Good day, and welcome to the Xcel Energy Third Quarter 2020 Earnings Conference Call. Today's conference is being recorded. Questions will only be taken from institutional investors. Reporters can contact media relations with inquiries, and individual investors and others can reach out to Investor Relations. At this time, I turn the conference over to Paul Johnson, Vice President of Investor Relations. Please go ahead, sir.

Thank you. Good morning and welcome to Xcel Energy's 2020 third quarter earnings conference call. Joining me today are Ben Fowke, Chairman and Chief Executive Officer; Bob Frenzel, President and Chief Operating Officer; Brian Van Abel, Executive Vice President and Chief Financial Officer; and Amanda Rome, Executive Vice President and General Counsel. This morning, we'll review our third quarter results, share recent business and regulatory developments and provide 2021 guidance in our updated five-year financial plan. Slides that accompany today's call are available on our website. As a reminder, some of the comments we make 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 our filings with the SEC. Today, we will discuss certain metrics that are non-GAAP measures, including items, ongoing earnings, electric and natural gas margins. Information on comparable GAAP measures and reconciliations are included in our earnings release. With that I'll turn the call over to Ben Fowke.

Well, thank you, Paul and good morning everyone. We had another strong quarter booking earnings of $1.14 per share for the third quarter of 2020, compared with $1.01 per share last year. Our year-to-date earnings are on track with our financial plan, and we are mitigating the impact of COVID-19. As a result, we are narrowing our 2020 guidance range to $2.75 to $2.81 per share. Now, consistent with our third quarter tradition, we have provided our updated base investment plan, which reflects 22.6 billion of capital expenditures over the next five years. This represents rate base growth of 6.3% off of 2020 base year. This represents our base capital. In addition, we've identified potential incremental CapEx of 1.4 billion associated with the Minnesota relief and recovery proposal, which, if approved, would drive rate base growth of 6.9%. We're also initiating 2021 guidance of $2.90 to $3 per share, which is consistent with our 5% to 7% long-term EPS growth objectives. We're very excited about our plan, which provides significant customer value, keeps bills well and delivers attractive returns for our investors. We also continue to help our customers and protect our employees during this pandemic. We stepped up charitable giving to help our communities including donating a gain from the sale of our Mankato facility. For more details, see our slides. Our business continuity plans have been executed extremely well, including the completing of a re-fueling outage at our Prairie Island Nuclear facility for keeping employees safe while providing reliable customer service. And we're helping to restart the economy through our capital investment programs which create jobs in our communities. Earlier this year, the Minnesota Commission opened a relief and recovery docket and inviting utilities to submit potential projects that will create jobs and jumpstart the economy. In September, we filed a repowering proposal that includes four Xcel energy wind farms of approximately 650 megawatts, with 750 million of capital investment. In addition, the proposal includes 67 megawatts of repowered PPA extensions. The portfolio is projected to provide customer savings of over $160 million over the life of the assets. We've requested a commission decision on the wind proposal by year-end. We're also proposing 460 megawatts of solar facilities near our retiring Sherco coal plant to take advantage of the existing transmission. Project represents an estimated investment of 650 million. We plan to file our solar proposal in early 2021 and anticipate a decision in mid '21. We're confident the commission will see the customer benefits of these projects. We continue to make progress on our PPA buyout strategy. In August, the Minnesota Commission approved our request to acquire the 99-megawatt Mower wind farm after it is repowered. Mower is currently a PPA. In addition, we filed to buy out the KEPCO solar facility in Colorado. While the $41 million investment is relatively small, the PPA is out of the money, and the buyout will save our customers $38 million over the 11 years. I think this is another example of our keeping bills well priority. We continue to make strong progress on our wind development initiatives. In August our 500 megawatts Cheyenne Ridge wind farm went into operation. Cheyenne Ridge was completed ahead of schedule and under budget. Since it began operations, we set a record with 70% of hourly load coming from wind generation in Colorado. We also reached an agreement to acquire a 74-megawatt solar facility in Wisconsin for approximately $100 million. We expect a commission decision later in 2021 and this will be our first universal scale solar rate base investment. I'm also excited to announce that Xcel Energy was recently awarded a $10 million DOE grant for an innovation pilot to produce carbon free hydrogen at one of our nuclear power plants. We're partnering with the Idaho National Lab and others to use excess electricity and steam to separate the hydrogen and oxygen molecules and water using a high temperature electrolysis process, which is 30% more efficient, and a sustainable way to produce hydrogen. And while it's not currently economical, we think hydrogen has long-term potential to be a carbon free form of dispatchable generation, which will allow the country to achieve its carbon goals, while maintaining reliability. I want to wrap up with a couple of comments on electric vehicles. We recently announced our vision to enable 1.5 million EVs in our service territory by 2030. We spent the last few years working with our commission on programs that will enable EVs in our service territory and help turn this vision into reality. Electrification of the transport system will reduce carbon and save our customers money. I'm also proud of the recent award we received from Fortnightly, which declared our EV program the smartest transportation electrification project as part of its smartest utility projects in 2020. We've developed an EV subscription that makes it easier for customers that have charging stations installed at their homes and to be charged a monthly rate for off peak usage, which can save customers money and make more efficient use of the electric grid. So before I do turn it over to Brian for more detail on financial results and outlook, I just want to say that as you probably know, the southeast is wrestling with Hurricane Beta, and its widespread outages. And the Southwest is working around the clock restoring our customers on the damages due to Winter Storm Billy. Our customers over the past three days have restored two thirds of 145 customers in SPS that have been out as a result of this ice storm. I know there are hundreds of thousands out there and other parts of the Southwest that are out. I'm just so proud of our team for focusing on our customers in these adverse conditions. And I'm proud of the industry. We have a history of mutual aid. It's never more evident in storm recovery and these last two events and quite frankly, the entire year. So with that, I will turn it over to Brian.

