DBRS Confirms Xcel Energy Inc. (Xcel) and Subsidiaries

DBRS has today confirmed the ratings of Xcel Energy Inc. (Xcel or the Company) and its related subsidiaries, as listed below, all with Stable trends. The confirmation reflects the following:

-- Stable performance of the Company’s business and operations, primarily regulated electric and gas utilities;
-- Relatively stable and favorable regulatory environment in key states;
-- Solid consolidated balance sheet, strong operating cash flows and stable financial metrics despite larger-than-historic financing needs for the ongoing capital programs, including the emission reduction projects in Minnesota (MERP) and the expansion of the Comanche coal-fired plant in Colorado;
-- External funding requirements for the major capital programs through the medium term;
-- Solid deconsolidated credit metrics at the holding company level.

DBRS believes the company should be able to generate strong internal cash flows, including a return on construction in progress, and manage its equity reinvestment programs and dividend payout ratio so that the financial metrics are maintained within the current rating range.

DBRS notes that the debt at the parent remains relatively high at US$1.5 billion and is not expected to be reduced over the medium term. However, DBRS believes that, over the long term, strong cash flows at the utilities will continue to provide adequate dividends to finance the parent’s debt and public dividend obligations.

Notes:
These ratings are based on public information.