Hello, and welcome to Xcel Energy Third Quarter 2025 Earnings Conference Call. My name is George, and I'll be your coordinator for today's event. Please note, this conference is being recorded. I'd like to call you over now to Roopesh Aggarwal, Vice President, Investor Relations, to begin today's conference. Please go ahead, sir.

Thank you, George, and good morning. Welcome to Xcel Energy's Third Quarter 2025 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 third quarter 2025 results and highlights, share recent business and regulatory updates, update our 5-year capital and financing plan, and provide updated 2025 assumptions and 2026 guidance. 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. In the third quarter of 2025, Xcel Energy recorded a charge of $290 million or $0.36 per share, reflecting the settlement in principle reached with plaintiffs in the Marshall wildfire. Given the nonrecurring nature of this item, it has been excluded from third quarter and year-to-date ongoing earnings. As a result, our GAAP earnings for the third quarter of 2025 were $0.88 per share, while our ongoing earnings which exclude this nonrecurring charge, were $1.24 per share. All further references to earnings, drivers and variances in our discussion today will refer to 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. In the third quarter of 2025, Xcel Energy continued our commitment to our customers, our investors, and our communities to make energy work better. During the quarter, we delivered solid earnings of $1.24 per share. We invested over $3 billion and $8 billion year-to-date in resilient and reliable energy infrastructure for our customers. We reached a comprehensive and constructive settlement with plaintiffs in the Marshall wildfire that helped our customers and our communities to move forward. And we accelerated our wildfire risk reduction efforts to protect our communities from volatile weather. Based on our results through the third quarter, we are reaffirming our earnings guidance for 2025 and remain confident in our ability to deliver on earnings guidance for the 21st year in a row, one of the best track records in the industry. As per our usual Q3 rhythm, today, we are introducing our updated 5-year infrastructure investment plan designed to serve increased energy demand, make needed investments to strengthen our transmission and distribution systems, provide a cleaner and more sustainable energy portfolio, and to keep energy safe, reliable, and affordable for all of our customers. In total, we expect this plan to deliver 7,500 megawatts of zero-carbon renewable generation, 3,000 megawatts of natural gas-fired generation, and almost 2,000 megawatts of energy storage to ensure system reliability, 1,500 new high-voltage transmission line miles to support demand growth in regional delivery, and approximately $5 billion of investment in our distribution and transmission systems to improve resiliency and reduce future risk from wildfires. We're able to accomplish this plan because we have one of the best utility, development, and supply chain teams in the industry. And in combination with our strong balance sheet, we can deliver infrastructure timely and affordably for our customers. In connection with this forecast, we have safe harbored all renewable and storage projects in our base capital plan and expect the same for the projects in our incremental plan to ensure that we can capture available tax credits and help keep customers' bills low. Our ability to deliver infrastructure with excellence, supported by our strategic geographic advantage, allows our customers to benefit from some of the lowest energy bills in the country. Over the past 5 years, our residential electric and natural gas bills have been 28% and 12% below the national average, respectively. Our residential electric customers in Colorado have the lowest share of wallet out of all 50 states, and the average residential bills in our other states occupy 5 of the next 11 spots. Since 2014, our residential electric and natural gas bill growth has been well under the rate of inflation. In fact, a typical residential Xcel Energy electric and natural gas bill is 14% and 20% lower than it was in 2014 when adjusted for inflation. Our Steel For Fuel program has saved customers nearly $6 billion through 2025. And our one Xcel Energy Way Continuous