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The Need to Advance Policies for All Stakeholders

Xcel Energy provides the energy that powers millions of homes and businesses across portions of eight Western and Midwestern states, including Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin. The company is a recognized leader in delivering renewable and other clean energy solutions to reduce carbon emissions. For the past 12 years, the company has been ranked the nation’s No. 1 utility wind energy provider according to the American Wind Energy Association. Xcel Energy’s solar portfolio is also rapidly growing, and the company offers customers an extensive portfolio of energy-saving programs and rebates. By 2018, Xcel Energy is set to retire about 25 percent of its owned coal-fueled capacity through a series of upgrades to its generating fleet.

Despite this progress, stakeholders in the company’s two major service territories, Colorado and Minnesota, are demanding more. Clean energy advocates and others continue to push for legislative and policy solutions that promote the transition to a clean energy future through renewable and distributed energy solutions as well as emerging technologies. The stakeholders driving this change are primarily located in major metropolitan areas. However, both states have significant rural populations that are more concerned with energy affordability, system reliability and economic stability. They depend on the coal and natural gas industries for their livelihoods, including the jobs and tax revenues that Xcel Energy’s fossil-fueled power plants provide.

To respond to diverse stakeholder interests and industry change, Xcel Energy recognized two years ago that it needed to advance a significant number of new policy and regulatory initiatives for adding distributed generation to its system, increasing the use of renewable energy and transitioning its generating fleet for the future. The company had struggled with advancing these types of initiatives in the past. As a consequence, Xcel Energy initiated a comprehensive, Our Energy Future advocacy campaign in Colorado and Minnesota for securing widespread stakeholder support, and ultimately, regulatory approvals on a number of important proposals.

A Campaign to Lead the Transition for Our Energy Future

Xcel Energy embarked on a concerted effort over the last two years to inform and collaborate with local stakeholders on future energy initiatives. The Our Energy Future campaign and associated collaboration resulted in the company finding solutions that satisfied diverse interests while meeting the challenges of a changing utility industry. This advocacy campaign was critical to securing approvals for a number of regulatory and policy efforts required for meeting evolving customer needs while transitioning the company’s operations for the future. The effort focused on three key objectives:

Transforming the company’s generating fleet and paving the way for new emerging technologies. The decline of renewable energy prices and available tax credits creates an opportunity to invest in renewable energy at a favorable price for customers.

Powering the economy and helping local businesses and communities achieve their clean energy objectives while promoting an advanced power grid without increasing the cost for other customers.

Empowering customers with new renewable and other energy options.

Colorado’s Our Energy Future Plan

In Colorado, Xcel Energy proposed a number of initiatives designed to position the state for a renewable and affordable energy future focusing on powering technology, powering the economy and empowering customer choice. These efforts included:

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A plan to build, own and operate the 600-megawatt Rush Creek Wind Farm in rural eastern Colorado to deliver low-cost, clean energy for customers and a $1 billion benefit to the local economy. To take full advantage of available tax credits, the company’s proposal required accelerated approval.

Expanding Xcel Energy’s existing solar energy programs for customers through a proposed Renewable Energy Plan, while proposing a new option, Renewable*Connect®, to give customers an affordable, flexible and easy way to choose up to 100 percent certified solar power for their homes or businesses.

A rate-case filing that proposed pricing plan improvements to make customers’ bills more transparent and understandable, and create more dynamic, flexible rate options.

Powering emerging technology through two solar-to-battery demonstration projects, including a residential neighborhood project that tests battery systems to manage high-levels of distributed solar generation and a large battery system which will provide critical backup power to a sustainable business campus development.

In late 2015, Xcel Energy leadership recognized the need to share a larger vision for Colorado’s energy future with stakeholders as the company would be submitting an unprecedented number of regulatory filings in 2016. The company developed a comprehensive stakeholder outreach and advocacy plan which was implemented by its regulatory affairs, state public affairs, key account management, and community relations organizations. Meetings were held with large customers, local governments, chambers of commerce, elected officials and other stakeholders influential in guiding Colorado’s energy future. The company shared its vision, listened to the needs of stakeholders, and frequently, received letters and comments of support for its regulatory efforts.

Xcel Energy leaders also engaged and kept all Colorado employees informed as advocates for the company. It broadcast three employee webcasts and hosted a well-attended lunch & learn event. In addition, Our Energy Future initiatives were the focus of the 2016 Colorado Legislative Day at the State Capitol for employees.

Powering Minnesota’s Energy Future

In Minnesota, Xcel Energy introduced three major initiatives to shape the state’s energy future:

A groundbreaking resource plan for the Upper Midwest will move the company away from coal to cleaner energy sources by investing in new wind, solar, energy efficiency and natural gas. The plan addresses pressure to retire two coal-fueled generators at the Sherco Generating Plant in Becker, Minn., resulting in a 60 percent reduction in carbon emissions and achieving a 63 percent carbon-free energy mix by 2030. The plan achieves all these benefits while keeping customer cost increases at lower than the projected rate of inflation.

A proposed new renewable customer option, Renewable*Connect® will provide customers a more convenient, flexible choice to sign up for 100 percent renewable energy, which is certified.

Minnesota’s multi-year rate case will support investment in clean, reliable and safe electricity, while providing price predictability and customer options.

The company promoted these initiatives through a consistent, detailed and transparent process that involved significant regulatory review, education and stakeholder engagement. The Upper Midwest Resource plan, in particular involved a unique and unprecedented advocacy effort.

In early 2015, Xcel Energy held the first in a series of stakeholder meetings to discuss its preferred resource plan. Three additional stakeholder meetings followed where company leaders outlined the

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details of its plan and addressed key areas of stakeholder interest including modeling, demand side management, evolving environmental regulations and transmission system impacts. Company leaders also met with individual stakeholders to discuss aspects of the plan and participated in technical conferences held by the Department of Commerce and the Clean Energy Organizations.

After listening and carefully processing all the stakeholder feedback, Xcel Energy introduced an updated vision of its plan in fall 2015, which included retiring two of the three coal units at the Sherco Generating Plant in Becker, Minn. With a combined capacity of 2,400 megawatts, Sherco is Minnesota’s largest power plant. The impact of the retirement on the Becker community was a central focus of Xcel Energy’s plan because the town depends on the plant for about 75 percent of its total city tax revenue. Xcel Energy proposed building a new, natural gas plant at the Sherco location to help maintain jobs and tax revenue in Central Minnesota, as part of its ongoing support of the Becker community.