Thanks, Ben and good morning everyone. We had another strong quarter booking $1.14 per share for the third quarter of 2020 compared with $1.01 per share last year. More significant earnings drivers for the quarter include the following. Higher electric margins increased earnings by $0.20 per share, primarily driven by riders and rate outcomes. O&M expensive were flat for the quarter, primarily driven by our cost management efforts. And the lower effective tax rate increase earnings by $0.07 per share. As a reminder, production tax credits lower the ETR. However, PTGs are flawed back to customers through lower electric margin and are largely earnings neutral. Offsetting these positive drivers were increased depreciation and interest expense, which reduced earnings by $0.12 per share, reflecting our capital investment program. In addition, other items combined to reduce earnings by $0.02 per share. Next, I want to discuss the status of COVID-19 impacts in our mitigation efforts. As expected, COVID-19 had an adverse impact as third quarter weather-adjusted electric sales declined by 2.4%. Although, these impacts are better than projected in our guidance assumptions, we now assume annual electric sales will decline approximately 3% for 2020. As a reminder, we have a sales drop mechanism for all electric classes in Minnesota, and the coupling for the electric residential and non-demand small C&I classes in Colorado, which covers about 45% of our total retail electric sales. Since sales have come in better than projected and weather has been favorable, we've adjusted our O&M contingency plans accordingly. We continue to closely monitor bad debt expense and work with customers on payment plans. At this point, we expect bad debt expense will increase approximately $25 million over normal levels, which remains in line with previous forecasts. We received approval for certain pandemic related expenses in all states, except for North Dakota, where our request remains on the Commission review. We've also made strong progress on reducing O&M expenses to mitigate COVID-19 impacts. Based on our year-to-date results and updated sales projections, we now expect annual O&M expenses will decline 1% to 2% in 2020 compared to our initial guidance of a 2% increase. Next, let me provide a quick regulatory update. In Texas, the Commission approved our rate case settlement that reflects an electric rate increase of $88 million, a ROE of 9.45% and equity ratio of 54.6% for AC/DC purposes, an acceleration of the depreciation life of the Tolk coal plant. In October, the Colorado Commission accepted the ALJs recommended decision to approve our natural gas rate case settlement without modification reflecting a net rate increase of $77 million, a ROE of 9.2%, an equity ratio of 55.6% and the historic test year of an adjustment for the Tungsten the BlackRock projects. We view both the Texas and Colorado decisions as constructive regulatory outcomes. My preference is to avoid rate cases when possible. So in July, we filed for rider recovery of our wildfire and advanced grid investments in Colorado instead of filing a comprehensive rate case. The riders will cover 2021 through 2025 and provide regulatory flexibility. We're still in the early phases of these proceedings. In September, we filed the 2021 sale proposal in Minnesota is as an alternative path to the rate case we plan to file in early November. We expect the commission to decide in December whether it will accept the sale or proceed as a multi-year rate case. And as Ben noted we're initiating our 2021 earnings guidance range of $2.90 to $3 per share, which is consistent with our long-term EPS growth objective of 5% to 7%. Our 2021 EPS guidance is based on several assumptions which are detailed in our earnings release. I want to highlight several of these items here. We've seen constructive regulatory outcomes in all proceedings. We anticipate modest impact from COVID-19. We project electric sales growth of approximately 1%, which reflects a modest recovery over the COVID depressed sales levels in 2020. We expect O&M expenses to increase approximately 1%, which reflects increased costs for new wind projects and lower O&M levels in 2020 due to COVID mitigation. Please note that wind O&Ms recover to regulatory mechanisms in most jurisdictions and is offset by fuel savings. And finally, we anticipate an effective tax rate of approximately negative 9%, largely driven by increased levels of wind PTCs, which are credited to customers and generally have no material impact on earnings. In our earnings release, you'll find more detail about our updated $22.6 billion five-year base capital forecasts. The base forecasts reflect significant grid investment including our advanced grid initiative and additional investment in the transmission system to maintain absolute health and reliability and enable renewable generation. It also includes a modest level of renewable, expenditure to improve the customer experience and the natural gas combined cycle plant at our Sherco facility to ensure reliability as we have proposed to retire all of our Minnesota coal plants by 2030. Our base capital plan results in annual rate base growth of approximately 6.3% using 2020 as a base. We also have potential incremental CapEx of approximately $750 million for wind repowering projects and $650 million for a solar facility, which are pending Commission approval as part of the Minnesota relief and recovery filing. We're confident the Commission will see the customer benefits of these projects. If approved, rate base growth will be 6.9%. In addition, we think there's other potential upside CapEx that could materialize in the future. Our capital investment plan supports are 5% to 7% long-term earnings growth objective and our goal to deliver EPS and dividend growth in the upper half of the range. We've also updated our financing plan, which reflects a combination of internal cash generation and debt issuances to fund the majority of our capital expenditures. In addition, we expected to issue $250 million of equity and $400 million of DRIP and benefits equity consistent with our previous forecasts. Importantly, our financing plan maintains our current credit metrics. We anticipate that the incremental capital, if approved by the Minnesota Commission will be financed with approximately 50% equity and 50% debt. This incremental equity will allow us to fund the creative capital investments, which will benefit our customers on maintaining solid credit ratings and favorable access to the capital markets. And with that, I'll wrap up. We're effectively mitigating COVID-19 impacts. We continue to provide reliable service to our customers, while ensuring the safety and well-being of our employees and communities. The Colorado and Texas Commissions approved constructive rate case settlements. Our relief and recovery proposal in Minnesota will create jobs, help jubilate our local economies and result in significant customer benefits. We narrowed our 2020 guidance range to $2.75 to $2.81 per share based on solid year-to-date results and progress on contingency plans. We announced a robust updated capital investment program that provides strong, transparent rate base growth and significant customer value. We initiated 2021 earnings guidance at $2.90 to $3 per share consistent with our long-term objective. And finally, we remain confident we can deliver long-term earnings and dividend growth within our 5% to 7% objective range. This concludes our prepared remarks. Operator we will now take questions.

