Xcel Energy Inc (XEL) — Q4 2024 Earnings Call Transcript

Good morning, and welcome to Xcel Energy's 2024 fourth quarter earnings call. Joining me today are Bob Frenzel, Chairman, President and Chief Executive Officer; and Brian Van 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 2024 full year 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. As a reminder, we recorded a charge of $0.06 per share in 2024 related to the disallowance of replacement power costs, associated with an extended outage at our Sherco plant in 2011. Given the outage occurred 13 years ago, and the non-recurring nature of this item, this charge has been excluded from full year ongoing earnings. As a result, our GAAP earnings for 2024 were $3.44 per share, while our ongoing earnings, which exclude this non-recurring charge, were $3.50 per share. All further discussion in our earnings call will focus on our annual ongoing earnings. For more information on this, please see the disclosure in our earnings release. I will now turn the call over to Bob.

Thank you, Roopesh, and good morning, everybody. At Xcel Energy, we know that economic growth and the prosperity of our communities and country depend on our ability to deliver energy to our customers when and where they need it, while keeping their bills as low as possible. And in 2024, we delivered on another year of solid operational and financial progress to that end. Across our eight states, we invested more than $7.5 billion to build and maintain infrastructure that supports our customers' energy needs in areas like advanced technology for a smarter, more reliable grid, long-haul and regional transmission to support customer growth and system reliability needs, and carbon-free generation to continue our pursuit of a cleaner energy future. We navigated considerable headwinds during the year and posted ongoing earnings of $3.50 per share, delivering within our guidance range for the 20th consecutive year, one of the best track records in our industry. Our long-term performance is attributable to our committed team at Xcel Energy who show up every day on behalf of our customers with safety, affordability, and reliability as their top priorities. I recognize this is the first time we've been below the midpoint of our target range in over 15 years. We made decisions in 2024 to make investments to improve resiliency and protect our customers throughout the year. And we coupled this with December weather that was considerably warmer than normal, with little time to adjust, resulting in earnings at the low end. But because of the operational improvements and investments we made in 2024, we remain confident in our ability to deliver on our 25% guidance range of $3.75 to $3.85 per share, the midpoint of which reflects 7% growth from the midpoint of our 2024 range. Over the next decade, we expect to invest significantly in our infrastructure to deliver reliable, resilient, and cleaner energy for our customers as well as serve significant forecasted customer growth. Our five-year base capital plan delivers rate base growth in excess of 9% and should deliver long-term EPS growth in the upper half of our 6% to 8% guidance range. At Xcel Energy, our long-term strategic model and value proposition is to make smart capital investments for the benefit of our customers, improving reliability, resiliency, and sustainability while providing excellent customer service and keeping bills as low as possible for our customers. In 2024, we reached several important milestones towards these goals. In November, Phase 1 of our Sherco solar project started commercial operations; two additional phases will come online in 2025 and 2026. Once complete, Sherco's total capacity of 710 megawatts will make it the largest solar facility in the Upper Midwest. By using existing interconnection from our retired coal unit, we save customers money and accelerated deployment by several years, providing opportunities to serve new customers, including multiple data center projects on and around the Sherco site. We're also near completion of the conversion of our 1,000-megawatt Harrington coal plant to natural gas, which provides essential energy resiliency and reliability to our customers and will benefit the local community there for years to come. In 2024, our wind fleet achieved availability of 97%, marking our best performance in five years in achieving first quartile benchmarks. High turbine availability ensures our customers benefit from the zero fuel cost resource and provides production tax credits that keep their bills low. In line with our Minnesota resource plan, the NRC approved a 20-year license renewal for our Monticello nuclear facility. This allows customers