Xcel Energy worked with customers in the Becker community to reinforce the benefits that the new proposal would bring while providing adequate time to transition the local workforce and creating new jobs and investments for the local community. Xcel Energy CEO Ben Fowke, as well as Chris Clark, president, for Xcel Energy in Minnesota, South Dakota and North Dakota, regularly visited Becker and other central Minnesota communities to listen to customer feedback and address concerns. The company has also worked closely with communities leaders on economic development efforts to replace jobs and tax base associated with the coal plant closures.

Supporting Communications

Xcel Energy leadership recognized early on that individually presenting and discussing the many technical filings resulting from the overall vision was going to be problematic. Thus, a comprehensive outreach and talking point strategy was developed to enable more effective communication and support of the broader goals. Both the Colorado and Minnesota energy future efforts were supported through robust communication plans that included media and social media plans. The company developed customer friendly messaging and booklets that described the multiple initiatives underway by consistently bringing customers and stakeholders back to the common core goals.

Each communication plan included development of a consistent message platform, Q&As, fact sheets, presentations, web content, media outreach and social media components, targeted outreach to key employees, and other tools to support stakeholder outreach and engagement. Communication toolkits for each major filing or initiative were provided to account managers, community relations managers, media relations and state and federal government affairs staff to support their advocacy work with customers, community leaders and elected officials—which in many cases, helped to garner letters of support with the utilities commissions for various proposals.

For the Colorado plan specifically, a series of advertorials were completed to highlight key initiatives and Xcel Energy’s track record around clean energy, collaborative partnerships and emerging technology. The company also supplemented this effort with digital content and video shorts. Furthermore, many employees toured the state, using existing relationships to present and discuss the broader goals and make those goals more tangible for customers and others.

For employees, Xcel Energy kept up a steady stream of messages and updates via employee pocket guide cards and ongoing coverage of milestones through internal employee news sources. Social media also played an important role in educating key audiences. In Colorado Xcel Energy targeted audiences, including Arapahoe, Denver and Jefferson counties, and promoted four videos highlighting

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the energy plan initiative, along with more than 25 posts driving traffic to energy plan initiative news articles, webpages and a petition to sign. These educational posts and energy plan initiative videos achieved nearly one million impressions and video views. In Minnesota, Central Minnesota audiences were targeted with social media messages that reinforced the economic value of Xcel Energy’s future plan, and Metro area audiences received promotions focused on the environmental benefits of the plan.

Approvals that Move the Company’s Energy Future Forward

Through a collaborative approach, Xcel Energy was able to work directly with stakeholders to tackle some of the utility’s most pressing challenges. These partnerships forged new ground by uncovering transformative solutions, delivering new business models and perhaps most importantly, creating a supportive network of problem solvers.

As a result of tireless efforts to educate and engage customers, stakeholders, opinion leaders and authoritative advocates, the following initiatives were approved.

In Colorado:

The company achieved a wide-reaching agreement that was the largest of its kind in Colorado history, involving a record number of interveners and key energy issues. Xcel Energy and 22 interveners agreed, in total or in part, on a global settlement on three regulatory filings—the company’s Phase II Electric Rate Case, Renewable*Connect and the 2017 Renewable Energy Plan. Parties to the agreement included municipal customers, some of Xcel Energy’s biggest electricity users, solar and wind power developers, private solar companies and trade groups, consumer and low-income advocates, and environmental advocacy groups. The agreement paves the way to update Xcel Energy’s rate design structures, to offer the new Renewable*Connect program to customers, and to expand and broaden its existing customer renewable energy programs over the next three years.

Xcel Energy received regulatory approval to build, own and operate the new 600-megawatt Rush Creek Wind Project and to build associated transmission infrastructure on an expedited schedule. The wind power project is expected to create substantial employment and economic development opportunities in Colorado. Additionally, because the project was green lighted prior to year end, the company was able to take advantage of federal tax incentives for construction, which will reduce capital costs and allows it to share these cost savings directly to customers.

The company moved forward with its Innovative Clean Technology Program battery storage demonstrations, in partnership with Panasonic, Younicous, Sunverge Energy Inc., and Northern Reliability.

As part of its Renewable Energy Plan, Xcel Energy is working with the Colorado Energy Office to implement a low-income rooftop solar program and with Energy Outreach Colorado to expand low-income access to community solar gardens.

The Colorado Public Utilities Commission approved the company’s Renewable*Connect proposal, which will give customers a flexible, convenient and simple way to “go solar” by purchasing up to 100 percent certified solar power for their home or business without installing private solar onsite.

As a result of the global settlement, Xcel Energy established several stakeholder groups to maintain ongoing collaboration with interested stakeholders, capitalize on emerging technologies and explore future opportunities to work together. These groups included: the Distribution Grid & Interconnection Stakeholder Group (looking at rate options for customers with battery systems and energy storage system interconnection standards); the Future Voluntary Renewable Programs Stakeholder Group (developing programs allowing customers to choose to contribute to carbon

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emission reductions from the utility’s generation fleet); the Existing Voluntary Renewable Programs Stakeholder Group (for ongoing recommendations and information sharing regarding existing renewable programs); and the Pilot & Trial Stakeholder Group (for providing input and suggestions for upcoming pilot rate offerings).

In Minnesota:

In 2015, the company successfully supported legislative efforts that improved and amended existing state legislation, which made the filing of its first three-year rate plan possible. After filing the case, the company worked collaboratively with intervening parties to reach an agreement on the case that includes all revenue requirements for the years 2016 to 2019. The Minnesota Public Utilities Commission is expected to decide on the case by mid-2017.

Xcel Energy received regulatory approval of its Upper Midwest Resource Plan to more than double renewable energy resources, continue operating carbon-free nuclear facilities that help enable the transition by providing base-load electricity and retire two coal-fueled generators in Becker, Minn., by 2026. Xcel Energy committed to helping the city of Becker with economic development, and they achieved it, providing a national model for other cities to use in the process. The Minnesota Pollution Control Agency commended Xcel Energy’s commitment to reducing greenhouse gas emissions, and the city of Becker expressed appreciation for Xcel Energy’s leadership role in maintaining a diverse energy portfolio and aggressive pursuit of renewable energy. Partnerships with communities, customers and stakeholders have helped to make Minnesota a leader in energy policy.