[Operator Instructions] Our first question today comes from Julien Dumoulin-Smith of Bank of America. Julien Dumoulin-Smith: Hey, good morning, team. Congratulations on the update there.

Thank you. Julien Dumoulin-Smith: I'll keep going here on the '21 update. Can you talk a little bit about the thought process on the 1% on an increase? I mean, conceptually I get that you had a down here this year. So it would reverse, but how are you thinking about that reversing? Obviously, you guys are one of the first out there in the industry to give a '21 with COVID impacts. How are you thinking about the back to business and the ability to sustain some of the benefits you saw this year?

Hey, Julien. Good morning. So the way we think about it and maybe frame it up into - if you remember going into this year, our O&M guidance was 2% up. We're investing significantly in our wind farms, along with all these strategic priorities, such as our grid investments in customer. And then we didn't see our guidance for 2021, but we expected a similar increase prior to COVID in that range. But now if you look at where we'll land this year, down 1% to 2, and slightly up next year, will roughly be flat to 2019. So that kind of gives - and that's on a consolidated level. Obviously, it's varies a little bit by article. But overall, that kind of gives you a sense of how we're kind of driving cost transformation through our business, as we absorb our strategic priorities and remain flat. Julien Dumoulin-Smith: Yeah, and even to clarify that slightly, you said in your prepared remarks, the wind aspect of the O&M increase, that would be also disclosed to as well. So when they impact your net margins? I heard you right?

Yes. So yeah, that's correct, in terms of where it is recovered. Julien Dumoulin-Smith: Excellent and then if I can a little bit more conceptually here, as you're thinking about prospects in the next year. And obviously, things are pending at two figures, but with respect to subsequent legislation in Minnesota, specifically around RPS reform, et cetera. Can you help frame some of the possibilities that are out there today, if you don't mind?

RPS reform Julien, this is done. Julien Dumoulin-Smith: Sorry, energy legislation, as I suppose there's a variety of -

Brian talked about. Julien Dumoulin-Smith: Right, I mean, I'll need you to fill in the blank pretty well?