to continue to benefit from a critical low-cost, carbon-free energy resource through 2050. One of the keys to energy resiliency and growth is expanding our electrical grid to ensure that customers have access to the generation resources needed to meet their daily requirements. For the past 15 years, Xcel Energy has been the leading provider of new transmission line miles in the country. In July, we began construction on the final segment of our Colorado Power Pathway project, which started construction in 2023. The Power Pathway is a 675-mile double-circuit, 345 kV transmission loop that will enable Xcel Energy to connect more than 5,000 megawatts of essential energy resources in Eastern Colorado. In the fourth quarter, the MISO Board approved tranche 2.1 of its long-term transmission portfolio, and the SPP Board approved its 2024 ITP portfolio. These two portfolios will enhance transmission systems in our regions and inter-regionally, ensuring that we can meet customer growth and resiliency needs. Our portion of these transmission projects could result in $3 billion to $4 billion of capital investment in excess of our base plan. We've also made considerable progress to protect our customers, communities, and system from the increasing threats of extreme weather that we continue to see across the country. During 2024, we filed an updated wildfire mitigation plan in Colorado, a new system resiliency plan in Texas, and issued wildfire mitigation plans for each of our other states. We've accelerated a number of risk reduction efforts, including operational mitigation such as enabling public safety power shutoff, wildfire safety operations across our entire system, and making investments to better sectionalize and automate these capabilities. Physical mitigations include the repair or replacement of priority one and two distribution poles across our system and over 600 miles of vegetation management in Colorado, amongst other milestones. We've developed foundational tools, completing comprehensive wildfire risk mapping of our system, and deployment of advanced risk modeling tools like Technosylva. We've increased situational awareness where, in Colorado, we completed the installation of 42 AI-equipped cameras and 25 utility coal-mounted weather stations, with many more planned across our system in 2025 and beyond. Equally importantly, our customer bills have remained among the lowest in the country, attributed to our thoughtful investments, access to some of the lowest cost renewable resources in the country, and focus on continuous improvement through our lean operating principles. Since 2020, our continuous improvement programs have generated nearly $500 million of sustainable savings for customers, while improving operations and reducing enterprise risk. Since 2017, our steel for fuel program has saved customers nearly $5 billion in avoided fuel costs and production tax credit benefits. Our average residential electric and natural gas bills are 28% and 12% below the national average, with historical growth rates well below the rate of inflation. We've also reduced our residential electric customer share wallet by 13% since 2014. With our low energy prices, customers have the further potential to reduce their energy expenditures by over 40% as they adopt electric vehicles. At the same time, we've reduced carbon emissions on our electric system by 57% relative to 2005 levels, and remain on track to meet our goal of 80% carbon reduction by 2030, proving that our geographic advantage for renewable resources ensures that customers don't have to sacrifice costs or reliability to achieve sustainability. Looking forward, we are focused on capturing the unprecedented opportunities for growth we laid out in our base capital investment plan for 2025, to deliver on our incremental capital opportunities, advance our clean energy leadership, and raise the bar on delivering a compelling experience for our customers to make energy work better for them and the communities we serve. Finally, I'd like to express my thanks to Paul Johnson. Earlier this year, Paul announced his retirement from Xcel Energy after 41 years of service. Over his career, his commitment, integrity, and acumen have been critical to the success of our Controller, Treasury, and Investor Relations programs. He has mentored countless programs inside the company and across the investment community. I consider Paul more than just a cherished colleague; he's become a personal friend. I know you will all miss him, as will I. I want to extend my sincere appreciation to Paul, his wife Renee, their two sons, and two dogs, and we wish him nothing but the best in his retirement. With that, I'll turn it over to Brian.