The Minnesota Public Utilities Commission approved Renewable*Connect program for the state in late 2016, with the company now planning to launch the new clean energy option to customers in 2017.

OUR ENERGY FUTURE

The Colorado Plan

xcelenergy.com | © 2016 Xcel Energy Inc. | Xcel Energy is a registered trademark of Xcel Energy Inc. | Public Service Company of Colorado, an Xcel Energy Company. | 16-02-305

Imagine a day when utility customers have more control over their energy and can design a plan that best suits their needs. Xcel Energy’s 2016 initiatives set the stage for that day and will place Colorado at the leading edge of energy policy. This plan will provide customers with more choices for what they want and meet the energy demands of the future, all while maintaining competitive prices. Xcel Energy will strengthen the way it provides energy to all of its customers and pave the way for an interactive, modern and efficient grid system that will be even more reliable and better prepared for future generations. Those contributions will be shared by Colorado’s economy, and enhance the quality of life and environment for years to come.

Colorado is standing at the threshold of our energy evolution.

Xcel Energy is proud of its role in promoting innovative energy solutions to meet the growing needs of our citizens, customers and the economy. Our company shares Colorado’s vision to exceed expectations. In partnership with regulators and elected officials, new ideas can be continually advanced to serve as a national model.Over the next year, a transformation will begin to position our state for a bold new energy future. This will be the foundation to efficiently manage energy sources on the grid and give customers the choices they want at a competitive price.

KEY OBJECTIVES

Powering Technology Emerging technologies will pave the way for Xcel Energy to transform and modernize as a utility. New pilot projects will advance tools that are environmentally and technically superior to ones currently in use. This will bring added efficiencies and reliability to the grid.

Powering the EconomyBusinesses and local communities are increasingly interested in harvesting more power from renewable energy. A modern grid will foster cutting edge technology and efficiently deliver all types of energy to customers. Xcel Energy works consistently to foster strong partnerships within the flourishing Colorado economy, with a commitment to support its continued growth.

Empowering Customer Choice New solar offerings and comprehensive rate design will provide new renewable energy options without negatively impacting the cost to other customers. The result is a more efficient use of resources and electricity. It will promote an equitable rate system that customers can better understand.

Stapleton Battery Project. Batteries will be placed on an existing residential feeder that serves the Stapleton redevelopment, a residential community with a high penetration of rooftop solar. Batteries will also be placed on the customer side of the meter in order to gain experience with onsite solar.

• Evolving industry. Electricity is often thought of as being generated at a power plant and flowing “one way” through various transmission and distribution systems until it reaches its destination. A growing concentration of customer-generated solar has created a new urgency to manage new sources of energy.

• Reliability. With electricity now flowing back and forth between the utility and the customer, on-site battery storage can help prevent equipment failure by absorbing excess energy and releasing it when needed. This project will ultimately pave the way toward sustaining larger amounts of rooftop solar.

Panasonic Microgrid Project. This project near DIA involves the installation of large, company-owned photovoltaic system as well as a single, large battery system on a commercial customer’s feeder.

• Maintaining a competitive edge. At Xcel Energy, we know first-hand that utility costs are among the top considerations when attracting and maintaining competitive business and industry.

• We take our part seriously. Working with Panasonic Corporation in a pilot setting has afforded us the opportunity to design a project that is not only valuable to Panasonic but also to the City & County Denver.

• Maximizing value. Batteries can serve multiple purposes for the grid. This project will test the ability to use battery storage to reduce peak demand, improve voltage, solar penetration and adjust for changing wind generation levels in Colorado.

Innovative Clean Technology | FILED

OCTO

BER 2015

Two Innovative Clean Technology (ICT) solar-to-battery projects were filed with the PUC in October 2015. These pilot programs will help pave the way toward improving system efficiencies and reliability, while managing greater amounts of renewable energy. The projects will be used to determine the commercial viability of new technologies before implementation on a larger scale.The ICT projects are designed to evaluate the system benefits of customer-sited batteries as a means to mitigate the growing impact of two-way power flow on the grid. The projects will help pave the way toward sustaining greater amounts of renewable energy, modernizing our grid and attracting new, competitive industries.

• Customer transparency. The Phase II Electric Rate Case filing is an innovative step in allowing individual customers the ability to obtain cost and usage data which can be used as tool to make better, more educated decisions on conservation and power choices.

• Equity. This filing will bring accountability and equity to all customers by charging for actual use of the shared electric grid network. This is critically important to maintaining a competitive edge for customers, as well as for meeting our state’s environmental and economic development objectives.

Phase II – E

lectric Rate C

ase | EXPECTED FILIN

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NU

ARY 2016

The Phase II Electric Rate Case (ERC) is the second step in implementing the case that was settled in early 2015. Phase II addresses rate design and important tariff revisions. This comprehensive redesign is a critical step towards a long-term strategy. It will make pricing easier, fairer and flexible enough to power new technologies. Information is power. Our objective is to ensure that rates are fair and just. Customers are increasingly demanding transparency in how they are paying for utility service, yet the way in which electric bills are calculated has not kept up with that trend.

• Safety and Reliability. Xcel Energy demonstrates continuing industry leadership in proactively protecting our customers and the environment. As regulations continue to change and raise the bar on performance, more certainty with multi-year regulatory plans will support that position. These multi-year plans allow longer planning horizons for renewal programs, ensuring that we can attract adequate resources and help meet an ever changing regulatory playing field. All cast iron pipes on the natural gas system were removed or replaced by the end of 2014.

• Advanced Technology. State of the art technology improves safety and reliability and helps manage costs. We can literally “see” inside many of our pipelines to determine when repairs or replacement is needed. We also monitor our pipelines from the air, improving leak detection and response. Extending our safety rider supports safety and reliability and the utilization of new technology across our system.

Natural G

as

The safety and reliability of our gas system is critical to Colorado’s energy future. Our 23,000 mile gas system network supports electric generation while reducing emissions and keeping Colorado warm. Xcel Energy has been an industry leader in the renewal of outdated materials and utilizing new technology to improve overall system safety and emission reductions. Throughout these changes, we have delivered reliable service to our customers at competitive prices. Low commodity prices for natural gas make this the right time to modernize, update and improve the overall safety and reliability of our system.

• Predictability. Predictable and stable gas prices will allow residential customers in Colorado to experience greater consistency with household budgets and will allow businesses to make investment, growth and relocation decisions with less risk.

