2014 Corporate Responsibility Report Download

FORGING OUR PATH Corporate Responsibility Report for 2014 A Report on the Economic, Environmental & Social Impacts of Xcel Energy Our Company • Message from the CEO • Operating companies • Company strategy • Stakeholders • Performance measures • Governance • Corporate Compliance & Business Conduct • Customer data privacy • Financial performance • About this report Earning Customer Loyalty • Customer numbers • Customer solutions • Customer engagement • Customers in need • Public safety Providing Community Value • Operations numbers • Reliable energy • Affordable power • Supply chain • Community investment Fostering a Safe, Productive Workforce • Workforce numbers • Safety and workforce relations • Talent strategy and transformation • Employee engagement • Total Rewards Leading Environmental Commitment • Emission numbers • Emission reductions and reporting • Environmental policy • Renewable energy • Energy efficiency • Clean energy partnerships • Environmental management • Waste reporting • Water reporting • Biodiversity 2 Safe Harbor Statement This material includes forward-looking statements subject to certain risks, uncertainties and assumptions. They include statements about our future performance, future financial and operational results, strategies, prospects and other statements that are not purely historical. Such forward-looking statements may be identified by words such as “anticipate, believe, estimate, expect, may, projected, objective, outlook, plan, possible, potential, should” or similar expressions; and speak only as of the date they are made. We do not undertake any obligation to update any forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to: general economic conditions, including inflation rates, monetary fluctuations, and their impact on capital expenditures and our ability to obtain financing on favorable terms; energy industry business conditions, including the risk of a slowdown in the U.S. economy or delay in growth recovery; trade, fiscal, taxation and environmental policies in areas where Xcel Energy has a financial interest; customer business conditions; actions of credit rating agencies; competitive factors; unusual weather; geopolitical events, including war and acts of terrorism; cybersecurity threats and data security breaches; state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an impact on rates or have an impact on asset operation or ownership or impose environmental compliance conditions; structures that affect the speed and degree to which competition enters the electric and natural gas markets; costs and other effects of legal and administrative proceedings, settlements, investigations and claims; actions by regulatory bodies impacting our nuclear operations; financial or regulatory accounting policies regulatory bodies impose; availability or cost of capital; work force factors; and other risk factors Xcel Energy lists in our 2014 report on Form 10-K to the SEC, including Item 1A - Risk Factors and Exhibit 99.01, as they may be updated in our subsequent 10-Q and 8-K reports. 3 About Us Minneapolis-based Xcel Energy is a major U.S. electricity and natural gas company operating in eight Western and Midwestern states. The company serves its 3.5 million electricity and 2 million natural gas customers with a leading portfolio of renewable resources and one of the most extensive offerings of energy management programs in the nation. Xcel Energy employs more than 11,000 full-time employees and is recognized for its commitment to hiring military veterans. The Xcel Energy Foundation donates about $13 million annually in communities the company serves. Vision We will be the preferred and trusted provider of the energy our customers need. Mission We provide our customers the safe, clean, reliable energy services they want and value at a competitive price. Values Our values reflect our core beliefs—who we are, how we conduct our business and the importance of our customers. We commit to: • Ensure safety for ourselves, our coworkers and the public • Work productively and create a challenging and rewarding workplace • Treat all people with respect • Conduct all our business in an honest and ethical manner • Work together to serve our customers • Be accountable to each other for doing our best • Promote a culture of diversity and inclusion • Protect the environment • Achieve operational excellence 4 Message from the CEO To our stakeholders: In a changing and challenging energy marketplace, Xcel Energy is exactly where we want to be: Forging Our Path for success and a more sustainable energy future. Achieving that goal means relying on fundamental values that are more important than ever, while determining new and innovative ways to satisfy our customers, care for our communities, support our employees and create value for our investors. Year after year, we’ve delivered on the fundamentals. For a decade, we’ve met or exceeded our earnings guidance, and our balance sheet and credit metrics stayed strong. Our customer satisfaction results are consistently high. We turn in outstanding reliability and operational performances. Our portfolio of renewable energy resources is second to none, and we’ve been the No. 1 utility provider of wind energy in the nation for more than a decade. We are a mainstay in our communities, supporting them with corporate funding and volunteer efforts. But we recognize more than anything that our customers want us to go above and beyond—and that is where we’ve set our sights. To guide that effort, we’ve developed a dynamic strategic action plan that focuses on improving the performance of our operating companies, expanding options for customers, growing our business and ensuring we have the technology and people we need to be competitive. Customers are looking in particular for cleaner energy options and more control over their energy use. This year alone to keep our systems safe and reliable, we are investing more than $3 billion, and we’ll invest $14.5 billion over the next five years. Beyond that, we are building an even more significant portfolio of renewable energy sources. By 2016, we plan to add 1,900 megawatts of wind energy across our service territory for a total of more than 7,000 megawatts. Already among the top 10 utilities in the country for solar capacity, we are expanding solar energy across our service territory, but particularly in the Upper Midwest, where we recently announced a first-in-the- nation Clean Energy Partnership with the city of Minneapolis. The agreement charts a collaborative approach to enable the city to meet aggressive climate and energy goals. In fact, Xcel Energy is on a path to reduce carbon dioxide (CO2) emissions 30 percent compared with 2005 levels by 2020. That makes us an industry leader in CO2 reduction. Beyond that, we’ve proposed a resource plan for the Upper Midwest that would double our renewable energy portfolio and reduce CO2 emissions 40 percent by 2030 in the region. With emission reductions as its driver, the plan gradually reduces our reliance on coal-fueled generating units but maintains a diversity of resources to keep costs reasonable. In the end, we would have an energy mix in the Upper Midwest that is more than 60 percent carbon free. In Colorado, we are significantly reducing CO2 emissions by retiring six coal-fueled units and building a new natural gas-fueled plant as part of the state’s Clean Air-Clean Jobs effort. Our transformed fleet of generating units is not only cleaner but more efficient and reliable. Those efforts put us in a strong position as the U.S. Environmental Protection Agency (EPA) prepares to issue new rules to reduce greenhouse gases. At the same time, we are working with the EPA to advocate for recognition of the early action we’ve taken to reduce emissions— again, to protect the interests of our customers. Finally, the most important element of our environmental leadership effort is the fact that we are delivering clean energy at a competitive price, which makes me particularly proud. 5 Our path forward relies on strong communities, and we think of them as our energy partners who benefit from clean, safe, reliable energy. Beyond that, we support them with corporate funding from the Xcel Energy Foundation, which in 2014 contributed more than $3.6 million to promote workforce development, STEM education, environmental stewardship and access to the arts. Our United Way campaign, which has been impressive over the years, resulted in more than $5.4 million to benefit the communities we serve—with the highest level of employee participation in our campaign to date. Employees are especially important to our success. Day after day, they demonstrate their commitment to our customers and communities, understanding that their work is vital to the quality of people’s lives. In return, we strive to provide employees a safe and welcoming workplace, give them the tools they need to do their best work, and ensure their compensation and benefits are fair. For the past few years, our employee recruitment effort placed special emphasis on hiring military veterans because we recognize that vets are a good fit at Xcel Energy, with outstanding technical and leadership skills among other attributes. Those efforts have garnered us recognition as one of G.I. Job’s Top 100 Military Friendly Employers for six years in a row, a distinction that places us among the top 2 percent of employers dedicated

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