies, enhanced power line safety setting installations, pole inspections and replacements, and operational measures such as wildfire safety operations and public safety power shutoffs.

Accordingly. We've already invested substantial capital and or physically commence construction of the clean energy resources included in our base, Capital plan, as well as enough to execute on our incremental investment pipeline, which we believe are necessary to meet the data center and electrification needs of our customers. We'll continue to Monitor and manage through the recent executive orders agency, rulemaking and trade and tariff actions and make adjustments as needed as we continue to develop the energy assets that we need in our regions.

In addition, we've procured 19 gas turbine. Reservations to meet the reliability needs of our customers.

We serve customers in the most resource-rich regions of the country and pairing wind and solar and energy storage. And gas backup means that we can deliver clean reliable and affordable energy for our customers at the speed that they require Xcel Energy. Also continues to make progress to mitigate risk from wildfires and extreme weather. This includes investments in Advanced Camera and weather station Technologies. Enhance power line, safety setting installations

Bob Frenzel: We've also seen strong support from our commissions and states to invest in wildfire risk reduction. In June, the Colorado PUC approved our unanimous settlement for our $1.9 billion wildfire mitigation plan, which included a partial securitization mechanism to manage customer bill impacts and an extension of our excess liability insurance deferral. And in July, the Texas Commission approved our $500 million system resiliency plan. Both investment plans enhance the reliability and resiliency of these systems to mitigate the impacts of evolving and volatile weather patterns. And on the legislative front, in both Texas and North Dakota, constructive wildfire legislation was signed into law. And North Dakota legislation passed, establishing that when a utility is in compliance with an approved wildfire mitigation plan, it has exercised a reasonable standard of care.

Whole inspections, and Replacements, and operational measures such as Wildfire, safety operations, and Public Safety power. Shut offs.

We've also seen strong support from our commissions and states to invest in Wildfire risk reduction, in June, the Colorado puc approved. Our unanimous settlement for our 1.9 billion Wildfire mitigation plan, which included a partial securitization mechanism to manage customer bill impacts and an extension of our excess liability insurance deferral.

And in July, the Texas commission approved, our $500 million system, resiliency plan, both investment plans, enhance the reliability. And resiliency of these systems to mitigate the impacts of evolving and volatile weather patterns.

And on the legislative front in both Texas and North Dakota constructive Wildfire, legislation was signed into law.

Bob Frenzel: In Texas, similar legislation passed that states an electric utility is not liable for damages from a wildfire provided it's not negligent and is in compliance with an approved wildfire mitigation plan. Finally, I want to take a moment to thank our incredible line worker crews and other employees who've been working in tough conditions this week to get the lights back on for our customers after two rounds of major storms in the upper Midwest. All told, about 200,000 customers experienced outages from storms Sunday and Monday nights, mainly in Minnesota, Wisconsin, and South Dakota. More than 2,000 crew members joined in the effort, including crews from our Colorado and our Texas service areas, as well as contractors and mutual aid partners.

In North Dakota legislation passed establishing that when a Utilities in compliance with an approved Wildfire mitigation plan, it is exercised a reasonable standard of care.

In Texas, similar legislation passed the states and Electric utilities, not liable for damages from a wildfire.

Provided it's not negligent and is in compliance with an approved wildfire mitigation plan.

Finally, I want to take a moment to thank our incredible line, worker Crews and other employees who've been working in tough conditions this week to get the lights back on for our customers. After 2 rounds of major storms in the Upper Midwest.

All told about 200,000 customers experience outages from storms Sunday and Monday nights. Mainly in Minnesota, Wisconsin and South Dakota.

Bob Frenzel: Their dedication to serving our customers when things get challenging is what they're known for, and I am very proud of everything they've accomplished in the past few days. With that, let me turn it over to Brian.

More than 2,000 crew members joined in the effort including Crews from our Colorado and our Texas service areas as well as contractors and mutual Aid Partners, their dedication to serving our customers when things get challenging is what they're known for. And I am very proud of everything they've accomplished in the past few days.

Brian Van Abel: Thanks, Bob. Good morning, everyone. Starting with our financial results, XCEL ENERGY delivered earnings of 75 cents per share for the second quarter of 2025, compared to earnings of 54 cents per share in the second quarter of 2024. The most significant earnings drivers for the quarter included the following: higher revenue from electric and natural gas service reflecting rate case outcomes and sales growth increased earnings by 24 cents per share, and higher AFDC increased earnings by 7 cents per share. Offsetting these positive drivers, higher interest charges decreased earnings by 4 cents, reflecting higher debt levels and interest rates. Higher depreciation and amortization decreased earnings by 3 cents, driven by increased system investment, and increased O&M decreased earnings by 2 cents per share. Turning to sales, weather normalized electric sales increased 3.5% for the second quarter, driven by strong sales growth across segments in SPS and PF scope.

With that. Let me turn it over to Brian.

Thanks Bob. Good morning everyone.

Starting with our financial results, Xcel Energy delivered earnings of 75 cents per share for the second quarter of 2025.

compared to earnings of 54 cents per share in the second quarter of 2024,

The most significant earnings drivers for the quarter included the following.

Higher revenue from Electric and natural gas service reflecting rate, case outcomes and sales growth increased earnings by 24 cents per share.

And higher afdc increase earnings by 7 cents per share.

All setting these positive drivers.

Higher interest charges decreased earnings by $0.04, reflecting higher debt levels and interest rates.

Higher depreciation and amortization decreased earnings by 3 cents, driven by increased system investment.

And an increase or decrease in earnings by $0.02 per share.

