4 unchanged sentences
These risks should be carefully considered together with the other information set forth in this report and future reports that we file with the SEC.
−Removed: You should not interpret the disclosure of any risk factor to imply that the risk has not already materialized.
While we believe we have identified and discussed below the key risk factors affecting our business, there may be additional risks and uncertainties that are not presently known or that are not currently believed to be significant that may adversely affect our business, financial condition, results of operations or cash flows in the future.
29 unchanged sentences
• Failures in the availability, acquisition or transportation of fuel or other supplies.
−Removed: • Impact of adverse weather conditions and natural disasters, including, tornadoes, icing events, floods and droughts.
+Added: • Impact of adverse weather conditions and natural disasters, including, tornadoes, avalanches, icing events, floods, high winds and droughts.
• Performance below expected or contracted levels of output or efficiency.
12 unchanged sentences
Our utility operations are subject to long-term planning and project risks.
−Removed: Most electric utility investments are planned to be used for decades.
+Added: Most utility investments are planned to be used for decades.
Transmission and generation investments typically have long lead times and are planned well in advance of in-service dates and typically subject to long-term resource plans.
1 unchanged sentence
sales growth, customer usage, commodity prices, economic activity, costs, regulatory mechanisms, customer behavior, available technology and public policy.
−Removed: Xcel Energy’s long-term resource plan is dependent on our ability to obtain required approvals, develop necessary technical expertise, allocate and coordinate sufficient resources and adhere to budgets and timelines.
+Added: Xcel Energy’s long-term resource plan is dependent on our ability to obtain required approvals (including regulatory approval in jurisdictions where Xcel Energy operates), develop necessary technical expertise, allocate and coordinate sufficient resources and adhere to budgets and timelines.
In addition, the long-term nature of both our planning processes and our asset lives are subject to risk.
−Removed: The electric utility sector is undergoing significant change (e.g., increases in energy efficiency, wider adoption of distributed generation and shifts away from fossil fuel generation to renewable generation).
+Added: The utility sector is undergoing significant change (e.g., increases in energy efficiency, wider adoption of distributed generation and shifts away from fossil fuel generation to renewable generation).
Customer adoption of these technologies and increased energy efficiency could result in excess transmission and generation resources, downward pressure on sales growth, and potentially stranded costs if we are not able to fully recover costs and investments.
1 unchanged sentence
Efforts to electrify the transportation and building sectors to reduce GHG emissions may result in higher electric demand and lower natural gas demand over time.
+Added: New data centers and crypto mining facilities could generate significant increase in demand.
Higher electric demand may require us to adopt new technologies and make significant transmission and distribution investments including advanced grid infrastructure, which increases exposure to overall grid instability and technology obsolescence.
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Multiple states may not agree as to the appropriate resource mix, which may lead to costs to comply with one jurisdiction that are not recoverable across all jurisdictions served by the same assets.
−Removed: We require inputs such as coal, natural gas, uranium and water to cool our facilities.
+Added: We require inputs such as coal, natural gas, uranium and water.
Lack of availability of these resources could jeopardize long-term operations of our facilities or make them uneconomic to operate.
Our utilities are highly dependent on suppliers to deliver components in accordance with short and long-term project schedules.
−Removed: Our products contain components that are globally sourced from suppliers who, in turn, source components from their suppliers.
+Added: Our products contain components that are globally sourced from suppliers.
A shortage of key components in which an alternative supplier is not identified could significantly impact operations and project plans for Xcel Energy and our customers.
−Removed: Such impacts could include timing of projects, including potential for project cancellation.
−Removed: Failure to adhere to project budgets and timelines adversely impacts our results of operations, financial condition or cash flows.
+Added: Such impacts could include timing of projects and the potential for project cancellation.
+Added: Failure to adhere to project budgets and timelines could adversely impact our results of operations, financial condition or cash flows.
We are subject to commodity risks and other risks associated with energy markets and energy production.
2 unchanged sentences
Delays in the timing of the collection of fuel cost recoveries could impact our cash flows and liquidity.