Thanks, Bob. And I think everyone in this room certainly echoes your comments about Paul. So let's turn to starting with our financial results. Xcel Energy had ongoing earnings of $3.50 per share for the full year 2024, compared to ongoing earnings of $3.35 per share in 2023. The most significant earnings drivers for the year include the following: outcomes from rate cases and riders increased earnings by $0.87 per share, and higher other income which increased earnings by $0.16 per share, due to interest income on cash balances and the gain on debt repurchase that we proactively used to offset increased spending on our wildfire risk reduction measures. Offsetting these positive drivers, higher depreciation and amortization decreased earnings by $0.40 per share, reflecting our capital investment programs. Higher interest charges net of AFUDC debt decreased earnings by $0.24 per share, driven by increased debt levels upon capital investments and higher interest rates. Higher O&M decreased earnings by $0.13 per share and other smaller items combined decreased earnings by $0.11 per share. Turning to sales, fourth quarter and full year weather-adjusted electric sales increased by 3% and 1% respectively, driven by increased C&I load in SPS and residential sales in PSCo. For 2025, we continue to expect full year weather-adjusted electric sales to increase 3%. Shifting to expenses, O&M expenses increased $96 million in 2024, reflecting actions we took to reduce future operational risk by increasing investment in wildfire mitigation. In addition, we experienced increased costs from generation maintenance, damage prevention, and storm response. We also made progress on a light rate case calendar. In our Minnesota electric rate case, interim rates of $192 million were approved effective January 2025. In North Dakota, we filed an electric rate case, and the commission approved our settlement in our natural gas rate case. Moving to 2025, we're looking to several milestones as we make progress on adding 15,000 to 29,000 megawatts of generation to replace retiring capacity and serve load growth. In the first quarter, we anticipate a decision from the Minnesota Commission on our RFP and IRP settlement. The RFP includes 720 megawatts of company-owned firm dispatchable resources. The IRP includes an additional 4,200 megawatts of generation needs. By summer 2025, we expect to file recommendations for up to 3,500 megawatts of this need across three RFPs. In the second quarter in SPS, we anticipate filing recommendations for 5,000 to 10,000 megawatts of generation from our RFP that is in flight. Finally, in the third quarter in Colorado, we anticipate a commission decision on our resource plan for the 5,000 to 14,000 megawatt resource needs, with RFPs to follow in late 2025 or early 2026. We're excited to execute on the significant opportunity and look forward to working with our stakeholders to drive economic growth for our communities and continue our clean energy leadership. Moving to our five-year sales forecast of data centers, we have already signed contracts for approximately half of our new data center capacity included in our five-year sales forecast. These projects are under construction and will begin energization late this year. Additionally, we expect to have executed contracts for the remaining amount included in our five-year sales forecast by this fall. We are in active discussions with several counterparties and look forward to bringing on these large customers that will drive economic development and benefit all of our customers. Given our large backlog of additional opportunities, we are confident in our long-term sales forecast. Additionally, we continue to see significant growth in other parts of the business, particularly in the oil and gas region in SPS. As a reminder, our data center growth represents only half of our 5% long-term sales growth that we are projecting. To help fund our $45 billion five-year capital plan, we issued nearly $1.4 billion in forward equity in 2024. This issuance significantly reduces financing risk, helps maintain a strong balance sheet and credit metrics, and funds accretive growth for our customers and investors. We also continue to make strong progress in the Smokes Creek wildfire claims process. We've resolved 113 of the 199 submitted claims, which we continue to view as constructive. We have committed $73 million in settlement agreements, of which $35 million have been paid. There is no change to our estimated liability of $215 million, as we described in our disclosure. With that, I'll wrap up with a quick summary. Xcel Energy posted ongoing 2024 earnings of $3.50 per share, navigating significant headwinds and meeting guidance for the 20th consecutive year, one of the best track records in the industry. We continue to lead the clean energy transition while ensuring safe, clean, and reliable service and keeping customer bills as low as possible. We are focused on reducing operating risk in our system from extreme weather, including proactive mitigations across our system, our resiliency plan filing in Texas and updated wildfire mitigation plan in Colorado. Going forward, we are excited to make significant progress on our $10 billion pipeline of additional investment opportunities. We continue to maintain a strong balance sheet and credit metrics, using a balance of debt and equity to fund accretive growth. And finally, we are reaffirming our 2025 guidance of $3.75 to $3.85 per share. This concludes our prepared remarks. Operator, we will now take questions.

Hi, thanks. Thanks for all the information today?

Hi, Nick.