Brian Van Abel: For the full year, we continue to forecast 3% weather normalized growth. Shifting to rate case activity, in South Dakota, we found an electric rate case requesting a $44 million increase based on a 10.3% ROE and a 52.9% equity ratio. Looking forward, we are evaluating options to file an electric rate case in New Mexico, a natural gas rate case in Minnesota, and rate cases in Colorado later this year. Moving to data centers, we are making solid progress on our target pipeline and are in active negotiations on several ESAs. We remain on track to meet our goal of contracting our total base plan by the end of this year, as we have spoken about before. We also continue to make strong progress on the Smokehouse Creek wildfire claims process. We've resolved 187 of the 253 submitted claims, which we continue to view as constructive.

The full year we continue to forecast 3%, weather normalized growth.

Shifting to a case activity. In South Dakota, we found an electric rate case, requesting a 44 million increase based on a 10.3% Roe and a 52.9% equity ratio looking forward. We're evaluating options to file an electric rate case in New Mexico and that's our gas, gas rate case in Minnesota and rate cases in Colorado later this year.

Moving to Data Centers, we are making solid progress on our target pipeline and are in active negotiations on several ESAs. We remain on track to meet our goal of contracting our toll-based plan by the end of this year, as we have spoken about before.

We also continue to make strong progress on The Smokehouse Creek Wildfire claims process.

Brian Van Abel: In addition, we have settled or dismissed 11 of 27 lawsuits. We have committed to $176 million in settlement agreements, of which $123 million has been paid through the second quarter of 2025. Based on current information and settlement activity, we are reaffirming the low end of our estimated liability of $290 million, which remains well below our insurance coverage of approximately $500 million, as we described in our earnings disclosure. Regarding the marshal trial, we are preparing for trial starting September 25th and expect it to conclude by mid to late November. Please see our earnings release and slides for additional disclosure on Marshall and Smokehouse Creek. Moving to guidance, we are reaffirming our 2025 guidance range of $3.75 to $3.85 per share. We remain confident in our ability to deliver long-term earnings growth in the upper half of our 6 to 8 percent target range.

We've resolved 187 of the 253 submitted claims which we continue to view as constructive.

in addition, we have settled or dismissed 11 of 27 lawsuits,

We have committed to 176 million in settlement agreements of which 123 million has been paid through the second quarter of 2025 based on current information in the settlement. Activity we are reaffirming the low end of our estimated liability of 290 million.

which remains well blower insurance coverage of approximately hundred million dollars as we described in our earnings disclosure regarding the Marshall trial

We are preparing for trial, starting September 25th and expected to conclude by mid to late November.

Please see our earnings release and slides for additional disclosure on Marshall and Smokehouse Creek.

Brian Van Abel: Updates to key assumptions are included in our slides and earnings release. With that, I'll wrap up with a quick summary. XCEL ENERGY posted strong second quarter 2025 earnings of 75 cents per share. We continue to lead the clean energy transition while ensuring safe, clean, and reliable service and keeping customer bills as low as possible. We now have visibility to $15 plus billion of opportunity in our investment pipeline. We continue to make investments to reduce risk to our system and communities from extreme weather, alongside constructive support from our states. We maintain a strong balance sheet and credit metrics using a balance of debt and equity to fund a creative growth. And finally, we reaffirm our 2025 EPS guidance of $3.75 to $3.85. We remain confident in our ability to deliver long-term earnings growth in the upper half of our 6 to 8 percent target range.

Moving the guidance we are reaffirming our 2025 guidance range of $3.75 cents to 3,085 cents per share. We remain confident in our ability to deliver long-term earnings growth in the upper half of our 6th 8% target range.

Updates to key assumptions are included in our slides and earnings release.

With that, I'll wrap up with a quick summary.

Xcel Energy, posted strong, second quarter, 2025 earnings of 75% per share.

We continue to lead the clean energy transition, while ensuring safe clean and reliable service and keeping customer bills as low as possible.

We now visibility to 15 plus billion dollars of opportunities. In our investment pipeline. We continue to make investments to reduce risk to our system and communities from extreme weather alongside constructive support from our states.

We maintain a strong balance sheet, and credit metrics using a balance of debt and Equity to fund a creative growth.

Brian Van Abel: This concludes our prepared remarks, operator. We will now take questions.

And finally, we are reaffirming our 2025 EPS guidance of 3,075 cents to 3,085 cents. We remain confident in our ability to deliver long-term earnings growth in the upper half of our 68% target range.

George: Thank you much, sir. Ladies and gentlemen, once again, it's time for questions. Our very first question today is coming from Carly Davenport of Goldman Sachs. Please go ahead.

This concludes our prepared remarks operator. We will now take questions.

Thank you, much sir.

Carly Davenport: Hey, good morning. Thanks for taking the questions. Maybe to start on the line of sight to the CapEx upside moving from that $8 billion up to $15 billion, I guess how should we be thinking about the potential conversion of that upside into the base capital plan next quarter? Is there spend that could fall outside from a timing perspective or any regulatory considerations that could keep dollars out of the base plan update? Just any color there would be helpful.

Ladies and gentlemen, once again to 1 for questions, our very first question, today is coming from Carly Davenport of Goldman Sachs. Please go ahead.

Brian Van Abel: Hey, Carly. Good morning. Yeah, I'll try and keep this somewhat succinct. But if we think about it, the SPS RFP, we're relatively early in that process. We'll be filing with the New Mexico and Texas commissions here in August and expect decisions of those certificates to need in the first half of next year. Minnesota, we continue to work through the RFPs, and then we have the transmission, the big transmission in SPP and MISOS. A lot of that will be in the kind of '26 to '23 timeframe with a little bit falling out. But as I think about it, we're generally conservative with what we view from a regulatory perspective. So we'll be really clear and transparent on Q3 in terms of what's in our base plan and what's outside of it. But overall, I think we feel really good about this.

Hey, good morning. Thanks for taking the questions. Um, maybe to start on the, the line of sight to the capex upside moving from that 8 billion up to 15. I guess, how should we be thinking about the potential conversion of that upside into the base Capital plan? Next quarter is there Spend That Could Fall outside from a timing perspective, or any regulatory considerations that could keep dollars out of the base. Base Plan update, just any color there would be helpful.