Improvement Program has realized over $1 billion in cumulative savings since 2020 while improving customer and operating outcomes. Our industry-leading demand-side management programs have saved enough energy to avoid building 30 average-sized power plants. And as customers continue to electrify transportation in other parts of their lives, that can further reduce their overall monthly energy costs with lower electric rates. We also continue to support critical programs to help our customers who may need assistance with their energy bills. Since 2024, Xcel Energy has connected over 200,000 customers with almost $300 million in financial resources. We're also exploring new opportunities to help even more customers across our jurisdictions, including proposals in our current Minnesota, Wisconsin, and upcoming Colorado rate cases. Moving to the topic of artificial intelligence, opportunities for Xcel Energy go well beyond our ability to power data centers. Of course, our load interconnection queue continues to grow even as we move some of our backlog into the contracted category. But across Xcel Energy, we are in the early stages of using AI in the business to bend the cost curve and to provide improvements in both customer satisfaction and operational outcomes. We're harnessing AI to empower our people, accelerate innovation, and build a smarter, more resilient energy future for our customers and communities. Automated analysis across our diverse enterprise data sources is delivering actionable insights that strengthen security, improve operations and planning, and drive process improvements. We're bridging knowledge gaps and empowering faster, more informed decision-making across the organization. And we're leveraging AI built by others to advance our business, including high-resolution imagery to transform how we inspect and maintain our distribution infrastructure. Through drone-based data collection and automated image analysis, AI-enabled processes can identify defects and assess risks and enable our teams to prioritize maintenance with greater speed and accuracy. And with wildfire mitigation, AI is transforming our risk models. By leveraging internal models and tools like Technosylva, we significantly improved our model coverage and accuracy as well as reduced analytical times to a fraction. This means faster, more reliable risk assessments protecting communities and infrastructure in real time. AI is truly an engine that's driving enterprise-wide innovation and transformation in Xcel Energy, making energy work better for our employees, our customers, and our communities. Moving to Marshall. On September 23, Xcel Energy, Qwest Corporation, and Teleport Communications America reached settlement agreements in principle that resolve all claims asserted by the subrogation insurers, the public entity plaintiffs, and individual plaintiffs. And while Xcel Energy does not admit any fault or wrongdoing and disputes that our equipment caused the second ignition, we believe this provides a positive outcome for our communities and our investors. Looking forward, Xcel Energy continues significant progress to mitigate risk from wildfires and extreme weather with public-facing wildfire mitigation plans in each of our states. This includes investments in situational awareness tools like weather stations and Pano AI cameras, advanced meteorology, fire science, and AI-enabled risk modeling tools, hardening our systems and deploying advanced wildfire safety operations and PSPS capabilities and operational actions, including daily stand-ups to address the threat from extreme weather across every part of our system and taking proactive actions as appropriate. Finally, each September, Xcel Energy employees and community members come together to honor the spirit of service. This year marked the 15th annual day of service for Xcel Energy with nearly 3,000 volunteers from across the company and the communities we serve coming together to support local nonprofit organizations. Together, volunteers dedicated almost 9,000 hours of service across more than 100 projects. This is one of my favorite days of the year, and it exemplifies the spirit and dedication of our employees and partners who show up every day to provide safe, clean, reliable, and affordable energy to our customers and our communities. With that, I'll turn it over to Brian.