Gas R

eserves | EXPECTED FILIN

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ECEMB

ER 2015

A continued focus on gas reserves will allow Xcel Energy to take advantage of historically low natural gas prices and offer predictable gas rates for the long-term benefit of our customers. The Gas Reserves filing will propose natural gas production to diversify our distribution gas portfolio as a long-term solution to market volatility. Commodity pricing significantly impacts prices for Xcel Energy’s 1.4 million gas customers. While the current gas procurement strategy allows for short term hedging and limited storage to account for seasonal fluctuations, customers are considerably exposed to spot pricing volatility within these markets.

• Customer choice. Solar*Connect places the customer in the driver seat and allows them to choose the solar program that best fits their needs.

• Commitment to Customer Solar Energy. Solar*Connect will join flourishing rooftop and community solar programs. Xcel Energy will continue to support its nearly 30,000 customers currently participating in Solar*Rewards for rooftop installations. The company also intends to partner with industry to fully subscribe the Solar*Rewards Community Program in 2016, while exploring opportunities to invest and own community-scale solar to the added benefit of our customers. Customer solar energy programs are expected to continue experiencing significant growth in the coming years.

Solar*C

onnect | EXPECTED FILIN

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1 - 2016

Solar*Connect is a new program that gives customers a choice to sign up for 100% solar power. Xcel Energy expects to offer two plans– a no obligation, premium price or a five-year evergreen contract. Colorado’s remarkable 300+ days of sunshine offer an abundance of solar energy, a resource that customers continue to value.

2017 Renew

able Energy P

lan | FEBRU

ARY 2016

The Renewable Energy Plan sets the foundation for future resources, programs, and Clean Power Plan compliance as part of the state’s Renewable Energy Standard (RES). The plan introduces new renewable programs and improves upon existing programs as part of the company’s compliance. The RES plan also integrates elements from other filings, particularly the Phase II Rate Case and Solar*Connect. The plan will provide the company and industry with consistency and certainty for a longer period of time than previous plans. It will promote customer choice and provide opportunity for the industry.

2016 Electric R

esource Plan | SPRIN

G 2016

The Electric Resource Plan (ERP) is filed every four years with the Colorado PUC. It sets forth the company’s projected loads and resources up to a ten-year horizon to ensure there are sufficient generation resources to meet the electric usage needs over that same period. This plan will also include steps to comply with the Clean Power Plan. Just as the Phase II Rate Case brings us to a new threshold of advancement, the RES plan and ERP ensure that Xcel Energy is maintaining a cost effective, diverse and reliable generation mix. Appropriate planning is essential to ensure cost containment and power development. Managing such an extensive and critical system takes time and thoughtful planning, being mindful that some level of flexibility is needed to adapt to new technologies and new opportunities.

• Efficiency. Recognizing that power generation is coming from multiple sources and is more intermittent than constant one-way flow, grid management has become increasingly more essential. A modernized distribution system will improve forecasting and cost management capabilities, while promoting rate transparency and customer choice.

Grid Intelligence and S

ecurity | SPRING

2016

Building the intelligent distribution grid is inevitable. The grid of the future must facilitate two-way power flow and increase resilience and reliability. The addition of interactive customer meters will promote choice and control. New meter technology will allow Xcel Energy to monitor the system and make strategic investments along the grid to improve performance. Information gained from the ICT pilot programs and the utilization of other technologies will complement the use of advanced meters. An integrated system will enable a view deep inside the grid, providing insight on how to better use and power energy along the system. The electric grid serves as the backbone and platform for new technologies, products and services. Our customers will continue to rely upon it as it is used to connect these devices.

• Proven leadership. Possible cost implications may vary among utilities in our state. Xcel Energy is confident that our track record of collaboration further reinforces Colorado’s profile as a national leader. This also delivers positive outcomes for customers, the state and our strong business climate.

EPA

Clean Pow

er Plan C

ompliance | O

NG

OIN

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The 2016 efforts will lay the foundation for Clean Power Plan compliance. The goal is to help our state take control of its energy future by developing a durable compliance plan that protects our customers from significant cost increases, while maintaining system reliability. We have experience reducing emissions, and the most recent clean-energy projects will count toward EPA targets. The foresight of policy makers and actions taken by Xcel Energy over the past decade have successfully implemented transformative changes in the energy industry. This has undoubtedly placed Colorado in a solid position to achieve compliance.

Conclusion

For well over a century, the electric grid has been a trusted backbone to our community. While the system has reliably powered our homes and businesses, it has also evolved into a platform to provide growth for emerging technologies, products and services which have contributed to new industry development, job growth and innovation. This has significantly changed the relationship that Xcel Energy has with its customers. Where in the past all customers were merely consumers of energy, many now are simultaneously producers of energy. Driven in part by new technologies and customer-generated energy, the grid is evolving at a rapid pace. Customers increasingly want more from their utility – not only knowing where their power comes from but choosing where it comes from. This is an important component to meeting the growing needs of residential customers, businesses and municipalities as they work to meet individual, corporate and community goals.

Powering Technology. Powering the Economy. Empowering Customer Choice.

Proven Leader

Keeping Prices Competitive

• The company’s ability to invest and plan for the future now will ensure that prices remain competitive. The risk in delay and not strategically planning ahead will result in higher costs at a later date.

• Competitive prices provide certainty for homes and businesses. They also attract development that will help Colorado’s economy continue to grow and thrive.

• Bold steps require thoughtful planning with the appropriate timing and flexibly needed to maintain competitive prices for our customers. Xcel Energy has a proven track record of accomplishing significant projects and investments with a minimal impact to customers.

Xcel Energy is a PROVEN LEADER, proud of an energy and business strategy that delivers results while maintaining competitive prices.

Renewable Energy

• Nation’s No. 1 utility wind energy provider for 11 years in a row (American Wind Energy Association)

• National top 10 for solar capacity (Solar Electric Power Association)

• Projected to exceed the state’s 30% renewable energy standard (RES) by 2020

Emission Reduction

• Completion of Clean Air-Clean Jobs scheduled for 2017, on time and under budget

• Projected to reduce carbon dioxide emissions 35% by 2020 from 2005 levels

Energy Efficiency

• National top 10 for energy efficiency (CERES, Inc.)