Brian Van Abel: What we've now changed is a $15 billion plus line of sight in terms of the progress we've made both in Minnesota and in SPS. And I think we have one of the best growth prospects in the industry, and we'll be really clear on how we lay that out in Q3.

Hey Carly. Good morning. Yeah, I'll try and keep this somewhat succinct but we think about it. Um, the SPs RFP were relatively early in that process, we'll be filing uh with the New Mexico and Texas commissions here in August um and expect decisions of those certificates of need uh in the first half of of next year. Um Minnesota. We continue to work through the rfps and then we have the transmission, the big transmission and spp in my house. A lot of that will be in the kind of 26 to 2030 time frame with a little bit falling out. Um but as I I think about it we're generally conservative with our you know with what we view from a regulatory perspective so we'll be really clear and transparent on Q3 in terms of what's in our base plan. Um, and what's outside of it? But overall, I think you we feel really good.

Bob Frenzel: Yeah, hey, Carly.

About this, what? We've now changed, 15 billion plus line of sight. Um, in terms of the progress, we've made both in Minnesota and in in SPS and I think we have 1 of the best best growth prospects in the industry um and it will be really clear on how we lay that out in Q3.

Carly Davenport: Hey, thank you, Bob.

Bob Frenzel: Just to add on to what Brian said, I agree with everything. You know, look, these projects are largely generation and transmission related in the incremental need category. And while a lot of it's driven by reliability needs of the existing footprint, some of it's driven by growth as well. And you know, we know as a company, as an industry, there's tremendous need for electricity in this country right now to meet growing demand from all the things I mentioned in my prepared remarks. And so we think that this incremental need is real. It's going to materialize. And whether it's in the front five or six or seven, it's definitely coming towards our territories to support reliability and to support growth.

Brian Van Abel: Yeah, and I think about the Colorado resource plan that we're working through right now and expect a commission decision here in Q3. That spend, the commercial operation for those projects is through 2031. So that's both going to be in this five-year and kind of that incremental CapEx for longer.

Carly Davenport: Great. I appreciate all that color. Super helpful. And then maybe just on the SPS resource plan, as you pointed to that in your previous answer, just could you remind us on your turbine procurement position just as we think about executing on the gas generation included in that plan? If I recall, when you initially filed it, it was supposed to come into service by kind of the 2030 timeframe. So could you just lay out the details on that front?

Really needs of the existing footprint, some of its driven by growth as well. Um, and you know, we know as a as a company as an industry, there's tremendous need for electricity in this country right now to meet growing demand from all the things I mentioned in my prepared remarks. And so, we think that this incremental need is, is real, it's going to materialize and whether it's in the front 5 or 6 or 7, uh, it's it's definitely, uh, coming towards our territories to support reliability and to support growth. Yeah. And I think about it about about the Colorado resource plan that we're working through right now and and expect a commission decision here in Q3. Um, that's spend the commercial operations for those projects is through 2031. So that's both going to be in this 5 year and kind of that that incremental capex for longer.

Bob Frenzel: Sure. Happy to, Carly. In the prepared remarks, I said that we had 19 turbine reservation slots to support either projects that we already know are coming or that we will need them for. I think the SPS portfolio requires nine of those 19. And so I think we're largely ready to supply those on time.

Great, appreciate all that color super helpful and then maybe just on the the SPs resource plan. Um, as you pointed to that in in your previous answer, just could you remind us on your turbine procurement position just as we think about executing on the gas generation? Uh, included in that plan. If I recall when you initially filed it, it it was supposed to come into service by kind of the 2030 time frame. So could you just lay out the the details on that front?

Brian Van Abel: Yeah, and Carly, this is something that we think about our overall scale and relationships with our OEMs and the need for gas generation we see across our footprint. Now we look at, you know, we reserve turbine slots in kind of that '27, '28 timeframe well ahead of the market so we could deliver on these projects because we see a significant need of gas generation across all of our operating companies to integrate the renewables and ensure reliability. So we're well positioned from that perspective, not only on the EPC side, but also on the OEM side, but also on the EPC side given the demand on EPCs and the construction of the gas units across the country.

Carly Davenport: Super clear. Thanks so much for the color.

So we're happy to uh, Carly in the prepare to work, so I said that we had 19 turbine reservation slots to support, um, either projects that we already know are coming or that we will need them for I think the SPs portfolio requires 9 of those 19. Uh, and so, I think we're, we're, we're largely ready to supply those on time. Yeah, in Carly. This is something that, you know, we think about our overall scale and relationships with our oems and the need for gas generation. We see across our footprint. Now, we look at, you know, we reserve turbine slots and kind of that 2728 time frame, well, ahead of of the market. So we could deliver on these projects. Um, because we see a significant need of gas generation and crawl across all of our operating companies to integrate the Renewables and ensure reliability. So we're well positioned from that perspective not only in the EPC side but also or on the OEM side but also on the EPC side, given the demand on epc's and the construction of the gas uh units across the country.

George: Thank you very much, Carly. Next question will be coming from Nicholas Campanella calling from Barclays. Please go ahead.

Super clear. Thanks so much for the caller.

Thank you very much CI.

Next question will be coming from Nicholas Campanella, calling for Barkley's. Please go ahead.

Nicholas Campanella: Hey, good morning. Thanks for all the updates. I just wanted to, I wanted to kind of hit OBDB, but more specifically, I guess the Treasury order that's coming in the next few weeks here. You know, it seems like your appetite for renewable build-out is unchanged now that we're on the other side of this. But just if the window for Safe Harbor is shortened, just how do you kind of see that affecting your plan? And I know that you did a lot of Safe Harbor on the original 45, so I just wanted to kind of confirm that you don't really see an impact on any outcome, but I'll let you talk. Thank you.