Thanks, Bob, and good morning, everyone. Starting with our financial results, Xcel Energy delivered earnings of $1.24 per share for the third quarter of 2025 compared to earnings of $1.25 per share in the third quarter of 2024. The most significant earnings drivers for the quarter include the following: Regulatory outcomes in electric and natural gas sales growth increased earnings by $0.18, and higher AFUDC increased earnings by $0.08. Offsetting these positive drivers, higher financing costs decreased earnings by $0.15, reflecting the funding of our infrastructure investments and our financial discipline of maintaining a strong balance sheet. Higher depreciation and amortization decreased earnings by $0.09, driven by increased system investments, and higher O&M expenses decreased earnings by $0.05. Turning to sales. Weather-normalized and leap year adjusted electric sales increased 2.5% through the third quarter of 2025, driven by strong residential sales growth across all OpCos and increased C&I load in SPS and PSCo. During the third quarter, we also energized Meta's new data center in Minnesota that will continue to scale in the coming years. In turn, for the full year 2025, we continue to forecast 3% weather-normalized electric sales growth. In the third quarter, O&M expenses increased $37 million relative to 2024. This increase was largely driven by a $25 million increase in health and benefit costs for the quarter. For the full year 2025, we now forecast that O&M expenses will increase 5%. Shifting to RFP and rate case activity. In Colorado, in partnership with Colorado Energy Office, UCA, and commission staff, we issued a near-term procurement for 4,000 megawatts of renewable resources and 500 megawatts of thermal and firm dispatchable resources. This RFP is intended to accelerate the deployment of a portion of our Colorado IRP to capture production tax credits before they sunset. Bids were received this month, and we expect to file a recommendation in December 2025 with the commission decision by February of 2026. In SPS, we issued an all-source RFP to meet an 870-megawatt accredited capacity need. This represents 1,500 to 3,000 megawatts of nameplate capacity that will be online by 2032. Bids are due in January 2026, with an expected portfolio announcement by June 2026. In October, the Wisconsin commission verbally approved NSPW's $725 million acquisition of the 375-megawatt Elk Creek solar storage project. Tomorrow, we expect to file a natural gas rate case in Minnesota requesting a $63 million total revenue increase based on a 10.65% ROE and a 52.5% equity ratio. Interim rates of $51 million will also be requested effective January 1, 2026. Regarding future cases, we expect to file a Colorado Electric and Natural Gas and New Mexico electric rate case later this year. Moving to data centers. We remain on track to contract the remainder of our original 2-gigawatt base plan by the end of the year. In addition, we have updated our total base plan to include approximately 3 gigawatts of data center capacity. Additional projects included in the base case we consider high probability and expect to be contracted by 2026. This will drive 3% of the 5% assumed annual sales growth in our 2026 to 2030 capital plan. We also continue to make strong progress on the Small Coast Creek wildfire claims process. We have resolved 212 of the 254 submitted claims, and we have settled or dismissed 21 of 34 lawsuits. We've updated the low end of our estimated liability to $410 million. We have made significant progress in the third quarter with the resolution of the 3 largest claims by acreage. We have committed $360 million in settlement agreements. So considering the low end estimated liability of $410 million, we're estimating approximately $50 million more on top of the $360 million that has been committed based on our current information. As a reminder, we have approximately $500 million of insurance coverage. Shifting to our investment plan. Today, we are providing an updated $60 billion 5-year capital expenditure forecast, which reflects annualized rate base growth of approximately 11%. These investments are critical to serving growing electric demand, meeting clean energy goals, and ensuring safety and reliability of our system. We also have an additional pipeline of investments to our $60 billion plan, specifically from our recent RFPs across jurisdictions, incremental data center load, and transmission projects from future MISO and SPP tranches. We're excited about our growth opportunities and will continue to finance accretive growth in a balanced manner. This year, we have issued or contracted approximately $3 billion of equity and equity-related content between our ATM program and our 2025 hybrid financing. Our updated '26 through 2030 capital plan reflects an additional $23 billion of debt and $7 billion of equity content. We anticipate that any incremental capital investments would be funded by approximately 40% equity content and 60% debt. We continue to maintain a balanced financing strategy, which includes a mix of debt and equity to fund accretive growth while maintaining a strong balance sheet and credit metrics. Moving to earnings. We're reaffirming our 2025 ongoing earnings guidance range of $3.75 to $3.85 per share. We're also initiating our 2026 earnings guidance range of $4.04 to $4.16 per share, which reflects approximately a midpoint of 8% growth from the midpoint of our 2025 guidance. Key assumptions are detailed in our earnings release. We are updating our long-term EPS growth objective to 6% to 8% plus with expectations to deliver 9% growth on average through 2030. This update reflects our significant investment needs to serve our customers and drive state policies, along with confidence in our financial outlook. We are maintaining our dividend growth objective of 4% to 6% with the expectation to be at the low end of the range. Over our '26 to 2030 forecast period, we expect our dividend payout ratio will trend towards the bottom end of our updated payout ratio range of 45% to 55%, which allows greater financial flexibility and dry powder for the future. With that, I'll wrap up with a quick summary. We continue to lead the clean energy transition, ensuring safe, clean, and reliable service while keeping customer bills as low as possible. We announced an updated 5-year capital investment program that provides strong, transparent rate base growth and significant customer value. We reached a constructive settlement in the Marshall wildfire and continue to make investments to reduce risk to our system and communities from extreme weather. Our customers have and will continue to enjoy some of the lowest bills in the country with our investment plan. We maintain a strong balance sheet and credit metrics using a balance of debt and equity to fund accretive growth. We reaffirm our 2025 EPS guidance of $3.75 to $3.85 and have initiated 2026 EPS guidance of $4.04 to $4.16, which reflects a midpoint of 8% growth from the midpoint of our 2025 guidance. And finally, we expect to deliver 9% EPS growth on average through 2030. This concludes our prepared remarks. Operator, we will now take questions.