• Since 2009, our programs have saved nearly $1.3 billion in electric system costs and helped customers reduce their energy demand by the equivalent of more than three medium-sized power plants

Corporate Responsibility

• One of Forbes Magazine’s Most Trustworthy Companies in America

• Recognized as a Best for Vets Employer by Military Times, one of the Most Valuable Employers for Military by CivilianJobs.com, and as a top -100 Military Friendly Employer by G.I. Jobs

• More than $25 million invested annually in Colorado communities as a result of corporate giving, low-income energy assistance and local spending

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POWERING MINNESOTA’S ENERGY FUTURE

Xcel Energy's Minnesota Plan

xcelenergy.com| © 2016 Xcel Energy Inc. | Xcel Energy is a registered trademark of Xcel Energy Inc.

In a rapidly-changing energy marketplace Xcel Energy is forging a path to a more sustainable energy future. Our customers and communities expect more from their utility than just reliable service, and we have a bold energy plan designed to meet those expectations and to help place Minnesota at the leading edge of a transformed energy system. One built on cleaner, more renewable energy delivered at a competitive price. For more than 100 years, our company has been a vital part of Minnesota’s economy, powering homes and businesses, providing good jobs, building and maintaining a robust energy grid and partnering with our communities. And stepping up and taking on important challenges.

That legacy continues today as we invest in a 21st century energy system, while leveraging innovation and managing risk. Our plan will strengthen the way we provide energy to our customers and pave the way for an interactive, intelligent and efficient electric grid. One that’s even more reliable and better equipped to integrate renewables and future innovations. These contributions will help drive Minnesota’s economy, enhance our cherished quality of life and safeguard our environment for years to come.

Xcel Energy is proud of its role as a leader in providing clean energy and in promoting innovative energy solutions to meet the growing needs of our customers, communities and the economy. Because being bold means moving forward in smart and thoughtful ways. Over the next year, a transformation will begin to position Minnesota for a bold new energy future. Our customers are at the heart of everything we do. And while we are committed to provide safe, reliable and affordable energy, we know our customers expect more. They seek innovative energy alternatives and market-leading options. And we are delivering.

KEY OBJECTIVES

Powering Minnesota’s energy future We are transforming our fleet of power plants to cleaner, more renewable energy sources. Our 21st century energy system will continue to deliver safe, reliable energy, but will be powered with one-third of the energy coming from wind and solar resources. By 2030, more than 63 percent of our energy will be from carbon-free sources and we will be well on the way to 80 percent carbon-free by 2050.

Powering the economyBusinesses and local communities are increasingly interested in sustainable business practices, including ways to be more energy efficient and tapping into carbon-free energy sources. We work to foster strong partnerships within Minnesota’s flourishing economy and are committed to supporting its continued growth. Innovative energy efficiency programs, 100 percent renewable energy options and new cleaner energy sources will help Minnesota’s business community thrive in today’s global economy.

Empowering customers Being bold means taking action. It’s why we offer customers renewable options as part of their energy sourcing mix. From a simple renewable plan to specialized programs focused on wind and solar, we’re giving customers options for their energy sources.

Upper M

idwest Integrated R

esource Plan | Filed 2015

Xcel Energy is leading the way to a future powered by clean, renewable energy, delivered at a price that is affordable for our customers. Our plan achieves 63 percent carbon-free energy by 2030, with more than one-third generated from renewables and paves the way for Minnesota and the surrounding region to affordably meet state and national energy standards. It also creates new jobs and investments for our communities and allows adequate time to transition our workforce. The result: Minnesota will be well on its way to achieve its goal of 80 percent carbon-free energy by 2050. Clean, reliable, affordable. Our clean energy proposal is a balanced and cost-effective strategy that reduces coal reliance by half and protects reliability, jobs and community investment. We will get there by more than doubling renewables, adding new natural gas plants to ensure reliability, maintaining our carbon-free nuclear fleet and continuing our commitment to help our customers be even more energy efficient.

• Reliability. Central to our plan is repowering two older coal plants at our Sherco site in Becker, Minn., with cleaner natural gas and building a new natural gas plant in North Dakota. Strategically, new natural gas plants in these locations will make the most of existing infrastructure and enhance local electric reliability.

• Protecting Jobs & Economic Impact. Our power plants bring jobs and economic impact to local communities; that’s why we have proposed a 10-year roadmap to cleaner energy sources. It gives our company, our employees and the surrounding communities a lengthy lead-time to successfully manage that transition.

Reliability | U

pper Midw

est Integrated Resource Plan

Reliability: it’s at the core of all that we do. Our customers need reliable service to power their homes and businesses and to keep their families and communities safe. The foundation of our plan is reliable energy, and we need to begin now so we can ensure a future of reliable service beyond the next decade. Without our plan, the majority of our baseload energy generation – the equivalent of what is needed to power more than two million homes a day – will be near the end of its useful life by the 2030s. By beginning now, costs can be saved in the long run, our customers can count on reliable service, and our communities can rely on local jobs and other economic benefits.

• Wind Generation. For more than a decade, we have led the nation as the top utility wind energy provider. We’re not stopping there. In 2016, we will add enough new wind energy in the Upper Midwest to power nearly 400,000 households. In the next 15 years, wind will generate a quarter of our energy.

• Solar Expansion. We are putting the power of the sun to work for our customers with a combination of large-scale solar projects, community solar gardens and rooftop panels. We are on a path to have 10 percent of our energy generated from solar by 2030.

Renew

ables | Upper M

idwest Integrated Resource Plan

Xcel Energy is at the forefront of renewable energy expansion. In the next four years, we will advance enough wind and solar energy to power approximately 432,000 homes and by 2030 well over one-third of our customers’ energy will come from renewable resources. Integrating wind and solar energy into the electric grid is a highly complex planning and engineering feat, but we are a leader in the field. We’ve been the nation’s No. 1 utility wind energy provider 12 years running and we’re bringing that same dedication to expanding our solar resources.

Nuclear | U

pper Midw

est Integrated Resource Plan

Achieving nation-leading carbon emission reductions is central to Xcel Energy’s long-term roadmap, and our carbon-free nuclear plants in Monticello and Prairie Island are essential to that effort. Nuclear energy is our only carbon-free base-load energy source that is available 24/7. These plants are our region’s energy backbone, generating enough electricity to power 1.3 million homes without emitting greenhouse gases. We propose to continue operating these plants through their planned lives to protect reliability for our system and to continue our commitment to the cleaner energy our customers want.