Hey, good morning, thanks for uh, thanks for all the updates. Um,

Brian Van Abel: Hey, Nick. Yeah, kind of a lot wrapped up in that question. So if I don't hit on all of it, just remind me of the pieces that you wanted me to hit on. I think, you know, stepping back, you know, when we look at our $45 billion base plan, you know, we've taken steps, as you'd expect us, to start physical construction on a number of projects last year, started physical construction on projects this year in the first half. So we feel very good about our $45 billion base plan plus the $15 billion plus line of sight projects that we have. So we feel good at delivering those projects for our customers and having them in a good place from a startup construction or physical work perspective. So overall, in a good place.

I just wanted to, uh, I wanted to kind of hit, uh, obb but more specifically, I guess the treasury order that's coming in. Uh, the next few weeks here. Um, you know, seems like your appetite uh, for renewable buildout is unchanged. Uh, now now that we're on the other side of this but just if the window for Safe Harbor is shortened, just how do you kind of see that affecting your plan? Um, and I know that you did a lot of Safe Harbor on the original 45. So I just wanted to kind of confirm that you don't really see an impact, uh, on any outcome. But I'll let you talk. Thank you. Hey, Nick? Yeah, the kind of a, a lot wrapped up in, in that in that question. So if I don't hit on all of it, uh, just, uh, remind me of the pieces that you want me to hit on. I, I think, you know, stepping back, you know, we're when we look at our 45 billion base plan, you know, we've taken steps as you'd expect us to start physical construction on a number of projects last year. Start a physical construction on projects this year in the first half. So we feel very good about our 45 billion.

Brian Van Abel: and I think about the Treasury guidance, you know, from our perspective, the statutory language is beginning construction, and that term has been defined for a long time. but you know, we've been engaged in DC along with, our industry partners, and I think we do expect something to come out here by mid-August. not going to opine on what that might be, but you know, as we look at it, we're continuing to start physical work on the projects and we evaluate that guidance as it comes up. but overall, we feel really well positioned with where we are today and the generation needs for our customers.

Base plan, plus the 15 billion dollar plus line of sight projects that we have. So we feel good at delivering those projects for our customers and having them in a good place from a startup startup construction or physical work perspective. So overall, um, in a good place, um, and I think about the treasury guidance, you know, from our perspective, the saturated language is beginning to construction and that term has been defined for a long time. Um, but you know, we've been in engaged in DC along with

Nicholas Campanella: Okay. Thank you for that. and then just with the $15 billion of CapEx upside becoming more of a reality now, just that should put pressure higher on rate-based growth. your cash flow profile is already improving, from the investments you're making today. And then you kind of talked about the depreciation benefits with OBDB, and we should have sales growth later in the plan as well. So just, you know, as we kind of think about getting further out in the in the plan, how should EPS growth kind of track against rate-based growth? Should we be kind of expecting similar types of equity issuance, or is that kind of improving in your view?

Uh, our industry partners, uh, and I think we do expect something to come out here by mid-August. I'm not going to opine on what that might be, but you know, as we look at it, we're continuing to start physical work on a project, and we value that guidance as it comes up. Um, but overall, we feel really well positioned with where we are today in the generation needs for our costs to serve our customers.

Brian Van Abel: Yeah, if I think about it, you know, I'll take that in a couple of different ways. You know, again, really excited about the growth prospects and delivering for our customers here, as we see the demand growth increase. from an equity perspective, you know, we've always been managing a strong balance sheet. We do a balanced mix of debt and equity. Now, if you look at our earnings release in our Q, we issued over a billion dollars of equity via ATM in Q2. and so that really, our base plan had $4.5 billion of equity, and we already accomplished $2.5 billion between the forward late last year and this this ATM issuance. So we're in a really good place, and we'll continue to do that. we do see the incremental capital, as we've always said, coming with a balanced mix of debt and equity.

Getting further out in the, in the plan, how should EPS growth kind of track against rate based growth? Should we be kind of expecting similar types of equity issuance or is that kind of improving in your view?

Brian Van Abel: And roughly, you know, rule of thumb we've always given is that 40% equity. and we view that, ATM is our plan to be, but we'll also look at other products, mandatories, converts as as our equity needs grow to fund our creative growth. As I think about that translating from rate-based growth to EPS growth, obviously, we'll provide, a holistic update in Q3 around our new five-year capital plan, our incremental pipeline, our sales growth, rate-based growth, and you know, even what we said last year when we moved to 6 to 8, we talked about being above the high end at times. And I think that's a good way to think about it.

Uh, if I, if I think about it, you know, I'll take that in in a couple different ways. You know, again, really excited about the, the growth prospects, uh, and delivering for our customers here. Um, as we see the demand growth increase, uh, from an equity perspective, know we've always been, uh, managing a strong balance sheet, we do a balanced mix of debt and Equity. You know, if you look at at our earnings release in our, in our queue, we issued over a billion dollars of equity via ATM in Q2. Um, and so that really our base plan had 4 and a half billion dollars of equity and we already accomplished 2 and a half billion dollars between the 4 late last year and this, this ATM issue. And so we're in a really good place and we'll continue to do that. Um, we do see the incremental Capital as we've always said, coming with a balanced mix of of debt and equity in roughly, you know, rule of thumb. We've always given is that 40% Equity? Uh, and we view that, um, ATM is our plan to be, but we'll also look at other products mandatory as converts as

Nicholas Campanella: Okay. Very fair. And just one last one, on Marshall. I know that trial will be in September. I think mediation deadline, was was today, but just is is settlement, of of that fully off the table for now, or is there still an opportunity to do that, into trial? And just taking your temperature there. Thanks.

