INTERVIEW: Xcel Energy's renewables-rich footprint is primed for hyperscalers, CEO says

Xcel Energy Inc. sees itself as uniquely positioned to continue leading on US power-sector emission reductions while accommodating a surge in demand from large-load customers such as data centers, Bob Frenzel, the company's chairman, president and CEO, told Platts.

"We think we can do that because we have a strategic geographic advantage," Frenzel said in an interview with Platts, part of S&P Global Energy, on the sidelines of the Edison Electric Institute's annual investor-owned utility conference in Las Vegas on June 3.

Maintaining customer affordability amid an estimated $1.4 trillion wave of planned US utility capital expenditures through 2030, driven in part by explosive growth in data center demand, was the overarching theme of the 2026 conference. Just a few years ago, US electric utility gatherings were broadly centered on climate targets and net-zero goals.

Frenzel noted Xcel Energy's most recent sustainability report, released June 2, which shows that the company's four operating utility subsidiaries across eight states reduced their collective carbon emissions by 58% through 2025 compared to 2005 levels. Xcel Energy's residential electricity and natural gas rates were also 29% and 11% below the national average, respectively, over the last five years, according to the report.

Minneapolis-headquartered Xcel Energy serves 3.9 million customers across the Great Plains region, including parts of North Dakota, South Dakota, Michigan, Minnesota and Wisconsin, as well as Colorado, eastern New Mexico and the Texas Panhandle.

Frenzel said the company's aggressive investments in new wind and solar generation over the last 15 years, along with new transmission lines, have helped keep rates low even as the nominal US average retail price of electricity increased by 23% from 2019 to 2024.

"We've been the leading provider of wind; we're a leading builder of transmission line miles in the US for the past 15 years," Frenzel said. "When you build infrastructure where it makes economic and reliability sense for your customers, you keep costs low and sustainable."

Data center pipeline

With consumer concerns mounting over the cost impacts of new data center development, Frenzel highlighted a deal Xcel announced in February with Google LLC to support a new 750-megawatt data center in Minnesota as a replicable model for protecting ratepayers.

As part of the agreement, Google committed to procuring 1,900 MW of incremental new wind, solar and energy storage capacity, including 300 MW from a Form Energy Inc. iron-air battery, the world's largest long-duration energy storage resource announced to date. The deal, underpinned by a Clean Energy Accelerator Charge, requires Google to cover the cost of related grid upgrades.

Frenzel said the agreement is expected to save regular Minnesota customers approximately $1.5 billion over a 15-year period, amounting to roughly 2% in annual savings on residential bills.

"We're commercializing innovation with our technology customers, we're building a more resilient grid for our new customers, we're continuing to deploy clean energy, all while protecting our existing customers," Frenzel said.

Xcel Energy, in its first-quarter 2026 earnings presentation, reported a 20-gigawatt pipeline of potential demand from hyperscalers and other large data center developers, with individual project capacity ranging from 200 MW to more than 1 GW.

To help meet that demand, Xcel Energy earlier this year entered into strategic partnerships with GE Vernova Inc. and NextEra Energy Inc. The strategic alliance framework with GE Vernova will support Xcel Energy's long-term capex plan, calling for 12 GW of new wind, solar, storage and natural gas generation from 2026 to 2030.

"Structuring an enterprise-wide agreement on our side and their side allows us certainty, price flexibility, and access to their engineering talent and pipelines of tech development," Frenzel said. "It allows us to move with speed and scale."

Meanwhile, a joint development agreement with NextEra Energy will see the two companies codevelop generation solutions for 2 GW of new data center capacity, with potential to expand beyond that.

"We're great owners and operators of infrastructure, and they're great developers, and that partnership allows us to move faster to meet the needs of our data center customers," Frenzel said.

Large-load tariff preference

As utilities seek to shield ratepayers through new contract and business model arrangements for data center customers, Frenzel expressed a preference for large-load tariffs with minimum demand charges, long-term power purchase agreements and exit fees.

"A large-load tariff is a simplified framework that allows you to move through the regulatory process quite quickly," Frenzel said.

Xcel Energy has two proposed large-load tariffs pending with Minnesota and Colorado utility regulators, with decisions expected in the second quarter of 2026 and early 2027.

Frenzel added that Xcel Energy can also "pivot" if a state has a different need. "We can be flexible, and we can be agile," he said.

Even as utilities prepare for a historic level of infrastructure spending, questions remain about how much new data center demand will actually materialize.

A recent JPMorgan analysis based on satellite imagery found that construction has yet to begin on roughly 60% of data center capacity planned for completion in 2027, with another 7% delayed.

Frenzel cautioned against reading too much into reports of data center delays, while adding that he would not pretend "to have perfect insight into the compute needs of the hyperscalers."

"The contracts that most people have with data centers, from the electric side, have minimum takes and values," he said. "So, to the extent we're building infrastructure on behalf of these large customers, we're largely protected from the cost side of this."

"My job is to make sure the infrastructure is ready when they're ready and that I protect our existing customers from any shortfalls in the timing of their projects," Frenzel said.