So, I just wanted to kind of get your general thoughts. I know there's been a lot of headlines in the new administration, but particularly around renewable permitting and siting; are any of your projects kind of in scope from either federal or private permitting halt perspective? And then, maybe you can kind of also just remind us what's embedded in the plan from a transferability perspective? Thank you.

Nick, it's Bob. Thanks for the question. Look, broadly speaking, when I think about the EOs, they support the energy dominance goals of the administration; we're supportive of a broad and all of the above energy strategy. Brian's comments in the prepared remarks talking about sales growth and the need of our customers for our product and our electrons would suggest that. We need to move quickly on building our infrastructure to serve our customers. We know that the administration supports economic development and low-cost energy, and while many of the EOs are directed at oil and natural gas, our focus area is really on the electricity side of the ledger. We support permitting reform broadly at a national level and even state and local levels to build the infrastructure we need to meet this era of growth. We have about 30% expected load growth over the next five years, so making sure that we can deliver on that is important. We think that any of the executive orders or challenges embedded in there today are things that we can always work through. As a reminder, we don't have any offshore wind; we don't have projects on federal lands, and our permitting needs are actually relatively light for wind, solar, and storage assets. I believe we'll be able to work through it all, and I'm optimistic our capital plan for '25 and beyond is going to remain intact. Brian, do you want to add anything?

Yes. Nick, I can just add a little bit of color to that. And there was an article yesterday around the Army Corps and our projects; we do not expect that to impact our projects in flight. And as Bob said, regarding the other projects in flight, we feel comfortable with our permits and continuing construction on all our projects. Obviously, with the RFPs once - whether it's tariffs or regulations, we can certainly look at how that impacts RFPs, but we feel very good about the need and our overall pipeline and executing both the stuff in flight and the pipeline. Just quickly, you asked your other question about PTCs. We have approximately $700 million a year in transferability embedded in our forecast, right, that's a reduction to revenue, and then we transfer the credits. That's been pretty consistent over the past year in terms of what we've forecasted.

I appreciate the answer on that. That's really helpful. And then at the end of your prepared, you kind of talked about, you do seem to have some line of sight to announce additional customers this year. Just how do you kind of think about the cadence of pulling in those 8.9 gigawatt customer requests? At which point do you think you would reevaluate that sales CAGR? Is that more of an EEI later in the year item? Or just how much of that can actually fall into this five-year time horizon and impact where you are in the 6% to 8%? Thank you.

Yes, and I think expect us, in terms of updating capital plans and five-year sales forecast plans, all that generally comes in our Q3 earnings release so we can talk about EI. I expect that all of that will be comprehensive updates on a regular cadence. Now what I mentioned in my prepared remarks is we expect to be able to sign contracts that will fulfill what we have in our base plan for the data centers. We're actively negotiating with several of those and expect to have them all executed by the fall. We're pretty excited about that. And, yes, as you alluded to, we also have a backlog behind that, which we'll turn to as we get through these. That highlights the significant opportunity we have. By the time we're doing, we expect to talk about this in greater detail in the fall; we'll have a data center in every one of our operating companies. We have regional diversity, the data center diversity, which will be with different hyperscalers. So we feel really good about the long-term sales prospect. As we continue forward, we'll see if there are opportunities to add more. It's not just the demand there, but ensuring that we have the discussions with our stakeholders and commissions about building those assets. You heard Bob say we need all the above energy strategy. We need to build these. It's really working with our stakeholders to drive economic development and benefit for all our customers.

Thanks for all the thoughtful answers today. We'll see you soon.

Yes, thanks, Nick.

Hi, good morning. Paul, we will certainly miss working with you, best of luck in retirement. Maybe just if we could touch on the wildfires a little bit here. Given national headlines recently, it seems like developments in other states might have impacted Xcel trading recently. I'm just wondering what thoughts you could provide here incremental as far as the outlook, the possibility for federal wildfire policy changes, and any views from D.C. here, just in conversations within Colorado as well, just trying to get some color there?