Bob Frenzel: Yeah. Hey, Nick. It's Bob. Thanks for the question. look, so, technically, the court order mediation, concluded at the end of July, but that doesn't mean that parties don't continue to talk. As we step back and think about, the trial broadly and the fire broadly, we continue to maintain that our equipment, didn't start the second ignition in the wildfire, and we're prepared to go to court, as Brian indicated in his prepared remarks, at the end of September. And that trial is likely to last through middle to late November. between now and then, you're probably going to see some filings back and forth from, plaintiffs and and us around, you know, pretrial briefs and things like that. But you know, we're planning to go to to trial.

As our Equity needs to grow to fund our creative growth. Um, as I think about that translating from rate based growth to EPS growth, obviously will provide, uh, a holistic update in Q3 around our new 5 year Capital plan, our incremental pipeline, our sales growth, uh, rate based growth. Uh, and you know, even what we said last year when we moved to 68, we talked about being above the high-end at times. And I think that's a good way to think about it. Okay. Very fair. And just 1 last 1, um, on Marshall. I know that trial the September, I think mediation deadline, uh, was was today but just is, is, is settlement, uh, of of that fully off the table for now. Or is there still an opportunity to do that uh in into trial and just taking your temperature there? Thanks.

Yeah, hey Nick, it's Bob, thanks for the question. Um,

Look, so, uh, technically, the court order remediation, uh, concluded at the end of July, but that doesn't mean that parties don't continue to talk. Um, you know, as we step back and think about, uh, the trial broadly and the fire broadly, we continue to maintain that our equipment, uh, didn't start the second ignition in the wildfire. And we're prepared to go to court as Brian indicated in his prepared remarks at the end of September. And that trial is likely to last through middle to late November, uh, between now and then you're probably going to see some filings back and forth from uh plaintiffs and and us around, you know, pre-trial briefs and things like that. But you know, we're planning to go to

Bob Frenzel: we're always open to settlement discussions, but we have to start with the idea that our equipment didn't cause that second ignition, and we maintain that.

Nicholas Campanella: Very good. Thank you.

George: Thank you very much, sir. Next question will be coming from Jeremy Tunnett of JP Morgan. Please go ahead. Your line is open.

To trial. Uh, we're always open to settlement discussions, but we have to start with the idea that our equipment didn't cause that second ignition, we maintain that very good. Thank you.

Thank you very much, sir.

Nicholas Campanella: Hi. Good morning.

Brian Van Abel: Hey, Jeremy.

Next, special be coming from Jeremy tonette of JP Morgan. Please go ahead. Your line is open. Hi. Good morning. Hey Jeremy.

Nicholas Campanella: I was just wondering if we could turn to the competitive transmission opportunities. How do you think about incorporating them into your plan? Do you probability weight the chance of winning contracts here, or do you include them kind of on a binary basis?

Brian Van Abel: Hey, Jeremy. I can speak broadly about it. We don't include them in our capital plan unless they're won. And we're very disciplined on the competitive side. You don't see us bidding on projects generally outside of our service territory. So pretty disciplined. I mean, we look at all of our growth capital that we have within our service territories, the transmission we need to build in SPP, MISO, longer-term Colorado, and all the generation. You don't expect us to be chasing competitively bid transmission projects kind of outside of our service territories.

I was just, uh, wondering if we could turn to the competitive transmission opportunities. Um, how you think about incorporating them into your plan? Do you probably wait, the, uh, chance of winning contracts here or do you include them kind of on a binary basis? Hey, hey Jeremy, I didn't speak broadly about it. Um, we don't include them in our Capital plan, um, unless they're 1 and and we're very disciplined on the competitive side, you don't see us bidding on projects generally outside of our service territory. So uh pretty disciplined. I mean we look at all of our growth Capital that we have within our service territories the transmission we need to build in spp MSO longer term, Colorado and all the Generation. Um you don't expect us to be chasing competitively bid transition projects kind of outside of our service areas.

Nicholas Campanella: Got it. Understood. Thanks. And just want to, I guess, turn to the data centers a little bit more. What is your contracting progress on the base data center assumption here? And can you provide any more color on the counterparty type, long-term ramp for the portion of your base forecast currently contracted?

Got it, understood. Thanks. Um, and just wanted to, I guess turn to the data centers a little bit more. What what is your Contracting progress on? Uh, the base data center, uh, assumption here and can you provide any more color on the counterparty type, uh, long-term ramp, uh, for the portion of your base, forecast,

Bob Frenzel: Hey, Jeremy. Let me start. It's Bob, and then I'll kick it over to Brian. You know, as a company, we're very excited about the opportunity to serve this type of critical infrastructure. We have about 1.1 gigawatts of data centers under construction and under contract. And our plan is for, by the balance of the year, to hit another sort of gig of data centers, ultimately hitting about two and a half by 2030 timeframe. And then we've got a really robust pipeline behind that high-quality stuff that we're working on right now of seven or so gigs that I would talk about as maybe tier two opportunities. And then there's even tier three and beyond stuff beyond that total. So really excited.

Cast currently contracted.

Bob Frenzel: As I sit and think about our business, we have interest in all parts of our three operating areas: the upper Midwest, Colorado, and the desert southwest. And for different reasons, each of those regions are very attractive to our data center counterparts, either whether you're a hyperscaler or a data center developer. With specific contract stuff, I'll kick it over to Brian to tell him of the ramp profile. But big picture, I think we see this as a real growth opportunity, a real opportunity to, you know, grow sales on our system, bring rates down for all of our customers, and be beneficial for both hyperscalers as well as our existing customer base.

Brian Van Abel: Yeah. And just to add a little bit of color, you know, we talked about we continue to make really good progress in the ESA negotiations with those counterparties. We talked about one in Minnesota, one in Wisconsin, one in Colorado. A couple of them are your, you know, what you expect to your your hyperscalers. And we continue to make progress. And that's when I think about progress, they have their system impact studies, facility studies, land, and now we're on to actually the terms of the agreement and discussing that. We also had a new opportunity pop up in Texas and Amarillo that we're working on. But again, we don't expect us to update our data center slide every quarter. Our pipeline is robust, as Bob mentioned.

