Xcel Energy’s leadership says a partnership with NextEra Energy will allow its operating companies to contract up to 6 GW of data center capacity by the end of 2027, with sales and generation investment ramping into the next decade.
“We think there’ll be increased clock speed as we think through combining the best sales teams, the best development teams and the best analytical teams in the country to deliver solutions for a very sophisticated customer set,” Xcel CEO Bob Frenzel told financial analysts during the company’s Feb. 5 year-end earnings call.
The companies the day before had announced a memorandum of understanding to co-develop generation, storage and interconnections for data center projects. They said the agreement will support existing and new large load opportunities across Xcel’s service territories by better anticipating system needs, streamlining development timelines and advancing innovative grid technologies.
“It brings scale and the ability to put an inflection point in the curve of data center delivery and signed [energy services agreements] and contracts and, ultimately, investment opportunities in all three of our big regions,” Frenzel said.
He said conversations with data center developers have affirmed Xcel’s position that they don’t want to own and operate their own generation.
“We don’t want you to take existing supply out of the stack,” Frenzel said. “[Data centers] would rather have someone own and operate for them in a deregulated market. That means me working with the developer to build that generation, leave it through a regulated utility and sell it to the customer.”
Xcel currently has more than 2 GW of new contracted data center capacity and a 3-GW goal by the end of the year. The company has more than 20 GW of capacity in its large load pipeline.
The Minneapolis-based company reported 2025 diluted earnings of $2.02 billion ($3.42/share), compared with $1.94 billion ($3.44/share) for 2024. It attributed the results to increased recovery of infrastructure investments and sales growth, partially offset by higher interest, depreciation, and operating and maintenance expenses.
Xcel reaffirmed its 2026 guidance range of $4.04 to $4.16/share. It has led or exceeded ongoing guidance for 21 consecutive years.
The company’s share price Feb. 5 closed at $76.12, down 8 cents from its previous close.
In a nod to the violent immigration enforcement taking place in Xcel’s hometown, Frenzel said he was pleased to sign an open letter alongside more than 60 other CEOs urging a solution to the turmoil.
“It goes without saying that the tragic events across the Twin Cities have weighed heavily on our communities, our customers and our employees,” he said. “We have engaged extensively and proactively with senior federal, state, local and community officials with a goal to de-escalate and identify a sustainable path forward.”
Xcel’s Energy Foundation has committed to help fund the Minneapolis Foundation and support local and small businesses affected by the events.
