Xcel Energy's 2026 Data Center Growth Plans with Hyperscalers Explored

Xcel Energy’s 2026 data center growth partnership plan with hyperscalers (from its filings)

Based on Xcel Energy’s 2026 Q1 earnings call disclosures, Xcel’s 2026 hyperscaler partnership approach focuses on (1) executing and expanding existing ESA activity (notably Google), (2) expanding the “large load” contracting/regulatory framework in additional states, and (3) growing a contracted pipeline that management expects will build into 2027 and beyond.

1) Execute the Google data center model and use it as the template

• Xcel said it provided further details during the quarter on its “groundbreaking agreement with Google,” described as a 15-year agreement where Google covers the entire cost of its service and infrastructure requirements for the new data center, including 1,900 MW of new wind and solar generation plus long-duration storage using Form Energy’s 100-hour iron-air battery. ¹
• Management framed this as a customer-protective model: with credit protections, Xcel estimated the data center would save customers $1.0B–$1.5B over the term of the ESA. ¹
• Xcel also highlighted water reduction via Google’s air-cooled technology in lieu of water-cooled approaches as part of shared sustainability goals. ¹
• Xcel also stated it filed the Google contract with the Minnesota PUC and referenced it as a “model” for large load development benefiting customers and communities. ²

What this implies for 2026: Xcel’s hyperscaler “growth partnership” execution in 2026 is centered on getting constructive outcomes through the regulatory process around the Google arrangement (and then using that framework to support additional ESAs and load growth). ¹²³

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2) Expand large-load tariff/regulatory filings to enable additional hyperscaler load

Xcel connected hyperscaler partnerships to state-level “large load tariff” structures that protect existing customers while allowing data centers to connect and procure power.

• Xcel said that, in April, it filed a large load tariff in Colorado with terms “similar in scope to” its Google ESA and Minnesota large load tariff filing, including long-term contracts, minimum bills, termination fees, credit requirements, and incremental cost tests designed to protect existing customers. ⁴
• Xcel stated that in the coming months it planned similar filings in Texas, New Mexico, and Wisconsin. ⁴
• In the Q1 call, management further indicated it expected to file a large load tariff in Texas “as well this year” to help expedite execution on load contracting, while still allowing near-term contracts to proceed. ³
• Xcel explicitly tied these efforts to “partnerships with hyperscalers, regulators, communities, and developers” and to maintaining clean energy goals without increasing costs for existing customers. ⁴

What this implies for 2026: the practical mechanism for hyperscaler partnerships is not only commercial agreements, but also regulatory enablement via large-load tariffs in multiple states where data center demand is active. ⁴³

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3) Build a “contracted pipeline” expectation into 2027 (with 2026 activity as the ramp)

Xcel described a pipeline of additional data center capacity contracting that is expected to extend beyond 2026, with management describing current-year execution and next-year scale-up.

• Xcel said management expects to execute enough ESAs this year to reach a 3 GW target, and another 3 GW next year. ³
• Management also stated that, on the “high-probability pipeline,” it expects 4 more GW to be contracted by 2027, and that this number is inclusive of the 2 GW referenced with the NextEra partnership (and that NextEra could be larger). ⁵
• In discussing market approach, management noted they are working across multiple regions and that hyperscalers like working with Xcel because it can deliver solutions in different parts of the U.S. to meet portfolio needs. ⁵

What this implies for 2026: 2026 is the year Xcel expects to accelerate ESA execution to a 3 GW contracting target, with the partnership framework designed to carry contracting momentum through 2027. ³⁵

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4) Leverage the NextEra co-development partnership to accelerate data center generation/storage availability

Xcel’s partnership plan in 2026 also includes upstream generation and interconnection development to serve large loads.

• Xcel stated that in April it reached a definitive nonexclusive agreement (previously announced MOU) with NextEra to co-develop generation, storage, and interconnections to accelerate data center development across Xcel’s operating companies. ¹
• Xcel said it expects the joint development agreement to deliver a balance of company-owned resources and purchase power agreements with NextEra “across all forms of generation,” including wind, solar, battery storage, and natural gas. ¹
• Management also stated it is already underway developing solutions for 2 GW of new data center capacity, with plans to expand in the near future. ¹
• Xcel also described the NextEra partnership as tied to its “Upper Midwest” focus area. ³

What this implies for 2026: hyperscaler data center growth partnerships require supply-side readiness (generation/storage/interconnections). Xcel’s NextEra alliance is positioned as one of the key execution tools that supports the hyperscaler load contracting pipeline. ¹³

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Bottom line summary (2026-focused)

In 2026, Xcel’s hyperscaler partnership plan emphasizes execution and replication of the Google “large load” model, plus state-by-state regulatory enablement and supply-side co-development:

• Execute the Google ESA framework (15-year, cost-covering by Google; credit protections; air-cooled water-saving approach) and work regulatory filings (Minnesota PUC). ¹²
• Expand large-load tariff filings beyond Minnesota/Colorado into additional states, including planned filings in Texas, New Mexico, and Wisconsin, with Texas targeted “this year.” ⁴³
• Ramp ESA execution in 2026 toward a 3 GW contracting target, building toward 4 GW contracted by 2027 (including the NextEra-related portion). ³⁵
• Use the NextEra co-development alliance to prepare generation, storage, and interconnections for 2 GW of data center capacity with further expansion planned. ¹

These are the concrete partnership/planning actions Xcel highlighted for data center growth in 2026 in the provided filings. ¹⁴³⁵