Dive Brief:

• Xcel Energy reported Q1 2014 unadjusted earnings of $261 million, $0.52 per share, up from Q1 2013’s $237 million, $0.48 per share, on the strength of increased electric and natural gas margins in its Minnesota and Wisconsin units during the frigid winter and rate increases approved by regulators in North Dakota and New Mexico.
• President/CEO/Chair Ben Fowke affirmed the company’s 2014 earnings projection of $1.90 to $2.05 per share and announced the Board of Directors approved a 7% dividend rate increase to $1.20 per share, higher than the company’s targeted dividend growth of 4% to 6%.
• The Xcel earnings-per-share increase came from gains in Xcel’s Wisconsin, Southwestern Public Service, and regulated utility units.  

Dive Insight:

While cautioning that "it may be a bit too early to call a trend" due to the "volatile weather," CEO Ben Fowke said Xcel is seeing "potential upside for the year based on improving sales growth," especially in the commercial and industrial class.

Weather-adjusted electric sales increased 2% across all of Xcel's electric operations, said CFO Teresa Madden, which she attributed to economic conditions being "generally stronger across the Xcel Energy region compared to the nation as a whole."

Xcel calculated the weather impact on its earnings per share in Q1 2014 to be $0.049 as against a weather impact in Q1 2013 of $0.013, a 73% increase.

Xcel’s Q1 natural gas margin was $256 million, up from $231 million for the same quarter in 2013, with $9 million of the $25 million due to a Colorado rate increase, $7 million due to increased natural gas prices during the uniquely high demand frigid winter, $4 million due to pipeline improvements, $3 million due to increased retail sales, and $2 million attributed to “other” factors.

Xcel recently announced an RFP for 100 megawatts of large scale solar for its Minnesota unit and is expected to make a potentially groundbreaking decision about whether to use the state’s newly mandated Value of Solar Tariff or stay with the net energy metering retail rate for its newest community solar garden installations.