Hi, good morning Jeremy, it's Bob. Look, obviously, the California fires were a tragedy for that community, and it does bring both a federal and state highlight to potential solutions there. We're going to work at both levels through EI largely at the federal level and then across our states for anything we can do to continue to protect our customers and communities from that kind of threat and that kind of risk. I'd say the dialogues are active across the federal government and at the state level. Obviously, at the federal side, there's a lot going on. I think a lot on TCJA, IRA, and items like that. So I think any wildfire movement at the federal level is probably a back half of the year kind of effort and focus. California certainly put a bright light on the issue and national problems, the national solutions. I think there's a big role for the federal government here to help set standards, helping with insurance backstops, getting to functional markets, both on the insurance side and the capital market side, as you alluded to. I think there's a big role for the federal government here. At the state level, we're having great conversations in Texas, Colorado, and the Dakotas around everything from the roles of the companies and roles of the states and how we set standards for forestry and building infrastructure for operations, making sure that there's a clear line of responsibility for who's doing what to protect our customers and our communities. I don't have anything to talk about that's advancing right now, but we're early in legislative sessions, and maybe we'll come back to you in the first quarter call.

Got it. That's helpful there. And just going to D.C. at large, is there anything else? I know you talked about it a bit with Nick there, as far as changes you think going forward, especially as it relates to, I guess, transferability; is there a need to go through the federal government in any way? Do you see anything changing there?

Jeremy, you just broke up in the very first part of your question there. Why did you say, I got the last part.

Just about any changes on D.C. I know you touched on it a bit there?

Yes, certainly. We're working very closely with our policymakers around D.C. Obviously, one of the things we're not working on is around the IRA and what happens through legislation. As we see it now, I think what we're hearing is that they're going to attempt to do one bill, but it could split it into two. I think you've heard me speak before; we believe the key tenets of the IRA are intact. When I say that, I'm talking about tax credits and transferability; they go hand-in-hand. We feel good about that. There's an incredible amount of jobs in manufacturing and economic benefit being driven by there, primarily going into red states. So there's a recognition of that, and we feel good about where that stands overall, and we'll just watch it play out and continue to be plugged in.

Got it. And just the last point there, does transferability go through the federal government? Or is it bilateral?

So I think the permissibility of transferability is definitely embedded within the IRA. I think the transferability itself is a bilateral contract between us and any other tax-paying entity. Yes, and I think that persists.

Yes, exactly. We negotiate directly with our other companies. We have a number of Fortune 500 companies in our backyard here in Minneapolis that we partner with. The one caveat is that co-ops and municipalities using direct pay would go directly with the government, but we don't use direct pay; we're using transferability.

Got it. And if I could just finish up on D.C. real quick here. The new administration is more focused, I think, on gas. Maybe there was in the past. At the same time, resource adequacy has been very much in focus. Wondering your thoughts on adding incremental gas-fired generation to meet higher-than-expected load growth. Has that evolved in any way based on what's coming out of D.C., or just higher growth expectations? Have conversations with large C&I customers changed on this side as well at all?

Yes. So look, I made a comment in my prepared remarks about sort of the real advantage we have across our eight-state footprint and the ability to deliver low-cost energy with wind and solar. That persists. We think that those are very valuable asset classes for our customers, particularly our hyperscale and data center customers who try to achieve their own sustainability goals, and we think that persists. We've been clear that we're going to continue to focus on achieving our 80% carbon reduction by the end of the decade. Since we made that announcement, we need dispatchable resources to support that. Gas has a real role to play; in our active resource plans right now, we've got CT builds in the Upper Midwest, Colorado, and in the Southwest. We also have incremental gas resources in there; they're all combustion turbines. We believe we need peaking resources and don't think we need baseload gas because of our advantage in wind and solar, as well as our ability to deploy solar and storage. We will have new gas across our systems; they'll have low capacity factors. We’ve discussed having them clean fuel capable at construction, and other items to ensure we can meet sustainability goals in our states, but we will have new gas coming, and we are converting some of our coal stations to gas as well. So there's an increasing importance for gas in our footprint, but we maintain a real sustainability footprint as well, given our geographic advantage.