Yeah, I mean, I think - I mean, we'll have to see obviously, how it plays out at the state level and obviously, the federal level as well. But Julien, I think we're very well positioned for whatever happens. I mean, remember, one of the things I'm so proud of is we're leading the way, we've got an 80% interim target, a 100% target by 2050, but we do that with liability and economics in mind. So that tends to bring both sides of the aisle along. At the federal level, if it does become a Biden administration, and maybe the senate flips as well, I think we're probably well positioned to do more with renewable. I think they would probably accelerate EVs and help with our 1.5 million target. I would also welcome the chance as both CEO of Xcel and Chairman of EI to work with the Biden ministration and kind of let them know that 2035 and utility timeframe for the technologies that will be needed is very aggressive. So there's a reason why we chose 2050. Now at the state level, we'll just play it out. But I mean, I think we've demonstrated we can work very well crafting legislation that works for customers and shareholders alike. Julien Dumoulin-Smith: Got it, excellent, well, I'll leave it there, taking this time, thank you all.

Thank you, Julien. Our next question comes from Jeremy Tonet of JP Morgan.

Hi, good morning.

Good morning Jeremy.

Just want to start off, see if it's possible, you could provide any early feedback that you might be having on your Minnesota recovery planning application at this point.

Hey, Jeremy, it's Bob, and thanks for the question, loved the headline on the report this morning and the reference. On the Minnesota R&R plan and the broader stay out proposal. We are working productively with all stakeholders. I think we've got support from the OAG and the environmental advocates for a stay out and so the R&R proposal, we're I would say proactively working with the department and trying to gain their support. We expect to follow our mean rate case next week as the alternative to the sale proposal. And similar last year, we would expect the commission to take that up in about six to eight weeks. So call it early to mid-December timeframe. We'd expect them to make a decision. And look we think the R&R plan and the stay out proposal are very much in line with the Administration's and the Commission's goals and we'd expect a productive outcome in December.

Got it, that's very helpful. Thanks for that. And then just switching gears here, there's been multiple reports of potential M&A in the industry and some transactions have happened recently. Just wondering, does Xcel have any role to play in industry consolidation or just the Great plants that you guys have in front of yourself as far as the attractive organic growth that really kind of keeps all of your attention focus there, and M&A is not really a big consideration for you guys.

Well, I mean, we don't - it's a great question, by the way. And I won't comment on anything specific. But I mean you've heard me speak over the years that our focus is primarily on organic growth. It's nothing like one times book. And I think our investors love that. But we obviously see what's happening in the industry and the long-term trend to consolidation. It's not like we don't look at things, but I will just tell you, we can be disciplined because we do have good organic growth, and we're not looking to fill some sort of earnings void or something like that. So we're very disciplined about it and I think that's one of the reasons why we trade at a bit of a premium to our peers.

Got it. That makes sense. That's helpful. Thank you.

Our next question comes from Durgesh Chopra of Evercore ISI.

Good morning.

Hey, good morning team. Thanks for taking my question. Just wanted to go back and clarify the December sort of timeline that you gave us, is that for the R&R filing? I'm just trying to see what kind of the milestones or timeline that we should be watching for you to kind of get approval on the incremental CapEx that you laid out?

Yeah, sure, so this is Bob again. For the mid December filing, we would expect a decision on rate case or stay out provision. We also would expect the wind component of our R&R plan to be heard in the December timeframe as well. I think the solar piece of our plan is more likely going to be a Q2 of 2021 timeframe. I think that makes up the bulk of the investment opportunity, there's some other areas around electric vehicles and distribution and transmission spend, which we could take up in normal course in separate dockets, but those are the two big buckets.

Super helpful, so just to clarify wind by this year, and then solar by the first quarter next year, right. Did I get that right?

Correct. Second quarter, sorry, end of second quarter is probably more realistic.

Okay, understood, thank you. That's great. And then maybe just going back to your comments around a potential regime change in Biden administration, I think we hear you on sort of the aggressive 2035 targets, but generally speaking, how does it fit into your current plan? Does it delve into future rate base CapEx growth the climate plan that is and then maybe is there any thoughts in a potential tax rate changing implications for you?

So I'm going to let Brian talk about the tax implications. As far as headwind tailwind, I think it's I think it's probably helpful to accelerate our renewable program. I absolutely think it'd be helpful to our 1.5 million electric vehicle goal. And that's something that would create additional opportunities for investment. I'm particularly excited about EVs, if you've heard me speak before, because I don't know if it's steel for fuel, but it's a type of steel for fuel. The variable cost of an EV is significantly below that of a gasoline. The charge off similar rates its equivalent of $0.60 a gallon, so while EVs are expensive today, we think that cost comes down. Biden administration might help that costs come down even more and then we're getting more EVs out there reducing the carbon footprint obviously, and creating investment opportunities for us in additional sales load, which all customers benefit from. I'll turn it over to Brian, for your tax question.