• Carbon-Free, Reliable Energy. Nuclear power produces constant, base load electricity with no carbon dioxide emissions. Our two nuclear power plants provide 30 percent of the electricity used by customers in the Upper Midwest. Each year, our nuclear plants avoid 10 million metric tons of CO2 the equivalent of taking two million cars off the road.

• Community-Focused. Our nuclear plants employ 1,400 local workers, who are active in their communities and donate their time and money to local charities. We purchase more than $300 million in goods and services annually for our nuclear operations and work with many local companies to source parts and services. Our nuclear facilities account for about $35 million in state and local taxes.

• Belle Plaine Battery Project. We are piloting a solar-to-battery project in central Minnesota, where batteries will be placed at an existing substation that serves the Belle Plaine community. It will enhance local reliability and may eliminate the need for a new substation in the community, while providing valuable data to evaluate the benefits of using batteries to enhance the transmission system.

• Integrated Technology. An enhanced power grid can optimize two-way power flow, automate outage restoration, increase grid resilience and give customers new options for managing their own energy use. We are integrating a sophisticated software platform that will enable those advancements to deliver a 21st century energy grid.

• Grid Security. Grid security is essential for delivering reliable service to our customers and communities and it goes well beyond just protecting the physical poles and wires. We continue to invest in robust, redundant security, ever-evolving technologies, well- designed, frequently tested emergency mitigation and recovery plans to protect critical systems and secure data from physical and cyber threats.

• Electrifying Transportation. Electric vehicles are increasingly taking center stage as more consumers recognize that EVs are reliable and better equipped to manage people’s daily transportation needs. We are integrating EVs into our own fleet, helping customers understand charging options, and partnering with communities to offer more charging locations. Our customers with EVs can power their vehicles with renewable energy through our Windsource® for EVs program and take advantage of a recently introduced program that gives EV customers lower rates for charging their vehicles at off-peak hours. We are also exploring other options that may help consumers seeking alternative fuel vehicles.

Innovative + Intelligent G

rid

Xcel Energy is developing the power grid of the future; advancing new technologies at the speed of value. A 21st century grid can accommodate ever-increasing amounts of renewables and new technologies, while maintaining round-the-clock reliability. It can also be resilient and efficient, prepared for cyber and physical security threats and optimized to allow our customers more control over their energy use. The electric grid serves as the backbone and platform for new technologies, products and services. Our customers will continue to rely on it as it is used to connect these devices.

Renew

able*Connect | Filed N

ovember 2015

While Xcel Energy continues its drive to a cleaner, more diverse mix of energy to supply our customers’ power, we also offer customers opportunities to meet their own sustainability goals. New product offerings we have proposed will give customers the option to tap into more solar and wind energy. Renewable*Connect® is a new option that gives customers a choice to sign up for up to 100 percent renewable energy. We have proposed to offer three plans – a no obligation, month-to-month program or five- or 10-year agreements. Many businesses are integrating sustainability principles into their businesses, seeking green energy options to control how their energy is generated and efficiency solutions to help consume less energy.

• Customer Choice. Renewable*Connect places the customer in the driver seat and allows them to choose the program that best serves their needs. It is among a growing array of product offerings we are developing to meet our customers’ energy needs.

• Commitment to Renewables. Renewable*Connect will join a flourishing portfolio of renewable energy offerings. We have more than 47,000 Minnesota customers who participate in renewable energy programs such as WindSource, our new Solar*Rewards Community® program or through rooftop solar options. And the options will only continue to grow.

Rate C

ase | Filed Novem

ber 2015

Continuous improvements to Xcel Energy’s infrastructure ensure our system operates safely, efficiently and reliably and allows the continued drive to cleaner, more renewable energy for our customers. Those improvements and the work our employees do around the clock to keep our power plants and the grid running safely and reliably require investments. We work hard to manage the cost of service and keep prices affordable for our customers. Today, increases are needed to support investments that maintain our distribution and transmission systems for continued reliability and the ability to safely integrate renewable energy onto our system and to continue to deliver carbon-free energy from our nuclear plants. These investments are resulting in cleaner air, a better environment and a more resilient, flexible and reliable energy system that can deliver value to our customers for decades to come.

• Predictability. Providing our customers with cost predictability helps them budget resources and plan for the future. We have proposed a multi-year rate plan that provides Minnesota customers with price predictability and spreads out the cost of investments we are making to help keep rates affordable.

• Competitive Mindset. We are operating in a competi-tive energy landscape and are responding with a comprehensive, forward-thinking approach to how we deliver service and establish stronger relationships with our customers. Controlling company costs, leveraging technology to improve our processes and working to establish longer-term regulatory agreements all play key roles as we work to operate more competitively.

• Saving Customers Money. Customers can save money on their energy bills by using natural gas service. More Minnesotans have the option of switching to natural gas as we expand our natural gas service to several new communities. We recently began offering natural gas service to Barnesville, Holdingford and Pillager and will also to bring natural gas service to the eastern Minnesota communities of Ulen and Hitterdal in 2016.

Natural G

as Service

Xcel Energy delivers natural gas service to nearly 450,000 Minnesota homes and businesses. Natural gas service allows customers to save money on their energy bill and can be an economic tool for communities as they try to attract new businesses. Our natural gas expansion and infrastructure investments are designed to help communities grow their economies. That includes helping customers convert from propane or fuel oil to natural gas and partnering with local builders to bring natural gas service to new construction.

• Multi-family Homes. Every family should have options to help save energy and money by becoming more energy-efficient, but for customers who live in apartments and other multi-unit buildings it can be challenging. We are offering a new program to help encourage multi-family property owners to invest in energy efficiency programs.

• Energy Benchmarking. In collaboration with the city of Minneapolis, we have designed a web-based portal that makes it easier for building owners and facilities managers to track their energy usage. With this input of “big data,” the U.S. Department of Energy can compare building energy usage across the nation to create and share best practices that leverage energy efficiency efforts which can then improve bottom line expenses.

Energy E

fficiency

Xcel Energy is a national leader in energy efficiency programs and has helped our customers save enough electricity to power almost 60,000 homes and enough natural gas to fuel another 10,000 homes, all in one year.