By 2030 time frame. And then, we've got a really robust pipeline behind. That high-quality stuff that we're working on right now of of 7 or so gigs that I would talk about is maybe tier 2 opportunities and then there's even tier 3 and Beyond stuff beyond that total. So, uh, really excited as I sit and think about our business, um, we have interests in in all parts of our 3, operating areas, the Upper Midwest Colorado and the desert Southwest uh, and for different reasons. Each of those regions are very attractive to our our data center counterparts. Either, whether you're a hyperscaler or a data center developer, um, with specific contract stuff. I I'll kick it over to Brian, tell them of the ramp profile, but big picture. I think we see this in real growth opportunity. A real opportunity to, you know, uh, grow sales on our system, bring rates down for all of our customers and be beneficial for both hyperscalers as well as our existing customer base.

Yeah, and and just to add a little bit of color, you know, we talked about, we continue to make really good progress in the ESC Esa. Negotiations with those uh counterparties. Uh, we talked about uh, 1 in Minnesota, 1 in Wisconsin. 1 in Colorado, a couple of them are your, you know what, you expect, your, your hyperscalers, um, and we continue to make progress. And and that's when I think about progress they have their system impact studies facility studies land. And now we're on to actually the terms of the agreement and discussing that. Um, we also had a new

Brian Van Abel: We continue to see inbounds and looking forward to executing on the agreements we talked about for the balance of the year and bring that forward.

Opportunity, um, pop up in Texas and Amarillo, um, that we're working on, but again, we don't don't expect us to update our data center, slide every quarter. Um, our pipeline is is robust as Bob mentioned. Um, we continue to see inbounds and looking forward to executing on the agreements. We, we talked about for the balance of the year, uh, and and bring that uh forward

Nicholas Campanella: Got it. Very helpful there. Thanks. And just a quick last one, if I could, if you could speak a bit more on the gain on debt repurchases there. And was this contemplated with a plan or any other color there?

Brian Van Abel: Yeah, Jeremy. No, it wasn't part of our plan. What we saw is we use it as opportunistic. It's a great tool when you think about we saw some headwinds in our venture capital investments related to clean energy. And you know this is a challenging market for clean energy. And so you saw some negative market to markets this year in the first half, and we just used that to offset that. So not an earnings driver at all.

Got it. Very helpful there, thanks. And just a quick last 1. If I could, uh, if you could speak a bit more on the gain, on debt repurchases there and was this contemplated or the plan or any other color there,

Nicholas Campanella: Got it. Understood. Thank you.

Yeah, Jeremy, uh, no, it wasn't part of our our plan. What we saw is we use an opportunistic. Uh, it's a great tool. When you think about, we saw some headwinds in our Venture Capital Investments related to clean energy and you you know this is a a challenging market for clean energy and so you saw some negative Mark to markets this year in the first half and we just use that top that to offset that. So not an earnings driver at all.

George: Thank you. What's your question set, Jeremy? Next question will be coming from Julian Smith of Jefferies. Please go ahead. Your line is open.

Got it, understood. Thank you.

Thank you. What's your question? Is that Jeremy?

Next question. She'll be coming from Julian. Smith of Jeffrey's. Please go ahead. Your line is open.

Brian Van Abel: Hey, good morning, team. Can you guys hear me okay?

Brian Van Abel: Perfect, Julian.

Hey, good morning, team can you guys hear me, okay?

Perfect, Too. Perfect. Julian.

Brian Van Abel: There we go. Excellent. Hey, you know, Bob, let me ask you this. I mean, you say at times, you know, we can do the math. But if I heard you right earlier in the call, I mean, it seems like you might actually be doing the math for us here, at least as it pertains to the third quarter update. I mean, are you guys actually going to refresh the full suite of guidance in a more formal way with that role form?

There we go. Excellent. Hey um, you know Bob let me, let me ask you this. I mean you you say at times you know, we can do the math, but if I heard you write earlier in the call I mean it seems like you might actually be doing the math for us here at least as it pertains to the uh the the third quarter update. I mean, are you guys actually going to refresh the full Suite of guidance in a more formal way with that roll forward?

Bob Frenzel: Yeah. So I think, as always, our third quarter update has a full and comprehensive update on all the assumptions, whether it's sales or capital deployment, rate-based growth, earnings growth, financing needs, etc. And we plan to do a full roll forward on the third quarter call.

Brian Van Abel: All right. Thanks for clarifying that. And then just going back to the, you know, your ROEs and the PF scope, backdrop, obviously, you got the distribution rider, etc. How do you think about the improvement in earned returns there just a little bit? Again, that might be one of the disintermediating factors between rate base and earnings here, or at least one of the bigger factors in the medium term. How are you feeling about that prospect, etc., just given the 7 to 8?

Yeah. So I think as always our third quarter update has a full and comprehensive update on all the assumptions, whether it's sales or Capital deployment rate based growth earnings growth, uh financing needs Etc and we plan to do a full roll forward on the third quarter call.

Thanks for clarifying that um and then just going back to the um, you know, your roas and the PS go backdrop. Obviously you got the distribution uh, right or Etc. How do you think about the

Bob Frenzel: Yeah. Julian, I can take that one. Yeah, you're talking about rolling 12-month average at 7.8%. You know, the distribution rider has been a good mechanism. You know, we have a lot of investments on the distribution system to deliver for our customers, both from a resiliency perspective and a growing capacity perspective. So in that rider this year was capped. So it was kind of partially implemented this year, then full implementation next year. That 7.8%, we do expect improvement through balance of the year and then continued improvement next year. And so we are working on that, and the distribution rider, once fully implemented, should help address some of that next year.