Operator, we will now take questions.

Just wanted to be clear, '26 at the midpoint, you did about 8%, and I hear you on the 9% through 2030. Does that start beyond '26? Or is that how you're kind of viewing this year?

Nick, I'll take that. No, that includes 2026, so 9% over the next 5 years, inclusive of '26 guidance. So that 9% would be based off the midpoint of this year, so $380 million.

Okay. Great. I appreciate that. And then just one other clarification, $7 billion of equity in the plan. I know you talked about $1.3 billion already priced forward. Is that kind of net against that $7 billion? Or is it still $7 billion from here on out?

No, I think of it as we do is kind of $7 billion from here on out with our new 2026 to 2030 plan. So if you look at what we did this year relative to last year's plan, which had $4.5 billion in it, and take those two pieces, we're right online with what we've been messaging around incremental capital that drives about 40% incremental equity content. I feel really good about our equity content plans and where we are in terms of managing our credit metrics and executing on the $60 billion investment plan.

So I guess first on the growth rate profile, the CapEx plan and rate base growth are very front-end loaded, and CapEx actually decreases significantly in 2029 and 2030. Many other companies have the opposite trend, with lower initial investments that ramp up over time. Can you discuss this and whether it's influenced by uncertainties regarding RFPs and other factors in 2029 and 2030?

Yes, Steve, I can address that. You're correct that we are conservative with our capital plan and our SPS portfolio process for the projects approved by our Minnesota Commission in the first quarter of this year. Looking ahead to 2029 and 2030, we initiated RFPs with Colorado SPS, and we are still in the early stages of that process. This is part of our additional pipeline where we anticipate opportunities to develop both generation to support customer load growth and transmission projects that we expect from SPP in the near future. The next SPP phase should provide us with more insight in the fourth quarter, along with the longer-term developments related to MISO Tranche 2.

Okay. I know you've previously provided some general insights regarding potential spending on favorable scenarios. Can you share any information on potential capital and the favorable cases that may not have been mentioned?

Yes. I would say the slide we have in our deck here for today, that's going to be a range of 6,000 to 9,000 total megawatts, we think out of those RFPs plus some transmission. We've always guided people to being competitive in our generation processes and winning about half of that plus that transmission. So I see a $10 billion-plus sitting in that pipeline, not all will be in 2030. Some of those generation processes run through '31, '32, but really good opportunity as we look at the low growth and the transmission needs in our system.

Yes, I think you're right about the shape of things. The earnings will generally align with the capital investment plan, though there will be some delay due to financing costs. We also intend to incorporate additional opportunities that Brian mentioned into the latter part of our plan.

It appears that he has just moved. We'll go to Carly Davenport. Okay, Carly, same thing. We'll go to Julien Dumoulin of Jefferies.

Can you guys hear me?

Yes, sir.