Got it. Understood. Thank you for that.

Hi, good morning team. Thank you guys very much. And Paul, it's been a real pleasure, I got to say?

Thanks.

Got absolutely. Are you kidding me? So guys, let me talk a little bit about '24 and '25 quickly. I know we've talked about some of the bigger picture items here, but coming back to, obviously, as you say, a little bit out of the norm for you guys historically on '24, some items that, as you say, you were trying to deal with through the course of '24. But in addition here, when you look at the '25 drivers, there are a few items that net to, I suppose, up to $40 million negative versus the prior kind of bits and pieces here, if you will. How do you think about where you're positioned on '25 and getting back on track? Back on track relative to what you guys have consistently delivered in terms of at or above your midpoint level?

Yes. Julien, thanks for the question. I can provide a little bit of color. I think on face it adds up to that, but I think you got to look at the property taxes that are offset in regulatory mechanisms. So that doesn't have an impact, and I look at some of the other offsets. It's probably less than half of the impact that you quoted. So, when I think about 2025, we feel very comfortable with where we sit. It's early in the year. We always target the midpoint of guidance. I expect that we deliver this year. Like you said, last year was a little bit of an anomaly for us. Overall, I feel very comfortable with 2025, and there are just some other offsetting stuff in there that gives me that comfort.

Got it, right. So bottom line, back on track, '25 onwards here. I appreciate it. I don't want to work with you guys too much, but you have made several times your confidence in the sales growth outlook, you made it in the prepared remarks and in Q&A. At the same time, how do you think about the backdrop here, when I think you dropped the sales growth number from the slides itself, I can't discern; was that purposeful? Is there some sort of update coming at some point here? I just wanted to ask you to elaborate. Maybe I'm nitpicking too much?

I think you might be reading into that too much, Julien. We generally talk about our five-year sales growth on the Q3 call. You heard me reiterate that in 2025, our 3% sales growth is unchanged. We feel good about that. So, there has been no change. Basically sitting here, what we wanted to do is give a little bit more context on the data center growth because that's about half of that 5%. We already have three signed contracts in construction. All three of those plan to energize later this year, and we expect to deliver the rest of that contract, or the capacity that's in our base sales forecast by this fall. We're actively negotiating with multiple counterparties right now. That should help alleviate any questions there. Just wanted to mention that.

Yes, absolutely. Well, thank you guys very much. I'll leave it there. All right. We'll talk soon. We'll talk to you on the third-quarter call on that sales update.

Thanks, Julien.

Thanks.

Hi, good morning. I wish you a final's call. So just, I guess, one other thing on the data centers that I can't recall the 8,900 megawatts pipeline; is that number the same as before? Did that go up? Just maybe on that topic, a little more on the tone of conversations, any shift in the last few months.

You'll see that number is unchanged. We just provide additional color on what's included in our base and what we have contracted already. So we didn't change that top side. We have a lot of discussions but regarding the tone, I guess you could bring this back to DeepSeek and what we're hearing. We had discussions with a number of hyperscalers post-DeepSeek, and some of the common themes are that the efficiency gains were expected. It didn't catch them off guard, and DeepSeek was focused on training and not inferencing, where we really think the long-term growth is going to be. In all discussions with the data centers, these active discussions around the ESA haven't slowed down. So absolutely not. I think that's why we feel good about where we are concerning the data center. So, as you'd expect us to be, we're in contact with many of them post that news, and that impact on our industry. So we feel good about the growth line going forward.

Okay. And then just a quick numbers question. SPS, I think, was basically flat on the year, despite all that growth. Is that just regulatory lag?

We actually had a wholesale customer load roll-off that started last year. So you saw the full annualization of it this year as one of the bigger drivers. That will get captured going forward.

That's right. Okay. Thank you.

