Xcel Doubles Two-Year Data Center Contracts Goal to 6 GW
The leaders of Xcel Energy Inc. expect to sign contracts with data-center operators for a total of 6 gigawatts of capacity between now and the end of next year. That figure is double their most recent estimate, which they gave last month.
Speaking to analysts on Feb. 5 after Minneapolis-based Xcel reported fourth-quarter earnings of $567 million (up from $464 million in late 2024) on total revenues of nearly $3.6 billion, CFO Brian Van Abel said the company’s teams are working on “some really good opportunities” across Xcel’s eight-state footprint. But, he added, the geographic focus in the near term is likely to be on the Upper Midwest, where Xcel operates Northern States Power Co.-Minnesota and Northern States Power Co.-Wisconsin.
“We expect to have these contracts signed by the end of 2027,” Van Abel said. “The construction cycle, a lot of those may come in kind of that ’29-type period. And then it’s really about energizing in 2030 and the early 2030s and about extending our capital investment opportunity, our generation need.”
Now, Van Abel and Chairman, President and CEO Bob Frenzel have grown their high-probability pipeline to about 4 gigawatts from 1.7 gigawatts last month. Adding those projects to Xcel’s territories will give the company a chance to extend its strong rate base growth pace, which Frenzel and Van Abel are forecasting will average 11% through 2030.
Helping enable that growth, Frenzel said Feb. 5, will be two tie-ups with other big names in the energy space. Xcel this week announced both a memorandum of understanding with NextEra Energy to co-develop various generation, storage and interconnection assets and a strategic alliance with GE Vernova that calls for Xcel to buy five more natural-gas turbines and to, among other things, have the two companies collaborate on grid modernization and R&D projects.
Shares of Xcel (Ticker: XEL) closed trading Feb. 5 essentially unchanged at $76.12 but were up about 2% in after-hours trading. Over the past six months, they have risen slightly and the company’s market value is now about $45 billion.
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications T&D World, Healthcare Innovation, IndustryWeek, FleetOwner and Oil & Gas Journal. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.