Yeah, and the details on the Biden tax and are still a little bit light, but I'll hit on a couple of high points, right, if you think whether tax rate increased from 21% to 28%. Just like the TCJA, where we went from 35 %to 21%, our customers saw a savings of 3% to 4%. So if we go the other way, we expect to see a onetime customer impact of 1.5%, 2%. In a while it's never positive to see that impacts our customer bills, we do think it's manageable. And we did set that precedent in all the regulatory proceedings going through the TCJA in terms of through the majority of our jurisdictions we the customers saw timely refund or saving. We expect similar treatment if the tax rate goes up. On the credit metric side, certainly in increasing the tax rates would help on the credit metric side. You'd probably expect for us to see 100 to 150 basis point increase in our credit metrics. But that depends on the details. I know there is a talk about an AMT related to book income, which would be detrimental in that sense, but that 100 to 150 basis points benefit to our credit metrics really related to if AMT goes back to the prior regime. So those are the two big components from the tax perspective.

Excellent Brian, thank you.

I do want to talk a little bit about - hey, Durgesh it's Bob, just a couple add-ons to Ben's comments. First and foremost, on the federal side, one of the tailwinds, we would expect to see is a real increase in the budgets for R&D for new generation, which we've been very focused on as a company, and at EEI and making sure that the next generation of dispatchable generation that will provide reliability and affordability for our customers, and the R&D has started today. And secondly, I don't want to diminish the impact that partnering with our states has had. Federal tailwinds are good, but our partnerships with our states have enabled us to deliver over the past four years a substantial amount of carbon reduction, electric vehicle penetration goals and other investment opportunities around cyber and wildfires and other areas that have been very helpful. So while the Feds can be helpful, I think the partnerships of the state are really important as well, I think we're very much aligned there.

And that's all customer driven, which is why I think this clean energy transition happens under just about any type of administration.

Super helpful guys, I appreciate all the comments. Just one quick follow up for Brian, really. Just Brian on PTCs, doesn't the actual increase in tax rate kind of help you with using higher PTCs increases your appetite for using PTCs?

Yeah, you're absolutely right. It also actually helps from just the L2 from our customers. So you're right about that.

Okay, perfect. Thanks, guys. Much appreciate the time. Thank you.

Our next question comes from James Thalacker of BMO Capital Markets.

Good Morning.

Good morning, guys. And thanks for the question, time for the question. Just looking at your updated CapEx forecasts and the rate base forecasts and understanding that the bulk of the incremental spend is probably not going to be sort of fully articulated, I guess, until 2Q of '21. But how are you guys, I guess, thinking about that translation into where you sit within the growth rate. Right now, it looks like you guys are kind of solidly at the midpoint. But should you be successful in Minnesota, would you think that that could put you solidly at the upper end, even with their modest solution you have with financing the incremental CapEx?

Yeah, I mean, we strive to be at the upper end of that 5% to 7% goal and the additional 1.4 million, albeit we'll make sure we're sensitive to credit quality, which is really important, would be helpful to that goal. So we're very confident that we're going to be able to achieve our long-term growth rate.

Is outside of an adverse outcome, I guess, on the solar side, is there anything that would prevent you from being at the top end of the growth rate?

Well, I mean there's always things, I mean, who thought we would be in COVID two years ago. So there's a lot of things that could happen. And of course, it could be - we've always had regulatory outcomes and things like that to consider, sales and there's always things, but again, I think we're in very good shape.

Okay. And I guess just following up on that point on sales, it looks like the 2021 assumption is for a 1% increase in retail rates. Could you talk I guess, a little bit about the component to the mix of that as you're thinking about it for 2021?

Yeah. Sure and good morning, Jim. So we kind of break it down between residential and C&I. Residential, we expect it to be fairly flat for this year. We are seeing good strong customer growth of about 1% across the consolidated family. So we expect that customer growth to continue and a little bit of I'll call it a reduction in the use per customer. On the C&I side, I think what you see is we expecting, call it, around the 2% increase in C&I sales. And the best way to think about that is really a - we don't expect in April and May to happen next year, but we do expect to know C&I sales to be impacted. So if you kind of took April and May out kind of the worst parts of COVID this year is kind of gives you a sense of what we're thinking for next year.

Thank you very much for that color.

Thanks.

Our next question comes from Stephen Byrd of Morgan Stanley.

Hey, good morning.

Hey, Stephen.

A lot of it's been covered already. I didn't want to talk more about EVs and then you provided some interesting commentary. I was just curious, let's assume that there is an interest at the federal level and giving specific financial support for EV infrastructure, what form of support would be most helpful? Is it tax credits, direct spending? And how might some level of increased federal support accelerate your plans in terms of spending on EV infrastructure?

Well, I think rebates to the consumer to buy down the cost of the EVs. I do think they're going to come down naturally, as more and more models are introduced, but that would - that obviously, would stimulate purchases and just making it an overall part of industry wide carbon goals would be helpful to Stephen. So I think their support can come in a number of forms. The other thing I would say is kind of this - the addressing range anxiety, maybe a public-private partnership to make sure we have fast charging stations around the corridors for people who travel, those are all things that I think you'd be more likely to happen under a Biden administration than a Trump administration. So I mean, I think we can get through our goal either way. But I was asked to comment, whether it would be a tailwind or headwind, and I definitely think that could be a tailwind for us.

