The leaders of Xcel Energy Inc. have raised their electric sales growth forecast for the next five years to 5% on average but expect that data center operators and oil and gas firms in Texas could push that growth rate to 8% in 2028.
The new growth outlook from Chairman, President and CEO Bob Frenzel and his team also comes with a $45 billion capital spending plan from 2025 through 2029—an increase of $6 billion from their 2024-2028 plan of $39 billion—that the executives say could grow by another $10 billion.
“Half of that sales growth, of the 5%, is coming from data centers,” CFO Brian Van Abel told analysts on an Oct. 31 conference call discussing Xcel’s third-quarter results. “But we also have significant growth in the oil and gas region in […] the Permian Basin and we’re starting to see the effects of beneficial electrification around EVs […] Having this diversity in growth is helpful in the overall plan.”
With its new growth outlook, Minneapolis-based Xcel is the latest to point to data centers as a significant driver of load growth for the foreseeable future. (See the sidebar for some of our recent coverage of other companies.) The company has received data center customer requests for up to 8.9 gigawatts of energy by 2030, which is 2.2 gigawatts more than three months ago. Executives’ budgets include the assumption that the company will sign contracts for a quarter of those requests in the coming five years but also expect that strong growth from that customer segment will continue well into the 2030s.
Xcel posted a net profit of $682 million in the three months ended Sept. 30, an increase of 4% from the prior-year period. Operating revenues from the company’s utilities in the upper Midwest, Rockies and Southwest slipped to $3.64 billion while sales growth (adjusted for weather and the leap year) rose 1.3%.
