Episode summary
Energy CEO: 'AI Data Centers Are Changing Everything We Do' | At Barron's
At Barron's
· · Hosts: Andy Serwer · Guests: Bob Frenzel
Summary
Bob Frenzel says Xcel Energy is being reshaped by the surge in AI data centers, which he believes are driving a structural jump in electricity demand across the U.S. He argued that Xcel already serves about 2.5% of the nation’s data center load and expects outsized growth because customers want reliable, affordable, sustainable power. He also said the company is protected by long-term contracts with minimum volume commitments, so existing customers should not shoulder the cost of any data center overbuild.
Frenzel described Xcel as a regulated utility with a large and expanding footprint across the upper Midwest, Colorado, Texas, and New Mexico. He said the company’s generation mix is shifting away from coal toward renewables, nuclear, and gas, and repeated the company’s 2018 goals of cutting electric-system carbon emissions 80% by 2030 and reaching carbon-free electricity by 2050. He highlighted wind as a key advantage, saying Xcel’s wind farms have saved customers more than $5 billion over the last five or six years.
On the stock, Frenzel argued that investors are underappreciating Xcel’s infrastructure role, its transmission buildout, and its exposure to industrial electrification. He said the company settled a Colorado wildfire case in September, removing a major overhang. He also pointed to lower-than-average electric prices in Xcel’s regions and said the business should benefit as AI, industrial users, EVs, and home electrification increase demand.
Key takeaways
- Frenzel says AI data centers are changing everything Xcel does and could drive outsized load growth for 10 to 20 years.
- He said Xcel has about 20 gigawatts of data-center backlog and expects contracts for up to three gigawatts by mid-2027.
- Frenzel said Xcel’s electric prices are 28% below the national average, which should help attract industrial and data-center demand.
- He said the company’s 2018 pledge still stands: 80% lower electric-system emissions by 2030 and carbon-free electricity by 2050.
- Frenzel said settling the Colorado wildfire case in September removed a liability concern the market had overstated.
Notable quotes
“AI data centers are changing everything we do as a company and everything I think the country is going to do over the next 10 to 20 years”
“So between now and 2050 think about a 50% increase in electricity demand largely but not exclusively driven by data centers”
“We made a couple commitments in 2018. We said we would be we would reduce our carbon footprint by from our electric system by 80% by 2030”
“I'd say that our business is largely a infrastructure owner and operator business”
“Our backlog is 20 gigawatts of data centers. Uh and we're serving call it one and a half today”
How the episode opens
Hello everyone and welcome to At Barrens. I'm Andy Sir and welcome to our guest Bob Frenzel, CEO of Excel Energy. Bob, nice to see you. Thanks for joining us. — Yeah, thanks for having me Andy. I'm excited to be here.
So Excel is a regulated utility based in Minneapolis, Minnesota. tell us about your geographic footprint number one and number two how you're different from other regulated utilities.
So XL Energy uh is one of the largest investorowned utilities. We're headquartered in Minnesota, but we actually serve 6 million electric and gas customers across the upper Midwest and in the Southwest. I'd say maybe strategically probably the biggest differentiator for Excel Energy is is we serve customers where the wind blows and the sun shines.
uh and that has allowed us as a c company to really deliver a cleaner energy product over a long period of time at very affordable prices for our customers.
I want to jump right in and ask you about AI data centers because that's all anyone's talking about in the business been driving the stocks a lot. How is that changing your business and what kind of exposure do you have to that industry? AI data centers are changing everything we do as a company and everything I think the country is going to do over the next 10 to 20 years.
Uh we it's not going to surprise you one of the biggest opportunities for data centers is finding you know reliable affordable and sustainable power and we have that in spades as a country and as a company. Um the data centers definitely are attracted to our service territory. Um and we're serving what I would say is our fair share of the data center load today.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai data centers
- energy sector
- stock picking
- investing thesis
- company leadership
Companies and tickers mentioned
- XEL
- Xcel Energy
Watch the episode
Watch “Energy CEO: 'AI Data Centers Are Changing Everything We Do' | At Barron's” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from At Barron's
-
Kai-Fu Lee on How AI Can Help Grow a Company's Earnings -
Rocket CEO: "Homeowners Are Still Waiting to Buy Homes" -
Moderna CEO on the Biotech’s Cancer Vaccine and Pipeline -
Anthony Scaramucci on Katie Zacharia, Trump, and the Midterms | At Barron's -
IMAX CEO on 'The Odyssey,' Chris Nolan, and Company's Sudden Ascent | At Barron's -
PG&E's CEO on Data Centers, Energy Rates, and the Stock | At Barron's
At Barron's, this episode and its artwork belong to At Barron's. Octagon is not affiliated with the show; this page is an independent summary.
