Pranav Hotkar
Denver, United States - February 4, 2026 - Xcel Energy, Inc. and NextEra Energy, Inc. announced a strategic memorandum of understanding (MOU) designed to accelerate delivery of power generation, storage and transmission resources to support growing demand from large energy users, including data centers, across Xcel Energy’s U.S. service territories.
The collaboration expands a long-standing commercial relationship between the two energy companies, aligning efforts to anticipate and plan for future load growth from cloud and AI infrastructure as well as advanced manufacturing and other large loads. Under the MOU, the partners will coordinate investment and development planning to make energy resources available more quickly and efficiently where they are needed most.
Data centers are among the fastest-growing categories of large customers on U.S. grids, with hyperscale facilities and AI computing clusters requiring substantial, reliable energy capacity close to interconnection sites. Xcel Energy said the agreement is intended to strengthen its ability to serve such customers through the 2030s and beyond, ensuring that generation and grid resources scale to meet long-term demand projections.
“Partnering with NextEra Energy is critical to deliver on this once-in-a-lifetime opportunity to meet increased energy demand in our communities,” said Bob Frenzel, chairman, president and chief executive officer of Xcel Energy. “By coordinating our resource planning and execution, we can provide reliable, cost-effective power solutions for all large loads, including data centers that are essential to the digital economy.”
Under the terms of the MOU, the companies will work together to evaluate and develop generation solutions, energy storage deployments and transmission enhancements that reduce bottlenecks and improve the speed with which new capacity can be brought online. A formal joint development agreement is expected to be finalized in the coming months, after negotiation of definitive terms and regulatory approvals.
John Ketchum, chairman and chief executive officer of NextEra Energy, said the partnership reflects a shared commitment to “scalable, cost-effective and quick-to-deploy energy solutions” that support accelerating demand from data centers and other large load customers. “As energy needs continue to evolve, proactive planning and collaboration will help ensure that infrastructure keeps pace with economic growth,” Ketchum added.
Energy industry analysts note that data center load growth poses unique challenges for utilities, with requirements for high availability, flexibility and long-duration capacity that must be synchronized with grid planning and interconnection timelines. Delays in power delivery can stall data center projects for years, making coordinated planning with major developers a competitive advantage for utilities.
Xcel Energy serves customers across eight states in the Upper Midwest and West, including Colorado, Minnesota, New Mexico and Texas, while NextEra Energy’s subsidiaries, including Florida Power & Light and NextEra Energy Resources, operate one of the largest portfolios of renewable generation and advanced energy assets in the U.S. Their combined expertise in grid management, generation expansion and storage solutions is expected to help unlock new capacity for hyperscale and enterprise facilities that increasingly fuel the digital economy.
The MOU underscores a broader trend in the energy industry: utilities and developers are increasingly forming partnerships to anticipate the grid impacts of AI, cloud computing and high-performance workloads, sectors that are reshaping power demand profiles in key markets.