Improvement in earned returns there just a little bit again, that that might be 1 of the this intermediate factors between rate base and earnings here, at least 1 of the bigger factors are in in, in the medium term. How are you feeling about that prospects? Etc. Just giving the 78? Yeah, and Julie and I can take that 1. Yeah. You're talking about rolling 12 month average at 787.8%, you know, the distribution Rider is, is been a good mechanism. You know, we have a lot of Investments on the distribution system that deliver for our customers, both from a resiliency perspective and a capacity, growing capacity perspective. So and and that Rider this year had was capped. Um, so it was kind of partially implemented this year that

Brian Van Abel: Yeah. So thank you. Brian mentioned his prepared remarks where we're looking at potential cases in Colorado at the end of the year. And that's a composite ROE. And so we've done a lot of work to improve the electric side of that ROE, and the gas still has lag in some of its mechanisms. If you think about the preponderance of the capital in that company going forward, it's largely electric. And as Brian mentioned, whether it's a distribution rider, a renewable energy rider, a transmission rider, or a new rate case, we expect certainly the electric side of that ROE to continue to improve.

Implementation next year. Um, that's 7.8%. We do expect Improvement through balance of the year, um, and then continue to Improvement next year. And so uh, we are working on that and the distribution writer once fully implemented should help uh address some of that next year.

Nicholas Campanella: Got it. Excellent. And sorry to, I don't mean to press you too much on this, but given what you have here already, and I know we can do the math, but just to verify, I mean, it does seem like a low teens rate-based carrier, which admittedly wouldn't be all that different from your, your, your, shall we say, regional peers necessarily. Curious if you want to verify that.

Has lag in some of its mechanisms. Uh, if you think about the preponderance of the capital in that company going forward, it's largely electric, and as Brian mentioned, whether it's a distribution Rider a renewable energy Rider, a transmission Rider or a new rate case. We expect, the certainly the electric side of that Roe to continue to improve

Got it. Excellent. And, and sort of I I mean to press it too much on this but

Given what you have here already and I know I know we can do the math but just to verify, I mean it does seem like a low teens rate is kicker, which admittedly would be all that different from your your your shall we say Regional peers, necessarily curious. If if you want to

Verify that.

Brian Van Abel: I mean, Julian, we did kind of give you that rule of thumb of 25 bits of rate base or 25 bits of the rate base equals roughly incremental billion dollars of capital. So yeah, you're doing the math correctly. Now, we will roll forward off a higher base for 2026 to 2030 rate-based guidance as we always do, but you are correct, and we believe we have one of the best growth prospects in the industry. And we're going to deliver these projects for our customers, right? We're really focused on reliable and affordable and clean energy for our customers. And so we have a lot of investments ahead of us to deliver on that.

Nicholas Campanella: Awesome. All right. Best of luck, guys. Talk soon.

I mean, I'm Julie, and we did kind of give you that rule of thumb of 25 bits of rate base or 20, 25 bits of the rate based equals roughly incremental billion dollars of capital. Um, so yeah, if you're you're doing the math correctly, now we do will roll forward off a higher base for 2026 to 2030. Great based guidance, as we always do, but you are correct. And we believe we have won the the, the best growth prospects in the industry. Um, and we're going to deliver these projects for our customers, right? We're really focused on reliable and affordable and clean energy for our customers. And and so we have a lot of Investments ahead of ahead of us to deliver on that.

Brian Van Abel: what happened?

Bob Frenzel: Oh, yeah. So the next question is coming from Steve Weichmann, Wolf Research. I think we lost our operator.

Brian Van Abel: Oh, well, that might be me, so I thought I lost the call.

Uh, what happened? Oh yeah. So the next question is coming from Steve fleshman. Wolfe research. I think we lost our operator.

Bob Frenzel: No, Steve, we can hear you.

Brian Van Abel: Okay, great. Thanks for the time. So just a follow-up on the question regarding the kind of OBB and executive orders. How do we need to be concerned at all about kind of federal land issue with respect to your kind of renewable projects?

Oh well, that might be me. So I I thought I lost the call. Um, no Steve, we can hear you. So, uh, thanks. Okay, great. Thanks for the time. Um, so just a follow-up on the question regarding the uh uh, kind of obb and executive orders. How do we need to work? Uh, be concerned at all about kind of federal land.

Bob Frenzel: Yeah. Hey, Steve, I can take that one. We don't have any projects on federal land, just make an easy answer.

Uh, issue with respect to your kind of pro, uh, renewable projects.

Brian Van Abel: Okay. I like easy answers. Thank you. And then on the going back to the also the topic of the Marshall fire, Bob, you mentioned the, you know, you kind of don't think you caused a second ignition. I think your slides also continue to show that a lot of the damage was already kind of happening from the first ignition. I assume that remains part of your core case as well.

Yeah. Hey, Steve, I can take that one. We don't have any projects on federal land; just make it easy, an easy answer. Okay. I like easy answers. Thank you.

And then on the going back to the also the topic of the Marshall fire. Uh uh Bob you mentioned the you know you you kind of don't think you caused a second ignition. I think your slides also continue to show that a lot of the damage

Was already kind of happening from the first ignition, uh, it. I I assume that remains part of your

Bob Frenzel: Yeah, absolutely, Steve. So when I think about the trial broadly, you know, I think the sheriff report identifies that the start of the fire was on property owned by the 12 tribes. That first ignition was subject to almost 100-mile-an-hour wind for over an hour and 20 minutes, causing a fire spread theory where we see propagation of that fire into the towns in Colorado. And then, obviously, at some point, there's a purported second ignition. And so we believe that, again, on a trial basis, you know, we have to have been found to have started a second ignition, that we were negligent in the maintenance of our maintenance and operations of our lines. And then we get into sort of joint and several or not joint and several liability on the call. It's sort of our portion damages based on causality.

court case as well. Yeah, absolutely Steve. So, what I think about the trial, broadly. Um, you know, I think the sheriff report identifies that the start of the fire was on property owned by the 12 tribes.

