Xcel Energy and NextEra Energy have entered into a 6‑GW data‑center power agreement that will lock in supply and development capacity for the next decade. The deal, announced on February 5, 2026, reserves five F‑class gas turbines, several gigawatts of wind capacity, and joint development resources to support generation build‑out across Xcel’s service territories.
The memorandum of understanding that underpins the agreement was signed on February 4, 2026, and it commits Xcel to secure up to 6 GW of data‑center load by the end of 2027. The five F‑class gas turbines are expected to provide flexible, low‑carbon power, while the wind capacity will add renewable generation that can be paired with storage to meet the constant demand of AI‑driven data centers.
The partnership addresses the explosive growth in electricity demand from data centers, a trend driven by the rapid expansion of artificial‑intelligence workloads. By combining wind, storage, and gas, Xcel and NextEra can deliver a diversified, low‑carbon mix that meets the reliability requirements of hyperscalers while supporting the broader transition to cleaner energy.
Xcel’s grid modernization plan, which includes a $60 billion investment over the next five years, is bolstered by this agreement. The new capacity will help Xcel meet the high‑profile data‑center demand without bearing the full cost of new generation, allowing the utility to focus on grid upgrades and digital twin technologies that improve reliability and efficiency.
For NextEra, the deal expands its renewable and merchant portfolio and creates a long‑term revenue stream tied to a high‑margin market. CEO John Ketchum highlighted the accelerating energy demand from data centers, noting that the partnership positions NextEra to capture a significant share of the AI‑driven market. The agreement also aligns with NextEra’s strategy of investing in natural‑gas infrastructure to serve hyperscalers while scaling renewable projects.
Xcel’s Q4 2025 earnings showed an EPS of $0.96 versus the consensus estimate of $0.97, a miss of $0.01, and revenue of $3.56 billion against an estimate of $3.73 billion. The miss was largely due to a modest decline in retail and industrial sales, offset by strong performance in the renewable generation segment. Xcel reaffirmed its 2026 EPS guidance of $4.04 to $4.16, signaling confidence in its capital plan and the expected growth of data‑center demand.
NextEra’s Q4 2025 results delivered an EPS of $0.54, beating the consensus of $0.53 by $0.01, while revenue of $6.50 billion fell short of the $6.78 billion estimate. The EPS beat was driven by cost discipline and a favorable mix of renewable projects, whereas the revenue miss reflected a slight slowdown in the merchant market. The company’s full‑year 2025 adjusted EPS of $3.71, up from $3.50 in 2024, underscored its growth trajectory.
Market reaction to the agreement was positive for NextEra, with the stock rising 2.46% in pre‑market trading, reflecting investor confidence in the company’s long‑term outlook and backlog. Xcel’s reaction was more muted, as the earnings miss tempered enthusiasm, but the reaffirmed guidance maintained investor confidence in the utility’s strategic plan.
The agreement positions both Xcel and NextEra to capitalize on the rapidly expanding AI‑driven data‑center market, strengthens their competitive positions, and provides a diversified, low‑carbon power mix that aligns with broader sustainability goals. For investors, the deal signals a strategic shift toward high‑margin, high‑growth segments and reinforces the long‑term value proposition of both utilities.
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