That's really helpful. I guess just building on that if you did receive or if we did see that kind of federal support, is that the kind of support where you would then start to really take moves to specifically sort of accelerate your existing plans? Or is that just more helpful to ensure adoption, more helpful to ensure that your existing plans could work well and that there's actually enough EV adoption to make sense for what you're already planning?

I mean, I think it gives us more confidence. I mean, the 1.5 million EV goal is definitely a vision and it reflects 20% of cars that are currently on a road. So I think it'd be very helpful to getting there.

Got you, thank you so much, that's all I have.

Thank you.

Our next question comes from Paul Fremont of Mizuho.

Good morning Paul.

Hi. Thank you very much. Basically, my first question is, you initially also talked in the incremental spend bucket of about 150 million of EV spend. Is that now been moved into your base spending numbers?

Hey, Paul, yeah, that is correct. That is in the base numbers.

And then my other question is what's driving sort of a higher level of spend at PSCo and the MSP Wisconsin and sort of a 400 million decremental spend at MSP Minnesota in your base interest?

Well, I think the big part is in Colorado, we're really starting to roll out our advanced grid initiatives. And we also have some transition investments that we need to do in Colorado. In longer term where we had - we talked about it before that we have significant transition investments in all our articles longer term really to enable the generation transition. In Wisconsin we do have some - the solar farm that we just announced, a $100 million solar farm with Wisconsin which is for Wisconsin size that is material, and we do have some transmission projects in Wisconsin. So those are really the big drivers for those articles.

In Minnesota, keep in mind, there's a lot of wind that's going into service which would lead to - and a lot of that wind is in Minnesota.

Right, so Minnesota is actually lower?

Yeah, you're rolling for the big win spend in Minnesota this year, so when you roll forward from 20 to 24 or 21 to 25 is what you're seeing.

Got it, so some of that wind is actually adjust when that would have taken place in another year?

The projects have been included in '20.

Yeah, go on in service. So then if you think of the incremental plan, right, we would like to tell Minnesota R&R, that's all Minnesota spend and significant customer value in the developed proved that will increase the overall CapEx for Minnesota.

Thank you, that's it.

Thank you.

Our next question is from Insoo Kim of Goldman Sachs.

Good morning.

Good morning. I think one question from me, in Minnesota what type of momentum, if any, is there for securitization legislation to retire coal plants? And I think - correct me if I'm wrong, there is a precedent the state for getting some accelerated depreciation for the remaining value of coal plants. How do you frame all of that and the potential to further accelerate the retirement of coal plants like Sherco 3 or the game plan?

Hey, Insoo, it's Bob, good to hear you this morning. We've got - we are accelerating with appreciation on the two plants that we have approval to retire early, that's Sherco units 1 and 2 and they're being accelerated and depreciated fully by their projected retirement date in '23 and 2026 respectively. As part of our Minnesota resource plan, we have offered to retire Sherco 3 and the King plants early also with accelerated depreciation. And we think those proposals, we likely heard sometime in 2021, next year, as we go through the resource planning process. We've been very successful and working with our stakeholders in mitigating the transition of these legacy plants of ours. We've taken care of the workforces, and the property taxes in the jurisdictions. And so we think this is just part of the overall package and we've been successful that in the past, and we'd expect to continue in that fashion.

The only place we have securitization is in Colorado. As of now we don't have it.

Right, no, I was just talking about asking about momentum for any potential securitization in the state, but understood. And just on that, I understand the Sherco 3 and King, what the proposals were the 2028 and 2030 for the two branches effectively. Is that the earliest dates that we should be considering for these plants given accelerated depreciation timeline?

Yeah, look, I think that we've taken a proactive approach to propose those in our resource plan. It gives us a runway to manage through the employee and community issues. And so that's our proposal right now.

Got it. Thank you very much.

The next question today is from Sophie Karp of KeyBanc.

Good morning.

Hi, good morning. Thank you for taking my question. Missing from your proposed incremental project is energy storage. And I was wondering if you could discuss maybe more broadly, what place energy storage would have in your portfolio going forward? And maybe tying that into potential election outcome, what kind of a policy from the federal level would be helpful to accelerate adoption there? Thank you.

Yeah, that's a great question. Thanks for that. I mean, I think you're going to see us - and the emphasis on storage will take place in our resource planning proposals, both in Minnesota and Colorado, and we do see a role for storage. It's not I think kind of fear, I mean, it's all our batteries can only do so much. So when you think of technologies that are needed to get that last 20% out, we're going to need perhaps some form of long-term storage to address those seasonal variations. But yeah, just thinking about the Minnesota plan we talked about peaking resources that will be needed. Well, that can - batteries is definitely part of his peaking resources. The same will hold true in Colorado. I would just say too, when we look at what we did with the R&R plan in Minnesota, we're actually saving customers money by repowering wind projects. And so to us, given the economic conditions we're in and that made all the sense in the world.