That first ignition, uh, was subject to almost 100 mph winds for over an hour and 20 minutes. Uh, causing a fire spread Theory, uh, where we see propagation of that fire into the, the towns of of, of, uh, in Colorado, um,

And then obviously, at some point, there's a purported second ignition. And uh, so we we believe that again on a

Bob Frenzel: So again, we feel very good about the facts and circumstances of our trial and are prepared to go there.

Brian Van Abel: Okay. And then there is still an opportunity to kind of settle if you deem that it makes sense.

On a trial basis. You know, that we have to have been found to have started a second edition. That we were negligent in the maintenance of our maintenance, and operations of our lines. And then we get into sort of joint and several or not joint, several liability on the call, and see if the S, our proportion damages based on causality. So again, we feel very good about the facts and circumstances of our trial and are prepared to go there.

Bob Frenzel: Sure. There's no prevention from a settlement proposal. We've got probably two months before the trial begins, and you could settle even during the pendency of the trial. So there's lots of opportunity there. But again, we feel very good about our facts, and we're prepared to go to trial.

Okay. Um, and then, uh, there is still an opportunity to kind of settle if you deem that it makes sense.

Sure there. There's no there's no, um, prevention from a settlement proposal. Um, we've got probably 2 months before the trial begins and you could settle even during the dependency of the trial. So there's there's lots of opportunity there. But again, we feel very good about our facts and, and we're prepared to go to trial

Brian Van Abel: Okay. Great. Thank you.

Okay, great. Thank you.

George: Thank you very much, sir. We'll now move to Sophia Karp of KeyBank. Please go ahead. Your line is open, ma'am.

Thank you very much, sir.

Carly Davenport: Hi. Good morning. Thank you for taking my question. I have a follow-up on the trial. Just could you remind us if there was any sort of range of estimate on the damages? I know that ultimately that will be decided at the second trial, but what are the estimates that are currently being contemplated?

When I moved to Sophia karp of KeyBank. Please go ahead. Your line is open, ma'am.

Bob Frenzel: Yeah. Hey, Sophie. It's Bob. I think you got it right. The structure of the trial is such that we look at liability in the first trial, and in the second trial would be any damages if we get that far. We don't have an aggregate estimate of damage claims. What we do believe is that from the insurance companies, there was about $2 billion worth of property damage that they paid off in their claim process.

Carly Davenport: Got it. Got it. Thank you. And then my second question is, just kind of broadly speaking, you have a lot of growth opportunities ahead of you, right? And you're going to presumably have some equity needs for those. And given that your evaluation does not reflect those growth opportunities right now, in my opinion at least, right, have you explored or are you likely to explore alternatives to equity rates, such as maybe selling off some of the non-core assets or assets you deem less core to your electric operation? Like how should we think about that?

Question. I have a follow up on the, on the trial. Um, yes. Could you remind us if there was any sort of, um, range of estimate on the damages? Um, I know that ultimately that will be decided at the second trial, but what are the estimates that are currently being contemplated? Yeah. Hey, Sophie, it's Bob, um, I think you got it right. The structure of the trial is such that we look at, um, liability in the first trial. And in the second trial would be any damages, if we get that far. Um, we don't have a aggregate estimate of damage claims. What we do believe, is that from the insurance companies? There was about 2 billion dollars worth of property damage that they paid off in their claim process.

Got it, got it. Thank you. And then uh, my second question is um, just kind of, broadly speaking, you have a lot of growth opportunities ahead of you, right? Then you, you're going to presumably have some Equity needs for those and given that your Revelation does not reflect those growth opportunities right now, in my opinion, at least, right? Um, have you explored? Um,

Brian Van Abel: Hey, Sophie. I can take that. You know, I commented a little bit forward in terms of ATM is there a plan to be, but we're looking at mandatory and converts. We have a strong balance sheet, and we're comfortable issuing equity to fund that accretive growth. No, I've been on record. We've been on record that we're not all that interested in minority interest sales. And if we think about, you know, we view our assets as core. And if we were ever to do anything, it would be for strategic reasons, not to fund our investments that we need to make. And we've been disciplined for the past 20 years on the strategic side.

Why are you likely to explore alternatives to equity raises, such as maybe selling some of the non-core assets or assets you deem less core to your electric operation? Like, how should we think about that?

Carly Davenport: Got it. Thank you so much. That's all for me.

You are assets as core um and if we were ever to do anything, um it would be for strategic reasons not to, to fund um our investments that we need to make and we've been disciplined for the past 20 years on the Strategic side.

George: Thank you very much, ma'am. We'll now move to Paul Patterson of Glenrock Associates. Please go ahead.

Got it. Um, thank you so much. It's all for me.

Too much, man.

Will now move to Paul Patterson of Glen Rock Associates. Please go ahead.

Bob Frenzel: Good morning. Can you hear me?

Brian Van Abel: Hi. You're breaking up again. So next question is Paul Patterson with Glenrock Associates.

Bob Frenzel: Hello. Can you hear me?

You're breaking up again. So next question is Paul Patterson with Glenn Rock Associates?

Hello, can you hear me?

George: Yes, sir. Your line is open, sir. Sir, your line was open. Okay, gentlemen, she appeared and did not hear us. Right now, we do not have any further questions. We'll turn the call over to Mr. Van Abel for an additional closing remarks.

Yes, sir. Your line is open, sir.

Sir, your line was open.

Brian Van Abel: Thank you all for participating in our earnings call this morning. Please contact our investor relations team with any follow-up questions.

Okay gentlemen uh is she up here and did not hear us right now? We do not have any further questions Lieutenant call over to Mr. Mr. Able for an additional closure remarks.

Thank you all for participating in our earnings call this morning. Please contact our investor relations team with any follow-up questions.

George: Thank you very much, sir. Ladies and gentlemen, that will conclude today's conference. We're going to disconnect. Have a good day and goodbye.

Thank you very much, sir. Ladies and gentlemen, have a good day and goodbye.