−Removed: A significant disruption in supply could cause us to seek alternative supply services at potentially higher costs.
+Added: A significant disruption in supply could cause us to seek alternatives at potentially higher costs.
Additionally, supply shortages may not be fully resolved, which negatively impacts our ability to provide services to our customers.
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Public perception often does not distinguish between pass through commodity costs and base rates.
−Removed: High commodity prices that are being passed through to customer bills could impact our ability to recover costs for other improvements and operations.
+Added: High commodity prices that are passed through to customer bills could impact our ability to recover costs for other improvements and operations.
Due to the uncertainty involved in price movements and potential deviation from historical pricing, Xcel Energy is unable to fully assure that its risk management programs and procedures would be effective to protect against all significant adverse market deviations.
−Removed: In addition, the Company cannot fully assure that its controls will be effective against all potential risks.
+Added: In addition, Xcel Energy cannot fully assure that its controls will be effective against all potential risks.
If such programs and procedures are not effective, Xcel Energy’s results of operations, financial condition or cash flows could be materially impacted.
Failure to attract and retain a qualified workforce could have an adverse effect on operations.
−Removed: The competition for talent has become increasingly prevalent, and we have experienced increased employee turnover due to the condition of the labor market.
+Added: The competition for talent has become increasingly prevalent, and we have experienced increased employee turnover due to the condition of the labor market and decisions related to strategic workforce planning.
In addition, specialized knowledge and skills are required for many of our positions, which may pose additional difficulty for us as we work to recruit, retain and motivate employees in this climate.
−Removed: Failure to hire and adequately train replacement employees, including the transfer of significant knowledge and expertise to new employees or future availability and cost of contract labor may adversely affect the ability to manage and operate our business.
−Removed: Inability to attract and retain these employees adversely impacts our results of operations, financial condition or cash flows.
+Added: Failure to hire, adequately train replacement employees, transfer knowledge/expertise or future availability and cost of contract labor may adversely affect the ability to manage and operate our business.
+Added: Inability to attract and retain these employees could adversely impact our results of operations, financial condition or cash flows.
+Added: Our businesses have collective bargaining agreements with labor unions.
+Added: Failure to renew or renegotiate these contracts could lead to labor disruptions, including strikes or boycotts.
+Added: Such disruptions or any negotiated wage or benefit increases could have a material adverse impact to our results of operations, financial condition or cash flows.
+Added: National unionization efforts could affect our business, as an increase in unionized workers could challenge our operational efficiency and increase costs.
Our operations use third-party contractors in addition to employees to perform periodic and ongoing work.
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We are exposed to risk of employee or third-party contractor fraud or misconduct.
−Removed: All employees and members of the Board of Directors are subject to comply with our Code of Conduct and are required to participate in annual training.
−Removed: Additionally, suppliers are subject to comply with our Supplier Code of Conduct.
+Added: All employees and members of the Board of Directors are subject to compliance with our Code of Conduct and are required to participate in annual training.
+Added: Additionally, suppliers are subject to compliance with our Supplier Code of Conduct.
Xcel Energy does not tolerate discrimination, violations of our Code of Conduct or other unacceptable behaviors.
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Changes in the long-term cost-effectiveness or to the operating conditions of our assets may result in early retirements of utility facilities.
−Removed: While regulation typically provides cost recovery relief for these types of changes, there is no assurance that regulators would allow full recovery of all remaining costs.
+Added: While regulation typically provides cost recovery for these types of changes, there is no assurance that regulators would allow full recovery of all remaining costs.
Higher than expected inflation or tariffs may increase costs of construction and operations.
2 unchanged sentences
Any reductions in our credit ratings could increase our financing costs and the cost of maintaining certain contractual relationships.
−Removed: We cannot be assured that our current credit ratings will remain in effect, or that a rating will not be lowered or withdrawn by a rating agency.
+Added: Our credit ratings are subject to change and our credit ratings may be lowered or withdrawn by a rating agency.
