Xcel Energy CEO Interview: Richard Kelly

• On 10:50 am EDT, Wednesday September 23, 2009

67 WALL STREET, New York - September 23, 2009 - The Wall Street Transcript has just published its Alternative Energy/Clean Energy/Power Generation/Utilities Report offering a timely review of the sector to serious investors and industry executives. This 83 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers.

Topics covered: Long Term Perspective on Alternative Energy Industry -- Leading Indicators for Alternative Energy Components Companies -- Mergers and Acquisitions in the Alternative Energy Industry -- Break Even Business Fundamentals for Carbon Free Energy Providers -- Development of Carbon Free Energy Production Infrastructure -- NAT GAS Act -- New Players in the Alternative Energy Industry -- Solar Power Cell Manufacturers Market Strategy -- Demand Response for Raw Materials for Solar Cell Production -- Alternative Energy Investment Opportunities -- Multiple Stock Winners in Carbon Free Production Industry -- Government Funding of Alternative Energy Power Providers -- Chinese Solar Energy Companies -- Alternative Energy Hedge Fund Investors -- Commodity Cycles -- Determinants of Market Valuations in the Alternative Energy Production Industry -- Carbon Emissions Statistics -- Energy Efficiency Statistics -- Innovations in Solar and Wind Power Generation -- Business Economics for Methane Based Power Generation -- Electric Vehicles Projections and Statistics-- Cap and Trade Projections and Statistics -- Development of Battery Technology -- Regulatory Environment Developments for Solar, Wind, and Alternative Energy -- Hybrid Vehicles Development and Sales Projections

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In the following brief excerpt from the report, Richard Kelley, CEO of Xcel Energy, discusses the company and the outlook for the sector and for investors.

TWST: Would you begin with an overview of Xcel Energy and a picture of the things that the company is doing at the present time?

Mr. Kelly: Xcel Energy is the fifth-largest gas and electric utility in the United States. We serve eight states, with the largest ones being Minnesota, Colorado, Texas and a substantial portion of western Wisconsin, and we provide service to approximately 3.4 million electric and 1.9 million natural gas customers. We are a fully integrated, regulated utility, and our strategy is to grow the core, which means we are going to stay in the regulated side of the business. Our goal is to be an environmental leader, which I believe we have accomplished. We've done a lot of good work on the environmental side.

TWST: What are the most significant trends or developments that you anticipate in your markets over the next two to three years?

Mr. Kelly: One of the things that I worry about most for Xcel Energy is public policy and how that will evolve. I'm specifically referring to some kind of energy bill or legislation on carbon emissions and global warming, and the impact that's going to have on all utilities, including Xcel Energy. It is for this reason we've worked on our environmental strategy for the past several years. For example, strong demand-side management, large renewable energy and carbon reduction are all aspects we have worked on so that we are prepared for whatever legislation comes out of Washington, D.C. Alternatively, if nothing comes from the federal government, then at a minimum we would be in line with meeting the states' requirements.

TWST: What are the growth opportunities that you see for this company?

Mr. Kelly: The major growth opportunity is going to be investment in our environmental leadership strategy. Investment in wind, solar and biomass present great opportunities for us. We are blessed with the geography in the middle part of the United States, where there is abundant wind. And as you get farther down south, obviously there is abundant solar, and in the Midwest we have a lot of opportunities for biomass. So while the customer growth might be less going forward, as people become more conscious of energy efficiency, we'll still be able to maintain our growth because of these opportunities we have on the environmental side.

TWST: I see that the National Renewable Energy Lab has rated Xcel Energy very highly. Would you tell us how the company plans to continue to reduce its carbon emissions and deal with new rules and regulations that may come from Congress?

Mr. Kelly: Sure, we started down the path of renewable energy before there were any laws or requirements, and we'll continue to move in that direction. So we will continue to invest in renewable energy. As I mentioned earlier, we are blessed with the geography. Minnesota, North Dakota and South Dakota have some of the best wind resources in the United States. Also, in Colorado and Texas we will concentrate our investments in solar. All this puts us in a good position so that over time, we can reduce the carbon emissions, and we'll start shutting down some of our older, less-efficient coal plants. That's how we will get to our carbon goal. And we believe we can reach a 20% reduction in carbon by 2020, starting with 2005 as our base year.

TWST: The company is active in several states, including Colorado and Minnesota. Are there any significant differences among those states in relation to the regulatory environment and their economies?

Mr. Kelly: There is not a lot of difference in the regulatory environment, and we are very fortunate as all the states in which we operate have strong regulation. Also the Commission is very helpful in supporting our environmental strategy, and they are all good states in which to do business. So we are very pleased with that. But there are differences in the states' economies. Texas and Colorado are driven by oil and gas. So you get more of the boom and bust. Minnesota is a more diverse economy, so it is not nearly as volatile as other places. The citizens of Minnesota are very environmentally conscious and have been very supportive of our strategy. But the farther south you go, the less they are. So there are some differences in the market, but regulatory and legislative groups have been very supportive in all of our states.

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