All right. Awesome, guys. Well done. Seriously. Look, if I can, just going back to where you left off with Steve, I'll just see it this way. Of those different points that you raised here, what are the more substantive pieces? I mean it seems like the SPP element could be more substantive that seems more front-loaded, and then b, the acceleration of some of these renewable procurements in light of tax credit expirations could be more substantive and lumpy and don't seem to be in there. But again, you tell me what are the bigger pieces that are not yet in that 60%. Again, you've laid out a whole bunch of them. I'm just curious which one moves the needle more as best you see it initially.

Julien, I'll begin, and then Brian can add his thoughts. A significant part of the SPP and RFP is included in our base capital plan. There's an additional RFP for SPP capacity and energy that is not part of the plan. When I consider Colorado generation, we have two RFPs awaiting consideration from the commission. One is a near-term procurement portfolio aimed at leveraging renewable credits, which represents a 4.5 gigawatt plan. The other is the just transition solicitation that has been under review by the commission for some time. We anticipate some resolution on this later this year or early next year, with generation needs ranging from 4 to 15 gigawatts, and there is some overlap in timing with the NTP and the JTS. Thus, I would not regard these as cumulative, but there is a substantial amount of Colorado generation expected to be addressed in the 2028 to 2030 timeframe that is not reflected in our base capital plan. Additionally, there are several smaller RFPs in the upper Midwest for generation that are also absent from our base plan. Regarding transmission, we have ITP and MISO 2.1 included, although these are longer-term capital plans with expenditures that will extend through this period and into the early 2030s. There are more upcoming ITPs and MISO LRTPs that are not incorporated in this plan. I believe Colorado generation is likely the primary driver of back-end investments in this five-year plan, with non-announced transmission from the SPP and ITP process being the second most significant. Brian, do you have anything to add?

Yes, on the Colorado side, we are making progress and actively engaging with our stakeholders to expedite the procurement of renewable resources, especially with the tax credit deadline approaching in 2030. We expect to gain more clarity on that portfolio in December, with a commission decision anticipated in Q1. We have received bids and are working through a strong bid pool, which is a significant factor for us. Additionally, as we look at the long-term, we see opportunities in developing data centers and collaborating with our stakeholders to promote economic growth and drive demand for future generation and transmission, which is an opportunity the industry is recognizing.

Excellent. Let me rephrase my question. Regarding the 6% to 8% plus compared to the 9% that you’ve mentioned, is the idea that the 9% reflects the current situation while the 6% to 8% plus accounts for future growth or possible variations from the 9% as we look forward a few years?

Yes. Julien, we think about it this way is that 6% to 8%. Well, the 6% to 8% is what would you think about a long-term view on EPS growth, when you balance the investment needs of our system, the low growth we're seeing on opportunities and also affordability. But when we look at our current 5-year plan and the $60 billion of infrastructure projects for our customers, serving the low growth and the needs of our system, derisking our communities. That plus really represents the 9% that we see over the next 5 years. If that helps us differentiate in terms of how we're thinking about it.

Maybe just on the load growth outlook, looks like continued strength in SPS, which is great to see. And then a couple of the other opcos shifting a bit lower from the prior plan. So could you just talk a little bit about what's driving those moving pieces on load growth across the regions?