Got it, so are you considering than any other types of storage you can rely on maybe pumped storage, any other kind of older technology, so hydrogen, even that can be effectively deployed to select addresses relations that you have in a cost-effective manner? Or is it just too early to say right now?

No. Yes to all of those. I mean, I think hydrogen is perhaps that long-term storage, it can be used in different ways, but storage is definitely one of the things. Pumped storage is on the table. We're looking at what we can do with our Cabin Creek plant. There is pumped storage in Colorado. So yeah, I mean, all those things are on the table. And you'll see some of that get, I think, flushed out a little bit as we go through the resource planning process.

All right, thank you.

Thank you.

The next question comes from Ryan Levine of Citi.

Good morning. So regarding - so it looks like you announced a couple updates around the PPA buyout program, can you comment around how that pace of development or opportunity could change into the election? If higher federal tax rate could influence any PPA buyout decisions?

Sure. Good morning, Ryan. Yeah, we announced to get more million from buyouts approved in Minnesota which is very good to see and deliver significant customer benefits than that solar buyout in Colorado was filed and again, significant customer benefits, even though it's a pretty small dollar amount, from a capital perspective. Yeah, it's something that we spend a lot of time in the corporate development team in terms of discussions and just conversations with the IPPs that we do business with. A couple things right that we watch, if you want to kind of talk about the election opportunities, right, if you could see an extension of PTCs, maybe that provides more repowering opportunities. If PTCs are extended, certainly a change in the corporate tax rate could impact how these IPPs view their wind farms. So this is something that we'll continue to look at and in conversations with. I speak about this as just something that we continue to have conversations is really a long-term opportunity, because it is about finding kind of the sweet spot in terms of ensuring that we deliver significant customer value and finding the price point that works for us actually quite well.

Have there been any recent acceleration of commercial development activity in those efforts in the last few months or is it been relatively routable around the conversations you're having with counterparties.

That would say it's relatively routable, certainly some conversations picked up during kind of the impaction of COVID as some of the developers had challenges. There was a PPA that was bid into our Minnesota relief and recovery win RFP, those PPA buyout - was bid in. We were close to getting there, but we couldn't get to the customer savings number that we wanted to deliver and that RFP and so we'll continue to negotiate with that counterparty to see if we can actually reach an agreement that provides our customers significant savings. So like I said, it's important for us to deliver the savings for our customers.

Appreciate it. Thank you.

Our next question is from Travis Miller of Morningstar.

Good morning, Travis.

Good morning. Thank you. I want to talk about the election and issues there, so wondering as a follow up for that conversation. What at the state level or the regulatory level are you looking at on election day, any key state level races are a regulatory election that you're looking at or policies at the local level stuff like that?

Well, I mean, I think what we'll be looking at in Minnesota is whether or not the Senate, which is currently Republican, if it were to go Democrat, and you have an all democratic DFL branches and we would be looking probably at increased corporate taxes and maybe some legislation, energy wise, but again, I think we've done a really good job of developing relationships across the aisle and actually executing on just these pretty bold and aggressive carbon reduction plans. And I do think the administration has appreciated what we've been able to do for our communities and things like the R&R plan that we talked about. So I'm not particularly focused on any kind of transformative type legislation that might come out of an election. I say that and Bob or Amanda, so you want to comment.

Yeah. Travis, this is Bob. I think the only other thing to watch is obviously the ballot initiative in New Mexico on elected versus appointed commissioners. And I think we've got a good history of working there well and any new commission, we would we would proactively engage with.

This is Amanda. The only other one we're obviously watching closely is the boulder vote on municipalization.

Okay, great. No, that's very helpful. Thank you. And then another follow-up to the whole easy discussion, is that a lot of talking and speculation about who might own and how they might own charging stations? What are your thoughts around that? And in terms of your role are you inclined to own them as rate base, like assets and expand that late which of being inclined on them as pseudo merchant pipe, so to speak assets? Or you have the right to charging the third party? Just wondering your thoughts around who owns and how the economics for the chargers?

Yeah. Are you talking about fast charging Travis?

Either way or whatever - not in home and probably the residential customer.