Significant events including disallowance of costs, use of historic test years, elimination of riders or interim rates, increasing depreciation lives, lower returns on equity, changes to equity ratios and impacts of tax policy may impact our cash flows and credit metrics, potentially resulting in a change in our credit ratings.
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We are subject to credit risks.
−Removed: Credit risk includes the risk that our customers will not pay their bills, which may lead to a reduction in our liquidity and an increase in bad debt expense.
+Added: Credit risk includes the risk that our customers will not pay their bills, which may lead to a reduction in our cash flow and liquidity and an increase in bad debt expense.
Credit risk is comprised of numerous factors including the price of products and services provided, the economy and unemployment rates.
3 unchanged sentences
Xcel Energy may have direct credit exposure in our short-term wholesale and commodity trading activity to financial institutions trading for their own accounts or issuing collateral support on behalf of other counterparties.
−Removed: We may also have some indirect credit exposure due to participation in organized markets, (e.g., MISO, SPP, Electric Reliability Council of Texas and California Independent System Operator), in which any credit losses are socialized to all market participants.
+Added: We may also have some indirect credit exposure due to participation in organized markets, (e.g., MISO, SPP, ERCOT and California Independent System Operator), in which any credit losses are socialized to all market participants.
We have additional indirect credit exposure to financial institutions from letters of credit provided as security by power suppliers under various purchased power contracts.
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There may be delays before these additional material costs can be recovered in rates.
+Added: The oil and gas industry represents our largest commercial and industrial customer base.
+Added: Oil and natural gas prices are sensitive to market risk factors which may impact demand.
We face risks related to health epidemics and other outbreaks, which may have a material effect on our financial condition, results of operations and cash flows.
−Removed: Health epidemics continue to impact countries, communities, supply chains and markets.
+Added: Health epidemics impact countries, communities, supply chains and markets.
Uncertainty continues to exist regarding epidemics;
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A major disruption could result in a significant decrease in revenues, additional costs to repair assets, and an adverse impact on the cost and availability of insurance, which could have a material impact on our results of operations, financial condition or cash flows.
−Removed: A cyber incident or security breach could have a material effect on our business.
+Added: A cybersecurity incident or security breach could have a material effect on our business.
We operate in an industry that requires the continued operation of sophisticated information technology, control systems and network infrastructure.
In addition, we use our systems and infrastructure to create, collect, use, disclose, store, dispose of and otherwise process sensitive information, including Company data, customer energy usage data, and personal information regarding customers, employees and their dependents, contractors, shareholders and other individuals.
−Removed: Xcel Energy’s generation, transmission, distribution and fuel storage facilities, information technology systems and other infrastructure or physical assets as well as information processed in our systems (e.g., information regarding our customers, employees, operations, infrastructure and assets) could be affected by cyber security incidents, including those caused by human error.
−Removed: The utility industry has been the target of several attacks on operational systems and has seen an increased volume and sophistication of cyber security incidents from international activist organizations, other countries and individuals.
+Added: Xcel Energy’s generation, transmission, distribution and fuel storage facilities, information technology systems and other infrastructure or physical assets as well as information processed in our systems (e.g., information regarding our customers, employees, operations, infrastructure and assets) could be affected by cybersecurity incidents, including those caused by human error.
+Added: The utility industry has been the target of several attacks on operational systems and has seen an increased volume and sophistication of cybersecurity incidents from international activist organizations, other countries and individuals.
We expect to continue to experience attempts to compromise our information technology and control systems, network infrastructure and other assets.
To date, no cybersecurity incident or attack has had a material impact on our business or results of operations.
−Removed: Cyber security incidents could harm our businesses by limiting our generating, transmitting and distributing capabilities, delaying our development and construction of new facilities or capital improvement projects to existing facilities, disrupting our customer operations or causing the release of customer information, all of which would likely receive state and federal regulatory scrutiny and could expose us to liability.
+Added: Cybersecurity incidents could harm our businesses by limiting our generation, transmission and distribution capabilities, delaying our development and construction of new facilities or capital improvement projects to existing facilities, disrupting our customer operations or causing the release of customer information, all of which would likely receive state and federal regulatory scrutiny and could expose us to liability.