Yes, SPS continues to show strength in the oil and gas sector, a trend we've observed for years. This year in New Mexico, we expect growth in the teens for the large commercial and industrial sector, along with ongoing electrification in that region. Additionally, Fermi America has opportunities in Texas and New Mexico that we've previously discussed. We're also observing potential shifts in the timing of data center arrivals. Overall, our sales growth across all operating companies is approximately 4% to 5%, with SPS at 8%. We're particularly encouraged by various data center opportunities in our service territory, including strong prospects in Minnesota and several good opportunities in Colorado, as well as in Texas and New Mexico. It's also worth noting that the 5% sales growth we mentioned is not solely due to data centers—only 3% of that growth is from them. The SPS oil and gas electrification accounts for 1.5% of the growth, and we're also seeing residential customer growth contributing about 0.5%. This diversified growth is significant as we look to the future. Yes, Carly. We have not altered our long-term outlook on our credit metrics at the 17% level; that remains unchanged. It is crucial to uphold a robust balance sheet and healthy credit metrics. Looking at our spending in the upcoming years, we plan to progress toward that 17%. We have structured our equity plan and content strategy to reach that 17% in the later part of this forecast period. Our long-term view has not fundamentally shifted in terms of maintaining our balance sheet and protecting our metrics. However, with the elevated capital expenditures anticipated over the next few years, there is some pressure involved.

I just want to step into equipment availability a little bit more, if I could, such as transformers, transmission, 2 CGPs and components there. Just wondering if you could frame for us how long the queues are there? And I guess, how you see aligning that with new data center interest or contracts?

Yes. Great question, very timely and very strategic. I said in my prepared remarks, I'm really proud of the team here at Xcel Energy. I think we have the best team working on this. We have been very, very progressive in terms of securing the assets that we need to build the infrastructure that sits in front of us. You're absolutely right. Lead times have elongated, and I'll let Brian comment on any particular components. But we think that given our scale, our scope, and our approach to our major vendors, that we have access to inventory and supplies maybe that others don't have. We've taken a very progressive shift in how we work with our vendors, making sure that they see our entirety of our capital plan, they can plan for the work that they do with us. We find out who's best able to serve us both on the services side as well as the equipment side, and we backward integrate them into our capital plan in a way that is both we protect ourselves from pricing side as well as we get certainty of equipment and certainty of labor in a pretty tight market. That's been the strategic focus for the team for a year or 2 as we saw the market start to tighten, particularly with data center build. And maybe I'll let Brian just comment on what we're seeing in turbines and transformers and things like that.

Yes, I believe it's clear where the turbine market stands, looking ahead four years. As Bob pointed out, we have proactively ordered 19 turbines, which is a key advantage of our scale. This enables us to order a considerable amount of equipment with the confidence that it will be utilized in our system, even amidst the slow growth we're currently experiencing. Large power transformers, specifically the 345 kV variety, are another area we've outsourced in previous years. The focus is on how to get ahead in this landscape and ensure we have the right supplier relationships in place to navigate potential tariffs and supply chain challenges. We feel very positive about our current position from a supply chain standpoint. This encompasses both the equipment for our base plan and the additional projects stemming from our incremental plan, ensuring compliance and safety. Additionally, we are also focused on the labor aspect, aligning with top-tier EPC firms, not just for this year or next, but for our five-year outlook and beyond. Building these key partnerships is crucial and sets us apart as we implement our strategy.

Got it. Very thoughtful process there. And I was just wondering if you might be able to align that a little bit more with the demand growth. It seems like the data center pipeline, as you described in the slides, stepped up quite nicely versus before. And just wondering what you see on the type of discussions and the speed to market world and how this all fits together.

Yes. Well, obviously, very strategic and timely as we watch our industry work very progressively to bring speed to power here and making sure that we energize this very critical national asset in terms of artificial intelligence and data center development. Not surprising. We've got great interest, and our pipeline continues to build, and we continue to move stuff from highly probable into the contracted categories. We have some of the most affordable energy in the country, as I mentioned in my prepared remarks. We have an incredibly good strong development team. We're working through either ESAs or large load tariffs in all of our states and making sure that we protect our existing customers from the addition of new large loads, and we've laid out in the past our principles around this in terms of cost causation and whose funding, and if we trigger a transmission investment, new generation investments, making sure that we protect our customers along the way, and there's a net benefit for the entire of the system when you bring out some of these new large loans. I think that it should also be noted that I mentioned sort of strategic geographic advantage. In addition to low energy bills, we have enormous high clean energy content in our systems already. That's a very attractive component to these data center developers as well as their end-use customers. So I think that between our sustainability portfolio and where we're trending as a company across all of our states and making sure that we can deliver a cleaner energy product as well as a highly reliable and highly affordable product is very strategic as we approach economic development with data center developers.