Yeah, on the residential side, or multi dwelling, things like that, I think we're very well positioned to own those charging stations. In fact I'm really excited about our EV plans that would allow you - if you had a home and you wanted to get an EV, we try to make it easy for you because it's not as easy as you think sometimes. And so with a call to us, we can get the home charger installed at no cost for you build it into our subscription rate, it just encourages you to charge off peak and saves you a significant amount of money. So you don't have to compare KWH and equivalence, it's like - I think it's $44 a month. And it's all you can use off peak. And we've done the math; we think it works out really well for the EV owner, but just as importantly, the other customers, because it minimizes the impact to the grid. Now, when you get to like fast charging stations, I think they're really necessary to address range anxiety, but make no bones about it. They're kind of lost. So I think that that's where a public private partnership could come into play. We're happy to play a role there. But we don't have to; I just like to see it done. So I guess that would be kind of like I answered your question. I think that's where we see it.

Sure. Okay, great and I appreciate it.

Thank you.

The next question comes from Paul Patterson of Glenrock Associates.

Good morning, Paul.

Good morning. How you doing? So just quick on the EV thing, just to sort of clarify this, the public private partnership, just to help me out here, what's the public entities or entity that you're thinking about? And who would be the private entities? Just really briefly sort of a - I'm missing exactly what that would be?

Well, I mean, I think it can take a lot of different forms. I mean, the government, either federal or state could provide funding to buy down the cost of those charging stations. It doesn't necessarily have to have an Xcel energy label on it, we could just provide the necessary supporting infrastructure, or we could be part of it. I mean, I would just tell you, Paul, we're wide open to that. The key to me is to get these stations built. So that people - one of the biggest barriers and purchasing an EV is space range anxiety. And so you need, I think, the right amount of fast charging stations, which again, are lost leaders to be built, so that you have more easy penetration. So it's kind of a chicken or the egg type thing and it can take a lot of different forms.

Okay. And I was just wondering, what about you guys basically just having a put into rate base so to speak and socializing cost over customers. I mean, I'm just wondering, is that an option? Or do you feel that is a simple strategy -

As long as it's - yes, the short answer is yes. But I mean you want to make sure the process is followed. I mean one of the things that we'd want to show is okay, if this leads to more easy penetration, how does that benefit all of our customers? How much it's exactly, how much we're going to socialize? And you've heard me talk about incentives and subsidies and things like that. And I've always been okay with them, as long as they're transparent. So I would not want something that is kind of hidden, where people were not really sure what is being socialized and what isn't being socialized. And I don't think that would happen with these charging stations. But that's what we'd be advocating for, just a real transparent process. Because not everybody - when you say the word socialization, I mean, it gets people upset sometimes. But a selective amount of seeding I think is really important and perhaps we could play a role in that.

Hi, Paul, it's Bob. We discuss two areas where I think we're excellent and also making sure that in a world where we are involved, we can make sure that public charging, whether it's on interstates or neighborhood, there are areas of town and areas that communities that don't get left behind, we want to make sure that there's an equitable investment, and making sure that all of our customers can benefit from the opportunity that electric vehicles provide. And the second area where I think that we are very valuable in ownership and control of the charging stations is really around the impacts in the grid and making sure that we have appropriate incentives for more off peak than on peak charging. Recognizing some on peak will have to happen, certainly in those public spaces, but bouncing the grid loads and making sure that we're optimizing the distribution investments around electric vehicles is really important. And I think our role there is critical. So that leads you to believe that we would be a very good partner or owner of those types of stations as well.

Awesome, okay and then just on the tax issue and I just have a crystal ball question and I realize it's kind of fraught, but I guess I'm sort of trying to wonder is, I mean, on the Biden plan, if one were to assume that he got elected, would there be - what kind of sense do you get Biden, in the Congress for higher corporate taxes in general? And do you think it would make a significant difference if it was a Democratic Senate or a Republican Senate or just any flavor there? I mean, when we're thinking about this how - and how do you guys look at this when you're trying to plan in everything and I don't know what I mean, is it sort of like, do you feel that there is a strong sense that people really want to raise taxes in Congress, on corporations, and that that's probably pretty likely?

Well, I think, I think to implement the Biden tax plan you're going to need to do sweep Paul. I don't think - I think it's - you might have some sort of form of compromise wrapped around other things if it's sports Congress and Senate. But I don't think there's going to be a tremendous amount of interest if the Republicans hold the Senate and implementing the full Biden tax plan.

But if we have a Democratic Senate, maybe, yes. I know, it's really -

I think you need a Democratic Senate and then I think if you look at how the Senate would be taken over by Democrats, many of those candidates are running on moderate platform. So I think you'd have to be - it would also depend on how big the sweep is.

Okay, fair enough. Thank you.

Stay tuned, we should know sometimes. Not so sure. It'll be November 3, by the way, but we will know at some point.

Yeah. I can't wait. Okay. Thanks so much.

Okay, thank you.

As there are no other questions, I would like to hand the call back to Mr. Brian Van Abel, CFO for any additional or closing remarks.

Yeah, thank you all for participating in our earnings calls this morning. If you have any follow up questions, please contact Paul Johnson in our Investor Relations team. Thank you everyone.

Thank you. Have a good day.

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.