Why did Xcel Energy terminate the Merricourt Wind Project?

Xcel Energy, through its subsidiary NSP-Minnesota, terminated the Merricourt Wind Project agreement primarily due to concerns about the potential adverse impact on endangered or threatened species protected by federal law. Uncertainty surrounding the cost and timing of mitigating these environmental impacts was also a significant factor in the decision.

How does the termination of the Merricourt Wind Project affect Xcel Energy's spending plans for 2011?

The termination of the Merricourt Wind Project has led Xcel Energy to revise its capital expenditure forecast for 2011. The company now expects to spend approximately $2 billion on capital projects for the year, down from what would have been allocated to the terminated wind project.

Has Xcel Energy changed its earnings outlook for 2011 because of this project cancellation?

No, Xcel Energy is reaffirming its previously issued earnings per share guidance for 2011, which remains in the range of $1.65 to $1.75. This indicates that the company does not expect the project termination to materially impact its overall profitability for the year, within the stated guidance range.

What are the risks associated with Xcel Energy's forward-looking statements?

As detailed in the filing, Xcel Energy's forward-looking statements, including earnings guidance and capital expenditure forecasts, are subject to various risks and uncertainties. These can include general economic conditions, energy industry business conditions, trade, fiscal, taxation and environmental policies, customer business conditions, actions of credit rating agencies, competition, unusual weather, geopolitical events, legislative and regulatory initiatives, and other factors detailed in their SEC filings, such as their Form 10-K.

XEL/XELLL 8-K: Regulation FD

Summary

Xcel Energy Inc. (XEL) disclosed through Northern States Power Company Minnesota (NSP-Minnesota) the termination of its agreement with enXco Development Corporation for the Merricourt Wind Project. This 150 MW wind project, located in southeastern North Dakota, was expected to cost approximately $400 million and begin commercial operations in 2011. The primary driver for this termination was the potential adverse impact on endangered or threatened species and the associated uncertainty regarding mitigation costs and timelines. As a consequence of this project's cancellation, Xcel Energy has revised its 2011 capital expenditure forecast to approximately $2 billion. Importantly, the company is reaffirming its previously issued earnings per share guidance for 2011, which ranges from $1.65 to $1.75. Investors should note that this filing contains forward-looking statements subject to various risks and uncertainties, as detailed in the report.

Key Highlights

1Termination of the Merricourt Wind Project development agreement by NSP-Minnesota with enXco Development Corporation.
2The Merricourt Wind Project was a 150 MW wind facility in North Dakota, with an estimated cost of $400 million.
3Key reason for termination: potential adverse impact on endangered/threatened species and uncertainty in mitigation costs/timing.
4Xcel Energy's 2011 capital expenditure forecast is now approximately $2 billion, a reduction from prior expectations due to project termination.
5The company is reaffirming its 2011 earnings per share guidance of $1.65 - $1.75.
6Filing includes standard forward-looking statement disclaimers with a list of potential risk factors.

XCEL ENERGY INC 8-K Report, Regulation FD Disclosure (Apr 1, 2011)

Summary

Key Highlights

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