Xcel Energy CEO Bob Frenzel welcomes the coming wave of data centers, despite the increased demand they will place on the grid.
Frenzel told financial analysts during the company’s third-quarter earnings conference call Oct. 31 that Xcel has nearly 9 GW of “opportunities” before 2030 in the customer pipeline. He said the company expects about a quarter of those projects will secure contracts during the next five years.
“The scale of this pipeline gives us the ability to thoughtfully negotiate agreements that deliver the energy and capacity needed to important new customers in the region [and ensure] that new data center load that’s brought onto our system benefits all customers,” Frenzel said. “It drives load growth to our increasingly decarbonized energy system, generates economic growth in vitality in our communities and delivers on the national imperative to support a domestic data center industry.”
As the large loads come looking for transmission and generation service, Frenzel said, they highlight a different need.
“We, as a country, [and] we, as an industry, need to be accelerating our ability to develop both transmission and generation to serve the load that we think is going to come. It’s meaningful load. If you can provide it across the entire country, it seems manageable as you get into very specific load pockets; it comes with a lot of need and a lot of speed that’s needed,” he said.
“We’re starting to see this energy transition we’ve been talking about and working on for the past five years really start to accelerate. We’re proactively removing our coal plants from the system and replacing them with cleaner and, in some cases, lower-cost generation resources,” Frenzel added. “I think that is an opportunity for us to mitigate cost increases across the entire country as we transition both our transmission and generation footprint for the next generation.”
The Minneapolis-based company reported third-quarter earnings of $682 million ($1.21/share), compared with $656 million ($1.19/share) in the same period in 2023.
Xcel also introduced its new five-year, $45 billion investment plan, with a focus on four key areas, Frenzel said: clean energy, customer electrification, new load growth, and safety and reliability.
The company’s share price was up nearly 6% on Oct. 31 at $66.81, a $3.76 gain from its previous close.
