Xcel Energy 2015 Annual Report Download - page 65
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Forward-Looking Statements
Except for the historical statements contained in this report, the matters discussed herein are forward-looking statements that are
subject to certain risks, uncertainties and assumptions. Such forward-looking statements, including the 2015 EPS guidance and
assumptions, are intended to be identified in this document by the words “anticipate,” “believe,” “estimate,” “expect,” “intend,”
“may,” “objective,” “outlook,” “plan,” “project,” “possible,” “potential,” “should” and similar expressions. Actual results may vary
materially. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update
any forward-looking information. The following factors, in addition to those discussed elsewhere in this Annual Report on Form 10-K
for the fiscal year ended Dec. 31, 2015 (including the items described under Factors Affecting Results of Operations; and the other risk
factors listed from time to time by Xcel Energy Inc. in reports filed with the SEC, including “Risk Factors” in Item 1A of this Annual
Report on Form 10-K and Exhibit 99.01 hereto), could cause actual results to differ materially from management expectations as
suggested by such forward-looking information: general economic conditions, including inflation rates, monetary fluctuations and
their impact on capital expenditures and the ability of Xcel Energy Inc. and its subsidiaries to obtain financing on favorable terms;
business conditions in the energy industry, including the risk of a slow down in the U.S. economy or delay in growth recovery; trade,
fiscal, taxation and environmental policies in areas where Xcel Energy has a financial interest; customer business conditions; actions
of credit rating agencies; competitive factors, including the extent and timing of the entry of additional competition in the markets
served by Xcel Energy and its subsidiaries; unusual weather; effects of geopolitical events, including war and acts of terrorism; cyber
security threats and data security breaches; state, federal and foreign legislative and regulatory initiatives that affect cost and
investment recovery, have an impact on rates or have an impact on asset operation or ownership or impose environmental compliance
conditions; structures that affect the speed and degree to which competition enters the electric and natural gas markets; costs and other
effects of legal and administrative proceedings, settlements, investigations and claims; financial or regulatory accounting policies
imposed by regulatory bodies; outcomes of regulatory proceedings; availability or cost of capital; and employee work force factors.
Management’s Strategic Plans
Xcel Energy strives to provide our investors an attractive total return and our customers with safe, clean and reliable energy services at
a competitive price. This mission is enabled via four key strategic priorities:
• Improving utility performance;
• Driving operational excellence;
• Improving customer experience; and
• Investing for the future.
Below is a discussion of these objectives.
Improving utility performance
Xcel Energy is made up of several utility operating companies. As part of the regulatory process, each state will generally establish an
authorized ROE. In many states, our utility operating companies earn less than the authorized ROE due to numerous factors including
the timing of implementation of new rates, timing of capital investments, a regulatory commission not allowing the recovery of certain
costs, the time period used as a test year for rate cases, fluctuations in sales, the impact of weather, unanticipated cost increases, etc.
The difference between the authorized return and what is actually earned is referred to as an ROE gap. Xcel Energy is focused on
reducing this gap over the next several years with specific goals as follows:
• Close the regulated ROE gap by 50 basis points by 2018 from the 2014 base level; and
• Derive 75 percent of our revenue from regulated operations via multi-year regulatory plans by 2017.
We continue to pursue regulatory and legislative changes to streamline rate case proceedings and optimize recovery, while improving
our alignment with state policies and keeping pace with evolving customer preferences.
Driving operational excellence
Providing safe, reliable service to our customers has, and will continue to be, a fundamental priority. Keeping our costs competitive is
also essential in terms of customer affordability, business results and sustained company success over time. To more closely align
O&M expense growth with projected sales growth, Xcel Energy is working to limit the increase in annual O&M expense to zero to
two percent without compromising reliability or safety. We intend to accomplish this objective by continually improving our
processes, leveraging technology, proactively managing risk and maintaining a workforce that is prepared to meet the needs of our
business today and tomorrow.