Hi, good morning. Thanks for taking the questions. Maybe just two quick follow-ups on a couple of the topics we've hit on so far. First, just on the data center comments. As you sign those remaining contracts that are in the five-year plan by the fall, is that something where we should expect to see any sort of announcements around those transactions, or investments to support those facilities? Or will that be more in the background?

Hi Carly, good question. A little bit depends on the counterparty and the potential regulatory filing around it. So maybe a little bit TBD, whether there'll be actual formal announcements or not. We're certainly wanting to respect the wishes of our data center customers, depending on how they want to handle this.

I might just add that there are times when the local economic development teams are also very happy to have supported the Governor's priorities in our states. So sometimes the communities or the state wants to make an announcement too. I would suggest that we may have more to say as we go through the year or it might be quiet until we give an update on the third-quarter call.

Got it. Great. That's very clear. I appreciate those comments. Then maybe circling back to the wildfire mitigation front. It’s been very much in focus. Just as you think about the two proceedings on the Colorado mitigation plan and the Texas SRP, how are you guys thinking about the prospects to reach a settlement in those proceedings? Or do you think they'll go the whole way?

I think we're certainly - as we look forward, we'll take Texas first. We've seen the settlement in the SRP by some of our peers in Texas. We're certainly hopeful that we can reach a settlement there. I think it's recognized in Texas by our stakeholders, the importance of wildfire mitigation and protecting our communities and customers. So I think we're hopeful in Texas. In Colorado, we'll start to engage there. We haven't received any testimony yet. We'll receive answer testimony from our stakeholders here later in February, should be next week. There's a settlement deadline to watch in mid-April in Colorado. We’ll start to engage those conversations and we're certainly hopeful we can reach a settlement. We're comfortable going through this, given the importance of this plan, the significance of this plan going through hearings with a decision deadline, which we would expect at the end of August from the commission.

Great. Thank you so much for all the color.

Hi team, good morning. Thank you for taking my questions. Just maybe March so far, that's where I want to start. And then, I'll go back to a big picture question. Just what's the latest there? The trials start in September 2025. What should we be tracking between now and ’25? Could there be a settlement or some sort of a resolution between the parties - maybe just latest thoughts there, please? Thank you.

Hi Durgesh, it's Bob. Thanks for the question. Look, there's not a lot going on a lot of changes in the Marshall proceeding. As you indicated, the trial is set for September and the judge reaffirmed that recently. As we indicated in the fourth quarter, we have made some decisions, the presiding judge has made some decisions around the structure of the trial. We'll do a liability-only trial in September, and if necessary, subsequent trials around damages. Not much has changed. The only new news out of the judge is probably the venue decision that he made; he's going to keep the trial in Boulder County instead of the adjacent county, Jefferson, where there was a venue change request. So not much going; not much new there. Again, back to your second question, which is really around settlement and settlement opportunities. As we said previously, we disagree with the share support and the source of the second ignition and are prepared to defend that in the trial in September.

Got it. Thanks, Bob. And then one big picture question on tariffs. Obviously, you have a very sizable renewable investment in the plan, and the China tariffs are now in effect. So if they're going to be sort of there for a prolonged period of time, how are you thinking that impacts your plan? How are you derisking your supply chain? Your thoughts there, please? Thank you.

Yes. Hi, good morning, Durgesh, and thanks for the question. I mean, I think the China tariffs were probably well-communicated. It's not as though we haven't dealt with tariffs before; there were tariffs under the previous Trump administration. We had tariffs under the Biden administration, AD CVD investigation. We became familiar with working with our suppliers and the manufacturing in terms of whether there's manufacturing capacity outside of China or just ensuring we're making the right procurement decisions to deliver the best possible price to our customers. I would say that the China tariff was not unexpected and not surprising. Given our forward-looking nature and all the renewable stuff we're having in flight, we had planned for something like that and taken the appropriate actions.

Awesome. Thank you. Paul, we will miss you greatly. All the best. Thank you.