Xcel Energy’s generation, transmission systems and natural gas pipelines are part of an interconnected system.
−Removed: Therefore, a disruption caused by the impact of a cyber security incident on the regional electric transmission grid, natural gas pipeline infrastructure or other fuel sources of our third-party service providers’ operations, could also negatively impact our business.
+Added: Therefore, a disruption caused by the impact of a cybersecurity incident on the regional electric transmission grid, natural gas pipeline infrastructure or other fuel sources of our third-party service providers’ operations, could also negatively impact our business.
+Added: Generative Artificial Intelligence, such as large language models like ChatGPT, present a range of challenges and potential risks as we consider impacts to the business.
+Added: These challenges involve navigating the complexities of creating and deploying AI models that generate content autonomously.
+Added: Data privacy, legal concerns, and security issues are all risks as this technology continues to be adopted.
Our supply chain for procurement of digital equipment and services may expose software or hardware to these risks and could result in a breach or significant costs of remediation.
−Removed: We are unable to quantify the potential impact of cyber security threats or subsequent related actions.
−Removed: Cyber security incidents and regulatory action could result in a material decrease in revenues and may cause significant additional costs (e.g., penalties, third-party claims, repairs, insurance or compliance) and potentially disrupt our supply and markets for natural gas, oil and other fuels.
+Added: We are unable to quantify the potential impact of cybersecurity threats or subsequent related actions.
+Added: Cybersecurity incidents and regulatory action could result in a material decrease in revenues and may cause significant additional costs (e.g., penalties, third-party claims, repairs, insurance or compliance) and potentially disrupt our supply and markets for natural gas, oil and other fuels.
We maintain security measures to protect our information technology and control systems, network infrastructure and other assets.
−Removed: However, these assets and the information they process may be vulnerable to cyber security incidents, including asset failure or unauthorized access to assets or information.
+Added: However, these assets and the information they process may be vulnerable to cybersecurity incidents, including asset failure or unauthorized access to assets or information.
A failure or breach of our technology systems or those of our third-party service providers could disrupt critical business functions and may negatively impact our business, our brand, and our reputation.
−Removed: The cyber security threat is dynamic and evolves continually, and our efforts to prioritize network protection may not be effective given the constant changes to threat vulnerability.
+Added: The cybersecurity threat is dynamic and evolves continually, and our efforts to prioritize network protection may not be effective given the constant changes to threat vulnerability.
While the Company maintains insurance relating to cybersecurity events, such insurance is subject to a number of exclusions and may be insufficient to offset any losses, costs or damages experienced.
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In addition, certain states have the authority to impose substantial penalties.
−Removed: If a serious reliability, cyber or safety incident did occur, it could have a material effect on our results of operations, financial condition or cash flows.
+Added: If a serious reliability, cybersecurity or safety incident did occur, it could have a material effect on our results of operations, financial condition or cash flows.
The continued use of natural gas for both power generation and gas distribution have increasingly become a public policy advocacy target.
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Also, the expansion of the wildland urban interface increases the wildfire risk to surrounding communities and Xcel Energy's electric and natural gas infrastructure.
−Removed: Other potential risks associated with wildfires include the inability to secure sufficient insurance coverage, or increased costs of insurance, regulatory recovery risk, and the potential for a credit downgrade and subsequent additional costs to access capital markets.
+Added: Other potential risks associated with wildfires and other climate events include the inability to secure sufficient insurance coverage, or increased costs of insurance, regulatory recovery risk, and the potential for a credit downgrade and subsequent additional costs to access capital markets.
While we carry liability insurance, given an extreme event, if Xcel Energy was found to be liable for wildfire damages, amounts that potentially exceed our coverage could negatively impact our results of operations, financial condition or cash flows.
2 unchanged sentences
We may not recover all costs related to mitigating these physical and financial risks.
−Removed: ITEM 1B — UNRESOLVED STAFF COMMENTS
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.