April 30 (Reuters) - U.S. utility Xcel Energy ( XEL ) on

Thursday narrowly beat adjusted profit estimates for the first

quarter, as higher recovery of electric infrastructure

investments and stronger sales helped offset warm weather and

higher financing costs.

As Big Tech firms increasingly build data centers to support

AI and cloud-computing services, utilities are seeing a surge in

requests for electricity, leading power providers to invest

heavily in upgrading their generation and transmission

infrastructure to meet the growing demand.

In February, Xcel entered into an agreement to power a new

Google data center in Minnesota.

Xcel said it filed a request with Minnesota regulators in

April for approval of the agreement, including a proposed charge

tied to 1,900 megawatts of clean energy resources.

The Minneapolis, Minnesota-based company posted revenue of

$4.02 billion for the quarter ended March 31, compared with

$3.91 billion a year ago.

Operating revenue at its electric segment rose 5% to $2.98

billion, while natural gas revenue fell 2.4% to $1.03 billion

from a year earlier.

Higher-for-longer interest rates can pressure utilities by

raising the cost of constructing and maintaining infrastructure

such as electrical grids.

Xcel's total operating expenses rose 1.2% to $3.27 billion,

while total interest charges and financing costs increased 20.4%

to $372 million, largely due to higher debt levels and interest

rates.

The company posted an adjusted profit of 91 cents per share

for the three months ended March 31, compared with analysts'

expectations of 90 cents per share.

It reaffirmed its 2026 ongoing earnings forecast of $4.04 to

$4.16 per share.

Xcel provides electric services to about 3.9 million

customers and natural gas services to about 2.2 million

customers across eight Western and Midwestern states.