From long-standing programs like Saver’s Switch®, that cycle central air conditioning units to reduce peak energy demand, to our high-efficiency furnace rebates that promote natural gas savings, energy efficiency is in our roots. High-tech offerings like smart thermostats, sophisticated energy benchmarking for commercial buildings and data monitoring tools give customers options to save money and the environment – often right from their smartphone or tablet.In the past two decades, our energy efficiency programs have helped customers eliminate nearly 3,000 gigawatts of energy demand – helping us avoid the need to build additional power plants.

Econom

ic Developm

ent

Innovative energy solutions can help Minnesota businesses succeed in an increasingly competitive global environment. As a key partner with local and state economic develop-ment leaders, Xcel Energy is working to help attract and retain businesses in our communities. Integrated energy efficiency solutions, business incentives and building design assistance are among the many programs that help make the state’s business environment attractive for new and growing companies.

• Integrated Energy Efficiency. Sophisticated computer forecasting and energy efficiency programs can optimize new construction, expansion or renovation projects. Energy modelling can predict a building’s energy use and suggest energy-saving strategies that can be incorporated into the design phase of a new construction project.

• Green Data Centers. As companies face significant growth in data storage, their energy consumption is also on the rise because data centers are inherently energy-intensive operations. Environmentally-sound practices, such as upgrades to increase airflow, moving to high-efficiency lighting and optimizing electrical equipment can help businesses use less energy. Our efficiency experts work with local business to identify opportunities to improve systems and tap into cash rebates that make the process financially attractive and easy to implement.

Minneapolis C

lean Energy Partnership

A first-in-the-nation partnership with the city of Minneapolis is charting a new path to help the city achieve its clean energy goals. In just one year, the Clean Energy Partnership has engaged local residents to become more energy efficient and provided innovative tools to help businesses better understand and track their energy usage. Recognized by the White House and the U.S. Environmental Protection Agency for its innovative approach, this partner-ship is serving as a national model for how communities and energy companies can come together to reduce carbon emissions and encourage energy efficiency.We are rooted in the communities we serve and have a rich history of working collaboratively with local business and government leaders to support key business initiatives, and boost volunteerism and charitable giving to help build thriving economies.

• Brighter Neighborhoods. We will be replacing about 90,000 company-owned streetlights with new energy efficient LED lighting. The plan would help communities reduce their streetlight energy use by about half.

• Transforming Communities. As cities seek to redevelop underutilized properties, we are working collaboratively to help advance innovative energy solutions.

– Rice Creek Commons is a former Army ammunitions plant that is being redeveloped to become a vibrant residential and commercial area. We are at the table, partnering with the city of Arden Hills

and Ramsey County, as they seek to build a forward-looking, energy-conscious community that uses environmentally sustainable and cost-effective energy solutions.

– The city of St. Paul is in the midst of creating a 21st century community along the Mississippi River on the former Ford site. We are one of the partners working with city leaders as they seek to create a thriving, mixed use neighborhood that looks to the future with clean technologies and high-quality design for energy, buildings and infrastructure.

Conclusion

For more than a century, the electric grid has been a trusted backbone, powering our lives and communities. While the system has reliably powered our homes and businesses, it has also evolved into an integrated network that can host emerging technologies, products and services and can contribute to new industry development, job growth and innovation. This has significantly changed the relationship we have had with our customers. In the past, customers were energy consumers, today many are also energy producers.

Driven in part by new technologies and customer-generated energy, the grid is evolving rapidly. Customers increasingly want more from their utility – not just knowing where their power comes from but choosing where it comes from. This is an important component to meeting the growing needs of residential customers, businesses and local governments as they work to meet individual, corporate and community goals.

Proven Leader

Keeping Prices Affordable

• Xcel Energy's ability to invest and plan for the future now will ensure that prices remain competitive. The risk in delay and not strategically planning ahead will result in higher costs later.

• Competitive prices provide certainty for our customers, allowing households and businesses to more effectively budget for the future. They also attract development that will help Minnesota’s economy continue to grow and thrive.

• Bold steps require thoughtful planning with the appropriate timing and flexibility needed to maintain competitive prices for our customers. We have a proven track record of accomplishing significant projects and investments with a minimal impact to customers.

We are a PROVEN LEADER, proud of an energy and business strategy that delivers results while maintaining competitive prices.

Renewable Energy

• Nation’s No. 1 utility wind energy provider for 12 consecutive years (American Wind Energy Association)• On a path to add enough new wind and solar energy to our system to provide enough electricity to power

more than 450,000 households by 2020 (800 MW wind & 400 MW solar)• Projected to exceed Minnesota’s 30 percent renewable energy standard by 2030

Emission Reduction

• Transformed our generation fleet to cleaner sources by repowering three metro-area coal plants to natural gas• Reduced carbon emission by 40 percent from 2005 levels• Projected to achieve 63 percent carbon-free energy by 2030; a 60 percent reduction from 2005 levels

Economic and Community Impact

• $18.8 million invested annually in Minnesota communities through corporate giving and low-income energy assistance• 23,000 hours employee volunteerism• 9,268 jobs• $642 million spending in Minnesota

Corporate Responsibility

• Named one of Forbes Magazine’s “Most Trustworthy Companies in America”• Recognized as a “Best for Vets” employer by Military Times, one of the “Most Valuable Employers

for Military” by CivilianJobs.com and as a top-100 “Military Friendly Employer” by G.I. Jobs• On-going efforts around bird protection and other wildlife species support are part of our commitment

to our local environments

CO2

Colorado Our Energy Future Website: https://www.xcelenergy.com/company/rates_and_regulations/colorado_energy_future

Minnesota Resource Plan Website: https://www.xcelenergy.com/company/rates_and_regulations/filings/upper_midwest_2016-2030_resource_plan

Information Sheet

Colorado

Rush Creek Wind ProjectA quick glance at our proposal to deliver more low-cost, carbon-free wind powerto Colorado and inject $1 billion into the region’s economy

That’s enough topower more than

325,000homes—

90 milesof transmission line to connect and carry wind power output from the turbines to

our existing Missile Site Substation

Largest wind projectin the state

Two wind farms will supply

600 megawattsof clean, renewable energy to customers

Choices customers want

Powering the economy

Will provide the lowest cost wind poweron our system at less than

three cents per kilowatt hour

Up to 240 wind farm development jobs

Up to 30 substation construction jobs

Up to 100 transmission line construction jobs

100%“Made inColorado”

300 Vestaswind

turbinesto be designed and

manufactured in Brighton, Pueblo,

and Windsor

3xthe number of Vestas wind

turbines installed in the state today

Will bene�t landowners in

�ve counties:Arapahoe, Cheyenne, Elbert,

Kit Carson, and Lincoln

$180 millionin landowner lease payments and property taxes

Will save customers $800 millionover the next 25 years

Majority of savings occurs in �rst 10 years of operation

Projected to reduce

one milliontons

of carbon each year

xcelenergy.com | © 2016 Xcel Energy Inc. | Xcel Energy is a registered trademark of Xcel Energy Inc. | 16-05-410

Xcel Energy’s collaborative approach solves challenges, charts successful path forward

© 2016 Xcel Energy Inc.