I just have, I guess, 2 super quick cleanups. I think to Steve's question, I think you mentioned about $10 billion of incremental CapEx. That is an addition or would be on top of current 9% EPS growth. Is that accurate?

That is accurate.

Great. And then this one, and I probably should wait for EEI, but just the time is right. You're currently talking 9% growth, but you've kept the guidance at 6% to 8% plus. Just curious on why not readjusting the 6% to messaging that shows all the potential upside that you have? Like it doesn't even seem likely that you hit 6% or even 7%, like I'm just curious on the thought process of keeping it 6% to 8% plus.

Yes, Anthony, we consider various viewpoints as we contemplate what the appropriate long-term strategy is. When I refer to the long term, I mean that 6% to 8% outlook goes beyond the next five years, focusing on balancing affordability with other factors. We positioned the plus to convey that we face significant infrastructure needs for our customers in the coming five years. However, looking further ahead, especially beyond 2030, we will keep reassessing our goals. Regarding your first question, while we mentioned $10 billion or more, some aspects might extend beyond this five-year period, especially concerning generation procurement and certain MISO transmission projects, which will take longer to realize. We are genuinely optimistic about our overall opportunities in the next five years and beyond.

Congrats on the strong, I guess, guidance revision guys. A couple of questions for me. So maybe if you could talk a little bit about the trends in SPS. I know you continue to flag the electrification of Permian as one of the drivers of the volume growth there. With the oil prices like being kind of where they are, is there any reason to be concerned about that trend at all at this point?

Sophie, it's Bob. I think the growth you see in the Permian is probably a function of 2 things. One is continued strength in mining in the Permian Basin. So just more wells, more infrastructure, more fields being open. The second is the trend towards electrification of those fields and of existing fields. So I think there's 2 big drivers out there. When I talk to our largest customers down in the Permian and the Delaware Basins, this continues to be their lowest cost resource around the globe. And so I think even when you start to see oil and gas prices fluctuate, I think these properties in the Southwest are still varying the money for them, and they'll continue to see mining and mining growth down in the Southwest. So I don't have a lot of concern about that load growth profile. And then as we talked about the data centers, that low growth profile, we feel very confident in and see opportunity to add to it. Yes, there are definitely a couple of important themes here. As I mentioned in my initial comments, we are located in one of the most favorable regions for both wind and solar energy. This positions us to provide significant benefits to our customers by continuing to invest in and utilize these natural resources, especially while tax credits make them more affordable. Additionally, we have plans to add 4.5 gigawatts of natural gas capacity over the next five years, along with over 5 gigawatts of energy storage. We are reinforcing our wind and solar operations with competitively priced backup energy, ensuring that we remain reliable, affordable, and sustainable for our customers, which is essential to our business.

I just had a quick one. Just had a quick one. I appreciate the color on the 9% because one of the things, I guess, I was scratching my head out and I was hoping to get a little color on was clearly '29 rate base moves up something in the order of 20-plus percent. And so if you run the midpoint of your EPS guidance out, now at 9% versus where you were previously in the plan. It implies a pretty significant compression in earned ROEs, implied earned ROEs. Now obviously, you're spending a lot more capital and spending it quicker. So that kind of makes sense to me, but you do have pretty good mechanisms. So can you talk about any embedded conservatism that's in the plan around assumed earned ROEs that you would get given the significant increase in rate base?

