Xcel Energy Inc. (NASDAQ:XEL), a Minneapolis-based utility with a market capitalization of $41 billion and a strong track record of dividend payments, has filed for a substantial electric rate increase in North Dakota, citing a need for additional revenue to support its service and infrastructure.
The filing is based on projections for the year 2025 and includes a proposed return on equity of 10.3%, a rate base of about $817 million, and an equity ratio of 52.50%. The company's stock has shown strong momentum, gaining over 33% in the past six months and currently trading near its 52-week high of $73.38.
In addition to the permanent rate increase, NSP-Minnesota has requested interim rates, subject to refund, that would amount to roughly $27 million, with the proposed implementation date of February 1, 2025.
Xcel Energy's request reflects the broader industry trend of utilities seeking to balance investment needs with customer rate impacts. The company's forward-looking statements in the filing emphasized the anticipated rate increases and regulatory proceedings. However, these statements come with the usual caveats regarding the uncertainties and risks inherent in such forecasts.
In other recent news, Xcel Energy Inc. has finalized additional forward sale agreements related to its common stock, with Barclays (LON:BARC) Bank PLC and Bank of America (NYSE:BAC) as forward purchasers for an aggregate of 2,748,091 shares. This follows the company's previous entry into an Underwriting Agreement and initial forward sale agreements for 18,320,610 shares of common stock. In the financial realm, the company reported an increase in ongoing earnings per share from $1.23 to $1.25 in the third quarter of 2024, and introduced a 2025 earnings guidance of $3.75 to $3.85 per share.
Analysts from Goldman Sachs (NYSE:GS) and Jefferies have shown confidence in Xcel Energy's growth, with Goldman Sachs raising Xcel Energy's target to $78 and Jefferies upgrading it to Buy. This follows Xcel Energy's revised load growth forecast from 2-3% to 5% and an increased five-year capital plan by $6 billion.
In terms of strategic moves, Xcel Energy announced a five-year capital investment plan of $45 billion, primarily targeting clean energy and customer electrification. The company is also managing increased Operations & Maintenance expenses and has settled a significant number of wildfire claims.
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