Hi, good morning. I don't know if we go that far, but yes, congrats Paul. Thanks again. Just I guess two quick questions. I wanted to follow up on Steve's comments, I guess, regarding the tone of the data center. I'm just curious if we can contrast the tone between maybe customers associated with the data centers and non-data centers. Is there more of a sense of urgency, with maybe data center customers to hook up? Or do you see it's the same across whatever customers are coming to you?

Anthony, you mean like other C&I or oil and gas or just…

Exactly. Yes.

I mean, I think from the data center side, certainly, the speed to market continues to be one of the most important factors in terms of can we deliver the transmission generation capacity on the timeline that they're looking for. As for other customers, we continue to see significant growth out of the oil and gas industry. That's reflected in the resource plan we filed in New Mexico with RFP, when you look at the upside of that RFP in Texas and New Mexico; that is about 14,000 megawatts of generation informed by our oil and gas customers in terms of what their electrification needs are. The recent approval of this big portfolio of projects, including a 765 kV awarded to us and will build, indicates continued growth, and our customers are looking to get connected. I wouldn't differentiate. We don't differentiate amongst customers; but overall, it hasn't changed, the tone hasn't changed with data centers concerning their speed to market and importance.

Great. And then just on that, if I think about the political or regulatory support that you get with new customer hookups, I'm sure it's great for all the communities, whether it's property tax offsets or what the property tax would pay. I think there's probably greater economic development associated with the non-data center customers. Is that fair to look at it that way, and maybe they get greater continued regulatory support or political support than the data centers? As you said earlier, there's no differentiation between the type of customer that's getting hooked up, a hookup is great for regulators?

I think it depends. If you're talking about a data center that's going to build out to a gigawatt plus capacity, you have years and years of construction jobs. They may also support the community's significant property tax base. It does benefit all our other customers. When talking about a data center load that large, it drives benefit for all our customers. I wouldn't characterize it that way because data centers and these large customers understand that they need to bring economic development benefits to our customers for us to get it approved in front of the commission.

Good morning. I'll echo much appreciation, Paul; enjoyed over the years, and appreciate all the help over the years. Question on a high level; we're trying to figure out what are some of the constraints really across the industry on some of the big CapEx numbers and growth coming out. What about labor? A lot of questions about equipment and tariffs, etc. But what about labor availability for you and what you see across the industry? Is that a concern?

Hi, Travis. This is Bob. Great question and certainly one we've focused on for a number of years. We've been actively working with both national and local IBEWs and other trade organizations that we partner with to hire the critical talent we need to own and operate these assets. We've got insights into our backlog of capital projects to our vendor partners to make sure they knew where our growth was coming from. Our job is really massively in partnership with those who help provide us the human talent we need to do this big build-out. That gets pressured by other people also needing talent. We are in constant competition for human capital and talent, both at our vendor side and for our company talent as well. It's a great question; we started the process, and there's more work to do there. Everything from funding programs in developmental, senior colleges and technical colleges, going into high schools, and recruiting at that level can help us make sure we've got the human capital we need.

Okay. Great. That's very helpful. And then just specific on the data centers, apologies if I missed this in many of the comments, but do you anticipate any specific regulatory filings for any of the customers, either you have signed, or you're working with? Just thinking of something that might need such a big build-out that you need some kind of preapproval or approval?

Travis, yes, we would likely expect we haven't disclosed which states we're negotiating with these customers. But yes, we would likely expect that we would seek regulatory approval. And that's a little bit back to my comment that data centers understand for us to get regulatory approval; it must show a benefit to our current customers, and benefit kind of the communities. So well, with that, I just want to lastly echo Bob's comments around Paul retiring. You can tell he's in the room with us for one last time. He's been a mentor to me, a mentor to many of us in this room, and a close and personal friend to me over the 15 years I've been at the company. So thank you again, Paul. Roopesh, welcome to the first earnings call. We look forward to many more going forward. So with that, I'll wrap up. Thank you for participating in our earnings call this morning. Please contact our Investor Relations team with any follow-up questions.