Steve, I can address that question for you. I want to emphasize our expectation of 11% rate base growth and 9% earnings growth over the next five years, which indicates we do not anticipate a significant compression in return on equity. We've previously mentioned some rate cases that could drive ROE improvement, as we've postponed certain rate cases for various reasons. At this level of high growth, with 11% rate base growth, we recognize that substantial capital expenditures will require financing. This typically leads to about a 200 basis points difference between rate base profit and earnings growth over a five-year span. We want to highlight that as we progress over the coming years, our financing will align with our capital expenditures, and as we navigate some regulatory processes, we will bridge the gap between rate base growth and earnings per share growth. Overall, we feel confident about our long-term EPS growth, the financing plan, and maintaining a strong balance sheet. We do not foresee any ROE compression at this point, even though our plan has conservative ROE estimates.

Questions around the transmission spend. Obviously, this has been a big thing for you for many years. But wonder as you ramp that up and think about these large customers, how easy or difficult is it to identify specific customers who might pay for some of this transmission spend, i.e., we see contracts between generation and data centers. Can you think some of this transmission spend essentially off of residential commercial customer bills and identify specific customers to pay for it?

Yes. Great question. First, thanks for recognizing leadership and transmission. I'd like to say that we have been the leading builder of new transmission line miles over the last 15 years when you come from the state of hockey, you got to skate to where the puck is. And we feel like we've built a grid in an infrastructure system that is enabling us to energize data class. When I think about incremental people willing to spend incremental money on transmission, I think our first principle with regard to hooking up data centers is if they require a new transmission line, particularly a lateral, usually they're paying for that 100%, and we put that into sort of a kayak bucket as opposed to net rate base spend, and it's going to be attributable directly to that customer. And when you talk about can you identify those customers. Those customers are knocking on our door freely and willingly to spend the money, particularly on the transmission interconnection to make sure that they can get service as quickly as possible. So this is really a management of the inbound as opposed to us having to go find people that are willing to do it. I think that's a pretty common approach that the data center developers and the hyperscalers are willing and able to do. We're protecting our customers from the transmission build. And then when you think about the net benefit, if you're taking the entirety of our system cost and adding more megawatts to it. That's a net benefit on a per kilowatt-hour rate on the transmission system in totality and a benefit for all customers.

Okay. So not all of that transmission spending would be reflected in commercial and residential bills?

The transmission expenses we discussed in our plan are focused on regional and super regional initiatives. We are working on connections between the MISO and SPP markets. Significant regional transmission projects are emerging from the long-term planning within the MISO process, which are allocated regionally and not solely directed to our customers. Similarly, much of the spending for our SPP development is regionally allocated and will not directly impact retail rates by 100%.

Yes. Travis, those are really customer-specific system impact studies to just wherever that customer is locating on the transmission system, the size of that customer, the ramp of that customer. And so those are really specific, hard to put a number on it in a general sense.

I have a question regarding the regulatory aspect. It’s encouraging to see the capital expenditures and the transmission developments; however, I’m curious about your discussions with regulators regarding expectations for rate trends over the next five years. I'm interested in how you balance revenue requirements with volume growth and what the response has been to those discussions.

Yes. Great. I think it's really fundamental and foundational for our team here to make sure that we keep our bills for our product as affordable as possible for our customers. So we wake up every day thinking about that. We have to balance that with other desires, reliability, sustainability, resiliency, and safety across our system to make sure that we can meet those needs of our customers as well. I mean, you don't have to look any further than Jamaica or Cuba to realize the devastating effect that communities have when our system and our product isn't available. So we are spending time and energy, as you say, with our regulators, with our legislators, making sure that we recognize all of the things that we're bringing to the system and that while affordability is a hugely important piece, we think we start from a very good spot. We think we've been a very good steward of our customers' money over the last decade. We'll continue to be very prudent, very focused on making sure that we can deliver the system that they need and want with the policy objectives that they need and want at a price that is as affordable as possible. So we work through that with each state and each class of customer and making sure that we keep our product very affordable and attractive.

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

Thank you very much, sir. Ladies and gentlemen, that concludes today's conference. We wish you a very good day. You may now disconnect. Have a good day.