COVID-19's grip on the U.S. economy has sapped electricity demand at factories and offices — and Xcel Energy hasn't been spared.
Still, Minneapolis-based Xcel notched a healthy increase in second-quarter profits as hot weather and cost cutting helped offset a 7% decline in its weather-adjusted electricity sales.
COVID-19 led to lockdowns and an economic contraction that sapped energy demand of all kinds. Earlier, this week the U.S. Energy Information Administration reported energy consumption, particularly oil, in April hit a low not seen in over 30 years. Electricity consumption in April hit a 19-year low.
Xcel is by far Minnesota's largest electricity provider, and the company also has a big presence in Colorado as well as operations in New Mexico, Texas, Wisconsin the Dakotas and a small slice of Michigan's Upper Peninsula.
"Because of Xcel's size and locations, I usually consider it as a good barometer for the entire industry," said Travis Miller, a stock analyst at Morningstar.
Xcel's weather-adjusted residential electricity sales rose 5.4% in the second quarter as people worked at home instead of at the office. But that increase was more than canceled out by a 11.5% decline in commercial and industrial sales.
Still, hotter than normal weather — and a corresponding hike in power-sucking air conditioner use — helped cushion the decline in Xcel's actual electricity sales.
Overall, Xcel "continued to put up solid numbers" during the second quarter, Miller said.