Partnerships help keep pace with technological advancements and address emerging issues.Xcel Energy is collaborating directly with customers and other like-minded energy providers to tackle some of the utility industry’s most pressing challenges. These partnerships are forging new ground by uncovering transformative solutions, delivering new business models and perhaps most importantly, creating a supportive network of problem solvers.

“Xcel Energy is strongly committed to the communities we serve. Every day we work with local residents, businesses, organizations, and other civic and stakeholder groups to ensure the best interests of those individuals or groups are put forth,” said Chris Clark, President, Xcel Energy–Minnesota, South Dakota and North Dakota. “In recent years many communities and stakeholders have become more involved in how they use energy, and Xcel Energy, through a number of programs, has been with them to identify priorities and help them achieve their goals.”

One high profile example of how Xcel Energy works with the community and stakeholders is Minneapolis’ Clean Energy Partnership, a first-of-its-kind collaborative leadership framework. The unique initiative brings together the City of Minneapolis, Xcel Energy and CenterPoint Energy in support of the city’s Climate Action Plan and 2040 Energy Vision. Together the group is planning, implementing, marketing and tracking new approaches to delivering energy efficiency, energy choices and renewable energy to Minneapolis residents and businesses.

Now in its second year, the effort is receiving national recognition and praise from clean

energy advocates. This spring, the U.S. Environmental Protection Agency awarded the Clean Energy Partnership a Climate Leadership Award.

In its Colorado service area, Xcel Energy and 22 other parties representing diverse and wide-ranging interests recently reached an agreement aimed at opening up new avenues for customer choice and expanded clean energy offerings. The comprehensive agreement specifically addresses three proposals currently in front of state regulators: one to update the utility’s rate design structures, another to create a new solar power program for residential and business customers, and a third to expand and broaden the utility’s renewable energy programs over the next three years.

Customers today want clean, reliable and affordable energy solutions, and Xcel Energy is committed to collaborating with others to uncover the best way to meet those wants and needs, said David Eves, President, Xcel Energy–Colorado.

“Taking a partnership-centered approach allows us to work directly with our customers to be the energy provider they want us to be,” Eves said. “And it creates unparalleled

opportunities to work together to foster the use of technologies with great promise for solving environmental concerns while providing customers with more reliable, lower cost and cleaner energy today and well into the future.”

These collaborative ventures allow Xcel Energy to offer customers new options and more control over their energy mix, bring more carbon-free power onto the system, and support emerging energy technologies—all while ensuring power remains reliable, and prices stay reasonable and affordable for all customers.

“ Xcel Energy is strongly committed to the communities we serve. Every day we work with local residents, businesses, organizations and other civic and stakeholder groups, to ensure the best interests of those individuals or groups are put forth.” Chris Clark, President, Xcel Energy–Minnesota, South Dakota and North Dakota

8.125x10.875_CO-PUF_Adv_Oct2016_P04.indd 1 10/14/16 9:03 AM

Sample Letters of Support:

Information Sheet

Cleaner energy at an affordable price for customersIn October 2015, Xcel Energy proposed to transform its energy system away from coal to cleaner energy sources, investing in new wind, solar and natural gas. The result will achieve a 60 percent reduction in carbon emissions and a 63 percent carbon-free energy mix. Detailed analysis shows this transformation can be achieved with a modest increase in rates that will keep prices competitive with the national average.

Our strategyThe bulk of Xcel Energy’s base load generation faces the end of projected operational lives in the mid-2030s—about 3,000 megawatts. This proposal begins the transition of our generation fleet in a coordinated manner, avoiding the need to compress this transition in a short period of time.

The certainty this plan provides enables a transition that can be developed and implemented over time, limiting the burden on employees, customers, regulators and other stakeholders.

Xcel Energy transition to clean energyOur Upper Midwest energy resource mix will be 63 percent carbon-free

Solar8%

Wind25%

Coal15%

Nuclear28%

Hydro2%

Natural Gas22%

63%

CAR

BON FR

EE ELECTRICITY

2030

51%

CAR

BON

FRE

E EL

ECTR

ICITY

Coal34%

Nuclear27%

Wind14%

Other Renewable 10%Hydro: 7%Biomass: 3%

NaturalGas15%

2015

Xcel Energy's clean energy proposal delivers for our customers and our communities

• Reliable electricity

• 63% carbon-free energy

• 35% renewables

• An affordable cost for our customers

• Long-range transition to protect customers, employees and communities

20%

30%

40%

50%

60%

70% 2030

2028

2026

2024

2022

2020

2018

2016

Perc

ent R

educ

tion

Percent CO2 Reduction from 2005

Carbon dioxide emissions will be 60 percent below 2005 levels, exceeding EPA Clean Power Plan requirements

Information Sheet

xcelenergy.com | © 2016 Xcel Energy Inc. | Xcel Energy is a registered trademark of Xcel Energy Inc. | 16-05-101

Cleaner energy at an affordable price for customers

Our proposal

• Natural gas plants: New plants at the Sherco site and in North Dakota will provide electric reliability and transmission system stability. The Sherco location is cost-effective and uses the existing transmission system. Using the existing infrastructure both reduces overall costs and ensure electric reliability due to the plant's location on the regional transmission system.

• We will more than double our renewable energy resources. The new wind and solar will provide enough electricity to power 1.2 million homes.

– 1,800 MW of new wind (800 by 2020)

– 1,400 MW of new solar (400 by 2020)

• Continue operating carbon-free nuclear facilities that help enable the transition by providing base load electricity. The plants are a critical component of providing reliable, carbon-free electricity to meet our clean energy goals.

Xcel lays out sweeping plan for Colorado’s energy future – 01-25-2016

Xcel Energy working to make Colorado an innovation hub – 03-07-2016

Sample Social Media Postings: